'Hardball with Chris Matthews' for Tuesday, March 5th, 2013

HARDBALL
March 5, 2013

Guests: Ben White, Jim Warren, Carol Leonnig


MICHAEL SMERCONISH, GUEST HOST: Good evening. I`m Michael Smerconish in
New York, filling in for Chris Matthews.

We will get to the Hugo Chavez story in just a moment, but our big story
leading off tonight, the market strikes back. We`ve heard it all before
from the right. President Obama hates the free market. He`s a socialist.
His policies are going to destroy the economy.

Well, he seems to be doing a pretty bad job of ruining the economy because
today the Dow closed at an all-time high of over 14,250. That means the
Dow has more than doubled since its low in 2009.

It`s not all to the president`s credit, of course, and the recovery is
uneven at best. But you can be sure that if the Dow were in the tank,
Obama would get the blame. So maybe he should get some of the credit.

Also, the empire strikes back. Could we be looking at another Bush run for
the White House? Jeb Bush isn`t saying no. And when they don`t say no,
they often mean yes. Add to that Bush`s apparent shift to the right on
immigration, and you can see the outlines of a presidential run. So you
know what that means. We could be looking at another Clinton-Bush
election.

Plus, why was President Obama so eager to get past the sequester fight?
Here`s why. His job approval is dropping as a result of that mud fight, at
least for now. More important, he wants to move on to climate change, to
immigration reform, to gun safety. The president`s window to claim a
legacy is brief, and the time is now.

And the beat goes on. Once again, the right wing loves a story so much, it
doesn`t bother to find out whether it`s true.

Finally, mea culpa, mea culpa, mea maxima culpa. Jon Stewart takes on the
media for obsessing about President Obama`s "Star Wars"/"Star Trek" mix-up
while ignoring John Boehner calling taxation "theft."

But first, more on the breaking news story from Venezuela. Hugo Chavez is
dead. The Venezuelan vice president made the announcement just moments
ago.

Eugene Robinson met and knew Hugo Chavez when he was foreign editor of "The
Washington Post." Eugene, what reaction do you have right off the cuff?

EUGENE ROBINSON, "WASHINGTON POST," MSNBC POLITICAL ANALYST: This is a
very big story, actually. Hugo Chavez was a fascinating character who
first tried to stage a coup to take power in Venezuela. That didn`t work.
He was in the wilderness for several years. He came back. He ran for
president.

And he became an ally of the Castro brothers in Cuba and sort of formed
this new leftist axis in South America that`s had a lot of influence over
the last decade in countries like Bolivia and countries like Ecuador and
provided kind of another pole, another sort of not great power but moderate
power pole to counteract the weight of the United States in Latin America.

SMERCONISH: And Eugene, he was just reelected this past October, correct?

ROBINSON: Yes. He was just reelected. But the thing about Chavez that a
lot of people in this country didn`t understand was that he had genuine
popular support in the country, in a divided country, despite a number of
his policy which we would consider, certainly, because they are, anti-
democratic, because of his -- in spite of his economic philosophy, which
was a kind of very personalized socialism.

The Venezuelan economy suffered greatly. Freedom of the press suffered
greatly under Hugo Chavez. But he provided services for the poor with a
lot of Cuban assistance. He provided medical attention that the poor of
Venezuela hadn`t received before. And frankly, it was the first time in
many decades that a leader had paid that kind of attention to the poor
majority in Venezuela, and he was very popular. He would have gone on
being reelected, I`m confident, as long as he lived.

SMERCONISH: What, if anything, surprised you in meeting him? To the rest
of us we have only seen him on television. But when you`re up close and
personal, or you were with Chavez, what surprised Eugene Robinson?

ROBINSON: He`s very quick-witted. He -- it was a visit he made to
Washington shortly after he became president. And I remember he came to
"The Washington Post," and there were several of us waiting to greet him.
He -- I didn`t know if he spoke English at the time, so I introduced myself
to him in Spanish when he got to me in the line. And he shook my hand and
he looked up at me and he kind of grinned and he said, Hello, my name is
Hugh. And it just kind of cracked everybody up.

And that was -- he was very loose and very quick in that way. He had this
odd television show that he did. This was, of course, before he fell ill.
But he would do a television show for hours every week. I believe it was
on Sunday nights, called "Allo Presidente (ph)," "Hello, Mr. President."

And it was like this stream of consciousness kind of talk show where he
would sing and he would just kind of rant for a while and he would joke.
He would answer callers. It was just a very kind of odd and idiosyncratic
way for the leader of a -- you know, an important oil-producing country to
act, but that was Hugo Chavez.

SMERCONISH: And you frame him in the context partially of the Castro
brothers. And one looks at their ages. A lot of change coming in that
part of the world, as well.

