'Hardball with Chris Matthews' for Friday, October 5th, 2012

HARDBALL
October 5, 2012

Guest: Jack Welch, Cynthia Tucker, Mark McKinnon, Steve McMahon, Blanche Lincoln, Bonnie Lautenberg

CHRIS MATTHEWS, HOST: 7.8 percent jobless number.

Let`s play HARDBALL.

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

"Let Me Start" with the good news on the unemployment front. Getting
the jobless number down below 8 percent, down to 7.8 percent a month before
the election could be the upbeat news to give this president the kind of
big-time bounce he needs. Since the campaign began, we`ve known the power
of the unemployment figure. Now we have the number itself. Plus, the good
news about the last two months. It`s clear that the economy created more
jobs than previously estimated.

There are some people out there who don`t like this number, don`t like
it at all, and leading the band is the legendary CEO of General Electric,
Jack Welch, who joins us right now.

Jack, you made a lot of news today. Here`s the tweet you put out this
morning. "Unbelievable jobs numbers. These Chicago guys will do anything.
Can`t debate, so change numbers."

And I`m just wondering -- I understand the way it works is the
president gets a heads-up on the unemployment number 4:00 o`clock the day
before and has to keep it to himself. You`re saying in your tweet this
morning that the news went the other way, that the people working for the
president somehow got to BLS, the Bureau of Labor Statistics, and played
with the numbers so it would come down below 8 percent today.

How does it work from your perspective? What happened here?

JACK WELCH, FORMER GE CEO & CHAIRMAN: Well, Chris, all I can talk
about are some of the numbers. We had 600,000 government jobs added in the
last two months. We had 873,000 jobs by a household survey, which is a
total estimate from 50,000 phone calls. Of those, 600,000 were temporary
workers.

Chris, these numbers are all a series of assumptions, tons of
assumptions, and it just seems somewhat coincidental that the month before
the election, the numbers go one tenth of a point below where they were
when the president started, although I don`t see anything in the economy
that says these surges are true.

The 873,000 jobs in the household survey is the strongest economy
since 1983. I don`t think you can find an economist -- there were 25 of
them this morning that predicted 8.1 to 8.2, but they did predict 114,000
jobs. We got 114,000 jobs, and somehow, the assumptions ended up at 7.8.

MATTHEWS: Well, let me just get back to your tweet this morning. It
must be embarrassing for to you do a tweet now after the power you used to
have. I mean, tweeting doesn`t seem like something I`d hear from Jack
Welch, and I mean it. But here you put out the word here, "unbelievable
jobs number," fair enough. "These Chicago guys will do anything," so they
changed the numbers.

What evidence do you have that they got to the BLS?

WELCH: I have no...

MATTHEWS: That the Chicago guys got to the Bureau of Labor Statistics
and jimmied these numbers by 0.3 percent, as you put it.

WELCH: I have no evidence to prove that. I just raised the question.

MATTHEWS: No, you didn`t raise the question. You said "These Chicago
guys will do anything," so they changed the number. You were asserting
here in your tweet that you put out at 8:35 this morning, five minutes
after the report came out -- did you talk to any economists or any people
in the national (ph) income (ph) accounting world that understood how these
numbers were put together before you accused the "Chicago guys" of changing
the numbers?

WELCH: Chris, I know that these numbers are gathered by a series of
wild assumptions. Maybe they weren`t right at 8.5. Maybe they weren`t
right at 8.4. But it seems coincidental that one month before the
election, they would end up at 7.8.

You -- the president today is on the stump. The president always
talked about his 7.8 percent. He didn`t mention 600,000 jobs added in the
government...

MATTHEWS: Well, let`s get back to your -- see, you`re -- it`s not
your attitude about Obama people care about. It`s your analysis. And you
came out this morning and asserted, not a question mark or a question or
concern about a coincidence, you say "These Chicago guys will do anything,"
so they change the numbers. Do you want to take that back?

WELCH: No, I don`t want to...

MATTHEWS: This is an assertion...

WELCH: ... take anything back.

MATTHEWS: ... that there was jimmying with these numbers, there was
corruption here, an infiltration or getting to -- getting to -- it`s not
funny, Jack. You`re talking about the president of the United States
playing with the Bureau of Labor Statistics numbers. This is Nixon stuff.

WELCH: I`m saying...

MATTHEWS: This is what Nixon did back in the old days...

WELCH: Hold it, Chris!

MATTHEWS: ... he accused them of doing this.

WELCH: Chris, don`t lose it now.

MATTHEWS: I`m not losing it. Look at my face. I`m not losing it.

WELCH: I can`t see your face.

MATTHEWS: I wonder if you`re -- Jack, do you want to take back the
charge...

WELCH: No, I don`t want to take back...

MATTHEWS: ... that there was corruption here?

WELCH: I don`t want to take back one word in that tweet!

MATTHEWS: So you assert, as of now, 5:00 o`clock this afternoon,
"These Chicago guys will do anything, they can`t debate, so they change
numbers."

WELCH: I didn`t say what they did. I said they`d do anything.

MATTHEWS: And what did they do here?

WELCH: They`ve been calling Mitt Romney a liar, a falsehood, for the
last 48 hours after the debate.

MATTHEWS: OK. But you don`t have any independent evidence. You
didn`t get any evidence between the time the numbers came out this morning
at 8:30 and 8:35 when you tweeted. You didn`t use that five minutes to
gather any actual information or evidence...

WELCH: No, but I tweeted last night...

MATTHEWS: ... that there was corruption in these numbers.

WELCH: Chris, tweeted last night that I predicted it`d be at 7.9.,

MATTHEWS: OK. And why did you make that prediction?

WELCH: Because I guessed that`s what would happen a month before the
election.

MATTHEWS: So you guessed that the Chicago guys would do this.

WELCH: Well, I don`t want to put words in the mouth of what I said
last night, but that`s what I did.

MATTHEWS: Well, this morning -- I just want -- let`s not go over the
tweet one more time. I don`t think we`re getting anywhere. But the
question -- what started this whole band today, and people with a lot less
IQ than you and certainly a lot less business sense, like Allen West and
some of the real screwballs out there, are following the band you`re
leading. And the band you put together today was that there`s corruption
here, that the Chicago people, meaning the guys around President Obama, got
to the BLS...

