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'Hardball with Chris Matthews' for Dec. 13

Read the transcript to the Thursday show

Guests: Nancy Giles, Anne Kornblut, Joe Trippi, Mark Penn, Donny Deutsch, Chrystia Freeland, Ryan Lizza, Ezra Klein

CHRIS MATTHEWS, HOST:  Why would a reporter ask if the senator from Illinois had ever sold drugs?  We‘ll ask the Hillary Clinton campaign official who raised the issue.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Welcome to HARDBALL.  Breaking news.  The national co-chairman for the Clinton campaign, Bill Shaheen, announced late this afternoon he‘s resigning from the campaign.  His resignation came in response to his comments yesterday, 24 hours ago, about Barack Obama‘s past drug use.  More on this breaking story in just a moment.

Today the Democratic candidates for president participated in the final debate before the Iowa caucuses.  The polls show a statistical tie among Clinton, Obama and Edwards, and in just three weeks, the people of Iowa will make their choice.  And in a race this tight, are the campaigns going negative in the final three weeks?

And a newspaper report that the Clinton campaign is ready for a shake-up.  We‘ll talk to the 2008 gladiators, Clinton senior strategist Mark Penn, Obama top strategist David Axelrod, and Joe Trippi, the senior adviser to the Edwards campaign, all from Iowa.

And what do the candidates have to do to win this thing?  Answers from CNBC‘s Donny Deutsch straight ahead.

Plus the HARDBALL “Big Number” tonight reveals John Edwards‘s Iowa strategy.  And get ready for your “Politics Fix” tonight, later in the show.

We begin with today‘s breaking news and HARDBALL‘s David Shuster, who‘s in what‘s called the spin room, adequately named, out there at the Iowa debate.  David, tell us what‘s going on with this drug dealing charge or this inquiry involving Barack Obama.  Who started it?  Is it going to end, or has the fuse been lit?

DAVID SHUSTER, HARDBALL CORRESPONDENT:  Well, I think it‘s safe to say, Chris, the fuse has been lit.  I mean, it led to Hillary Clinton actually offering a personal, direct face-to-face apology to Barack Obama on the tarmac of Reagan National Airport today.

All of this began yesterday, as you said, when Billy Shaheen told the that Democrats should not make Barack Obama the nominee because that would make him vulnerable to Republican charges about his admitted drug use and raise questions about whether he had ever distributed drugs, whether he had ever sold drugs.

The Obama campaign immediately accused the Clinton campaign of dirty tricks and suggested that perhaps the Clintons had been behind this.  The Clinton campaign very quickly said no.  They tried to distance themselves from this.  There was the apology by Hillary Clinton.

But again, in the midst of all this, in the midst of the Obama campaign showing their indignation over all this, they were out there fund-raising today about it.  There was a fund-raising appeal that the Obama campaign sent out based on all this, and with all of this sort of in the mix today, Chris, during the debate, it was never raised, of course, during the debate, but afterwards there were questions that were put to David Axelrod, the Obama spokesman, because his campaign was essentially sustaining this and trying to ride the wave of the outrage over all this.  He was asked directly, What about the exact charge?  Did Barack Obama ever sell drugs?  And he gave an emphatic no.  The next question was, Well, do you know if Barack Obama ever distributed or shared drugs?  And at first, he started to say no, but then he said, Well, not as far as I know.

So at least as far as the content, it‘s out there.  It was asked of the Obama campaign and it was answered, of course.  And now you have the Obama campaign trying to ride this wave of indignation that somebody associated with the Clinton campaign put this out there.  And then late today, Billy Shaheen resigned, which is apparently something the Obama campaign had been insisting on.

So does this story continue?  Who knows?  But the Obama campaign, Chris, certainly is convinced that this was a designed effort by higher-ups in the Clinton campaign to try to put this information out there—Chris.

MATTHEWS:  Let me ask you again.  What is the connection you suggested there, clarify it, on the fund-raising efforts of the Clinton campaign and this little sugarplum they dropped out there to raise the issue of drug sales and drug use?

SHUSTER:  Well, it‘s fund-raising by the Obama campaign.  They‘re trying to say, and as they said in their fund-raising appeal...


SHUSTER:  ... these remarks by the Clinton campaign crossed a line that should never be crossed, and they‘re asking their supporters to express their anger about this by giving Barack Obama a donation in money.

MATTHEWS:  Was there a bigger story today than what you‘re just talking about?  Could this trump what happened in that debate today?

SHUSTER:  I think it will, Chris, because the debate was largely sort of friendly.  There were a couple jabs, but the highlights from the debate will not necessarily be on policy issues.  But, for example, Hillary Clinton‘s rivals were eager to have reporters focus on her laugh at one point during the debate.  Obama was asked a question about, How can you stand for change when many of your foreign policy advisers worked in the Clinton administration?

And before he could answer, there was Hillary Clinton with the microphone picking up her cackle, sort of an extended cackle.  And then Barack Obama came back a zinger, saying, Hillary, I‘m looking to forward to you advising me, as well.  And that‘s when her laughter stopped.  But it was a remarkable television moment, and of course, Clinton‘s rivals enjoyed it a lot—Chris.

MATTHEWS:  OK.  Thank you very much, David Shuster, from the spin room out at the Iowa debate.

Now to the Democratic debate in toto, Newsweek‘s Howard Fineman, who‘s an MSNBC political analyst, Nancy Giles, who‘s a social commentator, and “The Washington Post‘s” Anne Kornblut is in Iowa at the debate.

Let me start with Howard.  It seems to me that this has worked its dirty way here.  Here we are talking about a spin room conversation where David Axelrod, who‘s coming on the show in just a couple minutes, the top strategist for Barack Obama, being forced to deny charges, or questions which are highly charged, that his candidate has engaged in drug sales, which was a story which has its roots only yesterday in a comment made by Billy Shaheen, a co-chair of the Clinton campaign.

