updated 7/20/2004 9:25:44 AM ET 2004-07-20T13:25:44

Guest: Daphne Barak, James Garner, Anne Kornblut

CHRIS MATTHEWS, HOST:  Did Iran help bin Laden in the 9/11 terrorist attacks?  And if so, why did America invade Iraq?  Plus: As Democrats get ready to nominate John Kerry at their convention in Boston next week, RNC chairman Ed Gillespie says Republicans are ready to rumble and that Arnold Schwarzenegger doesn‘t have to apologize for calling Democrats in the legislature “girlie men.”  And a prominent Republican says the war on terror, excessive tax cuts and post-9/11 spending could be bankrupting our future.

From Los Angeles, let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  The 9/11 commission‘s final report is being readied for public release this Thursday, and in it are a number of bombshells.  The commission is expected to recommend the creation of a cabinet-level post to oversee all U.S. intelligence agencies.  And according to “Time” magazine, the commission has uncovered evidence that suggests that Iran, not Iraq, provided eight to ten of the 9/11 hijackers safe passage from October of 2000 to February of 2001.  So should we have gone to war with Iran instead of Iraq?

Roger Cressey served as director for transnational threats on the National Security Council staff from 1999 to 2001.  He managed the government‘s response to the 9/11 attacks, as well as the bombing of the USS Cole.

Roger, question.  Did we go to war with the wrong country?

ROGER CRESSEY, FORMER NATIONAL SECURITY COUNCIL OFFICIAL:  Well, if your level—your standard was who‘s a bigger state sponsor of terror, Iran was a bigger state sponsor of terror.  Iran had stronger ties with al Qaeda, too.  So if it‘s just a question of who‘s a state sponsor, we should have invaded Iran.

MATTHEWS:  Who did the most help of the 9/11 effort?  Who—who kicked in most to help al Qaeda blow up the World Trade Center and hit the Pentagon?  Which of the two countries, Iran or Iraq, was most involved?

CRESSEY:  Well, we‘ve not seen any evidence of Iraq or Saddam providing any support to the 9/11 hijackers.  What we now know is that several of the hijackers came through Iranian territory.  Did the Iranian government support that?  We don‘t know.  But that‘s at least a little bit more evidence than what we have with regards to Iraq.

MATTHEWS:  What about that other sugar plum in the “Time” magazine report, that bin Laden offered to go to work with Iran—Iran, rather, offered to go to work with bin Laden, bin Laden turned them down because he didn‘t want to offend his friends in Saudi Arabia?  They‘re Sunni in Saudi Arabia.  The Shia in Iran would have corrupted that deal.

CRESSEY:  Yes, that was a fascinating point, Chris.  That was news to me, as well.  To think that the Iranian government was interested in partnering with al Qaeda, in the classic case of “the enemy of my enemy is my friend,” is fascinating.  Again, we‘ve not seen any type of information like that regarding Iraq.  So if you‘re comparing the two, from a terrorism perspective, Iran is a much more significant threat.

MATTHEWS:  So the president of the United States and others have said we had to go to war with Iraq because of the potential alliance of Iraq with the terrorist that hit us 9/11.  Now we know there was, in fact, an offer from the Iranian government to help the 9/11 hijackers—that organization, al Qaeda, after 9/11.  The horror had been on the pictures.  They‘d seen the towers going down.  They said, We want to be a part of that.  That‘s what the Iranian government is saying, according to “Time” magazine, We want to be part of that kind of action.  Pretty bad stuff.

CRESSEY:  We also have to keep in mind that in the 1990s, Iran was the probably the biggest threat we had leading up to the East Africa bombings in 1998.  They were involved with the Khobar Towers attack against the U.S.  Air Force.  They had a global contingency plan against U.S. interests.  So Iran was a serious threat in the ‘90s, and it continues to be a serious threat today.

MATTHEWS:  So why‘d we go to war with Iraq?  You were inside the government right at the top.  Why did we choose go with Iraq in early or late 2001, sometime after 9/11, rather than go to war with Iran, which now seems to have had some instrumental role in at least getting these people to where they wanted to get to the United States, where they could hit us.

CRESSEY:  Well, Chris, I believe the president learned the right lesson after 9/11, which is you have to preempt these threats when they come up.  You can‘t wait.  But he applied the lesson in exactly the wrong place.  From a terrorism perspective, Iran—I‘m sorry—Iraq was not a significant threat.  We‘ve seen no evidence of active state sponsorship between Saddam and al Qaeda.  So when you look at that time it from that perspective, regarding the war on terrorism, we invaded the wrong country.

MATTHEWS:  And what happens if Iran does—or Iraq, does, in fact, come apart, that the Basra part of it, basically populated by Shia Muslims, joins up, in effect, with the—the Shia-driven, Shia-dominated Iran?  Are we worse off than we started in this campaign against terrorism?

CRESSEY:  Well, there‘s a lot of unknowns right now, but it‘s safe to say Iran has a better strategic plan for what it‘s going to do inside Iraq than the United States does for what‘s going to happen inside Iraq.  Iran...

MATTHEWS:  What‘s Iran up to?

CRESSEY:  Well, Iran is going to—is going to wait.  They‘re going to be patient.  They‘re going to see how the Allawi government unfolds.  They‘re going to work closely with the Shia, and they‘re going to put themselves in a position to be very influential over the long term because the Iranian objective here is exercising influence over the long term.

MATTHEWS:  What if Sistani wins the election next January, and you have the Shia running Iraq, and he lines up with a Shia-dominated Iran?  Are we worse off than when we started?

