updated 6/26/2012 4:47:51 PM ET 2012-06-26T20:47:51

Guests: Antonio Villaraigosa, Beth Healy, Neera Tanden, Joe Klein, David Maraniss

CHRIS MATTHEWS, HOST: Playing half-court.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews down in Washington.

Let me start tonight with this hot issue of illegal immigration. The
Supreme Court today took a whack at the Arizona law, declaring part of it
unconstitutional. It left standing that requirement that the police check
on the immigration status of someone they stop for a possible violation who
the police officer suspects is in the country illegally.

Will this drive people to the polls this November? Will it ignite
fury that the Republican-packed high court is in league with the pro-"self-
deporting" Mitt Romney?

Joining me now is the mayor of Los Angeles, Antonio Villaraigosa,
chairman of the upcoming Democratic national convention, and John Heilemann
of "New York" magazine, a top MSNBC political analyst.

Gentlemen, I want you to look at this bit now. It`s a quote from
Harry Reid, the Senate majority leader. He had strong words about the
provision the court left standing today. Let`s listen to the leader.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER: I just say to you, Mr.
President, and to anyone within the sound of my voice, someone with my skin
color or yours, I don`t think you`re going to be carrying your immigration
papers with you every place you go. But if you`re in Arizona and you speak
with a little bit of an accent or your skin color`s brown, you better have
your papers with you. That`s unfortunate.

(END VIDEO CLIP)

MATTHEWS: Mayor, thank you so much for joining us in your twin
capacities as mayor of the great Los Angeles city and also chairman of the
Democratic national convention coming up in Charlotte. It`s an honor to
have you on the show.

How did you react, or what do you think -- maybe a bigger question,
how will the Democratic Party nationally react to the court ruling today on
the Arizona law?

MAYOR ANTONIO VILLARAIGOSA (D), LOS ANGELES: Well, this was a partial
victory for the idea that President Obama and the Justice Department
articulated, and that is that there`s federal preemption here with respect
to the immigration laws. They struck down, as you know, three of those
provisions.

That they left standing the one that says they can stop -- when
they`re stopping for a legal stop, they can ask for your papers. That is
very problematic. I don`t see any way to implement that decision without
profiling and without violating the Constitution.

But what they left open is court challenges and further litigation on
that matter. I think we`d like to get this out of the campaign. I think
we`d like to get this in the Congress, where it should be. They ought to
fix this broken immigration system.

Governor Romney ought to join President Obama in calling on both
houses, both parties, to work together to pass the Dream Act and pass
comprehensive immigration reform.

MATTHEWS: Well, it`s not happening. Let me go to John Heilemann.
One reason it`s not happening is that both parties have problems with a
really tough solution. It`s going to be difficult for both sides to reach
a final agreement on the situation, a fair, enforceable immigration law.
It`s very hard to get to that.

Employers, of course, want cheap labor, the cheapest possible, and
sometimes great (ph) labor, people that just got here and are undercover,
operating off the books. And the question is, do the Democrats really want
to go with enforcement if they don`t have the Republicans joining hands
with them? It`s very hard for one party to pass a law of any kind with
sanctions on it that the other party doesn`t go along with because then
you`re blamed entirely by the community that`s affected.

John Heilemann, is this going to be a burning issue, this fact that
the Supreme Court left standing this egregious thing that allows a
policeman -- or forces a policeman to stop a driver -- he`s got a bad tail
pipe, he`s got a bad back light on his car.

He stops him or her for his -- basically, not a big crime, let`s put
it that way, and then has to ask them for their immigration papers because
they are of background (ph) and they have an accent or look that suggests
they might be from somewhere else recently, or whatever, or any reason for
doing it. It gets into profiling.

Is this going to be the hot issue going into the conventions and the
election?

JOHN HEILEMANN, "NEW YORK" MAGAZINE, MSNBC POLITICAL ANALYST: Chris,
I don`t think this is going to be a hot issue, although I think it is part
of a broader set of issues that the Obama operation, the campaign and the
White House, will try to exploit in terms of pointing out the stark
differences between where the White House is and where the Republican
nominee, Mitt Romney, is on issues related to Hispanic voters, especially
in a lot of these important swing states. Arizona`s not quite a swing
state, although it will be relatively soon, maybe next election, maybe the
election after that. And you`ve got a situation where...

MATTHEWS: Who`s going to vote? Who is more likely -- I mean, you`re
a political analyst. And I am, too, not of your greatness perhaps. But
who comes out of this result and says, Damn it, I`m going to vote for sure
this time because?

HEILEMANN: Well, I...

MATTHEWS: Who`s most likely to do that be of that ruling today,
people angry about the fact that they left standing the requirement that
cops stop people because they look a certain way or the fact that they went
the other way on the other provisions and they got rid of them and said,
No, you`re supplanting federal law here?

Who`s this going to ignite? Anybody?

HEILEMANN: Well, Chris, I just think -- look, as I said, it is part
of a broader set of issues, right? I don`t know that there are that many
Hispanic voters who are going to be driven to the polls by this issue
specifically. I think there are some Hispanic voters who are going to be
driven to the polls by a constellation of issues where the Obama
administration, as I said, is going to draw a contrast between its
position...

MATTHEWS: Yes.

HEILEMANN: ... and the position on the Republican side. That`s...