ROBINSON: Absolutely. It is remarkable that Fidel Castro has outlived 10
U.S. presidents, also has outlived Hugo Chavez, his protege now. This --
the relationship between Venezuela and Cuba is very interesting. Venezuela
provided the oil that kept the Cuban economy and thus the Castro regime
afloat for years. And the Castro brothers provided ideology, advice,
security assistance.

It was always said that the Cubans had organized Chavez`s own personal
security detail, and it`s something that the Cubans are very good at. Now
Fidel Castro is well into his 80s. He`s no longer the president in Cuba.
His brother Raul has already announced that he intends to leave office
after his five-year term.

So there is going to be big change in both these countries, and the
question is which way these countries go. Do they go -- does Venezuela go
the Cuban route toward a purer kind of ideology, or does it move away to a
more -- to a less socialist, more social democratic sort of model that
might edge it back into the better graces of the United States? That`s
going to be very interesting to watch.

SMERCONISH: Eugene, thank you for your perspective. We appreciate it.

ROBINSON: My pleasure.

SMERCONISH: We`ll have more on Hugo Chavez`s death as we continue.

Now to our other big story tonight, President Obama and the economy. "The
Washington Post`s" Ezra Klein is an MSNBC policy analyst and Ben White is
Politico`s chief economic correspondent.

Gentlemen, while an imperfect measure of the overall U.S. economy, the Dow
Jones is still what many Americans look to in order to measure the health
of the stock market. And today, it reached a new high, adding roughly 126
points in trading. It means that since 2009, the low points of the
recession, the Dow has more than doubled, which has surprised many market
watchers.

Ezra, good news for all or just good news for some?

EZRA KLEIN, "WASHINGTON POST," MSNBC ANALYST: Well, look, it`s good news
that the Dow is coming back. I want to throw some cold water. I want to
be a bit of an unfortunate buzzkill. The Dow Jones is a little bit weird
in that it doesn`t adjust for inflation, which is how we would always do a
calculation like this.

So if you do adjust for inflation, which you do need to do to see the real
value here, the Dow is at a lower point than it was in `09. It is at a
lower point than it was in 2000. So this is not great. And so there`s not
quite the huge disparity between the actual economy and the Dow that would
be implied by the Dow hitting a new high. The Dow is lower than it was in
2000, and the actual economy, the labor market is still 7.9 percent
unemployment.

So it has been a better time to be in the stock market than to, say, be
unemployed, but it is not -- we are not on such a rip-roaring good stock
market run here that we should see the kind of gulf that I think is being
implied in some of the commentary here.

SMERCONISH: And Ben, I`m sure at the White House, they`re elated over the
market. But by the same token, doesn`t it undercut arguments, politically
speaking, that have been made about sequester? I mean, Wall Street
apparently has a big harumph as a reaction to the sequester.

BEN WHITE, POLITICO: It does to a degree. I mean, certainly, they`re
happy about a market that`s doing well, stock prices that are rising, and
overall, you know, increase in the wealth effect that that generates.

But you`re absolutely right. In terms of their arguments for the sequester
and the impact that they said it would have on the economy, that they said
it would have on people`s lives, you know, a Dow at record highs is not
very good for that intellectual argument. It doesn`t feel to people like
the sequester is really hitting very hard if the Dow and other stocks are
rocketing to new highs.

But Ezra is absolutely right. I mean, we`re not -- we shouldn`t be putting
on our Dow 36,000 hats anytime soon. We`re not at an inflation-adjusted
level of where we were in 2000. And remember, this is partly the result of
$3 trillion in stimulus from the Federal Reserve pumped into the economy,
into money markets, which tends to drive people into stocks. It takes them
out of less risky assets into stocks. Every time the Fed does this, we
have a rocketing market...

(CROSSTALK)

SMERCONISH: And Ezra, it`s been a jobless recovery thus far. I mean,
where are the jobs, is still the refrain that one could ask. Capitalism is
working for the corporations represented on the Dow Jones Industrial
Average.

KLEIN: I think that`s right. I mean, Look, again, I don`t want to go so
far as to say jobless because we`ve created a couple million jobs in the
last couple of years and unemployment has fallen from around 10 percent to
around a little bit under 8.

But your broad point is right. We have not had a quick recovery, and we`ve
not had a sufficiently broadly shared recovery. The number I find really
striking here is the -- there was new data that came out of Berkeley the
other -- a couple weeks ago that the top 1 percent has enjoyed 121 percent
of the income gains of the recovery.

And so you might wonder, well, how can they get more than 100 percent of
the gains? And the answer is that the bottom 99 percent has lost some
income share during the recovery.

So we`re seeing three problems. One is slow growth. The other is growth
that, when we get it, is not broadly shared and is not translating as
quickly into job gains as we would like to see. So there is a somewhat
broken transmission mechanism in the economy.