HOWARD FINEMAN, “NEWSWEEK,” MSNBC POLITICAL ANALYST:  Yes, and the notion that Billy Shaheen was acting completely on his own without any knowledge or interest of the Clinton campaign I think is going to be hard to defend.  He‘s in on those conference calls.  He‘s in close in.

I think, interestingly, both the Obama campaign and the Clinton campaign, to one degree or another, think there may be some benefit in this controversy.  But the real benefactor of this controversy is John Edwards, the third guy in the race.  He‘s not part of it.  He got to get his message out.  He‘s not going to be in this back-and-forth over drugs and fund raising, and that‘s the bottom line from this event today, in my view, in this story.

MATTHEWS:  Nancy, this is a Washington ritual.  Someone makes a comment, it‘s challenged as unfair, evil, dirty tricks, whatever.  Hours pass—in this case, 24 hours—during which the dirty work gets done and reporters begin to ask the questions, and the solution is already there in terms of the purpose of the person who made the comment.  He got the dirty word out there.  Let‘s start talking about drug use...


MATTHEWS:  ... possible drug sales, the whole thing.  And after he‘s done the job, he resigns from the field, only to be rehired, of course, several months later in another capacity.  I mean, I am predicting the last part because it is predictable.

GILES:  It does seem like it.  And I think what‘s so interesting is that, as you said, the word‘s out there, and whether or not any of it is true or substantiated—I mean, come on!  What do they mean when they say shared drugs?  Does that mean a scene that maybe some of us have experienced at a party, when you pass certain things around, you know, whatever?

I mean, I think what‘s so cool about Senator Obama was he tried to let this information out himself and control the information flow when it came to the whole drug use story.  But this little bit of leakage by Senator Clinton‘s people is just as weird, let‘s say, as that interesting question that‘s going to be in “The New York Times” magazine article this weekend, the Mike Huckabee thing about, Isn‘t it true that you think that the brother of Christ is Lucifer?

I mean, you get it out there, and then that takes the conversation away from the things that are really important, like Iraq and like taxes and like medical health plans and all that jazz.  It‘s just—and I know you‘re right.  I know that that guy, the guy that let the story out, will be rehired by another campaigner who likes that kind of dirty trick.

MATTHEWS:  No, he‘ll be back where he went from.

GILES:  Oh, definitely.

MATTHEWS:  It always works that way.  Let me go to Anne Kornblut, though, about the legs of this story.  This thing began just yesterday.  It evolved to the point where Hillary Clinton had to apologize to the target of the attack, Senator Obama, directly at the tarmac, apparently, at Reagan airport.  And now it proceeded through the afternoon to a questioning period in the spin room, as David Shuster told us, and then it led eventually to the resignation of Billy Shaheen from the campaign.  The ritual‘s not done, I don‘t think.

ANNE KORNBLUT, “WASHINGTON POST”:  Well, no.  I mean, I guess what‘s so surprising about this is that, you know, in a Democratic primary, we‘ve seen negative campaigning before, and we saw it in 1992, and Bill Clinton was the beneficiary of rumors that were abounding, his perceiving that he was under attack.  This was sort of a hallmark of the Clinton era.  And in fact, just a few months ago, we saw Hillary Clinton arguing that she‘d been the victim of negative campaigning, and her campaign said, Look, that‘s good for us.

Now, when she‘s on the delivering end of that, if you will, and Barack Obama is on the receiving end of it, I think it stands to reason that the same logic applies.  And the Obama campaign has, as you were talking about earlier, continued to talk about this.  The indignation has continued, and they see political benefits of this, as well.

MATTHEWS:  Sure.  One of the best political tactics in the world is attacking from a defensive position, which of course, I‘m familiar with, but that‘s, in fact, what—I‘ve written about it, but that‘s, in fact, what Obama is able to do.

By the way, for the record, here‘s the statement from Billy Shaheen, who resigned as co-chair of the Hillary Clinton for president campaign.  Quote, “I would like to reiterate that I deeply regret my comments yesterday and say again that they were in no way authorized by Senator Clinton or the Clinton campaign.  Senator Clinton has been running a positive campaign focused on the issues that matter to America‘s families.  I made a mistake, and in light of what happened, I have made the personal decision I will step down as the co-chair of the Hillary for president campaign.”

Howard, you‘re shaking your head in the negative.  This is really ritualistic.

FINEMAN:  It sure is.  And there are two words in there that are

completely wrong and they‘re completely phony, and those were “authorized”

nothing authorized by the Clinton campaign—that‘s a big rabbit hole you can jump down.  And the other one is “my personal decision” because it wasn‘t his personal decision, it was the campaign‘s decision that he had to take the heat and take the fall.  And I agree with you, he‘ll be back in one way or another because he‘s crucial to Hillary‘s chances in New Hampshire.  He‘s married to the former governor, Jeanne Shaheen...

MATTHEWS:  Who‘s running for the Senate.

FINEMAN:  ... who‘s running for the U.S. Senate.

MATTHEWS:  And what—and New Hampshire‘s a state the Democrats need to pick up for the general.

FINEMAN:  Yes.  The whole Democratic strategy, the whole Hillary strategy, is based on that family relationship between the Shaheens and the Clintons.  Do you think that‘s going to disappear because of this?  Absolutely not.

MATTHEWS:  Well, let‘s take a look.  Here‘s Hillary Clinton talking about change in today‘s debate.


SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  Everyone wants change.  Well, everybody on this stage has an idea about how to get change.  Some believe you get change by demanding it.  Some believe you get it by hoping for it.  I believe you get it by working hard for change.  That‘s what I‘ve done my entire life.  That‘s what I will do as president.