WELCH: Chris...

MATTHEWS: ... and manipulated the numbers.

WELCH: Chris, stop it now! I`ve reviewed (ph) 14 businesses this
week from restaurants to rental cars to widgets. I have seen everybody
with a third quarter equal to or weaker than the first quarter.

MATTHEWS: OK.

WELCH: In order to get 873,000 new jobs, you would have to have a GDP
going at 4 to 5 percent. The second quarter was downgraded from 1.7 to
1.3.

MATTHEWS: I know.

WELCH: The third quarter`s not going to be very strong. It just
defies the imagination to have a surge larger than any surge since 1983 a
month before the election! I leave it to you to do all the analysis.

MATTHEWS: No, I`m just going back because it seemed like you were
doing that. Let me go to Keith Hall (ph). He was Bush`s guy, who was
commissioner of the BLS. And he said to "The Wall Street Journal" today,
following what you said, "There`s no way someone at the Bureau of Labor
Statistics could change any of the data from its surveys. These numbers
are good."

So why do you know more than him? I mean, do you really think it gets
back to the question of integrity. Do you believe the BLS, the Bureau of
Labor Statistics, lacks integrity, that a president of the United States --
Nixon said he could never get to them. He used to say there was an ethnic
factor, they were all Jewish people over there, he didn`t trust them. He
thought they were all out to get him.

Now you say the president controls the BLS. Previous presidents said
they couldn`t get their hands into that place...

(CROSSTALK)

MATTHEWS: ... independent.

WELCH: You don`t think it`s coincidental that we`ve got the biggest
surge since 1983 in the job surge? Come on, Chris!

MATTHEWS: It`s 0.3 of 1 percent shift this month.

WELCH: No, Chris, it was...

MATTHEWS: 0.3. It went from 8.1 down to 7.8.

WELCH: Wait a minute, Chris. It was .2, 8.3 to 8.1 last month.

MATTHEWS: Right.

WELCH: 8.1 to 7.8.

MATTHEWS: Right.

WELCH: It`s a 6 percent improvement in employment in two months.
Chris, 6 percent improvement would require a GDP...

MATTHEWS: OK, Jack...

WELCH: The numbers don`t jibe!

MATTHEWS: All I want to know is when we write this down three weeks
from now or four weeks from now, when the election is over, I want to know
what you meant. Do you mean it`s a coincidence or do you mean you have
evidence that there was corruption...

MATTHEWS: I have no evidence of corruption...

MATTHEWS: ... here in these numbers?

WELCH: ... none whatsoever.

MATTHEWS: OK. OK. So "these Chicago guys" had nothing to do with
the number coming out today.

WELCH: Well, I don`t know that.

MATTHEWS: Well, why did you say it? "These Chicago guys will do
anything," they`ll change the numbers. You just said it in your tweet!
I`m always careful when I tweet, Jack. I usually have somebody like my
producer say read my tweet.

WELCH: Chris, I`m...

MATTHEWS: Do you really want to stand behind this tweet?

WELCH: I want to raise the question of these...

MATTHEWS: You did raise the question.

WELCH: ... numbers. Chris, these numbers defy logic. They defy
logic! We do not have a 4 to 5 percent booming economy...

MATTHEWS: OK.

WELCH: ... with 873,000 people added.

MATTHEWS: OK.

WELCH: I mean, stop it, Chris! On the face of it, we don`t have this
GDP. I love you, but you can`t get there.

MATTHEWS: I think you`re a great, brilliant businessman. In some
ways, in fact, I do wish you were in charge of my stock options these days
because you made a lot of money for us here.

But let me ask you this one more time. So that all the people out
there of lesser intellect will stop marching in your band, Jack Welch
thinks this is a coincidence. Jack Welch does not believe the boys in
Chicago changed the numbers?

WELCH: No, Jack Welch is raising the question for some good analysts
to go look at.

MATTHEWS: OK. Good. You`re raising the question. You certainly did
that. Jack Welch, thank you very much for joining us at the very top of
HARDBALL tonight.

WELCH: Thanks, Chris.

MATTHEWS: And with me now, not to fight with Jack, but to have a
different point of view, is Jared Bernstein. He`s former chief economist
and economic adviser to Vice President Biden.

Jared, you heard that discussion. I think in fairness -- because I
like Jack. We`re very -- I`m very fond of the guy, obviously. Jack Welch
has raised the question, but it was obviously his business instinct and his
attitude, I think, towards this president, that came together this morning
at 8:35 and he tweeted out this "Unbelievable jobs numbers. These Chicago
guys will do anything. Can`t debate, so they change the numbers."

I`ll go back to what I just heard Ezra Klein say a few minutes ago out
here in the room, that a 0.3 of 1 percent shift in the unemployment rate is
not wild. It`s very conceivable. Your thoughts.

JARED BERNSTEIN, CTR. ON BUDGET & POLICY PRIORITIES, CNBC: No, that`s
absolutely true. I mean, what I just heard from Jack Welch was about --
with respect, I guess, was about, you know, 10 minutes of absolute
nonsense, with no grounding in what the Bureau of Labor Statistics actually
does.

Now, he`s absolutely right that a very large jobs number in the
household survey is an outlier. It`s unusual. These things happen. I
don`t -- that number has a large margin of error around it. The Bureau of
Labor Statistics is very public about that.

MATTHEWS: But these are non-politicians, though. These are absolute
bureaucratic government servants.

BERNSTEIN: That`s the point. That`s the point. It wasn`t that Jack
Welch was raising a question. It wasn`t that there`s an outlier in the
data. He argued very clearly that the White House had a thumb on its
scale, was entering a political bias into the print on the BLS numbers.

MATTHEWS: That`s what he tweeted.

BERNSTEIN: That`s what he tweeted.

MATTHEWS: That`s what he initially tweeted. Now he`s come back...

BERNSTEIN: That is an outrageous...

MATTHEWS: ... from that and says he simply has questions. Go ahead.