(CROSSTALK)

MATTHEWS: That is one of the most important things that President
Obama has going for him. It`s one of the things that is the keystones to
how they hope to win reelection. And he`s going to -- he`s going to hit
that issue hard.

As you saw today, Mitt Romney didn`t make -- he released a statement
in which he did not actually say what he thought of the Supreme Court
ruling and he did not get on camera today. He took no questions today.
His spokespeople would refuse to answer the question of what he thought
about the ruling.

That tells you about where (ph) the political vulnerability is seen by
the Republican nominee. He thinks this issue is an issue that`s
radioactive for him. Anytime he`s talking about immigration, it`s bad for
him because it`s -- because he`s in a bad place...

MATTHEWS: OK...

(CROSSTALK)

MATTHEWS: Mayor? Mayor, react to this, Mayor. Here`s Mitt Romney,
what he said today, which is nothing. It noncommittal. His statement is
almost nothing. Quote, "President Obama has failed to provide any
leadership on immigration. I believe that each state has the duty and the
right to secure our borders and preserve the rule of law, particularly when
the federal government has failed to meet its Republicans."

And talking to reporters on his way to Arizona today, Romney`s
spokesperson was no more helpful. Let`s watch him, and then Mayor, react
to what I don`t think is a real strong statement from Romney.

(BEGIN VIDEO CLIP)

QUESTION: Does he have a reaction as to whether he agrees to this
decision?

RICK GORKA, ROMNEY TRAVELING PRESS SECRETARY: Yes.

QUESTION: So -- so...

GORKA: States out there have the right to craft their immigration
policies (INAUDIBLE)

I`ll say it again and again and again for you. The governor
understands that states have their own right on drafting policies to secure
their own borders to address illegal immigration.

(END VIDEO CLIP)

MATTHEWS: Mayor, it looks to me like the Democrats have an easy walk
here because it looks to me like your party is in strong position with the
Latino voter for the simple reason the other side has basically forfeited
the credibility, the allegiance, and it`s hard to say a completely dramatic
statement, but when you`re coming out for self-deportation and you don`t
have a word to say against Arizona, you -- go ahead. Your words. Your
thoughts.

VILLARAIGOSA: That`s exactly right, Chris. You hit it right on the
head. Virtually everybody covering Governor Romney today has said that
he`s -- what they`ve said all week, and that -- that he`s been evasive,
that he`s refused to answer.

What we know is this. He`s refused to answer whether or not he would
overturn the president decision to defer action on the Dreamers. What we
do know is he`s said repeatedly that he would veto the Dream Act. What we
do know is that he continues to point at the president, but has never put
forth his own comprehensive immigration plan.

And what we do know is he could get it out of the campaign right now.
Let`s call on the Congress to do their job. So it`s very clear. He walks
around with Chris Kobach (ph), who is the author of the Alabama law.

And even in his statement today, Chris, he`s saying that every state
should have their own law, should have the right to pass their own laws in
contradistinction to the Supreme Court, which reaffirmed that we have
preemption on this issue, the federal government.

So he continues to maintain, clearly, that the Alabama and Arizona
laws are a model for the nation, that he`d veto the Dream Act. That`s the
wrong way to go. We`re talking about real people that have lived here
their whole lives.

MATTHEWS: Yes.

VILLARAIGOSA: We`re talking about dividing families. We can create
another path, a bipartisan path.

MATTHEWS: Well, let`s take a look at this. During the primaries,
Romney had positive things to say about the Arizona law. Let`s listen to
him here.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R-MA), FMR. GOV., PRESIDENTIAL CANDIDATE: I think you
see a model here in Arizona. They passed a law here that says -- that says
that people who come here and try and find work, that the employer is
required to look them up, e-verify -- going back to the question that was
asked, the right course for America is to drop these lawsuits against
Arizona and other states that are trying to do the job Barack Obama isn`t
doing!

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

MATTHEWS: Well, he didn`t want to have a court decision, obviously,
and here he is saying he supports the law because the federal government
has failed to lead on the issue. Take a listen here.

(BEGIN VIDEO CLIP)

ROMNEY: I support the Arizona law, recognizing that what Arizona has
done underscores the failure of the federal government to do its job. It
has been the responsibility of the federal government to protect our
borders and the federal government has failed.

(END VIDEO CLIP)

MATTHEWS: You know, John Heilemann, I know you have to be completely
objective on this, but let me ask you a chance. (SIC) I`ll give you one
more chance to slice this. Back in `64, Barry Goldwater came out against
the Civil Rights bill. I don`t question his motives, but by taking that
position, he basically told the African-American community, Forget about
it. I`m not with you on the most important thing in the world to you right
now, which is Civil Rights, public accommodations, access to restaurants
and hotels and gas station restrooms and all that came with it, all those
freedoms that come with being an American.

It seems like this time, it`s pretty much the same thing, only this
time, Romney`s saying to the Hispanic community, I`m not with you. Self-
deport yourself, people here illegally. And I`m just not with you in your
sentiments. I`m going to go with the Anglos. I`m going to go with the
other side and put my money on the working class white guy who`s ticked at
you. I`m going the other way. You just lost with me.

I`ve never seen a candidate take sides so clearly.

HEILEMANN: Chris, I -- I`ll be -- I`ll be -- I`ll try to be
objective, but I -- my -- my analytical point...

MATTHEWS: Don`t you hear him doing that?