MATTHEWS:  Nancy Giles, that‘s a shot against a number of other candidates, I assume against Edwards and Obama.  Just guessing.

GILES:  Of course.  Yes.  Well, the “hope” one makes it sound like all Obama says is, Gee, I really hope things change, and he has no kind of a plan.

Listen, I want to—I have to ask about this Shaheen guy.  Is he the same one who came up with that kindergarten-gate, you know, examining Barack Obama‘s kindergarten term papers and what he wanted to be when he grew up, and now somehow, that made him a hypocrite because he actually talked about being president because if it‘s—I just don‘t believe all of this stuff is done without Hillary Clinton‘s authorization or involvement or something.  She‘s too involved in what goes on in the campaign, don‘t you think?

MATTHEWS:  Well, actually, that was put out by a paid spokesman, actually.  That was put out by somebody on the payroll.  I believe it was Phil Singer.  That‘s—and that guy has not quit.  He‘s still aboard.

GILES:  Well, what‘s interesting, though, is that‘s two really bad strikes in a row for her, between that, which was just absurd, and now this.  And it‘s just—it makes her look a lot more, I don‘t know, kind of devious and searching for something than I‘d had her pegged as before.

MATTHEWS:  You mean plausible deniability?  Here‘s Obama in today‘s debate.


Sen. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  I would call in the Joint Chiefs of Staff and tell them they have a new mission, which is to, in a responsible, careful way, end this war in Iraq, bring our combat troops home and that we are also ending the war in Iraq where we‘re spending $10 billion to $12 billion a month.  We are not going to be able to dig ourselves out of that hole in one or two years, but if we can get on a path of sustained growth, if we can end the war in Iraq...


MATTHEWS:  You know, I thought, Anne Kornblut, that there was the man doing very well out there in Iowa right now, Senator Obama, basically laying down the marker that he‘s going to get us out of Iraq, even though Iraq may not be the number issue this month, at least so far.  He clearly wants to remind the troops why they‘re with him.

KORNBLUT:  Well, that‘s right.  And the questions in this debate were not about Iraq.  You almost had to bring it up yourself if you were these candidates because some of the questions were really more about economic policy, et cetera.  But he did.  He brought up Iraq, plays extremely well, actually, out in Iowa, which has a very anti-war activist base in the Democratic Party.

On the quote that you played earlier from Senator Clinton, it‘s interesting to hear her talking about change now because she obviously has never been the change candidate.  But her campaign felt that, inherently, because she was a woman, she would represent change.  That hasn‘t really worked, and so now you hear her talking about change and driving (ph) the change message somewhat as she does so, to try and take that away from Obama.  She‘s really—it‘s a reflection of the hard time she‘s having out here gaining any kind of edge.

MATTHEWS:  Do you think that the campaign debate we watched today yesterday was an attempt by people who hate television to destroy television?


MATTHEWS:  Anne Kornblut, have you—I know you‘re a print guy (ph), but have you ever seen a worse hour-and-a-half or three hours in your life on television?

KORNBLUT:  It was pretty diligent.  It was a pretty diligent public broadcasting display, I would say, yes, not the most riveting hour.


MATTHEWS:  I think you have to go back to Chelsea girls and some old Andy Warhol film that went on for 24 hours to get that degree of ennui.

KORNBLUT:  Well, you know...

MATTHEWS:  I think you have to really work for that in a European setting.

GILES:  I liked...

MATTHEWS:  You can‘t quite get it on this exciting continent.

GILES:  I kind of liked the woman who ran the debates, though.  She had this kind of crisp librarian thing about her, like she‘s the kind of librarian who would really kick your butt if you talked too long or talked too loudly or returned a book late.

And the other thing I had to say is, whose idea was it in the first place to have 7,000 debates from both parties a full year—


GILES:  ... before the election year?  It‘s, you know, exhausting.

MATTHEWS:  (INAUDIBLE) you‘re talking too loudly, Nancy, by the way. 

Howard Fineman, thank you very much, Nancy Giles.  This is the quiet car. 

Anne Kornblut, thank you very much.

Up next: Three weeks before Iowa, so where‘s the Democratic race headed from here?  We‘re going to talk to the top honchos, and I mean it, the three top honchos of the Democratic candidates out there fighting.  Those three are the candidates.  We‘re going to talk to the people behind them.

And later: How nervous is the Clinton campaign?  All three early states are now, those numbers show, up for grabs.  Can the senator from New York win all three or lose all three?

You‘re watching HARDBALL, only on MSNBC.


MATTHEWS:  Welcome back to HARDBALL.  Obama has pulled 6 points ahead of Hillary Clinton in Iowa, according to the latest “Newsweek” poll.  But with three weeks left to the caucuses, can he hold or even widen his margin?  Is the Hillary campaign due for a shake-up?  And can Senator Edwards survive if he loses in Iowa?

Big questions for our big guys coming and joining us right now.  David Axelrod is chief strategist for the Obama campaign.  Joe Trippi‘s senior strategist for the Edwards campaign.  And Mark Penn and the senior strategist for the Clinton campaign.  Gentlemen, you are the big shots.  You are the star fighters of this coming—in fact, new century.

Let me ask you, David Axelrod, are you satisfied with the explanation from the Hillary Clinton campaign that the comment by Mr. Shaheen about drug use by your candidate was not something coming from the top?

DAVID AXELROD, CHIEF OBAMA CAMPAIGN STRATEGIST:  Look, I have no way of knowing.  They say that, and we have to accept them at their word.  I‘ll say this, Chris.  When you launch a negative attack and you say that this is the fun part of the campaign, you send a signal down the line to others in the campaign that leads to this kind of thing.