And to the point about the stock market, while I don`t think the Dow, as
Ben says, we should be putting on our party hats quite yet, it is a case
that corporate profits as a percentage of the economy have been at record
highs or near record highs, and that is happening at the same time we`re
not seeing real job growth. We are not seeing significant income gains.

So there is a significant and sharp break between corporations and the
people who are running the corporations and the average worker, and that`s
worrying.

SMERCONISH: Ezra, thank you for your time. Ben, we appreciate your being
here, as well.

Coming up: It sure looks like Jeb Bush is thinking about running for
president in 2016, and that could mean a clash of the titans, another Bush
versus Clinton election.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

SMERCONISH: Recapping the breaking news this hour, Venezuela`s president
Hugo Chavez is dead. Chavez lost his two-year battle with cancer. The
fiery and feisty leader rose to power in 1999 and was popular at home,
winning reelection late last year. But he was frequently a thorn in the
side of Washington. Hugo Chavez was 58 years old.

(COMMERCIAL BREAK)

SMERCONISH: Welcome back to HARDBALL. What are the odds that we could
wake up in November of 2016 to the news that the next president of the
United States has a very familiar last name, as in Bush? Well, the
election is still a long way off, of course, but the prospect that another
Bush might at least run for the highest office seemed a bit more likely
after a recent round of interviews in which Jeb Bush was talking about his
new book.

Take a look at what he said to NBC`s Chuck Todd.

(BEGIN VIDEO CLIP)

CHUCK TODD, NBC WHITE HOUSE CORRESPONDENT/POLITICAL DIR.: You`re being
much more open about considering national office than I`ve ever heard you
before. What`s different this time?

JEB BUSH (R), FMR. FLORIDA GOVERNOR: Well, I`m not saying yes. I`m just
not saying no. And I...

TODD: Well, that`s what`s so different. You used to be pretty definitive.

BUSH: Well, yes. So 2008, I was asked about it, and I said, heck, no. It
wasn`t the right time. In 2012, it wasn`t either. This may be the wrong
time, too. I don`t know. I mean, this is -- it`s way too early to go
through that process four years out.

TODD: But I guess is what is your motivation to at least not shut the door
this time? What`s different this time than shutting the door before?

BUSH: I`ve accomplished some things in my life that allow me now to have
that kind of discretion to be able to think about it.

(END VIDEO CLIP)

SMERCONISH: "The Washington Post`s" Chris Cillizza points out that Jeb
Bush`s recent high visibility makes a strong case that he`s strongly
considering making a run. Quote, "This was Jeb`s less than subtle signal
to donors that he`s seriously considering 2016, and he sent it in a way
that Marco`s sure not to miss." That, of course, refers to Senator Marco
Rubio, also of Florida, who`s considering a bid of his own.

If he decides to run, will Jeb Bush be the frontrunner in the Republican
field, or will the recent flap over his contradictory statements about
immigration dent his public image?

Michael Steele is the former chair of the Republican National Committee and
an MSNBC political analyst, and Ron Reagan is an author and MSNBC political
analyst.

Michael, is he your front-runner, if, in fact, he gets into it?

MICHAEL STEELE, FMR. RNC CHAIR, MSNBC POLITICAL ANALYST: Oh, I believe he
is, very much like Hillary for the Democrats would be an automatic front-
runner. I think Jeb has a great deal of gravitas in the Republican Party.
I know that there were a lot of folks pining for him to enter the race in
2012, and obviously 2008, as well.

So I think he`s right. I think he`s taken his time. He`s measured himself
on these things. And I think he`s now beginning to put out there, as you
noted in setting this segment up, the conversation with donors, as well as
with activists around the country.

I think he needs to be a little bit careful in how he does that, obviously.
He`s already kind of got a little left foot/right foot problem on
immigration, which he needs to correct, I think, fairly quickly before it
snowballs. But it`s Jeb, and I think he brings a lot of juice to the
table.

SMERCONISH: Jeb Bush`s position on one of the most contentious elements of
immigration reform, backing a path to citizenship for illegal immigrants,
seems to have undergone a bit of a transition. In this new book, he makes
a strong case against it.

He writes, "It is absolutely vital to the integrity of our immigration
system that actions have consequences. In this case, that those who
violated the laws can remain but cannot obtain the cherished fruits of
citizenship. To do otherwise would signal once again that people who
circumvent the system can still obtain the full benefits of American
citizenship. It must be a basic prerequisite for citizenship to respect
the rule of law."

Now, that`s a far cry from what he said last year, as late as last summer,
as a matter of fact, presumably when he was writing this book, when he was
seen as one of his party`s most progressive voices on immigration.

Listen to what he told Charlie Rose back in June.