HEILEMANN: My analytical point is the same. He has a huge problem
because of the position he`s taken with the Hispanic community. He`s right
now polling in the mid 20s. You can`t win a national election polling with
-- given the size of the Hispanic vote now, and especially in certain key
states, you can`t win with that kind of number.

One of the most serious political imperatives Mitt Romney has is to
try to fix his problem with the Hispanic community. What he has done is,
if anything, dug himself in deeper, rather than fixing that problem.

MATTHEWS: OK.

HEILEMANN: And I think nothing about -- that happened today helped
him with the Hispanic community. I think nothing that`s happened over the
course of the past 10 days has helped him with the Hispanic community. And
the way he`s handled it, as I said, has made his problem worse, rather than
better.

I don`t see...

MATTHEWS: OK...

HEILEMANN: Whether you cast it in the moral, historical terms that
you do or in the narrower political terms that I do, it`s still a huge
problem because the Hispanic community...

MATTHEWS: OK...

HEILEMANN: ... as you suggested, does not think Mitt Romney is by and
large with it.

MATTHEWS: OK, let me -- let me -- thank you. Well said. And let me
go to the mayor...

(CROSSTALK)

VILLARAIGOSA: Actually, I think this goes beyond...

MATTHEWS: OK...

(CROSSTALK)

VILLARAIGOSA: Actually, I think it goes the Hispanic community. I
think people who care about a just, humane immigration policy that enforces
our borders but gives us a pathway to citizenship is much broader than just
Latinos...

MATTHEWS: OK...

VILLARAIGOSA: ... and much broader than just Democrats.

MATTHEWS: I think you`re right. Among independents...

(CROSSTALK)

VILLARAIGOSA: ... Americans who believe in that.

MATTHEWS: Let me ask you while I`ve got you...

VILLARAIGOSA: That`s exactly right.

MATTHEWS: ... my friend, Mr. Mayor -- it`s an honor to have you on,
my friend, but let me tell you this. I`ve got to nail you. When the
Democrats write their platform this summer, when you write your platform on
same-sex, will you endorse a state-by-state approach to this, or a federal
law that basically -- that guarantees the right of people to marry someone
of the same sex? Would it be federal or state-by-state?

VILLARAIGOSA: Well, I...

MATTHEWS: The party will support.

VILLARAIGOSA: I think I`ve made it fairly clear. I think that
marriage equality is a fundamental liberty that the federal government and
our Constitution ought to protect. I`ve made that very clear. You`re not
nailing me to anything, my friend. I believe in that. I think it`s about
family values.

I think we ought to keep...

MATTHEWS: OK...

VILLARAIGOSA: ... families together on the immigration side. But
also when someone wants to marry, they want to have a loving relationship,
the federal government should not be interfering with that right.

MATTHEWS: Although, should the federal government support the right
to a same-sex marriage in the law?

VILLARAIGOSA: Yes.

MATTHEWS: OK, thank you very much. John Heilemann and Mayor
Villaraigosa, Antonio Villaraigosa, chairman of the Democratic national
convention this summer.

Coming up: Bain, Bain, don`t go away. Three damaging stories this
weekend about Mitt Romney`s years with Bain capital show how much staying
power this story has. And now Romney`s being linked to junk bond king
Michael Milken, the role model for Gordon Gekko.

Also, no health care decision today from the Supreme Court. But did
you ever wonder why the law`s so unpopular? Wait until you hear what
"Dirty, Angry Money" has gone into making it unpopular, paid for by you
know who, the conservative groups out there.

And becoming Barack Obama. The great journalist and author David
Maraniss comes on the show today to talk about the coming of age of this
young man once known as Barry Obama.

Finally, "Let Me Finish" with the Supreme Court. Do you think it
would have desegregated our schools, this court? Think about who`s on it.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Well, Both Mitt Romney and President Obama spent part of
last week in Florida trying to win over a large chunk of the Hispanic vote.
But a new poll suggests Romney is focusing on the wrong issues when it
comes to what`s important to that community.

According to a new "USA Today" Gallup poll, health care, unemployment
and immigration policies top the list of concerns for Hispanic voters. The
economic growth Romney has been raising -- or basic most of his run for the
White House on is a major concern for only 17 percent of Hispanic
registered voters. Wow. He`s off base on that one.

We`ll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MICHAEL DOUGLAS, ACTOR: The point is, ladies and gentlemen that
greed, for lack of a better word, is good.

(END VIDEO CLIP)

MATTHEWS: Welcome back to HARDBALL. The line by the fictional Gordon
Gekko epitomizes 1980s excess. And of course, the real-life star from the
go-go 1980s who flamed out most spectacularly was Michael Milken. Now a
"Boston Globe" report links Romney to a business deal with Milken. It`s
the last of a triple hit of negative Bain stories in three major newspapers
over just the last few days.

Here`s the fight sequence, if you will. First, "The Washington Post"
dug deep into Bain`s business, uncovering that Bain Capital was a pioneer
in investing in companies that -- get this -- moved jobs overseas. Can`t
do worse than that in this environment.

President Obama couldn`t resist bringing this up in a Tampa campaign
rally this Friday.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Today it was reported
in "The Washington Post" that the companies his firm owned were pioneers in
the outsourcing of American jobs to places like China and India. We do not
need an outsourcing pioneer in the Oval Office!

(CHEERS AND APPLAUSE)

OBAMA: We need a president who will fight for American jobs!

(END VIDEO CLIP)

MATTHEWS: "We do not need an outsourcing pioneer in the Oval Office."
That`s getting personal!