And so whether or not there was an instruction to Mr. Shaheen, I think it‘s important that a signal get sent right from the top of the campaign that this isn‘t encouraged, that it‘s not the fun part of the campaign, that we ought to be lifting up this country instead of trying to tear each other down.

MATTHEWS:  Are you serving notice by your comment right now and your comment in the spin room that any further negative attack or suggestion by one of the Clinton people will come from Hillary?

AXELROD:  Well, I—I‘m not suggesting that, Chris.  But I will say this.  Unless there‘s a strong, consistent signal from the top, unless we refrain from saying things like, Negative campaigning is the fun part of the campaign, you‘re going to have that happening.  There‘s sort of—it‘s sort of a wink-and-a-nod thing.  Everybody down the line says, Oh, well, this is what this is about.

So, I would think that it would be important for all the candidates to send a strong signal to their troops that this isn‘t where we‘re going go with this campaign.  We‘re not going take it into the gutter. 

MATTHEWS:  Mark, given the fact that this has reached into the spin room today, and there were several questions to David Axelrod about whether his candidate, Senator Obama, has in fact shared or sold drugs, do you expect the Republicans to use this against the Democrats, no matter who wins the election—the nomination fight, I should say? 


I think, though, I‘m very disappointed by David‘s comments.  I mean, you know, he‘s trying to rewrite history here.  It is his candidate, Senator Barack Obama, on the front page of “The New York Times” that called Senator Clinton disingenuous. 

He started a wave of direct, personal negative attacks.  And the senator finally began to reply very substantively that his plan leaves out 15 million people, whereas hers covers every single person.  And he kept bringing up an Iran vote that he in fact skipped. 

So, I‘m really disappointed.  I think this thing with Billy Shaheen, he has stepped down.  He was never a part of this campaign.  It was unacceptable.

MATTHEWS:  Did you tell him to step down? 

PENN:  The senator made that clear. 

No, he stepped down.  And he made clear...

MATTHEWS:  Do you tell him to step down?  It took 24 hours for him to do it.

Do you think he did it in time...

PENN:  No.  No.

MATTHEWS:  ... to stop this from becoming a story?

PENN:  I think this story is over.  I think we made it very clear yesterday that we didn‘t condone it.  We weren‘t—we weren‘t part of these—of—of the story that he—that he went on with.

And we absolutely apologized.  And the senator went on the tarmac of the airport as we were all coming down to this debate and apologized personally, because this is not part of her campaign. 

MATTHEWS:  Right. 

PENN:  And I think it‘s very important.  She has been running a year-long positive campaign, in which she‘s out there talking about ending the Iraq war and health care for all. 

MATTHEWS:  These comments that are coming out of your campaign from different directions—and I‘m not sure how they‘re coming, and nobody does—but going after his perhaps youthful drug use, which he admitted in his book, and going after comments he made as a student and as a kindergarten student in fifth—at the age of 5, I should say, do you think those appropriate shots at the opponent, or are they below the belt? 

PENN:  Well, I think we have made clear that the—the issue related to cocaine use is not something that the campaign was in any way raising.  And I think that has been made clear.

I think this kindergarten thing was a joke after Senator...


JOE TRIPPI, SENIOR EDWARDS CAMPAIGN ADVISER:  I think he just did it again.  He just did it again.


PENN:  This kindergarten thing, after what the senator did...

TRIPPI:  Unbelievable.  They just literally...


PENN:  Excuse me. 


TRIPPI:  No, no.  No, no, Mark, excuse me.

PENN:  Excuse me.  Excuse me

TRIPPI:  This guy‘s been filibustering on this.  He just said cocaine again.  It‘s like...

PENN:  I think you‘re saying cocaine. 


TRIPPI:  No, no.


TRIPPI:  You just did it.


PENN:  I think you‘re saying that. 


MATTHEWS:  OK, Joe Trippi‘s turn.  



MATTHEWS:  Joe Trippi‘s turn.


TRIPPI:  What has happened—no, look, the person who won today was -

was John Edwards.  Why?  Because he‘s speaking to the frustration of Americans about something that‘s going on, how greed‘s taken over Washington, is stopping health care from happening, stopping—stopping trade—you know, trade deals that go through.  They will talk about corporate profits. 

He was talking about real stuff that—that is really, really affecting working people here in—in Iowa who are frustrated and worried about their jobs, while we listen to this garbage that has been going for a couple of days now and needs to stop. 

And I agree with David on that. 

MATTHEWS:  Are you going to slip ahead?


MATTHEWS:  Let me ask you this.


MATTHEWS:  Guys, you all know the history of Iowa caucuses.


MATTHEWS:  And it could be that you‘re the campaign that slips ahead when the other two are fighting in the gutter, as somebody put it. 

If the campaigns of Hillary Clinton and the campaign of Barack Obama involve themselves in what the senator from Illinois said as a kindergarten student and whether he used drugs or shared them or whatever, doesn‘t that allow John Edwards to sneak by, both of you guys? 


PENN:  Wait a minute. 

Let me answer your question, first of all.  Look, we all know that—that Senator Obama raised this question about whether or not there was a 20-year effort to become president, that he actually launched an attack.  This kindergarten thing was something that was a joke at the end of a long research document.  It was not meant to be taken seriously.

What was serious was that Senator Obama said his being, you know, age 6 to 10 in Indonesia was a qualification for foreign affairs. 

TRIPPI:  I can‘t believe we‘re doing this again.  This is amazing. 


TRIPPI:  Every day they go out and prove—every day they go out and prove that...


MATTHEWS:  Let me go to David Axelrod.


MATTHEWS:  David Axelrod...


MATTHEWS:  David Axelrod, I want to ask you a question. 