CRESSEY:  Oh, there‘s no doubt.  And if nothing else, that‘ll scare the bejesus out of the Sunnis.  It will lead to the very thing we sought to try and void, which is a bifurcation, or worse, of Iraq.  And that type of environment will lead to very deep instability in the region.  It‘s not just going to influence Iraq, but it‘s going to influence Saudi and the rest of the Gulf Cooperation Council.

MATTHEWS:  So in going to war with Iraq instead of going to war with Iran, we have created a lose-lose situation for the United States.  If we have a democratically elected Iraq, that government will side up with their fellow Shia in Iran, who are clearly our enemy.  If the government comes apart because of terrorism and just chaos in the streets of Iraq, then we‘re going to have a Basra, a southern Iraq, which will be splintering off and joining Iran.  We‘ll have hell to pay in that way, as well.

CRESSEY:  Well, it‘s not a compelling picture either way.  I‘m not arguing we should have gone to war with Iran because there is no compelling military option there.  But from a terrorism perspective, in the war on terrorism, we made a strategic mistake going into Iraq.

MATTHEWS:  Plus or minus.  Was going to Iraq a plus for us or a negative?

CRESSEY:  You know, a year after, a year-and-a-half after Saddam fell, we are in less—we are in worse shape in the war on terrorism than we were before we went in.  And that‘s a very bitter irony.

MATTHEWS:  Bureaucratic question.  Will it help to put a man over in charge, a czar, if you will, of all the intelligence agencies?  That‘s being proposed, we hear, by the 9/11 commission this Thursday.

CRESSEY:  Short answer is no.  Putting another box in wiring (ph) diagram doesn‘t guarantee anything.  You could have a DNI in place today and al Qaeda could still strike tomorrow.  It‘s a question of budget authority, resources and having control over the very assets that comprise the intelligence community.  You need to empower this person with real authority.

MATTHEWS:  Why would the president want to get daily briefings from a leader of overall intelligence community who had no bureaucratic power to hire, fire, get together a team, establish esprit de corps and the job done?  This person would have no agency underneath him, man or female.  He‘d have to really on all the other agencies, including the DIA, CIA, et cetera, et cetera, FBI.  He wouldn‘t have any power.

CRESSEY:  Well, the question here, of course, is accountability.  If there‘s a DNI, is that person accountable?  Do they have all the assets under their control?  And if they don‘t, then this is just a—it‘s an empty suit.  So you got to give this person true power and authority.  And if that doesn‘t happen, Chris, then we shouldn‘t even bother.

MATTHEWS:  Well, Tom Ridge, who‘s Homeland Security, he doesn‘t have the power to fire the deputies, the assistant attorney generals, the deputy attorney generals.  He doesn‘t have the power to fire the FBI director.  Does he have any power?

CRESSEY:  He has limited power.  No, the real authority, of course, is the president.  It‘s the president‘s responsibility to direct the cabinet to ensure that the right flow of information gets to him and that he acts upon it.  So be it the Department of Homeland Security or a director of national intelligence, in the end, its the president‘s responsibility.

MATTHEWS:  After all the talk, will we have a new national intelligence director above everyone else?

CRESSEY:  Well, think there‘s a consensus in Washington that that‘s what we should do.  I mean, the knee-jerk reaction every time we have a report like this is to immediately do some sort of bureaucratic change.

MATTHEWS:  But you don‘t think it‘ll work.

CRESSEY:  Well, it‘s going to take years for it to work, if at all.

MATTHEWS:  OK.  Thank you very much, Roger Cressey.

Coming up: As the spotlight shines on the Democrats heading into their convention next week, what are the Republicans planning to do to keep the pressure on them?  Republican Party chairman Ed Gillespie‘s going to come here to join us right away.  And later, a prominent Republican says the deficits created by big tax cuts during a time of war could lead to economic problems, big ones, down the road.

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  With seven days to go to the Democratic convention and forty-two days until the Republican convention, I‘m joined right now by the chairman of the Republican National Committee, Ed Gillespie.

One of your chief speakers at the convention in New York, Ed, as you know because you scheduled him, is Arnold Schwarzenegger, the governor of California.  let‘s look at what he said a couple of days ago about the Democratic legislators of California.

(BEGIN VIDEO CLIP)

GOV. ARNOLD SCHWARZENEGGER ®, CALIFORNIA:  If they don‘t have the guts to come out here in front of you and say, I don‘t want to represent you, I want to represent those special interests, the unions, the trial lawyers, and I want them to make the millions of dollars, I don‘t want to represent you—if they don‘t have the guts, I call them girlie men.  They should go back to the table and they should fix the budget!

(END VIDEO CLIP)

MATTHEWS:  Now, what do you make of that, “girlie men”?  Is that OK to call your opponents, your political opponents “girlie men”?

ED GILLESPIE, REPUBLICAN NATIONAL COMMITTEE CHAIRMAN:  Well, obviously, it‘s a trademark Schwarzenegger line from a movie, as I recall.  I haven‘t seen all of his movies, but I think it was from his movies, or from a take-off, I guess from “Saturday Night Live.”  And a little humor in politics is fine, I think, Chris.

MATTHEWS:  Well, you know, he called me a girlie man one time.  We were talking casually, and I said, you know, Unlike you, Arnold, your Maria, your wife lets you smoke cigars in the house.  And I said, My wife, Kathleen, will not let me smoke cigars.  I got to go out on the porch.  And he said, You‘re what we call in Austria a girlie man!

(LAUGHTER)

GILLESPIE:  Well, if...

MATTHEWS:  Do you think he should apologize for this or laugh it off? 

That‘s what I want to know.

GILLESPIE:  If that‘s the criterion, Chris, then I‘m with you.

(LAUGHTER)

GILLESPIE:  I‘m relegated to the outside, as well.

MATTHEWS:  You‘re a girlie, man, just like me!