Next, "The New York Times" piled on with a report that Bain basically
rigged its deals so that even when companies went broke, Bain profited.

And today, Mitt`s hometown paper, "The Boston Globe," dug into Mitt`s
business deal with 1980s junk bond king Michael Milken.

Just to remind you how notorious Milken was, here`s part of a
"Nightly" newscast just before he went to prison.

(BEGIN VIDEO CLIP)

TOM BROKAW, ANCHOR, "NBC NIGHTLY NEWS": One of the richest men in the
world, Michael Milken, pleaded guilty today to six criminal charges and
agreed to pay the largest fine ever assessed against an individual. It
marked the end of one of the wildest financial eras in American history.

(END VIDEO CLIP)

MATTHEWS: Well, Howard Fineman`s an MSNBC political analyst and
editorial director of the Huffington Post Media Group. Beth Healy is a
financial reporter for "The Boston Globe" and co-wrote today`s piece on
Romney and Milken.

Ms. Healy, thanks so much for joining us because sometimes these
business stories become a little bit too numerical, but when something ties
somebody to an iconic figure like Milken, who has, in all fairness, cleaned
up his act as a human being, and everybody knows that -- I think they all
know that -- Howard`s looking at me!

HOWARD FINEMAN, HUFFINGTON POST MEDIA GROUP, MSNBC POLITICAL ANALYST:
No, no!

MATTHEWS: We don`t know the whole story on anybody. But here it is,
a guy who`s identified with a guy who`s on his road to prison and who
clearly was a risk for his reputation. Why would Mitt Romney get into bed
business-wise with Milken if he wanted to ever be president?

BETH HEALY, "THE BOSTON GLOBE": Why did he go into business with him?

This was going to be Bain`s biggest deal yet. This Stage Stores
retailer down in Houston and Bain was able to put down $10 million, and put
together financing -- $300 million, they were able to get with Drexel in
order to get this big deal done.

MATTHEWS: So, they got $300 million leveraged by a $10 million ante.
And -- but wasn`t there -- any time you make money like that, or see you`re
going to make money, isn`t there a risk to your reputation that comes with
it? That`s why you get all the big payoff. It`s what you usually call a
junk bond.

But your thoughts?

HEALY: There is a risk to it.

And Romney had been historically a very cautious guy. That was really
his role at Bain since he started it in 1984 was to be very careful with
the firm`s money and investors` money, and this was a big departure. This
was really saying OK, in venture capital, you take a lot of risk with
start-ups, and you make a little bit of money. But with this type of deal,
with a leveraged buyout, you could make a lot of money.

MATTHEWS: OK.

Let`s get to why he would go for the big kill. Here`s how a former
employee involved with the Romney-Milken deal describes Mitt`s rationale,
his motive for getting in bed with the junk bond king. I love this quote.

"Mitt, I think spent his life balanced between fear and greed. He
knew that he had to make a lot of money to launch his political career.
It`s very hard to make a lot of money without taking some kind of
reputational risk along the way. It`s just hard to do. It doesn`t mean
you have to do anything illegal or immoral, but you often have to take
reputational risks to make money."

And "The Boston Globe" reports, "So it was that Romney decided to rely
on a man and a company in the thick of one of the most intensive
investigations ever undertaken by the Securities and Exchange Commission."

Howard, that is one of the great bites I have ever come across. A guy
who just gives you just what you want to hear. Why would you take a big
risk? Because he was going for the big kill, the American presidency. And
he knew wanted to have a ton -- he said it before. My father taught me to
make a lot of money before you run for office.

HOWARD FINEMAN, NBC CHIEF POLITICAL CORRESPONDENT: Yes. Having
studied Mitt Romney`s career, I think that`s absolutely right.

I think you can make some money by nurturing the young companies. You
make the big killing on predation, which he was moving from.

MATTHEWS: Remember in "Bonfire of the Vanities," you make money
through crumbs?

FINEMAN: Yes.

MATTHEWS: He`s not interested in crumbs.

FINEMAN: No, no, he didn`t want the crumbs. He wanted the big scores
and he wanted the money from Drexel to help him do it.

And I think it`s utterly consistent with what Mitt Romney`s lifelong
game plan was and he was willing to take the risks because of the big
payoff. He wanted the big money, but he wanted the big money for an
ultimate reason, which is to do what his dad couldn`t do, which is to
become president.

MATTHEWS: Beth Healy, back to you again. In terms of Bain, what
makes this a story that just keeps giving? It was your paper broke that
story today. And congratulations for "The Globe," of course.

HEALY: Thanks.

MATTHEWS: And I mean that. And of course "The Times" is on the
story. "The Post" was on it. The president paid a tribute to that in fact
on Friday. Why do you think Bain has circled back into news inquiry? Why
are we back into story again now after a couple of weeks of not doing it?

HEALY: Because it seems like when you want to evaluate Mitt Romney
and since he is presenting himself as the president who can fix the
economy, the would-be president who could fix the economy, this is the
period of his life on which you can really judge what he brought to the
table with business.

And so there are about 100 deals. We evaluated them at length for
"The Globe"`s book "The Real Romney."

And this deal is important because it shows that he really did pivot
to be willing to take on more risk in order to make a lot of money for
investors.

MATTHEWS: Yes.

Let`s take a look at this and then, Howard, react.

