updated 10/8/2004 12:10:08 PM ET 2004-10-08T16:10:08

Guest: Howard Dean, Deborah Orn, Ben Ginsberg, Rick Santorum, Mark Wrighton

(BEGIN VIDEOTAPE)

CHRIS MATTHEWS, HOST:  Tonight, the presidential race is tightening.  New data available just today shows the gap is closing on all fronts with Senator John Kerry moving up.  Plus, a new “Wall Street Journal” battleground states poll shows a shift in the political landscape putting John Kerry ahead of President Bush in 13 of the 16 closely contested races. 

And the country is watching.  We had more people tuning into us the night of the vice-presidential debate than we had for the first presidential debate.  Will even more people be watching tomorrow night for the town hall style debate here in St. Louis?  Live from Washington University in St. Louis, let‘s play HARDBALL.

(END VIDEOTAPE)

MATTHEWS:  Good evening.  I‘m Chris Matthews and welcome to a special edition of HARDBALL. We‘re live from the campus of Washington University in St. Louis where tomorrow night, President Bush and Senator John Kerry will debate for the second time before an audience of uncommitted voters.  But something is happening in the country.  Kerry is closing on the president including in those states where the election is most likely to be decided.  Voters are finding their way to a candidate struggling for their final answer in this national moment of passion and reflection. 

Joining me tonight, my panel.  Deborah Orrin, the “New York Post” bureau chief.  Ron Reagan, political analyst for MSNBC.  MSNBC contributor Ben Ginsberg who served as the Bush/Cheney campaign attorney and “Congressional Quarterly” columnist Craig Crawford.  But first, we‘re joined by former Democratic presidential candidate Howard Dean.  Governor Dean, thank you for joining us.  Would you please explain to me how you talk to an audience on national television during a crowd behind you so you don‘t get your voice at the wrong level? 

How do you do that? 

HOWARD DEAN, FMR. PRESIDENTIAL CANDIDATE:  I don‘t know but I can hear you. 

Welcome, Washington University students.

MATTHEWS:  Let me ask you about this race.  How do you see it going right now three weeks out? 

DEAN:  I think Senator Kerry is closing fast.  We‘re a long way out.  I think the biggest problem the president has is that almost every day, a new document like the one we saw today comes out that shows the president wasn‘t truthful to the American people.  It wasn‘t so much that we‘re in Iraq.  I think that‘s a policy disagreement.  But it‘s the credibility of the president of the United States that‘s at stake.  And people will not tolerate a president of the United States who does not tell them the truth.  That‘s apparently what this president did when he got us into Iraq.  That‘s his biggest problem for the next 25 days. 

MATTHEWS:  But if his people, meaning half the country that support the president on the war, are they going to stop supporting this war?  Even John Kerry says the war was, he hasn‘t said it was a blunder yet exactly.  Your party is not an anti-war party like you were.  How can you benefit from concerns about a war if your party even now doesn‘t want to oppose? 

DEAN:  Chris, the reason I was an anti-war candidate is—remember, I supported the first Gulf War.  I supported Kosovo.  I supported Bosnia and I supported the war in Afghanistan.  This is a matter of telling the truth.  You can‘t build good public policy when it is built on things that are not true, when the facts are ignored.  That‘s my objection to this presidency.  The president doesn‘t care what the facts are.  It‘s not a matter of I‘m always against war.  I supported the past four wars.  My party was a little slower, although now Senator Kerry I think is doing a fantastic job explaining to the American people, the issue is not just the war.  It is the president‘s judgment and the president‘s truthfulness.  That is the central issue of this campaign. 

MATTHEWS:  Governor Dean, your name came up in Tuesday‘s vice-presidential debate.  Let‘s listen. 

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT:  Howard Dean was making major progress in the Democratic primaries, running away with the primaries based on an anti-war record.  So they in effect had decided they would cast an anti-war vote when they voted against the troops.  Now if they couldn‘t stand up to the pressures that Howard Dean represented, how can we expect them to stand up to al Qaeda? 

(END VIDEO CLIP)

MATTHEWS:  Was it your sense, Governor Dean, at the time that John Kerry and John Edwards both voted against the $87 billion for the rebuilding in Iraq, that they were trying to catch up to you on the anti-war front? 

DEAN:  No.  It was my sense that they understood that the president didn‘t put a high enough priority on that $87 billion to pay for it.  This  is the biggest borrow and spend, borrow and spend Republican administration we‘ve ever had.  They don‘t balance budgets.  We have a half trillion dollar deficit.  What Senator Kerry and Senator Edwards said was, if you care about this issue, Mr. President, you will raise taxes on people who make more than $200,000 and restore the taxes to what they were when Bill Clinton was president so we can pay for this war without charging it to our children.  I thought that was an admirable stance of John Kerry and John Edwards.  Somebody has to stand up for the American taxpayers.  They did.  George Bush didn‘t.  That‘s why we‘re going to change presidents. 

MATTHEWS:  You know, we read a lot in the papers about the concerns of the rest of the country outside of New England that this candidate, the Democratic party, John Kerry, isn‘t sufficiently religious in his public manner.  Do you think New Englanders, when they run for president, have to change their manner towards their religious belief in order to accommodate the more overt religious expression of people in the Bible Belt? 

DEAN:  I don‘t think it hurts to openly discuss religion.  It is something we don‘t do all that much in our part of the country.  But the truth is, New Englanders have a lot in common, and Democrats have a lot in common with the religious community.  I sort of think of the president‘s party as the Sadducees and the Pharisees.  They talk a lot about things but they‘re kind of the money changers.  They make the big money, they give our taxpayer money to the big corporations. 