(LAUGHTER)

MATTHEWS:  OK, let‘s go on.  Let‘s go on to the Republican convention coming up.  You‘ve got a lot of really great speakers at your convention coming up.  I don‘t have to sell them.  I mean, you got some real world-class heroes like Rudy Giuliani.  You‘ve got a worldwide figure like Arnold Schwarzenegger.  Are they representative of the direction of your party, those moderate Republicans?

GILLESPIE:  Well, we have a big party, Chris.  You know, when you‘re the majority party in America, as we are today, you‘re going to have a broad party.  And we‘re very proud of leaders like Governor Schwarzenegger, Mayor Giuliani, who‘s respected all across this country, Secretary Paige, who‘s also going to speak—be speaking, Senator Zell Miller, who is a Democrat but a strong supporter of the president‘s, and actually someone who had placed in nomination the name of Bill Clinton in Madison Square Garden not too long ago.  So we have a nice cross-section.

MATTHEWS:  Talk about a—talk about a flip-flopper!

GILLESPIE:  Well, actually, I think...

MATTHEWS:  You‘ve got Zell Miller at your convention.  You‘re knocking the—you‘re knocking the Democratic nominee for being a flip-flopper, and you got a Democrat who endorsed Clinton, now he‘s flipping and going the other way.  Is that the—is that the standard you set, you can be a flip-flopper...

GILLESPIE:  Well, I—I...

MATTHEWS:  ... if you flip in the right direction?

GILLESPIE:  I think what you‘re seeing here, Chris, is Zell Miller is someone who‘s been very consistent in his principles.  You know, he supported then governor Clinton because Governor Clinton was running on a new Democrat approach, trying to embrace some centrist ideas.  John Kerry‘s not running that way any—in any way, shape or form.  In fact, if you look at his policies of higher taxes and voting for the Iraq war and then voting against the funding for our troops, voting against the child tax credit, voting against repeal of the marriage penalty in the tax code, this is someone who‘s running very consistently as someone who is very much out of the mainstream.

MATTHEWS:  Good point.  Let me ask you about Ralph Nader.  Do you want him to do well in the general?

GILLESPIE:  Well, you know, my counterpart, Terry McAuliffe, has said that he believes that a vote for Ralph Nader is a vote for George W. Bush.  I see that Democratic Parties, state parties Across the country, have been trying to keep Ralph Nader off the ballots in their states.  Many Republicans have responded to that by trying to help him get on the ballot.  I think, at the end of the day, the fact is that it‘s not going to make much difference.  This is a high-stakes election, and I think that people who—probably the first 3 or 4 percent of the Nader vote, if he‘s not on the ballot, they may not even vote.  But the fact is, I think the conventional wisdom is, is that him being on the ballot probably is to the detriment of John Kerry.  There‘s not much that Terry McAuliffe agree on, but I might agree with him on that.

MATTHEWS:  Well, I looked at the numbers.  It‘s about 3 points that Nader gets right now in the up or downs in the three-way.  You make it a two-way race, and about 3 of the undecided go to Kerry.  So clearly, they were with Nader.  It could be about 6 points.  Do you agree with that?  You‘re expecting to win by more than 6, so it really won‘t matter?

GILLESPIE:  Well, our plan is to win head to head with John Kerry.  That‘s what we‘re executing against, regardless of who else is on the ballot.  And I do think that there‘s some question as to whether or not Nader voters who show up in polls as Nader voters actually show up on election day, at least, the first 3 or 4 percent.

MATTHEWS:  What do you think about the propriety of Republicans who are clearly identified with your candidate, the president of the United States, lending financial support, giving money to the Nader campaign?

GILLESPIE:  Well, like I said, Chris, there are Democrats across the country—there were reports of Democrats working hard and supporting efforts to keep Ralph Nader off the ballot, which is a very undemocratic approach, obviously, to politics.  And so it‘s not surprising to me that Republicans activists across the country would respond to that effort by Democrats and try to help Nader in the same way Democrats are trying to hurt him.

MATTHEWS:  Why do you think Republican ad buyers are buying time on Jay Leno, and Democratic ad buyers are buying time on Letterman?  What do you think that‘s all about?

(LAUGHTER)

MATTHEWS:  I love this cultural stuff, and I know you do, too.  What do you think it says about the two parties?

GILLESPIE:  I‘m not sure.  I think that, the fact is, we‘re getting our message out in unconventional places.  And people aren‘t just buying news adjacencies anymore.  Buying a lot of cable, a lot of -- .

MATTHEWS:  Judge Judy is a very—no, that‘s the Democrats.  They‘re going for Judge Judy.

(LAUGHTER)

MATTHEWS:  You guys are going for “Law and Order” and “JAG” and “NYPD,” much more—are you going for the men and the older people?

GILLESPIE:  We‘re going for everybody, Chris.  We are reaching out and trying to—we‘re trying to increase our share of the African-American vote, the Hispanic vote, women voters.  I think that the president has an appeal across demographics, and we‘re going everywhere we can to get voters to hear our message.

MATTHEWS:  I hate to do this, but as a journalist, I have to because it‘s in the headlines.  Do you think Arnold Schwarzenegger, the governor of California, should retract his statement that the legislators in California, most of them Democrats, are, quote, “girlie men,” close quote?

GILLESPIE:  Oh, I think...

MATTHEWS:  Should he retract it?

GILLESPIE:  ... one of the things that people have expressed, you know, concern about with him speaking at our convention is they say, as you did at the beginning of the program, Well, Governor Schwarzenegger is someone who is pro-gay rights and has been very clear about that.  His position is clear when it comes to...

MATTHEWS:  Well, should he...

GILLESPIE:  ... when it comes to gay rights.

MATTHEWS:  Should he continue to stick to his guns and say, I‘m not retracting?  Yes or no?