BERNSTEIN: That`s an outrageous allegation, and it`s an allegation
that strikes at the heart of a statistical agency with a tremendous amount
of integrity. I`ve worked at both the White House and the Department of
Labor. The firewalls between them are extremely thick. The data
processing, the analyses, the reporting are incredible rigorous and
careful.

And this is a number that moves markets. So for a guy like that who
claims to be an experienced businessman to come out and shed that kind
of...

MATTHEWS: Well, he is an experienced businessman, so we have to go
from there. But the question is, was he angry this morning? Was his
political attitude more than any kind of economic analysis? I would argue
right now, listening to him right now, it`s his attitude towards Obama.
And I think he is somewhat shocked that the number looks so good. He
doesn`t want it to look that good, let`s face it.

BERNSTEIN: Well, look, I mean...

MATTHEWS: This number is going to help the president.

BERNSTEIN: Absolutely. So it`s pure political. But then -- you
shouldn`t be then -- you`re right, he`s an -- for an experienced business
guy who people listen to and look to, to cast that kind of a ridiculous
aspersion is actually quite damaging and shouldn`t be done.

Now, look, let`s talk about the numbers for a second because I
think...

MATTHEWS: Let`s get to the reality. How good is this news today?

BERNSTEIN: How good is it, did you say?

MATTHEWS: Yes.

BERNSTEIN: It`s good news. It`s not over the moon good news, but
it`s good news. I think you also have to look at the payroll survey.
There I think you see an acceleration of job growth. And by the way, you
know, Welch has a point in the sense that you should never take one monthly
number. That has nothing to do with political bias and all that nonsense.
But you know, if there`s a germ of something in there, you should never
take one monthly number. You should average.

And if you look at the past three months, payrolls have been growing
about 150,000 per month, compared to about 67,000 per month in the prior
three months. So that`s a bit of an acceleration, a little momentum on the
unemployment rate (INAUDIBLE)

MATTHEWS: Well, let`s put this in historic terms. We cover elections
here, not economics, generally, but Ronald Reagan was reelected with a 7.2
percent unemployment rate because he was able to say "This is morning in
America."

BERNSTEIN: Right.

MATTHEWS: And he set up the dynamic and the PR (INAUDIBLE) And he was
good at it. Optimism was what he sold. And he was able to say 7.2 percent
is great news, great news. He got reelected with 49 states! He lost
Minnesota and the District of Columbia with 7.2 percent.

What should Obama get with 7.8 percent? It seems like it`s within the
range there and everybody is pooh-poohing it and, Oh, geez, oh -- I know
why Jack Welch is scared. That number is too damn close to Reagan`s
number! That`s what he`s worried about.

BERNSTEIN: Well, you know, I mean, I think what -- how this works
with the president`s narrative is that we`re moving in the right direction,
don`t change -- you know, don`t change horses, don`t go back to a playbook
that demonstrably didn`t work -- that`s the George Bush supply-side stuff
that I think he can legitimately tie to Mitt Romney.

He had a narrative that says the economy is moving in the right
direction, and I think this job report actually strengthens that narrative.
And much more than levels of variables like the level of the unemployment
rate, it`s momentum that I think forms voters` views on the economy.

MATTHEWS: I thought it was interesting that Jack let out that last
night, he tweeted -- I didn`t know this -- he had tweeted 7.9 was his
prediction. It comes out at 7.8. That is not exactly a wild deviation
from what he thought it was going to be.

(CROSSTALK)

MATTHEWS: and I would just say this now, I have tremendous respect
for the BLS. I know people who`ve worked there.

BERNSTEIN: Thank you.

MATTHEWS: I`ve known all my life it`s independent.

BERNSTEIN: Absolutely.

MATTHEWS: People like Nixon couldn`t get to it. You couldn`t get to
it.

BERNSTEIN: You can`t get to it.

MATTHEWS: And for him to say that I think is (ph) bad (ph) -- I hope
he eventually softens or -- I think he began to soften it today. It`s not
an attack on the integrity of those fellows an women working there, or it`s
lack of independence, because it`s (INAUDIBLE)

BERNSTEIN: Well, it`s the integrity of the system, which is one
that`s just irreproachable when it comes to the quality and the integrity
of the statistics.

MATTHEWS: Yes. Why would you work over there for 30 or 40 years with
pride and having a reputation for integrity so that some joker could call
you, quote, "from Chicago" and say you changed the number? Give me a
break, Jack! Anyway...

BERNSTEIN: I mean, that`s why -- that`s why -- it`s beyond just sort
of a little offputting kerfuffle. I think -- I think someone who says what
he said really should step back and think about, you know, that kind of a
comment.

MATTHEWS: Well, my guess is he is. Anyway, thank you, Jared
Bernstein, for coming on to straighten some things out.

BERNSTEIN: Thank you.

MATTHEWS: Coming up: Who was that masked moderate man on the debate
stage the other night with President Obama Wednesday night, the guy who
plans no $5 trillion tax cut -- well, if people wanted those tax cuts,
they`re looking for him -- who won`t cut education, who insists his health
care plan covers with people with pre-existing conditions? It`s the same
guy who now says his 47 percent comments were wrong. Well, did Mitt Romney
just take mask off, or has the emperor got no clothes?

Also, we`re beginning to the learn more about the flawed strategy that
led President Obama to lay a debate egg Wednesday night. One thing all
Democrats agree on, can`t happen again, best not happen again.

And we mentioned that the unemployment drop dropped sharply last month
-- well, .3 percent of 1 percent -- (INAUDIBLE) add Rick Santorum and Newt
Gingrich to the list of Republicans who would like to see Big Bird on the
unemployment line. Guess they`ve had too much education, those guys.

Finally, "Let Me Finish" with the 7.8 percent jobless number, what it
means, and why some people don`t like looking at it.

This is HARDBALL, the place for politics.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: After losing about
800,000 jobs a month when I took office, our businesses have now added 5.2
million new jobs over the past two-and-a-half years.

(CHEERS AND APPLAUSE)

OBAMA: This morning, we found out that the unemployment rate has
fallen to its lowest level since I took office.