Democrats ought to be, if they‘re good Democrats, more concerned about working people, the ordinary kinds of people that Jesus really cared about in the Bible.  So I think it is fine for Senator Kerry to talk about religion.  I think it is in the context of religion that we can relate to people who, for whom religion is a very important part of their life.  I don‘t think we have to give up on the religious community.  As long as we make clear our values are not the values of the Republicans who care about the rich men trying to get into Heaven just like passing the camel through needle‘s eye, I would like to see Democrats stick to their values of helping the kind of people that Jesus talked about in the New Testament.  so I don‘t think there‘s anything wrong with talking about religion as long as we keep our values. 

MATTHEWS:  Actually, it was the Pharisees up in the front row in the temple, and the publicans in the back.  It was the tax collector who was being humble in that particular sermon. 

Anyway, let me ask you, Governor, in this race, do you believe the people who oppose the war in Iraq as you did should vote for Kerry? 

DEAN:  I do.  Absolutely. 

MATTHEWS:  Do you believe that the people who support the war, who think it was a great idea, a necessary act of U.S. foreign policy, worth all the cost regardless of the new intel coming in, the failure to back up the cost of the war in the beginning of it, weapons of mass destruction, the failure to connect it to 9/11, do you think those people who still support the war should go with the president? 

DEAN:  I don‘t.  And the reason is that the war has not made us a safer place.  I said that eight, 10 months ago.  I say it today.  More American troops have been killed since Saddam Hussein was captured than before.  Furthermore, the president continues to run up these enormous deficits.  This is a president who has failed us on many fronts.  I‘m in Pennsylvania right now.  350,000 jobs lost in Pennsylvania in the last four years.  Hundreds of people, thousands of people losing their health insurance.  There‘s a lot of failure in this presidency.  It is not just our intervention in Iraq that‘s a failure.

MATTHEWS:  I‘m still trying to find an answer out from a top politician.  I‘m going to try one more time with you.  If there was no WMD, if there‘s no connection to al Qaeda which even the administration is now admitting, if there‘s no happy Iraqi to greet us there, if there‘s no Iraqis to pay for the war, why did we go to war?  Why did they take us to war? 

DEAN:  Only George Bush knows the answer to that.  We do know that Paul O‘Neill in the book about—in “The Price of Loyalty,” the former secretary of the treasury said in his very first cabinet meeting with President George Bush, he announced he was going to take out Saddam Hussein.  That was long before 9/11 and long before we knew that al Qaeda was about to drive planes into the World Trade Center and kill 3,000 Americans.  This president has some kind of obsession with Iraq and I think that‘s fine to have an obsession with Iraq but not if you‘re the president of the United States. 

MATTHEWS:  One of the first steps taken by the vice president elect Dick Cheney was to call for a briefing by incumbent secretary of defense Bill Cohen.  When Bill Cohen was told to do the briefing by the vice president for the new president, the vice president elect said don‘t give me one of these tour (UNINTELLIGIBLE) of the whole world.  Focus entirely on Iraq.  That‘s what I heard from Bill Killing (ph) so they were thinking earlier about that campaign in Iraq.

Thank you very much, Howard Dean.  When we come back, we‘ll talk to the panel and have the latest polls in this tight race, it‘s getting tighter.  You‘re watching HARDBALL‘s coverage of the eve of the second presidential debate live from St. Louis.

(COMMERCIAL BREAK)

MATTHEWS:  Well, despite the rowdy nature of the crowd you‘re looking at, this is one of the most elite schools in the country.  Washington University in St. Louis where President Bush and Senator Kerry will debate tomorrow night. 

Let‘s go to the panel.  Deborah Orn of the “New York Post,” Ron Reagan, Ben Ginsberg and Craig Crawford, all familiar faces in the world much punditry. 

Let‘s go right now to the question.  What do you feel is going on in the country, ignoring the particular numbers as we go into this second presidential debate? 

DEBORAH ORN, NEW YORK POST:  I think it is very fluid.  I think you can find a poll right now to prove almost anything you want.  But the basic point is this is a very close race and it‘s getting closer.  And whether we‘re moving toward the final decision point, or just another decision point where things could change, I don‘t think we know. 

But I think we do know that the debate tomorrow night is a very big deal.  And you can sort of see that today, because Bush and Kerry were really going at each other over Iraq. 

MATTHEWS:  You know historically, Ron, the presidential reelections are pretty dramatic.  As they say in Britain, people vote in italics.  You know, when you like the guy, you dump him, if you don‘t, you keep him if you do, rather dramatically.  It‘s not close.  Why would a race for re-election be getting closer?  We‘ve known President Bush for 4 years.

RON REAGAN, MSNBC ANALYST:  I‘m not sure why that‘s the case, but I agree with Deborah, and I think—I sense, I have no scientific proof of this.  But I sense the country is approaching a possible tipping point here.  That something will break one way or the other, and maybe depending on tomorrow night‘s debate. 

If George W. Bush turns in a weak performance, like did he in the first debate, he is in real trouble.  I think he might see him start to really memorandum hemorrhage supporters. 

MATTHEWS:  Yes, but he‘s good with crowds.

REAGAN:  He is good with crowds.

MATTHEWS:  He is very good with people. 