Do you believe that you‘re a victim here?  Is your candidate a victim here of a series of attempts to try to diminish him by going after his ambitions as a 5-year-old, his admitted drug use as a kid, as a youngster, or a younger person?  Is this an attempt to try to bring him down to size, so the Clintons can beat him? 

AXELROD:  Well, look, I don‘t—you would have to ask Mark what the intention was. 

I will say this.  I think, first of all, Mark says it was a joke. 

It‘s still a press release on their Web site. 

And it wasn‘t that good a joke that it should be there two weeks later, Mark, so you ought to take the press release down. 

Secondly, he said that Senator Obama said that Senator Clinton was disingenuous on some points.  I think that‘s a lot different than suggesting that someone‘s a drug dealer. 

Look, I think people are not interested in what Senator Obama said to his kindergarten teacher or his indiscretions as a teenager.  They‘re interested in their own kids, the future of their kids, what‘s going to happen to this country.  And that‘s what we‘re trying to address. 

This isn‘t a situation where two campaigns are fighting.  This is the sound of one hand clapping, and the hand is the Clinton campaign. 


PENN:  David, again—David, again, started a series of negative attacks.  He did it in the debate. 

But let‘s go to where we are right now.  I think you‘re exactly right.  The voters want to hear about the strength and experience to make change happen.  That‘s the senator‘s message.  We have run a positive campaign.  We have put out our issue positions on ending the Iraq war, on universal health care, on retirement security.  And that‘s what this campaign is going to be about.  Who has the experience?  She‘s ready to be president. 

Look, let‘s go to today‘s debate, a great debate, a very positive debate.  She very clearly knew, day one, what she would be ready to do as president, and I think that was absolutely critical, in terms of what the voters are looking for...


MATTHEWS:  Mark—Mark...


PENN:  ... rest of the country.


MATTHEWS:  OK.  I want to go to Mark, and then I want everybody to respond. 

Mark Penn, it seemed to me, in that Philadelphia debate at Drexel University, something happening during that debate, because, immediately afterwards, you or somebody went after the moderator, Tim Russert.  Then the campaign went after the other participants.  And then you went after the independent groups. 


MATTHEWS:  It seemed like something went wrong in your focus groups or something that showed you were in big trouble, because, otherwise, I don‘t explain why you cried so loud in pain after that one night of maybe a B performance by your candidate.  What went wrong that night that caused you to change your strategy from a front-runner of confidence to somebody scared to death? 


PENN:  Really, the change was not in us.  The change was that both Senator Edwards and Obama went negative, clearly so.  Senator Obama announced on the front page of “The New York Times” he was going negative.  And they went negative in that debate.

TRIPPI:  There‘s—there‘s no one—there‘s absolutely no one—no one who‘s watching any of this believes that.  We all know what‘s happened here. 

PENN:  Well, come on, Chris.  You have got the tapes.  Replay them. 

TRIPPI:  And what has happened here, today—today, what happened was one candidate spoke to the frustrations of working people, who are worried about job loss, about their children‘s future.  And that was John Edwards. 

And we‘re going to keep campaigning against the greed that‘s going on in Washington, while the Clinton campaign continually does what it does, which is to basically say it‘s a status quo campaign that had—there‘s nothing about change in that campaign, and everybody knows that. 

MATTHEWS:  OK, I want you to start, Joe—Joe, I want you and then Mark and I want David to answer this simple question.  If you had complete control over the American medium—media, all of us, all the way from now until the vote on January 3, what would be the one sentence you would like us to repeat over and over again about your candidate?  What‘s the one thing you would like to hear again and again echoing about, in your case, John Edwards?

And then each other strategist, tell me what the one thing you want us all to know, because you all say we don‘t really know your candidate.  The public doesn‘t really get you. 

OK.  what is the one thing you want us to know? 


MATTHEWS:  Joe Trippi?

TRIPPI:  That this is campaign—we believe this is a great moral test for our country to stop the greed that‘s happening in Washington, that‘s really stopping working people and their frustrations from making this country the better one and passing it on their kids. 


MATTHEWS:  OK, Mark Penn, the thing we should know about Senator Clinton between now and the vote.  What‘s important for us to concentrate on about her? 


PENN:  Look, I think, if you‘re looking for a new beginning in this country, if you‘re looking for change, then you ought to—and you‘re picking a president, you ought to take the candidate with 35 years of strength and experience at making change.  She‘s the one that will deliver for people. 

MATTHEWS:  Thank you.

And who‘s left?  David Axelrod, on Senator Obama, what‘s the most important line, if you could put it into our foreheads and walk around with it pasted to us, what would be the message you would like to hear from every one of us?  Because I hear the one—one is going after—one‘s populist, and one‘s experienced. 

What‘s yours?


AXELROD:  Well, the reality is, if we‘re going to really bring change

and change means solving some of these problems that are bedeviling people here in Iowa and across the country—we‘re going to need a president who can get us past the food fight of the last 20 years, bring this country together, Republicans, Democrats and independents, push back on the special interests, and level with the American people about the challenges that we face.  And Barack Obama has a history of doing that. 


MATTHEWS:  OK.  Thank you, David. 

Thank you, Joe. 

Thank you, Mark Penn.  You are the masters of the universe. 


MATTHEWS:  Up next:  It‘s do-or-die time for John Edwards, or is it?  And his new strategy is our “Big Number” coming up.  It‘s the number of times he said a certain word today.  John Edwards, we were watching, and we were counting. 

You‘re watching HARDBALL, only on MSNBC.  


MATTHEWS:  Welcome back to HARDBALL. 

So, what else is new out there?  Well, you have got to take a look at this new Hillary Clinton ad featuring an endorsement from, well, her mom. 