(BEGIN VIDEO CLIP)

BUSH: You have to deal with this issue. You can`t ignore it. And so
either a path to citizenship, which I would support -- and that does put me
probably out of the mainstream of most conservatives -- or a path to
legalization, a path to residency of some kind.

(END VIDEO CLIP)

SMERCONISH: Ron Reagan, read the tea leaves for me. He seems more
hardened now in his resolve against a path towards citizenship. You`d
expect the reverse, I think, given the direction of his own party in the
last couple of weeks and months.

RON REAGAN, MSNBC POLITICAL ANALYST: Yes, it`s very difficult to read him
on this. As you pointed out, first he was for the path, then he was in the
book against the path, and now he`s maybe for some kind of path again.
He`s kind of delicately straddling the fence.

I think what he has in mind are who he may be the -- the opponents he may
be running against in the primary in 2016, foremost among them perhaps
Marco Rubio, a fellow Floridian and somebody who has come out with his own
path to citizenship immigration plan.

So, he`s trying to kind of play off of Marco Rubio to a certain extent.
The larger problem for him, of course, is the larger problem for the
Republican Party. There`s an argument there whether their issue is really
marketing or substance.

So, ask yourself, does Jeb Bush help them with marketing or with substance?
As a marketing ploy, I think Bush 3.0 is a mistake. I don`t think it says
moving into the future. Substantively, well, the jury is still a little
out there. He seems uncertain on immigration, which is a low-hanging fruit
issue, frankly, for the Republicans. Let`s see how he does on income
inequality or marriage equality and things like that.

SMERCONISH: Michael, on this issue of immigration and his position, in
recent interviews Jeb Bush seemed to walk back a big his recent opposition
to granting a path to citizenship for illegal immigrants. Take a look at
what he told Chuck Todd on that issue.

STEELE: All right.

(BEGIN AUDIO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I just think this proposal caught
me off-guard, and it undercuts what we`re trying to do.

(END AUDIO CLIP)

SMERCONISH: Sorry about that. That was obviously Lindsey Graham and not
what he was saying to Chuck Todd.

The flip-flopping relative to the Republican base, how do you see that
playing?

STEELE: Well, I think Jeb has an opportunity here, much to Ron`s point on
the substance, to really move the party in a different direction and off
the particular pinhead it`s on right now on immigration to a broader, you
know, acceptance of the party of assimilation, which we have always at
least been historically, this idea that you are all welcome to this great
land of opportunity.

And I think that he has a chance to carve that out. You know, don`t try to
out, you know, Marco Rubio or be more conservative than. If Jeb Bush is
himself and is comfortable in his skin in his space, as we have seen him up
to this point, don`t let the prospects of running for the presidency change
you into something you`re not. You run into the Mitt Romney problem, and
then it`s downhill from there.

Be himself and bring the party to your reasoning on this subject and I
think -- I think quite honestly people will be surprised at the response.

SMERCONISH: Ron, do you think that American voters have the ability to
judge him on his own merits without looking at his brother or his father,
for that matter? It asks a lot, does it not?

REAGAN: It does.

And, in a word, no. I mean, we`d like to think that you could, and I`m
sure many people can, but basically that Bush name is going to be a big
albatross around his neck ultimately. I don`t think a lot of people out
here, certainly out here on the West Coast, are just sitting around waiting
for Jeb Bush to show up. You know, he`s got a tough road ahead of him.

SMERCONISH: Michael, do you buy into that?

I think the world of 41. I don`t know about the legacy of his son, but
41`s legacy is rock-solid, at least in my view. What do you think? How
does this play?

STEELE: I think your view is the accepted view inside the party and across
America, and I think you`re -- I think Ron again is on point when he raises
the question of how this plays for the average voter.

This is, again, the reason I think Jeb has an opportunity to do a number of
things, carve out fresh space on a very hot topic like immigration and
rebrand, if you will, you know, the Bush name, if that`s possible, but know
it`s going to be an uphill climb and know it`s going to be very difficult.
The country looking at a Clinton/Bush election in 2016, I don`t know how
they feel about that. We will see.

SMERCONISH: How do you think this plays, Ron Reagan, relative to Marco
Rubio? All of a sudden now, the attention being focused on illegal
immigration. They`re both from the same state. What is Rubio`s reaction
to this?

REAGAN: Well, I think Marco Rubio`s probably chuckling a little bit to
himself, because, again, on a low-hanging fruit sort of issue like
immigration, Jeb Bush seems to have kind of done a Romney.

I mean, really, can anybody describe what his actual position on
immigration is at this point? Is it his book? Is it what he said before?
Is it what he`s saying now, whatever that is? You know, it`s a little
confusing, isn`t it?

SMERCONISH: Yes. And just the fact that he`s publishing a book at this
time seems like it`s the painting my numbers, the first thing that you do
when you`re getting ready.