(CHEERS AND APPLAUSE)

OBAMA: More Americans entered the workforce, more people are getting
jobs.

Today`s news certainly is not an excuse to try to talk down the
economy to score a few political points. It`s a reminder that this country
has come too far to the turn back now.

(CHEERS AND APPLAUSE)

OBAMA: We`ve made too much progress to return to the policies that
led to the crisis in the first place.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

MATTHEWS: Well, it`s not just Jack Welch who`s out there questioning
the unemployment numbers today, which fell to 7.8 percent. Well, here he
is again. Florida congressman Allen West wrote on his Facebook page,
quote, "Somehow, by manipulation of data we are all of a sudden below 8
percent unemployment a month from the presidential election. This is
Orwellian, to say the least, and representative of Saul Alinsky from the
book `Rules for Radicals,` a must-read for all who want to know how the
left strategizes."

Anyway, just in case anyone takes Allen West too seriously, remember
This is the guy who thought there were 80 communists in the U.S. Congress.
Remember that? And don`t forget him.

(BEGIN VIDEO CLIP)

REP. ALLEN WEST (R), FLORIDA: I believe there`s about 78 to 81
members of the Democrat Party that are members of the communist party.

(END VIDEO CLIP)

MATTHEWS: It`s funny how he calls them communists, but never forgets
to say "Democrat" party.

We`ll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: And I fought against long
odds in a deep blue state, but I was a severely conservative Republican
governor.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

MATTHEWS: Sounds dangerous.

Anyway, welcome back.

(LAUGHTER)

MATTHEWS: That was Mitt Romney famously touting his conservative
credentials, calling him severely conservative back at a CPAC meeting this
February.

Well, the right-wing Romney you might remember from the primary fight
is no more, according to what happened this Wednesday night. This week,
the Etch A Sketch came alive, as the former governor championed centrist
principles during his debate with President Obama and got away with it.

So, he keeps this act up or will he have to fight a tougher fight with
Obama in the next round?

Michael Steele is a former chair of the RNC, as well as an MSNBC
political analyst, and Cynthia Tucker is a Pulitzer Prize-winning
syndicated columnist.

Thanks, Cynthia.

And, thank you, Michael.

MICHAEL STEELE, MSNBC POLITICAL ANALYST: Sure.

MATTHEWS: Michael, there`s on old tradition in politics, you go to
your fringe or your hard left or hard right to win the primaries and
caucuses, and then you start to move slowly the big battleship around, so
by Labor Day you`re ready to confront the enemy at the center.

He didn`t do it like that. He stayed right all the way through the
summer and then, maybe masterfully, Wednesday decided to go with, I`m for
the 100 percent, not the 47 percent.

STEELE: Right. Right.

MATTHEWS: I`m for preexisting condition coverage. I`m for all this
education, all this good stuff.

STEELE: Well, I think part of that -- you`re right in your analysis
there. That`s exactly what happens politically.

And I think for the Romney campaign, they just took that strategy,
elongated it a bit, because they still had some shoring up to do with their
base over the summer.

MATTHEWS: Can you pull it off? Can you make that kind of switcheroo
in September?

STEELE: I think you can. Yes, I think you can, number one. Number
two...

MATTHEWS: October, really.

STEELE: Yes, September -- late September, October.

I think you can, number one. Number two, we saw Obama do the same
thing, albeit earlier in the process. He was to Hillary`s left. He
brought it around, started quoting Reagan in the fall, sounding very
Reaganesque.

This is what the politicians need to do, because that`s where the
votes are. You lock that base in.

(CROSSTALK)

MATTHEWS: But your party has gotten so much domination by the Tea
Party people and the neocons. You have to almost sign on the dotted line.
In fact, with Grover Norquist, you have to sign down here no taxes.

STEELE: It doesn`t matter what you sign at that...

MATTHEWS: It doesn`t?

STEELE: At this stage of the game, it doesn`t matter. I will tell
you why. Because you don`t -- all those folks can vote for Romney and he
is still going to need those conservative Democrats and those independents
to be...

MATTHEWS: OK. I have a theory that, by the way, the people hate
Obama so much on the right, Cynthia, and perhaps center-right, they hate
him so much that they are willing to have this guy go to the center as long
as he wins. Your thoughts?

CYNTHIA TUCKER, UNIVERSITY OF GEORGIA: Well, that`s absolutely true,
Chris, because people like Karl Rove and Billy Kristol know that Mitt
Romney is an empty suit, and they can push him around if he wins the
presidency.

MATTHEWS: Ah.

TUCKER: You know that old saying, if you stand for nothing, you won`t
stand for anything?

Well, Romney doesn`t stand for anything. He doesn`t really have any
values or principles that he really believes in, except he really wants to
be president. That`s why we saw that new slick version of the Romney-bot
on Wednesday night.

This Romney-bot, they worked on him in the factory for hours...

STEELE: Oh, lord, Cynthia.

TUCKER: ... making sure he had the right smile, making sure he seemed
warm and sincere.

Well, who was that guy? Who was that guy, Michael? This is not a guy
we had seen on the campaign trail for the last...

(CROSSTALK)

STEELE: I can`t even take any of this seriously.

TUCKER: ... several months.

STEELE: Because I just think, first off, the whole idea that this guy
is an empty suit, it`s just laughable to say that, number one. He was the
governor of a state and he was very successful as the governor of a state.
He was able to cobble together the coalition, something this president
hasn`t been able to do, quite frankly, to get his agenda done.

MATTHEWS: Why does he keep saying that his health care -- excuse me.

(CROSSTALK)

STEELE: So I think that that is crazy.

MATTHEWS: Because this one gets to me, and I don`t like the word lie
but I think he`s dealing in untruth here.

He did it the other night after being corrected by his staff the other
day when he did it on one of the Sunday shows. He said that his health
care plan, such as it`s going to be, will cover people who don`t have
coverage for a preexisting condition and they try to buy a policy, and he
keeps saying they can go buy one, and he will make sure they can buy one
legally, and there will be such policies made available.