DOROTHY RODHAM, MOTHER OF SENATOR HILLARY CLINTON:  What I would like people to know about Hillary is what a good person she is.  She never was envious of anybody.  She was helpful.  And she‘s continued that with her adult life with helping other women. 

She has empathy for other people‘s unfortunate circumstances.  I have always admired that, because it isn‘t always true of people.  And I think she ought to be elected even if she weren‘t my daughter.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  I‘m Hillary Clinton, and I approve this message.


MATTHEWS:  That was a nice ad, but I really like the caption in there that—you might have noticed it.  It said, “Hillary‘s mom lives with her.”  I just thought that was a great appeal, obviously, to older Americans and those who care a lot and love older Americans.

Anyway, Barack Obama is getting a boost from the man behind JFK‘s unforgettable poetry back in the ‘60s.  Well, Ted Sorensen, the most famous presidential speechwriter in history, campaigned yesterday for Obama out in New Hampshire, comparing Obama to his former boss.

And to those who question whether an African-American can win this election, Ted Sorensen said that many had predicted JFK, his candidate, couldn‘t win because he was Catholic. 

And everybody is trying to get in the act.  I think Jimmy Durante used to say that.  “The Wall Street Journal” reports today that those close to Mr. Bloomberg—that‘s Michael Bloomberg, the mayor of New York—said, the 65-year-old billionaire is considering a White House bid, despite his repeated denials. 

Keep an eye on that guy, especially if Huckabee gets the nomination, which may not be likely.  But, if it happens, watch him. 

Finally, it‘s time for the HARDBALL “Big Number” tonight.  So, how can John Edwards stay relevant as Hillary and Obama duke it out for the nomination?  By fighting for the little guy.  That‘s what Edwards seems to think, at least.

Take a look at the enemy that he singled out over and over during today‘s presidential debate. 


JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE:  And one of the reasons that we have lost jobs, we‘re having trouble creating jobs, we‘re having trouble growing and strengthening the middle class is because corporate power and greed have literally taken over the government. 

It‘s why the profits of big corporations keep getting bigger and bigger.

The tax policy in America has been established by big corporations and the wealthiest Americans.

But all those things are at risk.  And why are they at risk?  Because of corporate power and corporate greed in Washington, D.C.


MATTHEWS:  That‘s 13 mentions.  We counted them.  You can count them in the transcripts yourself.  Thirteen times, he said corporate or corporation in a 90-minute debate. 

And that is tonight‘s “Big Number.”  And it tells you all about his populist campaign out there.

Up next:  Three weeks left before the voting begins in Iowa, what do the top Democratic candidates need to do in the days remaining?

And, by the way, we have got to count.  This is a steeplechase, because we have got Christmas coming, Christmas Eve coming, New Year‘s Eve coming, New Year‘s Day coming.  Not all the days are going to be working days. 

You‘re watching HARDBALL, only on MSNBC.  


MIKE HUCKMAN, CNBC CORRESPONDENT:  I am Mike Huckman with your CNBC “Market Wrap.”

And stocks bounced back late in the day, erasing some large losses.  The Dow Jones industrials finished up 44 points.  The S&P 500 ended with a gain of almost two points, while the Nasdaq lost more than two points. 

Hurting stocks today, wholesale prices surged 3.2 percent last month, the biggest one-month increase in 34 years.  Most of it was due to a big jump in gasoline prices, of course.  But, even excluding energy and food, so-called core inflation rose four-tenths-of-a-percent.  That is double what had been expected. 

There was also some good economic news.  Retail sales rose in November by a better-than-expected 1.2 percent.  Meantime, oil prices fell.  Crude dropped $2.14 in New York trading, closing at $92.25 a barrel. 

And it was announced that German airline Lufthansa is buying a 19 percent stake in JetBlue for $300 million, or an airline apropos $7.27 a share. 

That‘s it from CNBC, America‘s business channel—now back to


MATTHEWS:  Welcome back to HARDBALL. 

Today, we had the last Democratic debate before the Iowa caucuses.  It was out in Iowa.  It was sponsored by “The Des Moines Register.”  And now it all boils down to making the sale.  Which candidate will convince voters to actually go to the caucuses and vote for them?

Donny Deutsch knows how it‘s done.  He‘s the host of CNBC‘s “The Big Idea.”  He‘s also chairman of advertising agency, Deutsch Incorporated. 

Donny, you‘re the best and smartest guy I know.  Big picture question, how does Barack Obama keep the Mo going and win this thing? 

DONNY DEUTSCH, CNBC ANCHOR:  You said it before, defensive fighting.  This thing that happened with Sheehan—this is a big deal, because I‘ve said all along and you‘ve talked about it, people are really tired of this stupid negativity that is so obvious.  And Barack, we‘ve all been looking for him to fight.  He can actually fight now, but from a defensive position.  That‘s so effective because what it shows is that Hillary‘s frightened. 

People know he wasn‘t selling drugs.  He has already talked about his drug use earlier on.  People have much more concerns, their own pocket books.  This really showed old-time politics.  As you mentioned early in the show, her husband in ‘92 benefited from those attacks.  He became the victim.  He was able to fight as a victim.  Barack‘s in a great place. 

MATTHEWS:  He can come back as Ronald Reagan did to Jimmy Carter and say, there you go again, the same old tactics at work. 

DEUTSCH:  Honestly, I thought Axelrod was brilliant.  And I think you really saw a Penn dancing around there.  They know that coming up with these, like, really stupid claims, forget that they threw the guy overboard, shows they‘re frightened and really makes the other guy more likable.  I don‘t think the Oprah Winfrey stuff makes a difference.  I think people say great, we love Oprah. 

I think this was real a monumental moment for him. 