BEN GINSBERG, REPUBLICAN ELECTION ATTORNEY:  This is probably his best natural forum, being able to interact with other people.  I think they‘re looking forward to draw the contrast with John Kerry.  He‘s going to there be, his old usual jovial self, and we‘ll see how Senator Kerry (UNINTELLIGIBLE).

MATTHEWS:  Was this a bit of great gamesmanship by the Republicans?  You know, the briar rabbit thing, don‘t throw me that briar patch, please don‘t throw me in that briar patch?  Was Bush really wanting to get thrown into a town hall?  When he said, don‘t do that to me.  Was that a game? 

GINSBERG:  I think it all worked out perfectly for the American public. 

MATTHEWS:  Well said.  How does it feel to you?  You‘re excellent at this sort of thing. 

CRAIG CRAWFORD, MSNBC ANALYST:  First of all, it shows debates matter.  I think in the first debate, John Kerry achieved a level of credibility, met a threshold as commander in chief which President Bush now has to undermine, which is what he is trying to do. 

John Kerry in that first debate did something that I didn‘t expect him to be able to do and move these numbers.  We are now seeing battleground states moving back toward Kerry.  Ones that matter.  I mean, out of the 16 battleground states in this Wall Street Journal poll, Kerry is outside the margin of error in the lead in six of those states.  Bush is outside the margin of error in none of those states. 

MATTHEWS:  Yes.  They‘re all extremely close. 

Let‘s take a look at two national polls of likely voter released today.  According to the latest Reuters/Zogby poll President Bush leads Senator Kerry by 2 points, 46 to 44.  But the Associated Press paints a different picture with Kerry up 50 to 56.

Deborah, they both say to me, add them up, divide them, average them out, you get even. 

ORN:  They both say to me, deuce.

MATTHEWS:  Yes, deuce.

REAGAN:  Or wad them all up and just toss them into the air. 

MATTHEWS:  What is that?  Let‘s look at the one you mentioned.  This is fascinating to the people who watched this race.  In Pennsylvania, a Wall Street Journal/Zogby interactive poll of Pennsylvania voters shows Senator Kerry beating President Bush by a five-point margin.  In a Keystone poll of likely voters has Kerry beating Bush by a six-point margin, 49-43. 

I‘m from Pennsylvania.  I know I‘m from Philadelphia, which is sort of an interesting part of the state.  But you can sort of figure out, that the Democrats can‘t carry Pennsylvania solidly, I mean, win by six or so.  They‘re in big trouble. 

CRAWFORD:  That‘s the good news in this poll.  Some of these Democratic leaning states are coming back to Kerry, like Pennsylvania,  also, Wisconsin is coming back toward Kerry. 

MATTHEWS:  Let me tell you why Pennsylvania is probably a good leading indicator of Democratic strength.  It is an older state.  It is made up of regular people, not with the people that go to Florida, the sun birds, you know, snow birds, it is made up of regular people who care about retirement.  It is an older state.  They care about Medicare, they care about Social Security.  They trust those old programs they‘ve paid into all their lives to be there when the time comes and stay there. 

They‘re also hard hit by high-tech.  It is not exactly benefiting the way some other states have by high-tech.  It has been hurt by the decline of steel and the other industries of Pennsylvania over the years.  It is classic Democratic country.  Do you agree that they lose Pennsylvania, they lose the election?

CRAWFORD:  Absolutely.  And what we‘re seeing is the economic issues are bringing some of these states back to Kerry, I think.  This campaign is the war, stupid, do I believe this is becoming a referendum on the war in Iraq.  But the economic issues are the background music in states like Michigan and Ohio, Pennsylvania, where the economy is hardest hit are the ones coming back toward Kerry.  So, I don‘t think we should overlook the economy. 

MATTHEWS:  Does that mean the administration to save its office, cling to power, is going to have a spooky Halloween this late October?  They‘ll come back with all the goblins of gay marriage and abortion and all the other things that scare the hell...

CRAWFORD:  Well, luckily Halloween is just 2 days before election day. 

MATTHEWS:  Do you think your party is planning a Halloween to scare the voters back into their boxes? 

GINSBERG:  No.  I don‘t think that‘s necessarily true.  I think at that time, both parties will go to their base.  So, if that‘s scaring, that‘s scaring.  Both parties are going to appeal to the base.  The job numbers tomorrow will tell as you lot about which way the economy...

MATTHEWS:  What is a good number for the incumbent party, for the president?  5.4 now.  What would be a good number, 5.4 hold?

GINSBERG:  Yes, 5.4.

MATTHEWS:  That‘s good enough usually, except that we have a second problem, which I hope we get to before the election which is people are working their second jobs for $7 an hour.  Grown men competing with their kids for the same jobs.  It is a horrendous family situation and it is out there.  And it doesn‘t get picked up in these jobs numbers.

When we come back, we‘ll talk to the great crowd out here at Washington University.  This is one of those elite schools.  I think you‘ll be able to tell.  You‘re watching HARDBALL‘s live coverage from St. Louis on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to St. Louis.  We‘re here with the crowd at Wash U, as they call it.  Wash U, Washington University of St. Louis.

You know, a lot of people get confused.  They think Washington University, is it in D.C. or is it in Washington State.  How did you find this place in St. Louis called Wash U? 

UNIDENTIFIED FEMALE:  Oh, I live in St. Louis. 

MATTHEWS:  Is anybody here from out of town? 

CROWD:  Yeah!

MATTHEWS:  How did you find this school called Washington University out here in St. Louis? 