And then immediately, Fehrnstrom comes out and say that it only covers
people who had continuous coverage that have been paying into their health
insurance since they have been very young and not ill. And the same thing
happened last time. He said it covers preexisting conditions, and his
staffer came out and said it doesn`t.

Why does he keep saying something that he knows his staffer is going
to come out and correct later so he wins the battle before the 70 million
people? The 70 million people say he covers preexisting. Nobody hears the
statement that comes out by a staffer later.

I know the game he`s playing, plays to the biggest crowd with what he
wants to say.

(CROSSTALK)

STEELE: Why are you acting like you`re so surprised by it?

MATTHEWS: Well, it is dishonest.

STEELE: Well, it`s not dishonest.

MATTHEWS: It isn`t?

STEELE: No, I think what he is saying is, his plan, and it`s still a
plan that is evolving, as the president`s plans are evolving. That`s what
happens in this game.

(CROSSTALK)

MATTHEWS: OK. Let`s go to the big one here.

Initially, Romney defended his now infamous 47 percent remarks where
he doesn`t care about them because they don`t care about him, but last
night he was a striking a very much different tone. He offered up the
answer he probably would have given, who knows, had the president mentioned
that 47 percent during Wednesday`s debate this week.

Well, let`s watch him this week.

(BEGIN VIDEO CLIP)

ROMNEY: Well, clearly, in a campaign with hundreds, if not thousands
of speeches and question and answer sessions, now and then you`re going to
say something that doesn`t come out right. In this case, I said something
that`s just completely wrong.

And I absolutely believe, however, that my life has shown that I care
about 100 percent. And that`s been demonstrated throughout my life. And
this whole campaign is about the 100 percent. When I become president, it
will be about helping the 100 percent.

(END VIDEO CLIP)

MATTHEWS: It was a highly analytical thing he said at that fund-
raiser in Boca Raton, Cynthia and Michael. He said basically the 47
percent of the people are takers. They get benefits from the government,
whether it`s Social Security or they get disabled benefits or whatever, and
they are veterans benefits. They`re not paying any income tax. That 47
percent are not taking responsibility for their lives, as they should, and
they`re not going to vote for me.

That`s a big mouthful to say was a misstatement. What did he mean to
say?

TUCKER: Well, I think what he meant to say, Chris, was what he said
in private...

MATTHEWS: Yes.

TUCKER: ... when he thought the cameras weren`t rolling in private
before wealthy donors. He said that the 47 percent were victims who were
dependent on government, and that is why they voted for Obama.

And he didn`t just stand by that remark then. When he was initially
asked about it, he didn`t say, oh, no, that was all wrong. He said, well,
I may have stated it inelegantly, but I stand by the message.

You know, Michael said he was a successful governor of Massachusetts
for four years. Most people agree that that`s true, but he has spent the
past two years repudiating every single thing he stood for when he was
governor of Massachusetts.

So, what values does Mitt Romney really have? What does Mitt Romney
really believe, except that he very much wants to be president of the
United States?

MATTHEWS: Your thoughts on the 47 going to 100 overnight on "Sean
Hannity," nice place to bring it up, by the way.

(LAUGHTER)

STEELE: Well, no, but, look, I think -- I was very critical of the
comment on the 47 percent, because I think it was not presidential, quite
honestly.

And I think his team, certainly Mitt Romney himself, realized how that
was being interpreted regardless of his ultimate meaning. I`m for the 100
percent. Look, these guys and the president and Mitt Romney both have
admitted they have been in that box where they say things in private that
when get exposed puts them in a very awkward position, whether it`s God and
guns in 2008 or the 47 percent today.

I think right now what he`s trying to do -- and I think rather
effectively -- is to contextualize that comment in the course of everything
else that he`s talking about.

MATTHEWS: How is that different than Etch A Sketch?

STEELE: Well, look, Chris, I mean, why -- I don`t understand...

(CROSSTALK)

MATTHEWS: Because it`s like saying, my words don`t mean anything 24
hours later.

STEELE: No, it doesn`t.

(CROSSTALK)

STEELE: You know -- Chris, how long have you been doing campaigns and
politics? When you get to general elections, there`s a reset.

MATTHEWS: Everything you say shouldn`t be in disappearing ink. And
that`s what -- by the way, on that word -- and that is what it is,
disappearing ink with Mitt Romney.

STEELE: It`s not disappearing ink. You may not agree with it. You
may not like it, but it`s not disappearing ink.

MATTHEWS: Anyway, I called him Newt Romney, the worst thing I could
call the guy. I called him Newt.

Anyway, Michael Steele, thank you.

Cynthia Tucker, have a nice weekend. We will all be enjoying that 7.8
percent unemployment rate.

(CROSSTALK)

MATTHEWS: Up next -- yes, I`m sure you will be celebrating it, best
thing until Halloween. Anyway, thank you.

By the way, they`re talking about cutting Big Bird, cutting for Big
Bird. That`s not going very well. Wait until you hear what Rick Santorum
wants to do with Big Bird. You can guess.

This is HARDBALL.

He wants to homeschool Big Bird, I guess.

Anyway, this is HARDBALL, the place of politics.

(COMMERCIAL BREAK)

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

In Wednesday`s debate, you saw Romney pushing moderator Jim Lehrer
around pretty much at will. Eventually, President Obama joined in.

But here is a flashback of the Romney/Lehrer face-off from Jimmy
Fallon.

(BEGIN VIDEO CLIP, "LATE NIGHT WITH JIMMY FALLON")

JIMMY FALLON, HOST, "LATE NIGHT WITH JIMMY FALLON": It`s my priority
to repeal Obama...

UNIDENTIFIED ACTOR: OK, now, Governor Romney, you are well over the
two minute allotted time.

FALLON: Jim, I have still got 30 seconds here on...

(CROSSTALK)

FALLON: Jim, I`m just politely going to hush you up a little bit.

UNIDENTIFIED ACTOR: Keep things on a...

(LAUGHTER)

UNIDENTIFIED ACTOR: Respect the governor...

FALLON: Jim, do us all a favor and just...

(LAUGHTER)

FALLON: It`s a little weird that you`re here still.

(CROSSTALK)

FALLON: You can just leave and do whatever you want.