MATTHEWS:  How was—do you think that they, on the Clinton side of things, are trying to—there‘s Michelle, obviously, Obama and Oprah Winfrey with the candidate.  Let me ask you about that.  You‘re diminishing it.  I think what that helped to do—first of all, he has an extremely attractive wife to put out on display.  Everybody likes that.  Everybody likes this incredibly attractive woman.  Everyone thinks she‘s well educated, smart, hip and everything good.  And then you got Oprah Winfrey, his best pal in the world out there, endorsing him. 

I thought the benefit of Oprah was she said this guy‘s got a good soul.  She wasn‘t selling his list of issues.  She was selling his very being.  And it makes it harder, I thought, after she got the big embrace around the guy, for the Clinton people to trash him. 

DEUTSCH:  You know, I think it‘s hard to trash him because I think where Clinton came from was such an obvious, dirty trick.  I think you give Oprah a lot more credit.  She sells books.  I think in certain ways it almost kind of diminishes him sometimes.  He needs big Oprah behind to push him along.  It certainly didn‘t hurt him.  He got some great media attention.  But I don‘t think it made him any more likable, the fact that Oprah  likes, hugged him.  OK, there‘s a big hug. 

I think people are smart.  I don‘t think people sit there and go, oh, Oprah says to vote for him, and he‘s a good guy, so I‘m going vote for him.  And I think history has shown that every celebrity, even Oprah, does not swing elections.  I think what was more consequential is what happened the last 24 hours, vis-a-vis the drug claims. 

MATTHEWS:  Let‘s talk about another candidate who‘s been somewhat under attack and that‘s Romney on his religion front.  He has a small minority religion.  It‘s relatively small compared to, say, Roman Catholic or Protestant generally, or Jewish even.  It‘s a small group of people who are Mormon, the Church of Jesus Christ of Latter-Day Saints.  How does he avoid this very clever campaign by Huckabee, whereby he says I‘m the Christian leader in this race.  And, of course, we got the word out the other day about mentioning to that reporter for the “New York Times,” which is coming out this Sunday—still to be released—asking the reporter rather openly, “do they believe, those Mormons, that Jesus was the brother of Satan?” 

I mean, how do you fight something like that? 

DEUTSCH:  Obviously, that‘s an absurd comment, but the problem Romney has is—you know, we talked about a black president, a Jewish president.  A Mormon president, that‘s a tough sell to this country, particularly if he steps forward; he wins any of these early primaries and it really starts to peel back the onion.  OK, let‘s talk about this Mormon religion.  That‘s a challenge he‘s got.  He‘s going to continue to have it.  He can‘t run from it.  It‘s who he is.  Obviously, it‘s not an issue with Mormon people, but I think it is a very, very, very narrow religion, and I think there are some real issues there. 

MATTHEWS:  Do you think Romney made a big repackaging problem, that if he had ran as a moderate Republican, who was pro-choice, who was, sort of, the sophisticated suburban Republican, who represents more Republicans than evangelicals, what we used to call the “Herald Tribune” Republicans back in the old days, big city, big suburb, lots of them out there all across the country.  If he ran as that guy, he could have won. 

DEUTSCH:  I don‘t think he could have won, but I think it would have been a stronger case.  He would have come off as the business guy.  You kind of get a lot of those—Reagan.  Obviously, he‘s not Ronald Reagan.  But everything that Democrats also liked about Ronald Reagan—I thought that was the right position for him.  He can‘t go back now.  I think the one thing that will hurt any candidate right now is if, all of a sudden, they start to flip-flop, because that‘s the most vulnerable place in the world. 

MATTHEWS:  I know, I‘m doing the would have, should have, could have. 

Thank you very much, Donny Deutsch, a great mind.   

Next, the politics fix.  This is HARDBALL, only on MSNBC. 


MATTHEWS:  Welcome back.  Time for the politics fix.  Here‘s the round table, the “Financial Times‘” Chrystia Freeland, Ezra Klein of the “American Prospect,” a liberal magazine, and from Iowa, the “New Yorker‘s” Ryan Lizza. 

Let‘s all take a look at one of the fun moments of the debate.  This was when Hillary was cackling at something that was said about all the Clinton advisers going to work for Obama, and Obama came back with a coup de grace.  Here it is. 


UNIDENTIFIED FEMALE:  Senator Obama, you have Bill Clinton‘s former national security adviser, State Department policy director and Navy secretary, among others, advising you.  With relatively little foreign policy experience of your own, how will you rely on so many Clinton advisers and still deliver the kind of break from the past that you‘re promising voters. 

OBAMA:  You know, I am—

CLINTON:  I hear that. 

OBAMA:  Hillary, I‘m looking forward to you advising me as well. 


MATTHEWS:  You know, Chrystia, that was the first time in the campaign I thought I saw in the face of Obama the registering of his poll numbers.  He looks like the guy who is now leading the pack, at least in Iowa. 

CHRYSTIA FREELAND, “THE FINANCIAL TIMES”:  That‘s absolutely right.  I thought that was the most interesting thing in this debate, is you saw for the first time Obama looking, acting, having the confidence of a guy who is the front runner.  And I think you saw Hillary Clinton a little defensive. 

MATTHEWS:  You can‘t deliver those bon mots—or however you pronounce them, bon mots—if you‘re behind. 

EZRA KLEIN, “THE AMERICAN PROSPECT”:  It‘s interesting.  I think Obama is actually much more comfortable being the front runner than he was being an insurgent.  

MATTHEWS:  Wouldn‘t you be? 

KLEIN:  But he doesn‘t attack.  He likes to counter attack.  He likes for someone to go after them and then he comes back. 