UNIDENTIFIED FEMALE:  I just heard it was a wonderful school, and I applied here and I love it. 

MATTHEWS:  It‘s hard to get in, isn‘t it? 

UNIDENTIFIED FEMALE:  Yeah, it is. 

MATTHEWS:  Glad you made it.  How did you get in?   

UNIDENTIFIED FEMALE:  I don‘t know.  I don‘t know.  I‘m lucky, I guess. 

MATTHEWS:  OK, I‘ve got a whole bunch of Kerry people.  I want you all to have a deep reflection now, something really grown up.  Is everybody voting this year? 

CROWD:  Yes!

MATTHEWS:  Everybody always says that.  Are you all registered? 

CROWD:  Yes!

MATTHEWS:  Are you going to vote by absentee? 

CROWD:  No!

MATTHEWS:  How do you vote here? 

(CROSSTALK)

MATTHEWS:  Is Missouri—you‘re all for Kerry in this crowd.  I am going to move around a bit.  How come the polls show the president leading her by a couple of points?  What is it about Missouri?  And by the way, how do you pronounce it?  Missouri or Missouri?

How do you pronounce it?  Missouri.  Nobody has a Missouri accent here? 

CROWD:  No.

MATTHEWS:  I have a theory that if you‘re from Missouri, you‘re voting for Bush.  Is that fair?  More Southern people are more evangelical perhaps?  Tell me about—how works—how does it work here?

UNIDENTIFIED MALE:  Well...

MATTHEWS:  This is a battleground state.  Fill me in.

UNIDENTIFIED MALE:  Definitely.  Well, I‘m from Springfield, Missouri.  So that‘s much more conservative than the cities like St. Louis and Kansas City. 

MATTHEWS:  And do people say Missouri or Missouri? 

UNIDENTIFIED MALE:  Definitely Missouri. 

MATTHEWS:  Missouri.  See, I know this.  This is anthropology.  Don‘t you guys think so, sociology or anthropology here? 

Let me ask you to make a prediction.  Ignoring your political biases, who will the state of Missouri—I was somewhere in between—vote for for president?  Because if Missouri goes for Kerry, he will win the election, probably.  But see, it‘s really close now.  Your final answer.  Which way will Missouri go? 

(CROSSTALK)

MATTHEWS:  I‘ve got a well-selected Republican here.  She‘s going to defer.  Let me ask you the question.  Are you from this state? 

UNIDENTIFIED FEMALE:  I‘m from Missouri. 

MATTHEWS:  Are you from Missouri or Missouri? 

UNIDENTIFIED FEMALE:  Well, everyone from my town is from Missouri. 

MATTHEWS:  And Missouri is going to vote for the president? 

UNIDENTIFIED FEMALE:  Correct. 

MATTHEWS:  Why do they prefer the president over the Democratic challenger?  What‘s the difference? 

UNIDENTIFIED FEMALE:  He appeals way more to real Missourians than Kerry does.  So that‘s what I got.

MATTHEWS:  Kerry comes across as sort of an elite, Northeastern, secular type? 

UNIDENTIFIED FEMALE:  I would have to say so. 

MATTHEWS:  Oh, and that‘s bad, right?

(CROSSTALK)

MATTHEWS:  Let me ask you for your prediction.  Is anybody going to join this young lady, or are you just going to let her stand here alone in this sea of liberals? 

(CROSSTALK)

MATTHEWS:  You mean if somebody disagrees with you, if somebody disagrees with you, they‘re stupid? 

UNIDENTIFIED MALE:  No, sir. 

MATTHEWS:  OK.  Let me go back to you.

UNIDENTIFIED FEMALE:  Thank you.

MATTHEWS:  What do you think is going to happen to this state come November 2? 

UNIDENTIFIED FEMALE:  I think it is going to be incredibly close, but I think Bush might pull it out.   

MATTHEWS:  That‘s a very nice of putting it.  Thank you.  You‘re very nice.

Let me ask you, we were in Case Western Reserve in Cleveland just the other day for the vice-presidential debate.  And maybe this is too elite rich kids school.  Is it?  Are you all rich kids? 

CROWD:  No!

MATTHEWS:  Because they said one of the biggest concern affecting them is a pocket book issue, which is rising tuition costs for college.  Now, what does it cost to go here?  Can anybody give me an answer answer? 

(CROSSTALK)

MATTHEWS:  $45,000 to go here? 

CROWD:  $40.

UNIDENTIFIED FEMALE:  $41. 

MATTHEWS:  Do you know what it was for me to go to college?  Two.  Two.  But a dollar was a dollar back then.  Let me ask you, do you think that‘s anything to do with the government?  That‘s just private costs? 

UNIDENTIFIED FEMALE:  Private costs. 

UNIDENTIFIED FEMALE:  Private costs.

MATTHEWS:  Nothing the government can do about it? 

UNIDENTIFIED FEMALE:  No. 

MATTHEWS:  Case Western (UNINTELLIGIBLE) government can do.  Let me ask you, do you think the draft is coming back?  Do you think the draft...

UNIDENTIFIED FEMALE:  No. 

MATTHEWS:  Does anybody think the draft is coming back? 

CROWD:  No. 

MATTHEWS:  How many people think that only poor kids that can‘t come to Wash U should fight in the war? 

UNIDENTIFIED FEMALE:  Definitely not.  

UNIDENTIFIED FEMALE:  Definitely not.