Here`s a Priorities USA ad. This is a pro-Obama super PAC. It`s out
with this new ad again hitting Romney for jobs lost in these Bain deals.
Let`s listen to new ad by the pro-Obama group.

(BEGIN VIDEO CLIP PRIORITIES USA AD)

UNIDENTIFIED MALE: Out of the blue one day, we were told to build a
30-foot stage. Gathered the guys and we built that 30-foot stage, not
knowing what it was for.

Just days later, all three shifts were told to assemble in the
warehouse. A group of people walked out on that stage and told us that the
plant is now closed and all of you are fired. It turns out that when we
built that stage, it was like building my own coffin.

(END VIDEO CLIP)

MATTHEWS: So let`s talk about the kind of person who`s probably going
to decide this election, the college -- the non-college white guy, to be
blunt about it. I hate talking about race, but that`s the way it`s going
to be.

The guy who works in a factory, who doesn`t work in a factory, used to
work in a factory. I always talk about Scranton to Oshkosh. I`m told that
the campaign, not the journalists, but the campaign, wants to focus on Bain
because it won`t work on the East Coast where everybody`s sort of into the
financial industry in some indirect way. They support it. Ohio, Iowa,
Wisconsin, those three states.

FINEMAN: And defending Pennsylvania, where the Obama campaign
itself...

(CROSSTALK)

MATTHEWS: And Pennsylvania. Why do these issues of Bain work outside
the East Coast?

FINEMAN: Well, because in the industrial heartland, they saw the
consequences of both outsourcing and pumping and dumping, to use the term
that was used back in those days in relation to the stock manipulation.

MATTHEWS: So well said.

FINEMAN: And they have seen the consequences of it. They have got
the buy American ethic there. That`s why the president succeeded
politically as well as economically I think with the auto bailout, which
helps them in that region.

This is saying, look at Mitt Romney. Yes, on paper, he knows how to
deal with economies, but the United States of America is not a company that
can be subject to a leveraged buyout. If it goes bankrupt, it goes
bankrupt. There`s nobody you can sell it to. This is our company. You
can`t buy it, pump up the stock and sell America.

And that`s going to appeal to exactly the kind of people you`re
talking about as an attack on Mitt Romney, not necessarily as a compliment
to Barack Obama, don`t forget it.

MATTHEWS: Oh, I agree with that .

FINEMAN: Because a lot of those same people are suspicious of
government. They don`t like the government...

(CROSSTALK)

MATTHEWS: And they know how the Democrats get money from Wall Street
too.

FINEMAN: But one thing everybody in the heartland agrees on, Democrat
and Republican, is you don`t want outsourcing of jobs. They don`t mind it
so much perhaps in New York or Los Angeles, but they don`t like it in the
heartland.

(CROSSTALK)

MATTHEWS: I want to hear those conversations the next few months, of
working guys in those bars along the Route 40s of this country, where
they`re sitting they`re talking. What do you think of this guy Romney?
And the other guys say, I don`t like the way he killed all those companies.

FINEMAN: There you go.

MATTHEWS: That kind of conversation, it changes history.

Thank you, Howard Fineman.

And, Beth Healy, thank you for joining the show tonight from "The
Boston Globe." I love the place.

HEALY: Yes.

MATTHEWS: I know how to say it, "The Boston Globe."

(LAUGHTER)

MATTHEWS: Up next, seeing reds under the bed. A Republican --
another guy -- this new Senate candidate out there in Wisconsin is doing
his best imitation of Wisconsinite from Appleton, Wisconsin, Joseph R.
McCarthy. They`re back again with the Red Scare. What a joke. There
aren`t any reds left, buddies.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Back to HARDBALL. Now to the "Sideshow."

First up, how did a guy dressed like a chicken end up in a campaign ad
for the Montana Democrats? Well, it started when a Senate debate between
Republican Denny Rehberg and incumbent Democrat Jon Tester got postponed.
Rehberg said he had to be somewhere else, but if you ask the Democratic
group, there`s another reason why Rehberg was a no-show at that debate.

Well, they say he was too chicken to face Tester. I think in
Hollywood, they call that high concept.

Anyway, the Obama campaign has been pushing their dinner with Barack.
You make a donation and you get entered into a lottery and the winner gets
a date night with the president, but how do you know the president makes a
good dinner companion? Well, ask the other person who will be at the
dinner.

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, FIRST LADY: It was a cool date, actually. We spent
the whole day together, and we went to the Art Institute.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Art -- art, guys out
there, it impresses people. It shows..

M. OBAMA: He showed his cultural side, and then we took a nice long
walk...

B. OBAMA: Kind of romantic.

M. OBAMA: ... along Michigan Avenue. So, our first meal was a lovely
lunch.

B. OBAMA: And then we went to see "Do the Right Thing."

M. OBAMA: Spike Lee. Had just come out.

B. OBAMA: Had just come out.

M. OBAMA: Showed all the sides. He was hip, cutting-edge, cultural,
sensitive.

B. OBAMA: Take tips, gentlemen.

(END VIDEO CLIP)

MATTHEWS: We need more of her on television.

Anyway, you got some good advice there on how the behave on the all-
important first date from the president.

Finally, move over, Allen West. Remember when the Florida congressman
did his Joe McCarthy imitation, saying there were -- quote -- "78 to 81
members of the Democrat Party that are members of the Communist Party?"