(CROSSTALK)

(LAUGHTER)

SMERCONISH: Thank you, Michael Steele. Thank you, Ron Reagan, as always.

We will be back right after this.

(COMMERCIAL BREAK)

SMERCONISH: More now on the breaking story late today, the death of
Venezuelan President Hugo Chavez.

NBC`s Mark Potter is with us from Miami.

Mark, I guess not entirely unexpected. He`s been sick for a while.

MARK POTTER, NBC CORRESPONDENT: No, but it still comes as a shock. He
has, indeed, been sick for a while, but this is a shock to the Venezuelan
people.

Many of them had been holding out hope that somehow, miraculously, he would
recover and return as president. Many people there hated him, but many
people there loved him. And they were counting on him to recover. But
that did not happen, as was announced today about an hour-and-a-half ago.

Venezuelan Vice President Nicolas Maduro announced at 4:25 Caracas time
that, indeed, Venezuelan President Hugo Chavez had died at the military
hospital in Caracas. Maduro appealed for calm. He guaranteed that peace
would be maintained and he also said that extra security would be put on
the streets.

Chavez had returned to Venezuela on February 18 after a battery of
treatment in Cuba, cancer treatments. He had announced on December 9 that
his cancer he had been treated for in 2011 had returned. Another tumor had
returned. On the 10th, he went to Venezuela. On the 11th, he received his
first of the battery of treatments.

For the next two-and-a-half months, no one heard from Chavez. He did not
speak, although there were mixed reports from Cuba on how he was doing. At
times, it was said that he was doing fine, that he was recovering, he was
looking good, and then there were reports that he was in dire straits and
that the end potentially could be near. At least that was assumed to those
who were reading the tea leaves.

Many said that he was still -- some said at some time that he was actually
still giving orders as president, even though he had not been sworn in
after winning reelection in October to his fourth term as Venezuelan
president.

He was not sworn in because of those cancer treatments. Again on February
18, he returned to Venezuela and did not speak. He was still not heard
from. The only evidence that he was alive were some pictures that were
released from Cuba showing him holding the daily newspaper, but that was
it, and now this announcement from Venezuela that he has died. The next
question of course is what happens next in terms of a...

(CROSSTALK)

SMERCONISH: Yes. How might his passing -- how might his passing impact
the relationship between the United States and Venezuela?

POTTER: Well, of course, the hope in the United States is that it will
help improve the relationship, and there has been reporting that U.S.
officials have been trying to make entrees with the Maduro government.

What -- the answer to your question may be determined by what happens in
the next month when there`s an election, as required by the Venezuelan
constitution. Within 30 days , there must be an election, and the likely
candidates are Maduro, the current vice president, who will become the
president now, the interim president.

And Henrique Capriles, the opposition leader, the more right-wing
opposition leader who lost to Chavez in that October election, if he wins,
it`s believed that the relationship with the United States will be much
better than it is now, but there is some hope that if Maduro wins, given
the bad relationship between Venezuela and the U.S., over time, that there
can be a softening, a warming up.

After all, a lot of this is about oil, and even with all the problems
between the U.S. and Venezuela, Venezuela never cut off oil to the United
States. There was always that relationship, always that open door, and
there is still some hope that maybe that can be improved.

SMERCONISH: Mark Potter, thank you very much for your report.

Up next, President Obama is eager to put the sequester fight behind him,
and here is why. His approval rating has taken a hit. So, how does he
turn the page? That`s ahead.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

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

As you heard earlier, a new record high for the Dow. The average
surpassing its peak set back in October of 2007. The S&P 500 up 14, and
the Nasdaq gaining 42. As it stands now, the Dow is nearly up 9 percent so
far this year. Helping boost stocks today, an upbeat report on the
services sector. And according to CoreLogic, home prices rose nearly 10
percent in January over year-ago levels.

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

SMERCONISH: Welcome back to HARDBALL.

If there`s unanimity on anything in Washington, it`s that everybody is
tired of talking about the sequester, and possibly no one more so than
President Obama, particularly because it`s siphoned momentum away from
issues that he wants to make signatures of his second term.

In both his inaugural address and at the State of the Union, he outlined
the specific goals that he has for the country.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We will respond to the
threat of climate change knowing that the failure to do so would betray our
children and future generations.

Overwhelming majorities of Americans, Americans who believe in the Second
Amendment have come together around commonsense reform, like background
checks that will make it harder for criminals to get their hands on a gun.

Our journey is not complete until our gay brothers and sisters are treated
like anyone else under the law. Our economy is stronger when we harness
the talents and ingenuity of striving, hopeful immigrants, and right now,
leaders from the business, labor, law enforcement, faith communities, they
all agree that the time has come to pass comprehensive immigration reform.

Now is the time to do it. Now is the time to get it done.