UNIDENTIFIED ACTOR: I`m the moderator here.

(CROSSTALK)

FALLON: Jim, I`m going to have to ask you to stop talking, OK?

(LAUGHTER)

UNIDENTIFIED ACTOR: That`s just a noise.

FALLON: Jim, Jim, Jim, would you shut the (EXPLETIVE DELETED) up?

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS: That was a facsimile, I think.

Well, more from the debate aftermath. The Big Bird nonsense
continues. How do the former GOP candidates feel about the Mitt Romney
pledge to stop funding for PBS if elected president?

Well, first, Rick Santorum last night on CNN:

(BEGIN VIDEO CLIP, "PIERS MORGAN TONIGHT")

PIERS MORGAN, HOST, "PIERS MORGAN TONIGHT": Would you kill Big Bird?

(LAUGHTER)

RICK SANTORUM (R), FORMER U.S. SENATOR: Well, as a matter of fact, I
have voted to kill Big Bird in the past. It doesn`t mean I don`t like Big
Bird. You can kill things and still like them, maybe to eat them, I don`t
know.

(END VIDEO CLIP)

MATTHEWS: You can kill things, but still like them? Very
interesting.

On to Newt Gingrich, who went to one zoo after another during his
presidential campaign. Newt was on CNN last night with former Michigan
Governor Jennifer Granholm, an active Obama supporter, of course. Let`s
take a look.

(BEGIN VIDEO CLIP, "PIERS MORGAN TONIGHT")

MORGAN: Newt Gingrich, should Big Bird be killed or not?

NEWT GINGRICH (R), FORMER SPEAKER OF THE HOUSE: That`s total baloney.
Big Bird makes millions and millions of dollars annually.

JENNIFER GRANHOLM (D), FORMER MICHIGAN GOVERNOR: Save Big Bird.

GINGRICH: Big Bird is a commercially profitable show.

GRANHOLM: Save Big Bird. Save Big Bird.

MORGAN: So you would save Big Bird?

GINGRICH: I would save Big Bird by liberating Big Bird from the
bureaucracy.

(END VIDEO CLIP)

MATTHEWS: God, Jennifer Granholm looks like she`s still at that
convention in Charlotte.

Anyway, of course, he`s a Big Bird fan. It may look like he and
Granholm are on the same page with keeping Big Bird around, but Newt still
wants to do away with government support for PBS and other public
programming.

Up next: debate strategy. We now know more about what President Obama
was trying to do in his lackluster debate Wednesday night. That will be
helpful to know.

And one thing Democrats and Republicans can be sure of, it won`t
happen again. Well, we can hope.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

SEEMA MODY, CNBC CORRESPONDENT: I`m Seema Mody with your CNBC "Market
Wrap."

The Dow gaining 34 points, the S&P ending flat, and the Nasdaq falling
about 13 points.

Stocks barely moved despite that better-than-expected employment
report. As you heard, the unemployment rate fell to 7.8 percent last month
and payrolls rose by 114,000, more than estimates. However, many of the
jobs created last month were part-time. And with a rough session for
Apple, it slid more than 2 percent or $14 below the stock`s 50-day moving
average.

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

MATTHEWS: Back to HARDBALL.

Well, finally, we`re getting some insight into the strategy each
candidate and campaign brought to Wednesday night`s debate. And while it
may not blunt the pain certainly that supporters still feel after the
president`s lackluster performance, at least David Axelrod has an
explanation of sorts.

Here is a clip from a post-debate conference call he did yesterday.
Here is Axelrod, the president`s communications expert, explaining his
behavior Wednesday night. Let`s listen.

(BEGIN AUDIO CLIP)

DAVID AXELROD, SENIOR OBAMA CAMPAIGN STRATEGIST: He made a choice
last night to answer the questions that were asked and to talk to the
American people about what we need to do to move forward, and not to get
into serial fact-checking with Governor Romney, which can be an exhausting,
never-ending pursuit.

But, obviously, moving forward, you know, we`re going to take a hard
look at this.

(END AUDIO CLIP)

MATTHEWS: Well, you have to say something, I guess.

Anyway, joining me right now is Democratic strategist Steve McMahon,
our pal here, and Republican strategist Mark McKinnon, who I watch in the
morning all the time.

I`m going to start with you, Mark, because I was impressed by Mr. Romney`s
way of presenting himself. He was like an actor who came on playing a
bigger role than he normally plays like a big guy, "Master and Commander",
Russell Crowe. He grew when he came on stage and he stayed in character as
if he wanted to do a couple more hours of it.

So prepping him -- and I haven`t seen that Mitt Romney before.
People say, oh, I heard him in private 30 years ago or something. That guy
has not been out there. What happened with him? How did he get so ready
for that thing?

MARK MCKINNON, REPUBLICAN STRATEGIST: I think he and the campaign
totally understood what the stakes were and they prepared and they prepared
a lot. You know, I have watched Mitt Romney over the years, and he has
steadily improved, and, you know, people like Stuart Stevens and Beth Myers
took a lot of heat over the last couple months about the campaign, but
those -- I have worked with Stuart before in many campaigns and he`s a
debate preparation fanatic and they understood that this would be an
opportunity to shift the gears, to reframe the race, and one guy showed up
and one guy prepared, and it showed. It really did.

You know, a lot of people were saying it`s the best since Reagan.
Reagan had some natural gifts and was an affable guy. I think, you know,
in terms of preparation, this may be one of the best presidential debate
performances ever.

MATTHEWS: I agree. Totally amoral, apolitical sense, I agree with
you.

Steve, what do you think happened to Obama that night?

STEVE MCMAHON, DEMOCRATIC STRATEGIST: I actually think that he
prepared for and showed up for a news conference, not a debate. He
answered the questions --

MATTHEWS: But there weren`t any questions. Lehrer didn`t see it as
his role to grill the candidates.