GILLESPIE:  You know, Chris, I think that, you know, in politics, people ought to have a sense of humor.  And I think he was displaying a sense of humor.  You could hear the laughter in the room there.

MATTHEWS:  Right.

GILLESPIE:  People can always go back and dissect and put something in print and lose—it‘ll lose something in translation.  But it looked to me like he was—he was, you know, having a little fun and—and making a joke.

MATTHEWS:  That‘s it.  No reason for retraction.

GILLESPIE:  Looked to me like a joke, and I think that he‘s—he seems to be comfortable having made that joke, and that‘s where he is.  That‘s fine by me.

MATTHEWS:  Great.  Thank you very much.  Great to have you always, chairman of the Republican National Committee...

GILLESPIE:  You bet.

MATTHEWS:  ... Edward Gillespie.

Up next: the politics, the economy with former U.S. commerce secretary peter Peterson.  And later: Just one week away, “Newsweek‘s” Howard Fineman and “The Boston Globe‘s” Anne Kornblut will be here with a preview of the upcoming Democratic national convention from Boston.

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.

Former commerce secretary Peter Peterson is chairman of the Blackstone Group.  And in his new book, “Running on Empty,” he blames both Republicans and Democrats for bankrupting this country‘s future through needless tax cuts and out-of-control spending.  Pete Peterson is joining us right now from New York.

Mr. Peterson, Mr. Secretary, do you believe the Bush tax cuts have been good for America?

PETER PETERSON, FORMER COMMERCE SECRETARY:  Well, depends on whether you mean short term or long term.

MATTHEWS:  How about long term?

PETERSON:  Long term, they‘re not good for America (UNINTELLIGIBLE) I was (UNINTELLIGIBLE) the educated, Chris, the University of Chicago.  Milton Friedman, you know, was my old professor.  He used to say a long-term tax cut isn‘t a tax cut at all unless you reduce long-term spending.  And we have not only not reduced long-term spending, we‘ve increased long-term spending.  So I think these tax cuts long-term, particularly with the Boomers, the Baby Boomers beginning to retire in only five years, are not good for the U.S. economy.

MATTHEWS:  What about the Reagan argument of supply-side economics, which began with John Kerry, that when you cut the tax rates, you increase the tax revenues because people make more money?

PETERSON:  I just had my—a debate with my supply-side friends.  I have one or two.  I pointed out to them that during the Reagan years, debt as a percent of the GDP grew from 26 percent to 43 percent, one of the biggest increases in eight years we‘ve ever had.  So I‘m not particularly interested in growth that we finance by debt.

MATTHEWS:  Well, let‘s talk about the reality out there.  They used to say what‘s good for General Motors is good for America.  Is that still true?  Is it still good to give tax cuts to the wealthy people at the top?  Does that still help the economy?

PETERSON:  I have nothing against tax cuts, as long as we reduce spending.  But what‘s going on, Chris, is my party, the Republican Party, used to be known as the party of fiscal responsibility.  Now we seem to be governed by a philosophy, or I should say a theology, of any tax cut, any time.  And they‘ve been joined by Republicans who‘ve joined the spending binge.  And this isn‘t Pete Peterson saying it, it‘s the CATO Institute, who refers to the spending explosion.  It‘s Dick Armey, a very conservative majority leader whom you used to interview, who pointed out that he can‘t pin this one on the Democrats because they‘re in charge of everything.

The Democrats, on the other hand, have their own theology, a theology of they‘ve never met an entitlement they didn‘t like.  So here we sit with Medicare, that most people consider to be unsustainable the way it is, and their main complaint about the Medicare program is that it isn‘t big enough.

MATTHEWS:  Right.

PETERSON:  So we have a very unholy alliance here between two theologies that are simply shifting the bill to my kids and grandkids.

MATTHEWS:  Well, it looks to me like the Congress on Capitol Hill, which has a good number of liberal Democrats who do like to spend money and don‘t really believe in—I‘m sure when we look at the Democratic platform this year, we‘re not going to see a lot of calls for cuts in domestic spending and entitlements.  That‘s a sure bet.  But as for the Republican side, why does Dick Cheney say politically, deficits don‘t matter?

PETERSON:  Well, I guess if Dick Cheney were to say they did matter, then I suppose he‘d have to have a program on what do to do about them.  And that program would require distributing some pain.  And it‘s not popular, particularly in a presidential election year, to talk about pain.

MATTHEWS:  If you had been advising—Mr. Peterson, if you had been advising Bush, Sr., you would have said, Try to increase some revenues back in 1990, don‘t cut taxes, in fact, raise some revenues here and there.  George Bush, the senior president was thrown out of office to some extent by people who voted for Ross Perot or didn‘t vote because he had said, “Read my lips, no new taxes,” then had raised taxes.  Or at least, that‘s the way it was seen.  You‘re telling George Bush, Jr., basically, to do what George Bush, Sr., did, which cost him the presidency.

PETERSON:  No, what I am saying is that when George Bush—George W.  Bush took over, not just Pete Peterson but Bob Rubin, Paul Volcker, Sam Nunn, Warren Rudman, Bob Kerrey and I got together and said, This economy is kind of soft.  What should happen?  Well, we believe, A, you can justify a tax cut.  B, it ought to be temporary.  C, it should go to people that are going to spend it.  And four, and for God‘s sakes, don‘t worsen the long-term situation.  This particular brew of tax cuts did not, in my opinion, meet any of those requirements.

MATTHEWS:  What about the president‘s call to make the tax cuts permanent?

PETERSON:  I‘ve talked to some of the best economist, Chris, that I can find, and say, Do you know of any economic theory that five or six years from today, if Pete Peterson and Chris Matthews—and you‘re fairly affluent too, you know—were to understand—were to understand that in the year 2009 and ‘10...