MATTHEWS:  Is anybody here going to join the military?  Is anybody here going to join the military?

UNIDENTIFIED MALE:  No. 

UNIDENTIFIED FEMALE:  No.

MATTHEWS:  Does anybody here support the war for other people to fight? 

CROWD:  No. 

MATTHEWS:  So you‘re against the war and you‘re against fighting. 

CROWD:  Yes. 

MATTHEWS:  Would you fight—what?

I think it is interesting.  This is a liberal body of opinion here in the middle part of the country.  You‘re in the heartland.  Don‘t you know it?  This is supposed to be a part of the country everybody is pretty conservative, pretty supportive of the president. 

I need more support here.  Hey, come here, come here.  Come here.  Let her, let her through.  Let her through.  Come here.  Come here.  Speak up.  Speak for yourself here.  You‘re for Bush-Cheney. 

UNIDENTIFIED FEMALE:  I am for Bush-Cheney. 

MATTHEWS:  All right, do you think you should fight in this war as a woman? 

UNIDENTIFIED FEMALE:  I don‘t...

MATTHEWS:  Should men have to fight in this war who are rich kids, like you guys?

UNIDENTIFIED FEMALE:  I think that‘s a loaded question. 

(CROSSTALK)

UNIDENTIFIED FEMALE:  Yes.  I think there should be people fighting in a war if our president decides that... 

MATTHEWS:  Should people who—should wealthy people fight in the war or just poor kids? 

UNIDENTIFIED FEMALE:  I think everyone should fight in the war. 

MATTHEWS:  Do you have any friends who are going to the war? 

UNIDENTIFIED FEMALE:  I do have several friends. 

MATTHEWS:  What are they doing?  Are they going into the Army? 

UNIDENTIFIED FEMALE:  They‘re Army, they‘re Air Force. 

MATTHEWS:  Do you believe in the draft? 

UNIDENTIFIED FEMALE:  I do not believe in the draft, no. 

MATTHEWS:  So if you could support the war without fighting, that‘s OK?  You should be allowed to support the war without fighting?

UNIDENTIFIED FEMALE:  No, you have to fight in order to have a war.  I don‘t believe in war, period. 

MATTHEWS:  You‘re missing my point.  You‘re saying it‘s fine to be a conservative and a hawk and saying we should fight every war, but you don‘t have to fight it. 

UNIDENTIFIED FEMALE:  No, I‘m saying you do have to fight it. 

MATTHEWS:  No, somebody else does. 

UNIDENTIFIED FEMALE:  Not necessarily.  Not (UNINTELLIGIBLE).

MATTHEWS:  Thank you.  Up next—well, if it‘s voluntary, then very few will go.  Anyway, CNBC—thank you very much for your view.  We‘re getting them all here.  Lawrence Kudlow is joining us.  He‘s from the investor class; he‘s not like most of us.  You‘re watching HARDBALL, live from Washington.

(COMMERCIAL BREAK)

(NEWSBREAK)

(CHEERING AND APPLAUSE) 

MATTHEWS:  Welcome back to HARDBALL. 

We‘re live, as you can see, from Washington University in Saint Louis.  That is not a “We Are the World” sign.  That‘s for real.  We‘re here for tomorrow night‘s debate between George W. Bush and John Kerry. 

Joining us from New York right now is Lawrence Kudlow, co-host of CNBC‘s “Kudlow & Cramer.”

By the way, the Labor Department releases new job figures tomorrow for the month of September. 

Lawrence, thank you very much for joining us. 

It is a hot number, the number that comes out before the election. 

This is one of the last ones.  In fact, this is last number on employment. 

What do you think it is going to tell us? 

LAWRENCE KUDLOW, CO-HOST, “KUDLOW & CRAMER”:  Well, the consensus view on Wall Street, Chris, is about 150,000, which is a pretty good number, and people are speculating that prior months will be revised upward, so the actual number could be over 200,000. 

MATTHEWS:  So what do you think that will do to the race? 

KUDLOW:  To the unemployment rate? 

MATTHEWS:  Yes. 

KUDLOW:  Well, I think the unemployment rate will stay at 5.4 percent, but it could drop a little bit.  It actually could come down a little bit, which, again, is a big plus for the economy. 

MATTHEWS:  Well, historically, that‘s within the margin of safety for an incumbent.  It shouldn‘t defeat a president to below 5.5, as we‘ve looked at the numbers over the many election cycles. 

But let me ask you, how do we—can we get a good look at the kinds of jobs being created?  I‘ve seen studies that show that the replacement jobs, the jobs that have come in since we‘ve lost all those jobs during the recession and early in this administration, that the new jobs pay a lot less than the old jobs.  Is there a way to get an assessment of that? 

KUDLOW:  Well, there have been studies done.  FactCheck.org has done a study.  The Bureau of Labor Statistics has done a study. 

And what those studies basically say is, in the aggregate, the data show that job payments are about flat, but when you get into specific industries, they are actually higher.  One of the things we‘re hearing is that we‘re hiring white-collar workers in recent months for the first time.  So that will raise the job rate.  But I think that is a tough argument to make in the context of a debate. 

MATTHEWS:  What about the arguments that are going on about—I know you were on the conservative side of the argument, but fill us in on both sides.

John Kerry and John Edwards especially have complained, and I guess it started with Edwards early in the campaign, that people who have traditional jobs in mills, working with the hands, semi-skilled workers, have lost their jobs to overseas, what is called outsourcing, where the jobs are sent overseas and the product is sent back here for sale. 