MCMAHON: We can talk about Lehrer separately. But I think what they
were trying to accomplish is their view was the Mitt Romney campaign wasn`t
going very well, Mitt Romney wasn`t doing a particularly good job and they
would just play rope-a-dope and sort of run out the clock on the campaign.
It wasn`t --

MATTHEWS: Why didn`t he come -- let`s start with something that`s
not technical or tricky. Usually when you know you`re going to have an
hour and a half before the American people, I can`t imagine that, and you
say you get 45 minutes of that hour and a half, you get about half the
time, he got a little more than half, you have something to say.

He didn`t talk about the auto industry, he didn`t talk about Lilly
Ledbetter, he didn`t talk about equal pay, didn`t talk about the things he
cared about.

MCMAHON: And he didn`t talk about all the things the campaign has
spent so much time and energy prosecuting over the past several months. He
didn`t talk about Bain, how Mitt Romney made his money. He didn`t talk
about the middle class as much in that context as I expected. He didn`t
talk about the 47 percent.

I mean, I know when you`re the president you want to be careful not
to --

MATTHEWS: Yes, I know.

MCMAHON: -- swing down. But on the other hand --

MATTHEWS: How about just saying why you`re president, why you wanted
to be president, why you made the decisions you made, why you didn`t want
to have 40 million people sitting in the emergency room.

MCMAHON: I think he tried to do that, but I don`t think he did it as
well as he would have liked and certainly they`re going to take a new
approach next time. Mitt Romney just came to play. Mark is right.

MATTHEWS: An interesting thing, Mark, back to that again, Romney
seemed to know it was free form. It was like a city basketball game. You
know, winners get the ball.

Every time you make a good shot, it`s not like in the NBA where you
have to turn the ball over. He knew if he kept shooting he could keep
hitting and control the ball and the ref in this case, Lehrer, tried to get
the ball back and say, no, you can`t have it, I want it. Lehrer would say
OK.

How did he know it was going to be that free an opportunity to just
hog the ball?

MCKINNON: You know, he was like a guy in the fourth quarter that
wants the ball. He wants to play and he wants to score.

MATTHEWS: He got it.

MCKINNON: And I think that was from, again, watching those primary
debates. You just saw over time how increasingly he would do that and he`d
dominate and interject and he learned how to do that. That was a learned
skill. He just got his chops together and really learned how to do it and
learned how to execute.

MATTHEWS: Let`s look -- both these guys know what they faced. Obama
knows he had a bad night. Romney knows Obama knows he`s had a bad night.
Romney knows that Obama is coming in next time with a different approach.

So that make it is a separate challenge and an additional challenge
for Obama. The other guy knows what he`s going to do, he`s going to be
more aggressive.

So, what does Romney do next time to meet a more aggressive Obama?
Mark?

MCKINNON: And one thing, Chris, I think that the Obama campaign has
kind of telegraphed their strategy by calling him the serial evader. So, I
think they`ve already said that`s going to be a strategy.

MATTHEWS: Is that healthy to say you`re going to prosecute or come
in as a prosecutor?

MCKINNON: Well, I think the Romney campaign has a pretty good radar
screen and they have picked that up. I think they will have Romney well-
prepared for that. I also think it`s going to be interesting with the town
hall format because this is a very different kind of environment, and, you
know, I think this is where Romney is going to have to connect and feel
people`s pain. And so, you know, that`s naturally something that Obama
does well. We`ll see how well Romney adapts to that environment.

MCMAHON: I --

MATTHEWS: I`m hoping Candy Crowley gets more in there. She`s much
more political than Jim Lehrer. She knows the political game every minute,
every 24/7. She must, I just assume want to jump in there a couple of
times when these guys don`t answer questions. And say, wait a minute,
follow up on that, answer it.

MCMAHON: Oh, I think she will. And I think she`s going to be aware
of all the critique of Jim Lehrer that`s gone on in the past couple of
days. I think Mark raises a very, very good point as he so often does.
The format for the next debate is a format that favors somebody who is more
comfortable with people and who is a little more easy.

MATTHEWS: Can you fake it?

MCMAHON: Well, you know, I think this is -- this is a form that --

MATTHEWS: Can you fake it?

MCMAHON: I think you can fake it a little bit but not very much.
I`m not sure Mitt Romney is going to be able to fake it. I think the
president that we saw in Denver the day after the debate is the president
that we`re likely to see in the town hall meeting coming up next time and
you`re going to see Joe Biden unleashed, I think, in the next debate.

MCKINNON: That`s going to be fun.

MCMAHON: Maybe the most interesting of all of them.

(CROSSTALK)

MATTHEWS: Mark, you first, tout that one this week. Biden is twice
his aim. He`s a lot more friendly. He`s almost like a big, you know, a
big St. Bernard. He slobbers all over you but he`s very personable and
he`s very hard to dislike.

The other guy is a little colder version of humanity.

MCKINNON: Yes, this maybe one of the best debates of the season and
maybe one of the best debates across the board. This is a classic -- a
very different type of candidate. One is very affable and one is very, you
know, a nerdy sort of guy.

I think it`s going to be fascinating to watch this one, and I think
it`s going to be important, maybe more important than past vice
presidential debates have been in the sense that if Ryan does well, I think
it`s really going to substantially help that momentum that Romney has
established last week and will be very important and so the stakes are very
high on this one.

MCMAHON: You know what? That`s another great point. After the 2004
debate, when it looked like George Bush hadn`t had a very good evening,
Dick Cheney actually stopped the momentum that the Kerry campaign had in
the vice presidential debate.

So, Mark will remember that better than anybody. It`s Joe Biden`s
job here to go in there and basically change the story line and win that
debate. And I think Joe Biden actually is a much better debater than most
people understand.

MATTHEWS: Well, we`ll see. That`s a great one to watch.

By the way, God gave us all different weapons. It`s like that old
movie Spartacus. You know, Will Stroud (ph) had the trident and the net,
the other guy had the little knife, you know, Kirk Douglas? We all get
different weapons. That`s why God does this to be a able -- give him a
little knife, give him a long net, give him the other thing.

Anyway, thank you, Mark McKinnon. It`s always great to have you.
Steve McMahon, too.