Well, get this. He`s got company. Here`s what Republican Senate
candidate Eric Hovde of Wisconsin said about U.S. Congresswoman Tammy
Baldwin, the likely Democratic nominee in that state -- quote -- "I
fundamentally disagree with Tammy on almost everybody. She has a more
liberal voting record than anyone in Congress. Her philosophy has its
roots in Marxism, communism, socialism, extreme liberalism. She calls it
progressivism, vs. mine, which is rooted in free market conservatism."

Mr. Hovde should have his mouth washed out with soap for calling any
member of Congress a communist.

We don`t have communists.

Up next: dirty, angry money -- conservative groups flooding the
airwaves to make sure no one ever learns to love Obamacare.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

JON FORTT, CNBC CORRESPONDENT: I`m Jon Fortt with your CNBC "Market
Wrap."

Worries about Europe continue to dog the markets. The Dow falls 138,
the S&P sheds 21 and the Nasdaq loses 56.

Welcome news for drivers. According to the Lundberg Survey, gas
prices are down 14 cents over the past two weeks to $3.47 a gallon.
Meanwhile, new home sales rose 7.6 percent in May, the fastest pace in more
than two years. And Facebook`s operating chief, Sheryl Sandberg, is
joining the company`s board of directors.

That`s it from CNBC, first in business worldwide -- now back to
HARDBALL.

MATTHEWS: We`re back.

Whether or not President Obama`s health care law is upheld in the
Supreme Court this week -- and it looks like we`re going to hear Thursday -
- polls show it long ago lost in the court of public opinion and here`s one
big fat reason, a flood of largely unanswered negative advertisement by the
right.

Since the Affordable Care Act -- Affordable Care Act was passed and
signed in 2010, negative advertising spending on television has outpaced
positive advertising spending by more than 3-1, and it feels like a lot
more than that, with the U.S. Chamber of Commerce and Karl Rove`s super
PAC, Crossroads GPS, leading the charge against the law.

Just a fraction of the positive ad spending, less than $1 million,
comes on the Obama campaign. So how do we look at this thing?

A study by Kantar Media shows that the two sides barely reached the
same audience. Opponents focused on swing state markets, while supporters
aired ads in national broadcast and cable networks in markets in
California.

Neera Tanden is the president of the Center for American Progress and
on the president`s health care team in the White House.

You were on it, right? OK.

And Joe Klein is an all-purpose knowledgeable journalist from "TIME"
magazine.

(LAUGHTER)

MATTHEWS: I want to get to you, Joe, for just a second because I know
you have been out talking to people about this, which like to hear about.

Neera, look at these numbers, $235 million in negative ads up against
$69 million in positive ads. Less than $1 million of the positive ads was
paid for by the White House.

Why did the president stick his chin out after passing health care,
let them give it a name, Obamacare, and trash it? He once told a group of
us that they would spend $200 million, and he knew it. If you said, how
come it`s unpopular, he would say, well, they`re running all these ads
against me.

Well, they still are and it is unpopular. Why did he let it happen?

NEERA TANDEN, CENTER FOR AMERICAN PROGRESS: I think the challenge is
that Democrats haven`t had the resources.

The fact that it has been unpopular because it`s been outspent 3-1.
But in any one of these given cycles, in 2010, you had a lot of Democrats
who were defending themselves.

(CROSSTALK)

MATTHEWS: Who are the winners on health care that should be out
bankrolling and supporting it? Who should be jumping with joy at the
possibility of a health care bill being upheld by the court this week?

TANDEN: Consumers. And that`s the real conundrum here.

On one side, you have folks who have a stake in the law, health
insurers, some pharma, et cetera. But health insurers have spent a ton of
money going after this legislation, pushing their money through the Chamber
of Commerce.

And the -- on the other side, you have consumers. And that`s really
been the problem. It`s not -- it`s people who don`t have a...

(CROSSTALK)

MATTHEWS: Why do the insurance companies hate this bill?

(CROSSTALK)

MATTHEWS: I thought it guaranteed a lot more people buying insurance
because you`re required to. Why wouldn`t they want that?

TANDEN: Well, that`s been a mystery.

What we have found out recently is that they have spent close to $100
million funneling money through the Chamber of Commerce. And the reason I
think is something that hasn`t gotten a lot of attention in the law,
something called medical loss ratio, which is a fancy way of saying that
there`s a guarantee in the law that insurers actually have to pay back
premiums. They have to give money back to people because -- premiums to
people, and up to $2 billion for consumers in the last several years.

MATTHEWS: OK, let`s go to numbers that mean something to a lot more
to our viewers. This is what grabs our viewers.

TANDEN: Premiums matter.

MATTHEWS: Joe, let me look -- let us look at this together. A new
poll on this, "New York Times"/CBS poll that came out this June, just a
couple of days ago -- look at this, 41 percent say overturn the entire law,
41 percent say overturn the law, 27 percent say overturn the individual
mandate only, and 24 percent say keep the entire law.

So, basically if you add it up, 68 percent of people say get rid of
the individual mandate, which could happen this Thursday. That`s not a
good report card on something the president put stock his heart on.

(CROSSTALK)

JOE KLEIN, TIME: You know, the other statistic that isn`t there at
least according to what I`ve been seeing on the road over the last three
weeks, is that about 2 percent of the American public actually know what`s
in law -- and I blame the president for that. There are two huge
constituencies he hasn`t an address. There are 30 million working poor
people in this country who will be given health care for practically
nothing and the president has never really emphasized that fact.