MATTHEWS:  Right.

PETERSON:  ... these tax cuts are going to be made permanent and fat cat Pete Peterson isn‘t going to have to do estate taxes and that‘s going to somehow give the current economy...

MATTHEWS:  Right.

PETERSON:  ... a big shot upward, I can‘t find anybody that can prove or give me any justification for that concept.  And that‘s just when the Boomers are retiring, and our huge unfunded liability bills are going to come due, Chris.

MATTHEWS:  OK.  Well, I‘m not sure deficits are going to matter in this election, but I agree with you, they‘re going to matter in the long term.  Thank you very much, former U.S. commerce secretary Pete Peterson of the Blackstone Group and author of “Running on Empty.”

Up next: What does John Kerry need to do at next week‘s Democratic convention to get a good bounce—I love that word—bounce in the polls?  “Newsweek‘s” Howard Fineman and “The Boston Globe‘s” Ann Kornbluth—they‘re both going to join us.

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  This half-hour on HARDBALL, just seven days to go and John Kerry is getting ready for the Democratic Convention.  And his campaign is gearing up also for a possible legal showdown with President Bush.  That‘s coming up.

But, first, the latest headlines right now.

(NEWS BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

“Newsweek”‘s Howard Fineman is a NBC News political analyst and Anne Kornblut is a national political correspondent for “The Boston Globe.”

Both folks you, thanks for joining me.  I‘m thrilled, of course.  Howard is already in the mood now.  He‘s got the tie missing for the Democratic Convention.  This is like Christmas Eve for me.  I‘ll tell you, I can‘t wait. 

Let me go to Anne. 

The hub of universe, they call Boston, the very hub of the universe.  Is this a good place for the Democrats to win a presidential election, starting in Boston? 

ANNE KORNBLUT, “THE BOSTON GLOBE”:  Well, I think it‘s too late for them to change.  So...

MATTHEWS:  But not for you to criticize. 

(LAUGHTER)

(CROSSTALK)

MATTHEWS:  Is it smart?

KORNBLUT:  I‘m certainly not going to doubt it.

Look, they are going to try and make the most of what Boston has to offer.  The Republicans have spent a lot of time now criticizing Kerry as the guy from Massachusetts who obviously must be liberal, then.  Kerry is going to try to turn it around, use the sights and sounds of Boston to talk about its history as the birthplace of America, to emphasize all the beautiful backdrop, he is on Nantucket now, to show the water and really use all that is best about Boston to make the case for himself. 

MATTHEWS:  So you are not willing to give me an answer on that.  Do you think Boston is a good selling point for the Dems? 

KORNBLUT:  That‘s not for me to say.  I don‘t know.  I don‘t know. 

Time will tell.

(CROSSTALK)

MATTHEWS:  Howard, in the meantime, before

(CROSSTALK)

HOWARD FINEMAN, NBC CHIEF POLITICAL CORRESPONDENT:  She works for a Boston newspaper, yes.

MATTHEWS:  “Newsweek,” tell me, “Newsweek,” tell me, because “TIME” won‘t tell.  “Newsweek” will. 

FINEMAN:  Yes. 

MATTHEWS:  Do you think it‘s smart for the Democrats to meet at the very heart of liberalism? 

FINEMAN:  No, I do not.  And I think the fact that Kerry is the nominee makes it even more complicated. 

I agree with Anne.  They are going to trying to talk about Lexington and Concorde and the city on the hill and John Winthrop, who happens to be a distant ancestor of John Kerry.  But, no, the Democrats have won the presidency in recent decades with Jimmy Carter and then with Bill Clinton by basically distinguishing themselves from the Boston-based Democratic Party that John Kerry is now the inheritor of.

And John Kerry‘s trick is going to be to use the power of the history, the revolutionary history, the pro-civil rights history, the abolitionist history and the Kennedy legacy without getting stuck by it, without getting drowned in it.  It‘s a tricky thing to do.  If he can bring it off, it will be very powerful.  But it‘s very tricky. 

KORNBLUT:  And I would also say, you are not going to see John Kerry in Boston for the entirety of the convention.  In fact, he is going to be traveling to Columbus, Ohio, to the heartland.  He‘ll be in Philadelphia the day before. 

MATTHEWS:  Right. 

KORNBLUT:  So I think they are going to try and counterbalance the images of the Democratic Party in Boston, all the Democrats partying in Boston, with Kerry out there in the country. 

MATTHEWS:  Well, Anne, what about the warmup act?  We have got Hillary and Bill Clinton Monday night, Al Gore and Jimmy Carter Monday night.  Then we have got a whole night of Ted Kennedy, right? 

KORNBLUT:  Well, it is Boston.  This is the convention that Kennedy wanted to bring to Boston.  So, yes, it‘s pretty inevitable that we are going to have a lot of figures that are seen as some of the most liberal members of the party there. 

(CROSSTALK)

MATTHEWS:  How does that help the national ticket in Missouri and Ohio, the tricky states they need to win?

(CROSSTALK)

FINEMAN:  Go ahead, Anne.  I‘m sorry.  

KORNBLUT:  No, that‘s OK.

I was going to say, I don‘t—I think it all really depends on how much importance you think the convention has generally.  The networks as you know are going to be taking it on the main networks for an hour each night, three hours total.  So I think for junkies, it may have a real impact.  But I think it remains to be seen—and we have this debate every four years—but I think it remains to be seen how much impact it really has. 

MATTHEWS:  Well—well, from my point of view...

(CROSSTALK)

MATTHEWS:  HARDBALL, we‘re going to be doing five hours a night up there.  Our network is going to be doing gavel to gavel.  MSNBC is going to be all over that place.  So I think people are going to get a smell of the city. 