Is there any way that we would want to try to influence that shifting of job out of the country and should we want to? 

KUDLOW:  I think that would be a big mistake.  I think any protectionist activity, whether it is trade for capital or goods and services or jobs, would be a huge mistake.  It would damage the flexibility of the economy.  Ultimately, it would hurt consumers. 

When you look at the total here, we have lost some manufacturing jobs to outsourcing.  But, actually, when you look at the service sector, which is 80 percent-plus of the economy, we‘ve insourced jobs.  And don‘t forget, take a state like Ohio.  Automobile plants from Germany have actually moved into Ohio.  So there‘s insourcing going on. 

I just think that is a nonstarter.  I think George Bush has to take a leaf from Dick Cheney.  And I think Bush has to use facts and figures the way Ronald Reagan did 20 years-plus ago.  And he‘s got to run down, look, this economy is growing. 

(CROSSTALK)

CRAWFORD:  Lawrence, John Edwards hit Cheney with that argument about outsourcing.  He said, these guys favor outsourcing.  And Cheney left that on the table.  I didn‘t hear a strong response to that. 

MATTHEWS:  This is Craig Crawford talking. 

CRAWFORD:  Did that bother you?  You must have been grinding your teeth at that point.

KUDLOW:  Well, I don‘t grind my teeth as a general matter.  I don‘t think Cheney covered that issue.  You‘re quite right.  By the time they got to that, I think the debate was largely over. 

But I do agree with you that Bush must have at his command a whole bunch of facts and figures to put to Mr. Kerry.  That is what you learned from Cheney‘s debate.  It is a very effective debating tactic.  I saw Ronald Reagan use the same thing.  And I just want to note, apart from jobs, whether you look at incomes, whether you look after-tax incomes, whether you look at GDP or consumption or investment, there‘s a very good recovery going on.  But Mr. Bush has got to make the factual statistical case. 

MATTHEWS:  OK.

Lawrence, the hardest argument in the world is to make—the other day, yesterday, I went to get my AOL fixed.  I had a problem with it.  It turned out to be my problem.  I had something wrong.  When I talked to the person, they had—there‘s nothing wrong with this if they‘re living here.  But it was somebody with an Indian accent apparently around the world, the other side of the world, helping me figure out my AOL problem. 

If you‘re in an unemployment family, your father is out of work, your mother is out of work, it would kind of be disturbing to be trying to get help with your AOL and realizing that that job that you‘re helping to create is on the other side of the globe.  Why don‘t we go to Ohio or Missouri to get our computers fixed?  Why do we go to Bangalore?  Why do we do that?

KUDLOW:  Well, the reality is, this is the new economy.  It is a global, highly competitive economy.  And there is no turning back, Chris.  If the cost structure and productivity is better over there, we‘re going to go there.  But try this on for size. 

MATTHEWS:  Why would it be more productive for an Indian person, having to get their English sort of Americanized and even taking an American nickname, why is it more efficient for somebody in Bangalore to answer a computer question than somebody in Joplin? 

KUDLOW:  Because it is cheaper. 

MATTHEWS:  Why?

KUDLOW:  And because its‘ cheaper, businesses...

MATTHEWS:  Because the wages are cheaper.  That‘s why it is cheaper. 

KUDLOW:  Well, of course it‘s cheaper on wages. 

And because of that, domestic companies are more profitable.  And they are able to hire more workers with the extra profits.  On your AOL example, I think that‘s a great example.  But I think the issue is, if somebody in Bangalore can fix my broadband, fast-speed connection, I think the people involved are going to be very happy.  And they know darn well that this is the way the world works.  John Kerry cannot turn the clock back. 

MATTHEWS:  OK. 

Lawrence, thanks a lot.  It is great hearing from the investor class. 

Thanks for joining us from CNBC. 

(LAUGHTER)

MATTHEWS:  When we come back, a key Bush ally from a major swing state, Senator Rick Santorum of Pennsylvania is going to join us. 

You‘re watching HARDBALL‘s live coverage from the campus of Washington University.  Stay with us.

(CHEERING AND APPLAUSE) 

(COMMERCIAL BREAK)

(CHEERING AND APPLAUSE) 

MATTHEWS:  Welcome back to HARDBALL‘s live coverage at Washington University and Saint Louis.  We‘re here for the big debate tomorrow night between the president and John Kerry, the second of the presidential debates.

As I said, we had more people watching us in the vice presidential debate than even the first presidential, so interest is rising. 

We have Senator Rick Santorum of Pennsylvania joining me now.  He‘s a Republican. 

Senator Santorum, what is your advice for the president for tomorrow night?  Do you have any? 

SEN. RICK SANTORUM ®, PENNSYLVANIA:  Well, I think the president just has to lay it on the line and be direct with the American public and lay out his record of accomplishment over the last four years and John Kerry‘s record of futility over the last 20 years in the United States Senate.

I think the Kerry record is something that I think is a very important thing to put forward, not just his record on flip-flopping on the war and his being on the wrong side of history on national security issues, but also really his fecklessness and his ability to lead here in the United States Senate.  And you have someone who‘s been here 20 years with no accomplishments, he is not due for a promotion to the most important office in the land. 

MATTHEWS:  On the war in Iraq, if that were the only issue in Pennsylvania, if it was an up or down on whether we should have gone or not, would that be a victory for the president? 

SANTORUM:  I think it would be close. 