This is a huge moral issue. It`s a great step forward in taking care
of people who really work hard. We haven`t heard him say anything about
it.

The other group are small business people, people who are
individually employed who will be able to go to these health care
superstores, the exchanges, and buy insurance policies with the same market
cloud that a big company like Time Warner has. We haven`t heard him talk
about that either.

We don`t hear the president talk about things he actually gives
people.

Now, my suspicious is that he`s not doing that because there are a
lot of middle class people who don`t want the working poor to be getting
something for nothing.

MATTHEWS: Also because the people who are insured, they have a good
deal at work, they have a good union relationship, their union has fought
for, they have a contract or whatever, a personal services contract or
whatever that gets them health insurance, they don`t really give a darn
about these other people as much as they care about not screwing with their
own plan. Is that it? They fear that somehow this will hurt their
situation.

KLEIN: That`s right. But, you know, the real misinformation, the
target of all that money has been to small business people who actually
think they`re going to be worse off if this thing passes. They`re not
going to be. They`re going to be better off. It`s a Republican plan to
insert market principles into the health care market.

MATTHEWS: Well, the risks are obviously great politically for
Democratic elected officials who support the health care plan. Look at
Crossroads GPS, Karl Rove`s super PAC, is hitting how they`re going after
Senator McCaskill, who`s got a tough campaign. They`re spending a half
million dollars on this ad in Missouri.

Let`s look at this.

(BEGIN VIDEO CLIP)

NARRATOR: Obamacare is more like ObamaClaire because Senator Claire
McCaskill has voted with Obama 90 percent of the time, including Obamacare,
adding half a trillion in Medicare spending, cuts that could slash benefits
for some Medicare enrollees, and a board of unelected bureacrats with the
power to restrict seniors access to medical care. ObamaClaire brought us
Obamacare, and that`s bad medicine for health care.

(END VIDEO CLIP)

MATTHEWS: You know, back in `94, senator now, Secretary of State
Clinton and President Clinton both fought for health care. One of the
reasons he got in `94 was the vote against it. They just didn`t like the
looks of it. They didn`t like the sound of it.

Here we are again. Why is health care such a hard sell? Why is
calling it Obamacare almost like a curse word? Why?

TANDEN: Well, the president has endorsed Obamacare. He said it`s
fine to be called Obamacare. And he`s actually -- you know, he has
actually talked about the benefits.

But I think Joe`s experience on the issue is a good one, which is Joe
raised a lot of concerns about issues of people who are dying, essentially,
and what their health care system needs. There was a small provision in
the legislation around this that basically provide -- helped provide
information to consumers about it and that was turned into death panels.

And it was -- people lied about this issue and they made it into
something it wasn`t, and that`s been the problem of conundrum of health
care and the Affordable Care Act, which is you can demagogue the issue very
easily.

MATTHEWS: It`s easier to kill than to live.

Let me -- is that true, Joe, this is just -- it`s easier, the
complexity of the bill works for the enemies.

KLEIN: There`s another basic problem here. I mean, the Democrats
try to impose universal health care while 80 percent of the public say
they`re happy with their health care. Republicans try to destroy Medicare
when 80 percent of the country says they`re happy with Medicare as it
stands.

The reason why they do this is to appeal to their money bases on both
sides.

MATTHEWS: Wow. Thank you, Joe Klein. Always the pro.

Anyway, thank you, Neera Tanden. Please come back. Up next, we may
have to go back into, it happens Thursday.

Anyway, up next, how Barry Obama, that was his nickname, became the
man who would be president. That was his nickname. He went to Barack, the
more official name.

The author David Maraniss has written a brilliant new book about the
coming of age of this young man into the president of the United States.
We`re finally getting an honest look at his roots.

And this is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Well, he`s been a figure in Washington for more than four
decades. Tomorrow, Congressman Charles Rangel of New York City faces a
tough primary challenge, perhaps. While the Democratic incumbent from New
York, and that has been all this decade, he`s been plagued by ethical
problems of recent. He was convicted of 2010 of all but one of 13
violations, including accepting a rent stabilized apartment in Manhattan.

But his lead challenger Adriano Espaillat, who is aggressively
pursuing the Hispanic vote in Harlem. We`ll be right back. I`m betting on
Charlie..

(COMMERCIAL BREAK)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And I stand here
today, grateful for the diversity of my heritage, aware that my parent`s
dreams live on in my two precious daughters. I stand here knowing that my
story is part of the larger American story. That I owe a debt to all of
those who came before me and that in no other country on Earth is my story
even possible.

(END VIDEO CLIP)

MATTHEWS: Welcome back to HARDBALL.

By now, America knows Barack Obama was born to a white mother from
Kansas, a black father from Kenya. But the improbable presidential
background of a child in Hawaii and Indonesia is chronicle in a terrific
new biography called "Barack Obama: The Story."

The great author David Maraniss traveled to Kansas, Kenya, Indonesia
and Hawaii to delve into the president`s personal history from before his
birth until he set off for Harvard Law School. He`s with me today to share
what he learned.

Welcome.

So much of this is wonderful. I mean, he wins the Harvard law
editorship in a blind thing. He wasn`t because he was black or anything.

He was clearly born in this country. He had a black father and a
white mother.

How did that affect him, the man who he is today, that he came from a
mixed background?