Will they see liberalism in action up there that offends people or will they just see old memories of old liberalism, but today, Howard, the message is going to be more practical, more down the middle? 

FINEMAN:  Well, I think the message is more practical and down the middle.  If you read the Democratic Party platform, which was engineered by the Kerry people, it‘s very cautious.  It doesn‘t call for pulling the troops out of Iraq, for example.  It‘s moderate, but consistent with pragmatic Democratic policy on health care and so forth.

Look, the Kennedy legacy is something that Kerry is going to have to deal with, because, by his own lights, in his own biography, autobiographical writings, this is what inspired him.  John F. Kennedy is what got Kerry into politics.  And Ted Kennedy‘s help in 1996 through consultant Bob Shrum and others is what saved John Kerry in his race against Bill Weld.  And, indeed, it was Ted Kennedy who saved John Kerry in Iowa in many ways in the primaries just concluded.

So Kerry can‘t run away from it.  It‘s—and it‘s a powerful thing in the history of Democratic Party.  And it‘s like a powerful force that you have to know how to handle and you have to be able to channel and use properly.  That to me is Kerry‘s big challenge at this convention and what he is going to have to use that convention speech for, which will be at least in part written by Bob Shrum, who is the voice of Kennedy Democratic Party over the last 30 years. 

MATTHEWS:  And who is going to write the speech?  Is it going to be Bob Shrum or John Kerry?  Is he going to write his own speech?  He put out the word last week he is sitting up there in Nantucket with some legal papers, some scissors, some tape.  He‘s cutting and pasting.  He‘s using old tech, no word processor.

Do you really think he is going to sit down and write the great speech of his life? 

KORNBLUT:  I actually would suspect—we‘ve been told he‘s been thinking about the speech for months.  I don‘t think he is actually sitting there with a typewriter right now starting from scratch.

I think we have seen in the past that his M.O. is to ask a lot of different people to give their input, but in the end as he did with the vice presidential pick, he has actually made a point of, and I guess we have no choice but to think that it‘s actually sincere, showing that he himself is the one making decisions, doing the hard work, doing the writing. 

So we won‘t know.  I‘m sure there will be a lot of hand-wringing and second-guessing and questioning about each line of the speech as the day gets closer.  But I don‘t think we are really going to know until we see it and until we can really determine who has got their fingerprint on it.

MATTHEWS:  Do you know if he is getting any acting help?  There was a big piece in “The L.A. Times” out here today—I‘m in Los Angeles—talking about his inability to smile, all that kind of stuff.

The old joke is, if you are happy, tell your face. 

(LAUGHTER)

(CROSSTALK)

MATTHEWS:  How is he going to—how is he going to exhibit the enthusiasm and the hope through his own body language?  Is he going to be able to convey that as well as with the words?

FINEMAN:  Well, I think, Chris, he is a very diligent guy.  He is very dedicated.  He has not only been writing this speech for three months or three weeks.  He‘s been writing it for about 40 years. 

This is his moment.  He‘s styled himself a Kennedy.  This is going to be his moment.  And he will get the theatrics of it right.  The question is, how many cooks are going to be in there on this speech?  If it‘s typical Kerry, he will want to write the draft himself, but he will ask advice from a lot of people.  He will be very self-conscience about the notion that it‘s a Bob Shrum piece, Bob Shrum being famous for that great Ted Kennedy speech in 1980, the dream will never die speech.

He will not want it to be seen as a Shrum speech.  So there will be other speechwriters in there.  I foresee Kerry sitting up there in Nantucket with lots of different advice, lots of different paragraphs from people and Kerry himself will retain the power to make the final whole.  Whether it comes as a through-written piece or not, we‘ll see.

The key thing, though, is not the words particularly.  It‘s the story Kerry tells about himself. 

MATTHEWS:  I agree. 

FINEMAN:  He has got make a connection between the guy he is and the kind of president he wants to be. 

MATTHEWS:  Well, the parallels to Richard Nixon keep coming.  They keep congressman, ironically, as you know, Howard and Anne, because it was Nixon‘s biographical account which he used in the ‘68 convention which was the most powerful emotion of that campaign.

Whatever we think about Nixon after Watergate, before Watergate, when he gave that speech, I think it put him over the top. 

Anyway, will the earth move, Anne, when John Kerry speaks? 

KORNBLUT:  More—more predictions.  I hope there isn‘t an earthquake, since I‘m going to be there.

(LAUGHTER)

KORNBLUT:  I think that—I think that Howard is right about the message. 

I think that what some Democrats, the ones that are complaining behind the scenes, have said is that there is not enough of a consistent, coherent message from Kerry, that he has been a lot of things, he‘s had a lot of opinions and policy views, but we need to know, what is the one image, what is the sound bite that they can take away from this that will really come out of that speech that night?

(CROSSTALK)

MATTHEWS:  We‘ll have to come back, Howard.  We‘ll come right back and talk about the night of John Kerry‘s life coming up next week from Boston.

More with Howard Fineman and Anne Kornblut.  Plus, David Shuster reports on the legal strategies—you know what that means, Florida—each campaign is employing in battleground states in case ballots have to be recounted and we see another Florida 2000 scenario.

And don‘t forget, on Sunday, this coming Sunday at 8:00 Eastern, join Tom Brokaw and myself for a special look at America‘s rich history of political conventions, “Picking Our Presidents: The Greatest Moments.”

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, could the election deadlock of four years ago happen again? 

HARDBALL is back after this.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

With less than four months to go before Election Day, both the Kerry and Bush campaigns are preparing for the nightmare scenario, another tie.  Teams of recount lawyers have been assembled.  Training sessions are under way and office space in some states has already been reserved.  It all comes as fears are growing across the country that Florida-like problems have not been solved and that this election could be even worse. 