I think these debates are going to be—have been helpful, will be helpful.  But I think, in the end, Pennsylvania has got a very large veterans population.  We have a lot of folks in the heartland there who understand that this president is doing his best to protect us from this real threat.  And I think, increasingly, people are understanding this threat is not one that as John Kerry seem to brush off lightly as something that we can sort of negotiate our way out of, that somehow or another we can build alliances and this threat will go away. 

This is a threat that must be confronted and defeated and be defeated through force.  And we have a president who understands that, is committed to doing that to protect the security of the country.  And, as a result, I think he‘ll win Pennsylvania. 

MATTHEWS:  Do you think that the Iraqi government was in any way responsible for 9/11? 

SANTORUM:  You know, to me, this is sort of an issue that has sort of crept up in this political context.  I mean, the idea that somehow or another that the president‘s doctrine, the Bush doctrine was simply to attack just the terrorists that hit us didn‘t listen to the speech he gave to Congress the night that John Kerry was sitting in the chair with all of us to listen to what the president‘s response was to 9/11.

He didn‘t say we would just attack the terrorists.  He said we would attack those who harbor terrorists, those who harbor terrorists who want to defeat the West and defeat our way of life.  And I don‘t think there‘s any question that Saddam Hussein was harboring terrorists, some al Qaeda terrorists and certainly many other terrorists who are a network with the Islamic fundamentalism and fascism that we‘re seeing.  It is almost like saying that, well...

(CROSSTALK)

MATTHEWS:  ... the administration said before. 

Senator, just to correct you, before the war—you have as good a memory as I do.  Before the war, in making the case for the war, there was lots of talk of weapons of mass destruction, including nuclear weapons and a capacity to build them. 

SANTORUM:  Right. 

MATTHEWS:  There was lots of talk about a meeting in Prague in the Czech Republic between security people, intelligence people for the Iraqi government and the Mohamed Atta, who led the attack on 9/11, many references to that over and over in the months just after 9/11 by the vice president and then again and again throughout the war. 

So there was an attempt to connect Iraq with the attack on us.  And I just wonder why everybody is that fading on that now as we get closer to an election? 

SANTORUM:  Well, there was an attempt to show that there was an effort on the part of Iraq to harbor terrorists, not just al Qaeda terrorists, but a variety of others. 

I mean, there‘s no doubt that Saddam Hussein paid a bounty for suicide bombers to go into Israel, for these Islamic fundamentalists with the Islamic Jihad to go in and kill Israelis and Americans.  There‘s no question that they were a sponsor of terrorism. 

(CROSSTALK)

SANTORUM:  Now, my point, is, Chris, that you just can‘t say there‘s no connection; therefore, it‘s a falsity. 

The information you just provided was information that we believed at the time to be true.  Now, we found out subsequently that some of it wasn‘t. 

MATTHEWS:  Right. 

SANTORUM:  But you can‘t Monday-morning quarterback all these things.  You can‘t look two years later and say, well, now we shouldn‘t have gone had we known what we knew.  We had to base it on the best intelligence and have the courage to act.  And that‘s what the president did. 

MATTHEWS:  That‘s what I find odd.  I have a problem with that.  And you‘re being very honest about it.  But the vice president during the debate the other night said I never, ever suggested a connection between Iraq and 9/11, when in fact he did it over and over again before, during and after the war.  I just wonder why is everybody changing colors on the Republican side now on the reasons given for the war. 

SANTORUM:  Well, again, all I was suggesting, I think the vice president has said there may an connection.  I don‘t think he ever came out and said, at least in the interviews that I saw—I saw the “Meet the Press” article that everyone refers to.  He said there may be a connection.

MATTHEWS:  No, he said he never suggested it.   

SANTORUM:  Well, I didn‘t say he didn‘t suggest it.  He may have—he suggested it. 

(CROSSTALK)

MATTHEWS:  Well, he said he never suggested it.  That‘s what is strange here, Senator.  You‘re being consistent.  He hasn‘t been.  That‘s the problem. 

SANTORUM:  Well, maybe we‘re harping over words. 

MATTHEWS:  Isn‘t it?

SANTORUM:  I think what the point is, that we certainly had intelligence that showed us there was a connection. 

Now, whether that intelligence proved out to be true, we found out later that much of it was not.  But that‘s an unfair criticism of an administration.  You can‘t—you have got to base on it what you know at the time and make that decision.  And they were decisive enough to move forward to protect America. 

MATTHEWS:  Right.  All we ask is the best honesty before, during and after the war.

Thank you very much, Senator Rick Santorum, Republican of Pennsylvania.

When we come back, I‘ll talk to the students gathered here at Washington U. in Saint Louis.

(CHEERING AND APPLAUSE) 

(COMMERCIAL BREAK)

(CHEERING AND APPLAUSE) 

MATTHEWS:  We‘re here at Washington University in Saint Louis. 

And joining me right now is the Washington U. chancellor, Mark Wrighton, and Resa (ph) Wrighton.  Thank you for joining us. 

You know, we were in Miami the other day.  It‘s a hell of a school.  We were in Case Western Reserve University.  It is a hell of a school.  But it was really hot in Miami.  And it was really cold at Case Western up in Cleveland.  And it is just right here.  What do you think? 

(CHEERING AND APPLAUSE)

MATTHEWS:  Is that the climate?

MARK WRIGHTON, CHANCELLOR, WASHINGTON UNIVERSITY:  Saint Louis and Washington University, great places to be. 