Well, tonight at 10:00 Eastern, watch a special Friday night campaign
edition of "THE LAST WORD" with Lawrence O`Donnell. It`s 10:00 eastern on
MSNBC, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Well, guess who showed up at a Mitt Romney campaign event
in be Abingdon, Virginia, today? Yes, Big Bird himself. The campaign
event or the Obama campaign was happy to point out that a guy in a Big Bird
suit was in attendance today, carrying a sign that said, "Crack down on
Wall Street, not Sesame Street." Pretty good stuff.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: We`re back.

The life of a senator can seem glamorous from the outside but the
daily grind paints a very different picture. And while many Americans
struggle to even name their U.S. senator, many wonder what a senator does
actually all day.

Bonnie Englebardt Lautenberg does know well. She`s the wife of New
Jersey Senator Frank Lautenberg, and she made it her mission to highlight
every member of the 109th, 110th Congress in the Senate in the photography
exhibit at the Mana Contemporary Museum up in New Jersey. With each
senator portrait, there`s an explanation of what each person, man or woman,
sees as their legislative achievement.

This is so fascinating.

Blanche Lincoln is a former Democratic senator from Arkansas. One of
my fancy, I like moderate Democrat actually. I disagree with Mr. Schultz
here about that sometimes.

And let`s talk about this because you had the chance -- first of all,
I know because you are very sociable. You know a lot of these senators and
their spouses and you know them from a different perspective. And I want
to get people that always want to know that answer, what they really like.

You may not like this, but this is how we`re going to do this, OK,
Bonnie? You are going to tell us what it`s really like and you can join in
because what`s happened, it`s gotten really nasty up on the Hill.

BLANCHE LINCOLN, FORMER U.S. SENATOR: It has.

MATTHEWS: And people like Olympia Snowe have left because they don`t
want -- they can`t deal with their party. There`s no across the aisle
friendships like there used to be in the old says.

Let`s talk about Ted Kennedy, and let`s take a look at the picture
you got of him, the great Ted Kennedy, who really is one of the great
senators.

Tell me about Ted as a person, why he posed like that, and what he
saw as his greatest accomplishment.

BONNIE ENGLEBARDT LAUTENBERG, PHOTOGRAPHER AND WRITER: When I walked
into Ted`s office, Senator Kennedy`s office, there were photographs of his
family, of Martin Luther King, of President Kennedy, of Bobby Kennedy his
family, and it was so emotional.

And he had a chair set in front of the couch. I knew he wanted to
sit there. But he said, where would you like to sit? And I said, sit
right there because I wanted to get those photographs behind them and you
can see --

MATTHEWS: Sense of history up there.

Senator, you were up there. And I`m told you that you go down
history was a lot nicer than the history you live. That those senators
were much, much friendlier with each other before they went home every
weekend.

LINCOLN: Oh, absolutely. My predecessor, Dale Bumpers, Senator
Bumpers, was wonderful when I got here. He said, I know you`re going to be
great, he said, but I just wish you could know the Senate that I knew. He
said, you know, he said, "I`m a more liberal Democrat than you are," he
said. "But some of my best friends were Republicans because," he said, "We
did things together."

You know, back then, their kids lived here, they went through
football games together, suffered through band concerts together. They
barbecued on the weekends. Not every weekend but they got to know each
other as friends. The fact is, when you are friends, you may disagree on a
lot of stuff but you respect one another and you respect your differences.

MATTHEWS: Let`s talk about some of the big names in the Senate. I
want to -- I only have a little time here. Hillary Clinton, what is her
greatest achievement? Let`s see the picture you took of her. I hear you
had to cut through the staff to get to it. That`s gorgeous picture.
That`s great photography.

LAUTENBERG: Thank you.

MATTHEWS: And she should really want to have that picture. Your
thoughts about --

LAUTENBERG: I wanted to give it to her for the campaign.

(CROSSTALK)

MATTHEWS: That`s a great picture, and she`s had a rough time
traveling the world every three minutes, but she`ll look like that again
when she gets out of the office.

LAUTENBERG: Sure.

MATTHEWS: But your thoughts about her as a person and as a public
figure?

LAUTENBERG: Well, she`s very gracious, she`s very brilliant, and we
are so lucky to have her as our --

MATTHEWS: My feeling about Hillary, and I`ve been tough on her, I
take it back again, I really do, I take it back in. But because politics
is rough and journalism and politics is tough, but I got to tell you, when
I`m with here, every time I`m with her, I just fall for her. There`s a
charm for that person that doesn`t come across on TV as well as it should.

Your thoughts, Senator?

LINCOLN: Well, she is. She`s brilliant. She`s done an incredible.

But she is also real. When I first got here in the House and then my
husband and I married and I was expecting twins, you know, the president
and Secretary Clinton invited us over for dinner. We went upstairs and had
chicken in the residence quarters and she had on her shorts and a T-shirt
and so did the president and, you know, Chelsea came in from dance class.
I mean, they are normal people and they know and understand what a normal -
-

MATTHEWS: What is this, Razorback night? Shorts on and no air
conditioning?

LINCOLN: But -- I mean, she is a real person and she knows and
understands what real people go through.

MATTHEWS: Do you both want her to run for president?

LINCOLN: No.

LAUTENBERG: Yes.

LINCOLN: Oh, her, I thought you said us.

MATTHEWS: You want her to run.

LINCOLN: I supported her. Yes.

MATTHEWS: Let me -- last word, Joe Biden is going to debate this
week. How is he going to do?

LAUTENBERG: He`s going to do great.

MATTHEWS: OK, thank you, Bonnie, a good pal of ours.

Bonnie Lautenberg, you got all these pictures up, bring it around the
country. Bring it to the museum here.

LAUTENBERG: Absolutely.

MATTHEWS: Senator Blanche Lincoln, thank you for coming on.

When we return -- a good moderate, thank you. Let me finish with the
people who are questioning today`s great jobless numbers, down to 7.8 and
some people can`t stand it being that good.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Let me finish tonight with this. Let`s look at this great
jobless number. It`s great news for the country.

Let`s listen to the people fighting it. I guess they don`t like good
news. Wonder why. Could it be they prefer bad news? Wonder why?

What a time to know where people stand.

And that`s HARDBALL for now. Thanks for being with us on this big
night of good economic news.

"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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