HARDBALL election correspondent David Shuster joins us now with the latest—David.

DAVID SHUSTER, NBC ELECTION CORRESPONDENT:  Well, Chris, with the election looking awfully tight in up to a dozen crucial battleground states, officials in both parties fear that there are six or seven dates where determining a winner if that particular state is close could be more difficult than it was four years ago in Florida. 

In each particular state, party leaders are deeply concerned about voting list fraud, old voting machines and problems with new voting machines.  One official said that a recount in any one of these battleground states with the election hanging in the balance would be—quote—“a train wreck far worse than the 2000 election.”  So both campaigns, as you mentioned, Chris, are taking action. 

The Kerry campaign, for example, they are assembling a nationwide legal network.  That team is preparing for possible litigation.  They are analyzing voter registration lists.  They are looking at the recount procedures, renting office space.  And John Kerry himself is talking about the 2000 debacle in his stump speeches. 

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE:  We‘re not just going to sit there and wait for it to happen.  We‘re already out there putting together teams of lawyers.  We‘re already out there preparing challenges for these purges.  On Election Day in your cities, my campaign will provide teams of election observers and lawyers to monitor elections.  And we will enforce the law. 

(CHEERING AND APPLAUSE) 

(END VIDEO CLIP)

SHUSTER:  The Kerry campaign is not the only one that is saying this.  The Bush campaign says it has a assembled a team that will monitor 30,000 precincts across the country.  This is a team of lawyers and election observers that are already being trained. 

But, Chris, one thing that is very different from four years ago which could also be another crucial factor, and that is the issue of absentee ballots.  Because of the war in Iraq, the large number of Americans in the military overseas doing contract work, states are already seeing a record number of requests for absentee ballots.  And, as you know, a lot of these absentee ballots don‘t start trickling in until after the election.

And that could be another thorn in the side of both campaigns if in fact this race is not decided on election night—Chris.

MATTHEWS:  Are they going to agree, both parties, before the election in time to matter that you have to have your ballots postmarked before the election? 

SHUSTER:  Well, Chris, and that is going to be a matter of dispute, because nobody knows of course where the dispute, where the battle might be, whether it‘s going to be Florida or Ohio.

And in these particular states, Chris, there are different laws at least as far as the recount procedures, as far as some of the absentee ballots, when they are mailed out, when they have to go back in. 

MATTHEWS:  OK, thank you very much, David Shuster, HARDBALL‘s correspondent.

Let me go right back to Howard Fineman and Anne Kornblut—Kornblut.

Let me ask you about this whole question. 

Howard, is this stirring the pot by the Democrats to remind African-American voters that they felt that they were screwed, basically, last time?

FINEMAN:  That‘s exactly what it is.  There is a substantive reason for concern, Chris.  But also, among the Democratic base, the big mode of power, the big emotional thrust here is, we was robbed last time and we‘re not going to let it happen again. 

So, yes, especially in the black community, especially in Florida, where a lot of blacks were really concerned that it wasn‘t the ballot counting that was the problem, it was their inability to get to the polls and to be allowed to vote in the first place.  It‘s a huge thing.  It‘s part of the mythology of the modern Democratic Party.  And Kerry is tapping right into it.

MATTHEWS:  I don‘t want to be too retro here, but part of getting people ready to get to the polls is getting them prepared for sometimes complicated ballots, people that don‘t have a whole lot of education, poor people, not used to working some of this machinery, the ATM machines that the middle class are so familiar with, for example.

I know it sounds tough and Republican, but I‘ll just say it right now.  Isn‘t the Democratic Party‘s responsibility to get its voters up to speed on how to use these voting machines, etcetera, and even if it‘s paper ballots, how to do it right? 

FINEMAN:  Well, sure it is.  Sure it is.  But that‘s not what the legal argument is about.  The legal argument is about people who were properly qualified to vote who weren‘t allowed, who were purged from rolls who shouldn‘t have been.

MATTHEWS:  Oh, I know.  Let‘s talk about the purging.  Why do they keep doing it?  Why do the Republicans keep going through the felony lists looking for names of people to purge? 

FINEMAN:  Because, legally, they are allowed to.  And they are going to use that.

See, the Democrats got a lot of publicity back in 2000 for their effort on behalf of Gore in Florida.  But the fact was, without publicizing it very much, Jim Baker and other people, Ben Ginsberg and the others, ran a much more methodical ground game on all of this than the Democrats did. 

The Democrats used to be the experts at this kind of thing.  In the last 20 years, the Republicans have become more expert.  What Kerry is trying to do is catch up to the Republican technology and attention to detail.  The Democrats were outlawyered in Florida in 2000, as they subsequently admitted. 

MATTHEWS:  Let me Anne Kornblut right now.

I‘m going to give you the opportunity of a lifetime as a reporter.  Be an anthropologist.  Tell me, because I know the answer, but tell the country how the typical Bostonian is different than the liberal image that everybody has of him or her from outside the state? 

KORNBLUT:  Oh, gosh.  Well, first of all...

MATTHEWS:  Because you know they are different.

KORNBLUT:  Well, certainly.  The image is a lot different, I think, as you well know, than what the rest of the—than what really goes on in the city. 

First of all, there is a Republican governor, who—and Boston is the state capital.  And he—although his votes largely do not come from within Boston, they certainly contribute to getting him elected.  That‘s Governor Romney this time.  And there has been a Republican governor now.  This is the third administration in a row. 

MATTHEWS:  Right. 

KORNBLUT:  There are a lot of—on a more substantive note, there are a lot of anti-abortion Catholics in the state and in and around Boston, which I don‘t think is really the image that people have outside of Massachusetts. 