MATTHEWS:  Let me ask you, chancellor, about the student body here. 

We‘re surrounded by lib-labs here, all liberals.

(LAUGHTER)

MATTHEWS:  Every time I try to squeeze a Republican in here, they practically get eaten by these people. 

(LAUGHTER)

MATTHEWS:  Is that sort of the model of your school?  Are most of the kids here liberals? 

WRIGHTON:  I would say we‘re a very open community.  We respect each other, open views, wide discussion, a great group, very enthusiastic. 

MATTHEWS:  Well, let me ask you a trick question, Resa.  Are we in Missouri or “Missour-a”?

UNIDENTIFIED FEMALE:  We‘re in Missouri. 

(CHEERING AND APPLAUSE) 

MATTHEWS:  That tells me we‘re in liberal country.  This state has become a battleground state for the presidency.  There‘s a two-point differential right now, with the president still leading here.  Why do you think—is this state more conservative than, say, New York? 

WRIGHTON:  More conservative than New York, but Saint Louis and Kansas City, more liberal. 

MATTHEWS:  I see.  Is that the way you see it?

UNIDENTIFIED FEMALE:  I think so.  This is the Show-Me State and I think this debate is going to show us the right way to go. 

MATTHEWS:  Back in 1956 -- I‘m a student of history and politics.  And in ‘56, there was only one state in the Union that switched away from the man who received the Nazi surrender, Ike Eisenhower, Dwight Eisenhower, and switched over to the man they had voted against four years earlier, Adlai Stevenson. 

What explains that quirk in me Missouri history? 

WRIGHTON:  People from Missouri really are very thoughtful, very careful and go the right way. 

MATTHEWS:  All right, let me ask you this.  Are these kids jacked up to vote?  That‘s all I care about. 

(CHEERING AND APPLAUSE) 

WRIGHTON:  Yes.  Yes. 

This debate has created a great deal of interest.  Your presence here has certainly stimulated us, our students and faculty and staff.  I‘m very proud of all of them for working so hard to make this a very successful experience for the candidates and for the commission. 

MATTHEWS:  Do you know what I like about this school?  You have an office devoted entirely to the Peace Corps, to recruitment.  It changed my life.  I hope some people join. 

WRIGHTON:  Yes, indeed.  Many will.

MATTHEWS:  Let‘s go back to some interesting people here. 

(CHEERING AND APPLAUSE) 

MATTHEWS:  What in the world do you have in your cereal in the morning that makes you want to make a sign like that?  I am happily married to my queen, I call her.  Kathleen.  And if she‘s watching, she wants to know what you‘re up to.  What‘s your name? 

UNIDENTIFIED FEMALE:  I‘m Julie Davis (ph). 

UNIDENTIFIED FEMALE:  We love Julie.

MATTHEWS:  Julie. 

(CROSSTALK)

MATTHEWS:  ... a “Matthews for President” sign.  So I‘m going to marry you.  You‘ll be first lady.  I‘ll run for president.  There, “Chris Matthews for Prez.” 

UNIDENTIFIED FEMALE:  Hi, James.  Hi, James. 

MATTHEWS:  Should I run for president or marry you first?  Which should I do?

UNIDENTIFIED FEMALE:  Run for president!

(LAUGHTER)

UNIDENTIFIED FEMALE:  Run for president.

MATTHEWS:  Run for president first.  Then you‘ll like me better, right? 

(LAUGHTER)

UNIDENTIFIED FEMALE:  Right. 

MATTHEWS:  OK, I don‘t think—anything is possible, but not that. 

But thank you for your goodwill.

UNIDENTIFIED FEMALE:  Thank you. 

MATTHEWS:  It is a great testament.  Can you let me have that?  It might help me with my ego some morning when I‘m getting up. 

(LAUGHTER)

MATTHEWS:  Anyway, it‘s great.

Everybody, be quiet who is lib.  I want to hear the Bush people now. 

I want to hear the...

(CHEERING AND APPLAUSE) 

MATTHEWS:  You know, I‘ve always believed that Republicans get there early and the Democrats are late for everything, like the movies.  How come you folks were late to get the first row here? 

This is the first I‘ve ever seen Republicans late and Democrats on time.  Oh, look at the signs.  Oh, you‘re a Democrat.  Where are the Bush people?  I thought you were Bush people back there. 

(CHEERING AND APPLAUSE) 

MATTHEWS:  That says John Kerry.  Oh, there it says Bush.  I love that.  I love that.  I love that.  Flush the Johns?  Oh, that‘s classy. 

(CHEERING AND APPLAUSE) 

MATTHEWS:  We‘ll be back from Saint Louis in one hour with a special two-hour edition of HARDBALL, as we preview tomorrow night‘s presidential debate.

And tomorrow, our live coverage begins at 7:00 Eastern and the debate starts at 9:00.  We‘ll be here all night, as always.

(CHEERING AND APPLAUSE) 

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

(CHEERING AND APPLAUSE) 

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

END   

Copy: Content and programming copyright 2004 MSNBC.  ALL RIGHTS RESERVED.  Transcription Copyright 2004 FDCH e-Media Inc. (f/k/a/ Federal Document Clearing House Inc., eMediaMillWorks, Inc.), ALL RIGHTS  RESERVED. No license is granted to the user of this material other than for research. User may not reproduce or redistribute the material except for user‘s personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon MSNBC and FDCH e-Media, Inc.‘s copyright or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.

Discuss:

Discussion comments

,