DAVID MARANISS, AUTHOR, "BARACK OBAMA: THE STORY": I think his
biracial nature explains everything about him including his personality in
the White House. That speech that we showed is what made him famous. But
he was thinking that way long before that.

There`s a letter he wrote when he was 21 years old, in my book,
talking about how all of his friends were finding different niches. The
only one he could feel good about himself is if he embraced it all. That`s
what he tries to do just naturally.

MATTHEWS: Is he, like -- I mean, is he like the kid who wants his
kids to get together. And his parents have been white American and black
American. He wants them to come together. I`m dead serious about this.

Is he emotionally connected to that cause of unity?

MARANISS: It is the cause that got him into politics in some sense
and what got him into the White House. But he reached the White House
because of that. Then he had to deal with the transactional politics of
today. So it didn`t necessarily serve him that well.

MATTHEWS: His hopefulness about unity, has it been misplaced in this
terrible time we live in which Mitch McConnell says my number one goal, the
Senate Republican, is to destroy this guy`s presidency?

MARANISS: In some ways, it has been displaced. And it`s created
most of the problems of his presidency. The other aspect of it is that he
is so deliberative and cautious, that it feeds into that problem.

MATTHEWS: Predict history. You`ve got the great book. I think
everybody should read your book on Bill Clinton, first in his class, was
the best book written about Bill Clinton by any stretch.

Between now and November, from all that you know about Barack Obama,
can you forecast how he`s going to deal with what looks to be a very
dangerous campaign for reelection at this point? Dangerous, politically.

MARANISS: Well, two things that I learned from studying him, one is
he`s got enormous willpower. It`s under the surface, but it`s there -- as
strong as Clinton`s. And the second is he actually learns from his
mistakes.

So, if you put those two together, I would suspect that you`ll see a
much better campaign in these next three months.

MATTHEWS: Why does he hang in such a small circle of people?
Valerie, David, they`re all smart, but he doesn`t seem to want to enlarge
this group. He doesn`t make confederates out of senators and cabinet
members. He doesn`t have -- he`s more of a soloist, it seems to me, than a
maestro.

MARANISS: Compared to Bill Clinton, he`s the ultimate soloist.
Clinton needed everybody. He needed people to much. Obama doesn`t. And
he tends to play it alone.

It`s not that he doesn`t like people. You know, as he once said of
Hillary, he`s likable enough. He doesn`t mind people but he doesn`t need
them.

MATTHEWS: So, he just --

(CROSSTALK)

MARANISS: Often politicians use their flaws as their biggest assets.
You know, they need people. Clinton need them, was almost neurotic about
it.

MATTHEWS: How does he do it between now and election day? Use his
assets. You said persistence.

Will he try to develop new methods? If he sees himself losing on
Labor Day, will he do something dramatic?

MARANISS: Well, he`s probably planning for something dramatic
already. I don`t know what it is. But that`s his tendency. You know,
seem to be holding back, holding back, and then boom, something happens.

MATTHEWS: We keep saying get your act together.

(CROSSTALK)

MARANISS: Right.

MATTHEWS: Well, maybe that`s a precursor what`s going to happen this
election. Maybe it`s not.

David Maraniss, here`s the book, I know how much work you did on this
book. How many years writing this?

MARANISS: Four years.

MATTHEWS: How much travel everywhere?

MARANISS: Fifty thousand miles. I mean, it`s what I love to do.

MATTHEWS: You get into the heart of people into their guts. Thank
God. You were right. Donald Trump`s not right, you`re right.

MARANISS: About the birther issue, there`s no doubt about that one.

MATTHEWS: Anyway, thank you very much, David Maraniss. The book is
called "Barack Obama: The Story."

We`ll be right back. When we return, let me finish with what the
Supreme Court is up to. We`re about to get the biggest decision handed
down by the most conservative court in my memory, along time ago.

You`re watching -- I think you have to go back to the early `30s to
find this court -- the place for politics right here.

(COMMERCIAL BREAK)

MATTHEWS: Let me finish tonight with the Supreme Court.

Does anyone wonder like I do with this Supreme Court, the one
personified by Antonin Scalia and Clarence Thomas, would have done in the
landmark decisions of the post-World War II. I wonder whether this court
would have backed desegregation in the Brown case. I doubt this pack of
conservatives, which includes Chief Justice John Roberts, Sam Alito, and
Anthony Kennedy would have voted to knock separated but equal back in
1950s.

I doubt this group would have removed organized prayer from public
schools back in the 1960s, that decision that ignited the moral majority.

I doubt that this court would have recognized a woman`s right to
decide on an abortion in the 1970s.

Let me proper a tougher judgment. Would this court, voting as it
does today, have upheld the 1964 Civil Rights Bill? The statute which
declared it illegal to refuse access to someone because of race to a
restaurant, hotel, gas station restroom? Would Scalia, Thomas, Alito, and
Kennedy approved such a decision or would they have joined in the dissent?
Well, maybe Kennedy would have.

The fact is we have the most conservative court since the early 1930s
and maybe more conservative than that. These justices led by Scalia
believe in original intent. They want to judge cases the way the Founding
Fathers would.

Well, the Founding Fathers need, I remind us all, wrote slavery into
the constitution. It took a civil war and the 13th Amendment to get it
out.

That`s HARDBALL for now. Thanks for being with us.

"POLITICS NATION" with Al Sharpton starts right now.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY
BE UPDATED.
END

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