There is also a whole new Boston, a whole new Massachusetts, which is the high-tech corridor around Boston to the west of Boston.  It has brought in a lot of people from outside state, a lot of immigrants, which, again, is not the sort of old-school Massachusetts people think of.  Don‘t you think, Chris? 

MATTHEWS:  I agree completely.  And I‘ve worked up there.  I worked for Tip O‘Neill all those years.  He was part of the old Boston, the old Massachusetts.  But when you have a Mormon governor of a state in the East Coast, you have got to wonder if there is more in the water than liberalism. 

Anyway, thank you very much for everybody.

Coming up, should Arnold Schwarzenegger—stick with us, Anne and Howard—apologize for calling Democrats in the legislature out in California girly men?  More with Howard Fineman and Anne Kornblut when we return. 

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with “Newsweek”‘s Howard Fineman and “The Boston Globe”‘s Anne Kornblut. 

Here‘s what California Governor Arnold Schwarzenegger said about some Democratic legislators. 

(BEGIN VIDEO CLIP)

GOV. ARNOLD SCHWARZENEGGER ®, CALIFORNIA:  If they don‘t have the guts to come out here in front of you and say, I don‘t want to represent you, I want to represent those special interests, the unions, the trial lawyers, and I want them to make the millions of dollars, I don‘t want to represent you, if they don‘t have the guts, I call them girly men.  They should go back to the table and they should fix the budget. 

(CHEERING AND APPLAUSE) 

(END VIDEO CLIP)

MATTHEWS:  And here‘s what the Republican Party Chairman Ed Gillespie said about it earlier today on this program. 

(BEGIN VIDEO CLIP)

ED GILLESPIE, REPUBLICAN NATIONAL COMMITTEE CHAIRMAN:  It looked to me like a joke.  And I think that he seems to be comfortable having made that joke.  And that‘s where he is.  That‘s fine by me. 

(END VIDEO CLIP)

MATTHEWS:  Fine by me.  Howard, will that stand? 

(LAUGHTER)

FINEMAN:  No, because...

MATTHEWS:  I know it is funny to some extent, but will it stand? 

FINEMAN:  No.  It won‘t stand.

MATTHEWS:  Can he get away with this shot?

FINEMAN:  No.  And listen very carefully to what Ed Gillespie said.  He said that Arnold seemed to be comfortable with that comment.  The subtext of that was, he, Ed Gillespie, was not comfortable with the comment, because they‘re hoping to use Arnold at the Republican Convention as this sort of paragon of tough on defense, but very moderate and welcoming on social issues.  Suddenly, Arnold goes back to the Neanderthal mode on the social issues.

MATTHEWS:  You tell him that. 

(LAUGHTER)

FINEMAN:  And he uses...

(CROSSTALK)

MATTHEWS:  You call him a Neanderthal.  You go ahead, Howard.

FINEMAN:  He loses his value to the Republicans as a broadening force. 

That‘s my point. 

MATTHEWS:  Anne Kornblut...

FINEMAN:  And that‘s why Ed Gillespie was not happy with it. 

MATTHEWS:  Anne, Ed Gillespie finally did say he is fine with it.  Do you think that will stand, Anne Kornblut?  Knowing political coverage, will this just keep going until they say, I‘m sorry? 

KORNBLUT:  Well, I don‘t think it‘s going to go away, certainly.  I also don‘t think, though, it would have had the legs it seems to have had over the last 24 hours if Arnold weren‘t having some serious budget problems in the state. 

MATTHEWS:  I agree.

KORNBLUT:  He had a sweet long honeymoon there when he first came in as governor.  He came in promising to fix the budget problems, which Gray Davis couldn‘t do.  And it turned out, it‘s not as easy as he thought it might be. 

MATTHEWS:  Right. 

KORNBLUT:  So I think the underlying thing here is—now, I would also say that I did a little research about this girly men business today. 

And, apparently, in the German language, there are about 15 different ways to accuse someone of being wussy.  And one of them is to call someone a milk drinker.  And the other is to say he is a guy who likes to take warm showers.  So something tells me this may be a cultural difference.  Or at least that might be a defense. 

FINEMAN:  Anne, are you suggesting that Arnold speak in German next time? 

MATTHEWS:  We‘ve got to go.

FINEMAN:  All right.  Go ahead.

(CROSSTALK)

MATTHEWS:  More coming in Deutsch. 

Thank you, Howard Fineman and Anne Kornblut.

This coming Sunday, join NBC‘s Tom Brokaw and myself for a special presentation, “Picking Our Presidents: The Greatest Moments.”  Tom and I look back on the highlights and low points in America‘s rich history of political conventions. 

Here‘s a preview. 

(BEGIN VIDEO CLIP)

MATTHEWS:  I had never heard of Kennedy before ‘56.  And I remember, we had just gotten our TV set, I think.  And I remember catching—and I was sort of rooting for Kefauver, because I had heard of him.  And this guy Kennedy, Kennedy.  And I wasn‘t thinking Irish or anything.  I just thought, who is this guy? 

And then he showed up.  Remember, he showed up on the stage with Jackie to concede the defeat to Kefauver for the vice presidency.  And these people don‘t look like politicians.  They look great. 

TOM BROKAW, NBC ANCHOR:  I remember the Kennedy brothers during the racketeering hearings.  That‘s when I was first struck by it.  And they had that staccato New England accent.  They were handsome.  They seemed to be a new generation of politicians.  And that‘s when my attention was first drawn to them, when I was still in junior high. 

(END VIDEO CLIP)

MATTHEWS:  Next Sunday at 8:00, what a great show, “Picking Our Presidents,” Sunday at 8:00, this coming Sunday.

Right now, it‘s time for the “COUNTDOWN” with Keith.

END   

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