(CHEERING AND APPLAUSE)

SMERCONISH: And with the president`s picks for energy secretary and EPA
head, we`re getting a glimpse of how he may achieve his goals.

Today`s "Washington Post" notes that Obama`s second-term Cabinet members
will have bigger roles and more latitude for action -- quote -- "Obama will
rely on these new nominees, several of whom have experience in the agency
they have been picked to lead, to identify the levers of executive power
that they can wield quickly."

Joining me, Pulitzer Prize-winning columnist for "The Washington Post"
Eugene Robinson and Bloomberg View columnist Jonathan Alter. Both are
MSNBC political analysts.

Jonathan, what`s doable from that list?

JONATHAN ALTER, MSNBC POLITICAL ANALYST: Well, I think a lot of it is
doable.

You know, he`s throwing a lot of things against the wall to see what
sticks. It`s important to remember, though, that we`re not going to move
to that agenda right away, because, you know, not to get too down in the
weeds, but what they call the continuing resolution, which is basically the
budget to keep the government open, is going to come up at the end of this
month.

So we have at least three more weeks of a lot of arguments about the
sequester and about the larger budget issues. You saw that today. the
White House canceled all White House tours, saying that it was the
sequester that was to blame. That`s really going to get the attention of
congressmen, because they use those tours for their constituents.

But once we get into April and May, you`re going to see the president
shifting more to these other issues that are on his agenda.

SMERCONISH: Eugene, that`s not too optimistic of a look forward from
Jonathan, because, you know, it seems like these manufactured crises -- by
that, I mean those that they just refuse to work together to resolve, they
keep coming up and up, and I don`t frankly see an end in sight.

EUGENE ROBINSON, MSNBC POLITICAL ANALYST: No, they keep coming and coming
and coming, and so anything that requires action from Congress is sort of
held hostage to these periodic crises that we seem to have to have.

Now, there are some things. The president did say that when he can`t get
Congress to act, he will do what he can through executive action, and one
thing that is sort of teed up for him is climate change, specifically
through the Environmental Protection Agency`s regulatory power limiting
carbon emissions at power plants, which is a huge thing that he
theoretically could do when he feels he has the political capital to do it.

SMERCONISH: In other words, that story from "The Post" today acknowledging
that he intends where possible to end-run Congress and get these things
done on his own time.

ROBINSON: That`s right.

You know, he does have executive powers. Remember, when Congress wouldn`t
act on the DREAM Act on immigration, he essentially decreed a version of
the DREAM Act himself through his executive powers, and he has -- he can do
that on some of these issues but not all. A lot of this agenda will
require legislation to get through Congress, and that`s a heavy lift.

SMERCONISH: Jonathan, in his press conference on Friday, the president was
pretty exasperated. He admitted the limits of presidential power. Let`s
watch this moment.

(BEGIN VIDEO CLIP)

QUESTION: It sounds like you`re saying that this is a Republican problem,
not one that you bear any responsibility for.

OBAMA: Well, Julie, give me an example of what -- what I might do.

I have offered negotiations around that kind of balanced approach. And, so
far, we have gotten rebuffed because what Speaker Boehner and the
Republicans have said is, we cannot do







BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I have offered negotiations
around of that kind of balanced approach, and so far, we`ve gotten rebuffed
because of what Speaker Boehner and the Republicans have said is we cannot
do any revenue. We can`t do a dime`s worth of revenue. So what more do
you think I should do?

(END VIDEO CLIP)

SMERCONISH: "The New Yorker`s" Ryan Lizza wrote of that exchange, quote,
"All presidents come to appreciate the limits of power of their office, but
rarely do they ventilate such thoughts in public."

Jonathan, is that how you read what you heard from the president last
Friday?

JONATHAN ALTER, MSNBC POLITICAL ANALYST: Yes. I mean, as he said, you
know, he can`t have a Jedi mind meld with Congress.

You know, the great editor Charlie Peters said that to claim that the
president should, quote, "work his will" on Congress, which is what you
hear a lot of people saying, is like saying that a man should work his will
on a woman, or a husband should work his will on a wife. It takes two to
tango.

At a certain point -- a certain point if the Congress doesn`t want to go
along with him, in our system, there`s not that much he can do about it and
he really can`t blame him. He can only go so far.

Does he need to use other tools at his disposal to try to, you know, bring
them in to work with people below the level of the leadership? Absolutely.
And he did not do enough of that in his first four years.

You saw him have John McCain and Lindsey Graham in for a private
conversation this week. To me that was a very good sign. It`s very
important that they keep talking to each other and maybe on some issues
like immigration, they can make some progress.

SMERCONISH: And, Eugene, politically speaking, the White House already
starting to lay plans for what`s going to happen in 2014. They need 17
seats to take control.

EUGENE ROBINSON, MSNBC POLITICAL ANALYST: Right.

SMERCONISH: That`s a tall order. It would have to be Clinton-like in
terms of its achievement.

ROBINSON: It`s a very tall order, particularly after redistricting has
made a lot of safe districts for the Republican majority. It`s very
difficult to draw a map and look at it and see how they pick up those 17
seats. Then again, we`re getting used to some pretty big swings in the
House.

SMERCONISH: No doubt.

ROBINSON: And not all anticipated.

SMERCONISH: Thank you --

ROBINSON: Sometimes it happens.

SMERCONISH: Thank you, Eugene Robinson. Thank you, Jonathan Alter.

ALTER: Thanks, Michael.

SMERCONISH: Up next, it`s happened yet again, the right wing falls for
another story without checking into whether it`s true.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

SMERCONISH: Late today, the Senate Intelligence Committee approved
President Obama`s pick to run the CIA, John Brennan. The vote came after
the Obama administration provided the committee access to the top secret
legal opinions that justified drone strikes against terror suspects.
Still, some key Senate Republicans are threatening to oppose Brennan`s
confirmation unless the White House provides classified information about
the September 11 attack in Benghazi, Libya. The nomination now goes to the
full Senate later this week.

We`ll be right back.

(COMMERCIAL BREAK)

SMERCONISH: We`re back.

It looks like the right wing media may be at it again, failing to fact
check a story that makes a Democrat look bad. Remember last November when
the conservative Web site "The Daily Caller" reported that Senator Robert
Menendez paid prostitutes for sex in the Dominican Republic? Well, today,
"The Washington Post" reported that the prostitute who said Menendez paid
her for sex is recanting her story, saying she was paid to make up the
whole thing.

The FBI has no evidence to back up allegations against the senator.

Menendez told FOX News this is part of a plan to sabotage him.

(BEGIN VIDEO CLIP)

SEN. ROBERT MENENDEZ (D), NEW JERSEY: I can only say what I`ve said from
the very beginning, that nameless, faceless, anonymous sources through
right-wing blogs drove into the mainstream a story that was absolutely
false, that these were smears that began during my election process, and
that increasingly become obvious that that`s what they were -- smears and
an attempt to affect the results of an election.

(END VIDEO CLIP)

SMERCONISH: But "The Daily Caller" is standing by its story, saying "The
Washington Post" is talking about the wrong prostitute. Quote, "The
prostitute in `The Post`s` story does not appear to be one of the women we
interviewed in 2012. In addition, the attorney for the D.C.`s sources has
said the post`s allegations are fabricated and that the affidavit is
false."

Jim Warren is the Washington bureau chief of "The New York Daily News."
Carol Leonnig is with "The Washington Post."

Carol, let me begin with you because you wrote that story that responded or
debunked what "The Daily Caller" has said thus far. What do we now know?
Bring me up to speed in this regard.

CAROL LEONNIG, THE WASHINGTON POST: What we now know is one woman who is
an escort in the Dominican Republic, and one man, a lawyer in the Dominican
Republic, have gone to Dominican authorities, sought immunity from
prosecution, any involvement in a smear or slander campaign, and have sworn
in affidavits that they were hoodwinked into making a tape of some sort
where they recited a script about having sex for money with Senator
Menendez and also a wealthy donor friend of his.

The woman says she didn`t realize she was being taped and also said she was
approached and paid to make these statements and read them aloud. The --

SMERCONISH: Paid by whom? Do we know?

LEONNIG: Yes. She knows who paid her. It is the first lawyer who has
also made another sworn affidavit. His name is Mr. Galvan, according to
the affidavit in the Dominican court. He says he also was hoodwinked. He
was told by another lawyer to please make this tape, that he was a divorce
lawyer and needed help in corroborating the infidelity of a particular
person, and he needed just somebody to say it on tape and could he arrange
to find these women and get them to say this.

SMERCONISH: Jim, what`s going on with these stories? They`ve been a
number of them. And one of them stems from an interview that someone at
your newspaper did. Is it laziness or is it deliberate willfulness? What
drives them?

JIM WARREN, NEW YORK DAILY NEWS: Oh, I think it`s a noxious mix of
laziness, a desire to almost deceive, and then throw in the overriding
reality of technology. Obviously, nobody has a monopoly on what has become
this ferocious desire that we all have to be first. But, boy, the inherent
tension, Michael, between that desire to be first, particularly in the
online world, and accuracy in fairness is substantial.

I mean, I don`t want to get too pedantic and mythologize the journalism
past. I mean, I`m someone who started out in a Chicago newspaper in the
late `70s sitting near a Pulitzer Prize winner who had gained a reputation
and deservedly so for frequently impersonating Chicago police officers so
that over the years, he could get artifacts, including photos from families
grieving over the death of a loved one.

But fast forward to today and I really do think you see this tremendous
tension between a lot of ideologically driven media and set of values in
which often being provocative and interesting is a whole lot more important
than being correct. And you see that absolutely every single day.

SMERCONISH: The story that I was making reference to is that shocking
story that the former senator, now defense secretary, Chuck Hagel, received
speaking fees from a group called "friends of Hamas", and Breitbart TV, you
know, ran with it, even though it wasn`t true.

WARREN: Yes.

SMERCONISH: Even members of Congress chimed in before everybody found out
it was false. As a matter of fact, here`s Senator Rand Paul on the Hugh
Hewitt radio program.

(BEGIN AUDIO CLIP)

HOST: Let me bring up one piece of information that Ben Shapiro at
Breitbart put out today. Which is one of the foreign funders behind
Senator Hagel that he has not yet disclosed formerly is something called
"friends of Hamas". If that is, in fact, true, Senator, would that lead
you to vote against Mr. Hagel?

SEN. RAND PAUL (R), KENTUCKY: You know, I saw that information today also,
and that is more and more concerning. With each day, they are new things
coming out.

(END AUDIO CLIP)

SMERCONISH: Carol, they just take on a life of their own. It just needs
to get into the public domain, could be by virtue of the touching the
"send" key and then it`s treated as if it`s legitimate by media and
politicians.

LEONNIG: I think, you know, what`s important here is two things at once.
There were a lot of salacious allegations made about Senator Menendez and
many, many people in the media wanted to figure out if it was true. At
"The Washington Post", we were really interested in figuring out if there
was any evidence of this and we wrote a story a couple of weeks ago about
the FBI agents on -- in the Caribbean interviewing people and basically
coming up with nothing. And that made us intrigued.

On the other hand, I have to say, there are other reasons for Senator
Menendez to be under scrutiny that we`ve written about which has to do with
his friendship with a wealthy benefactor and donor.

SMERCONISH: Right, and the travel fees and alleged lobbying. So, he`s --

LEONNIG: Right. He`s not disclosing, Michael, you know, the plane trips
with Dr. Melgen while trying to interview on his behalf. What got this
going were the salacious allegations. And those at least right now don`t
seem to be checking out.

SMERCONISH: And thank you both. Thank you, Jim Warren. Thank you, Carol
Leonnig.

When we return, let me finish on why Warren Buffett is now bullish on
something most aren`t.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

SMERCONISH: Let me finish tonight with this.

Warren Buffett is one of America`s wealthiest and most successful
businessmen. Such is the interest that Buffett commands that even his
secretary`s tax rate can spark a political debate. His Berkshire Hathaway,
Incorporated has a market capitalization of $250 billion and employs
288,000 people. It has holdings in everything from auto insurer Geico to
railroad operator Burlington Northern to See`s Candies.

Well, Buffett just released his annual letter to Berkshire stockholders.
It`s quite an entertaining read, even for the financially uninitiated. For
example, in 2012, Berkshire achieved a total gain for its shareholders of
$24.1 billion. That`s a profit that Buffett called that sub par.

And guess what he`s bullish about? Newspapers. OK, maybe not all
newspapers, but smaller, community-based papers.

During the past 15 months, Berkshire acquired 28 daily newspapers at a cost
of $344 million. Buffett, a former newspaper boy, acknowledged that
television and the Internet have created a challenging environment. He
acknowledged that stock market quotes and the details of national sports
events are old news long before the presses begin to roll. He said that
the Internet offers extensive information about both available jobs and
homes, and that television bombards viewers with political, national, and
international news.

Despite editorial content, Buffett laments that in one area of interest
after another, newspapers have lost their primacy, and, as their audiences
have fallen, so has advertising. Revenues from "help wanted" classified
ads, long a huge source of income for newspapers, have plunged more than 90
percent in the past 12 years.

But then, Warren Buffett said this: "Newspapers continue to reign supreme,
however, in the delivery of local news. If you want to know what`s going
on in your town -- whether the news is about the mayor or taxes or high
school football -- there is no substitute for a local newspaper that`s
doing its job. A reader`s eyes may glaze over after they take in a couple
of paragraphs about Canadian tariffs or political developments in Pakistan;
a story about the reader himself or his neighbors will be read to the end.
Wherever there is a pervasive sense of community, a paper that serves the
special informational needs of that community will remain indispensable to
a significant portion of its residents."

He could have said something else -- that newspapers provide a vital
oversight function. In a world where everyone with a computer is suddenly
a journalist, there is nevertheless a lack of primary news-gathering, and
local papers with their editorial pages often remain the best watchdog we
have over local government.

So, here`s hoping the Oracle of Omaha`s investment in American newspapers
pays off.

That`s HARDBALL for now. Thank you for being with us.

"POLITICS NATION" with Al Sharpton starts right now.



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