MATTHEWS:  That‘s called attacking from a defensive position.  I wrote a chapter about it in my latest book.  It is true.  It‘s what Reagan does, there you go, Mr. President.  It‘s very attractive.   

KLEIN:  He‘s not good from the second, but he is good at doing that from the top. 

MATTHEWS:  Ryan Lizza, what did you make of the campaign?  I got a feeling he acted with a bit of (INAUDIBLE).  He‘s ahead of everybody.  Hillary was good.  He was solid.  She made a lot of good points.  The other guys was very populist.  But Obama acted like he had the calm charm of the winner. 

RYAN LIZZA, “THE NEW YORKER”:  Yes.  I don‘t know if maybe the psychology of the polls and the fact that Obama is now sort of even with Hillary has sort of changed the psychology of all of us when we‘re watching this, but I had the same reaction you did.  He is starting to look like he‘s growing into the role.  He‘s looking a little bit more presidential. 

And in what was maybe one of the most boring debates we‘ve had all season -

I think if you combine the genteelness of Iowa with the genteelness of public television, you get these really boring debates today and yesterday.  And that was sort of the only fun moment of the night. 

MATTHEWS:  I thought it was an attempt to kill television by the people that put those debates together.  People who hate television proved it.  They thought that in three hours they could end the reign of American television.  They almost did it.  If I had to watch that, I think they could give it to people instead of prison. 

Anyway, let‘s go to this one.  Here‘s Clinton responding.  I think she was pretty good, in my judgment.  She‘s responding to a criticism about the failure of the health care plan as she tried to execute it back in the ‘90s.  There she is. 


UNIDENTIFIED FEMALE:  During your time as first lady, there were criticisms that your process to develop your health care plan was too closed and secretive.  Some Iowans we hear from are worried that your presidency would operate the same way.  As president, how would you ensure that your administration doesn‘t hold—withhold information from the public, even if it gave ammunition to your critics. 

CLINTON:  Well, I learned a lot from that experience.  And, clearly, one of the principal lessons is you have to have a very strong communications strategy, and we didn‘t do that.  And I have certainly learned from that during the remaining years in the White House, when I helped to create the Children‘s Health Insurance Program, and did a lot of other work with the Clinton administration, and, of course, now in the Senate. 

I want to have an open and transparent government.  I have put forth very specific plans for how I would reform the government, put as much as we can on the Internet.  Now we‘ve got this tool, let‘s use it.  Let‘s have as much sun light as we possibly can gather. 


MATTHEWS:  What do you think, Ezra?  Do you think that technological answer was sufficient to the question that really involved her secrecy about Whitewater, secrecy about the billing records, which was at to the Rose law firm, her secrecy about her cattle futures windfall.  This woman has never wanted to come clean on matters she thought she had a right to keep secret.  Was that technological answer of saying, I‘ll put in on the web—I‘ll put it on the Internet, sufficient?

KLEIN:  It was a weird answer than that, because that‘s not what happened to health care.  If I‘m right, what she really thought was that the first sentence coming right before it.  I will have a communication strategy.  She was telling Iowans, I will not lay down, let myself get distorted, let myself get destroyed.  That was what happened to health care.

She moved into this answer about that she‘s going to run an open presidency.  But that seemed a little neither here nor there.


LIZZA:  Exactly.  That‘s exactly right.  What she‘s saying is she learned a political lesson.  She‘s going to learn this time how to actually get health care passed.  It‘s not that the process is going to be more open or that her administration will be more open.  And look at her record.  Her record in the Senate is that she has been much better at reaching across the aisle and doing the politics necessary to get the legislation passed.  She has been better at that.  But she hasn‘t necessarily been a more open senator than she was as first lady. 

MATTHEWS:  Interesting point.  We‘ll be right back with the round table, starting with Chrystia, and the politics fix continues on today‘s debate, which was the last of the debates.  Wow!  You‘re watching HARDBALL, only on MSNBC. 


MATTHEWS:  We‘re back with the politics fix.  Here‘s Obama, by the way, in today‘s debate, defending Joe Biden, after Senator Biden was forced to answer a series of questions about comments he made that the moderator suggested that he had a race problem.  Here is Obama defending his colleague. 


OBAMA:  I just want to make the comment; I‘ve worked with Joe Biden.  I‘ve seen his leadership.  I have absolutely no doubt about what is in his heart and the commitment that he‘s made with respect to racial equality in this country.  So I will provide some testimony, as they say in church, that Joe is on the right side of the issues and is fighting every day for a better America. 


MATTHEWS:  Good for him.  I thought it was a cheap shot, the question.  Nobody doubts Joe Biden‘s values or instincts or anything else.  He used a few words that are a bit out of date, that‘s all.  Go ahead.  What do you think? 

FREELAND:  I thought Obama handled it beautifully.  Stepping in like that, he showed he‘s a gracious guy.  I think he did more than that.  I think he did something good for himself, which is he suggested to Americans, I am comfortable with my race.  I am comfortable with the racial issues.  And I think he‘s done that really successfully. 

MATTHEWS:  I thought also, Ryan, that he showed he was the leader of the pack.  If you noticed, he came off as almost avuncular, like speaking for the group here, because he said it right after a series of applause.  People were applauding Joe Biden and then he, sort of, spoke for the group. 

LIZZA:  Yes, one thing that‘s consistent in Obama‘s career is he never plays the race card.  The other thing is, we‘re at the point in the campaign where the top-tier candidates, sort of, start being really nice to the second-tier candidates, because they want their second—it would be their second choice, because of the weird nature of the Iowa caucuses.  If your choice isn‘t—

MATTHEWS:  You‘re so smart.  Lizza, you are so strategic.  You have beaten, me sir, because you figured out that those Biden votes might, if they don‘t get 15 percent in those various caucus settings, might go well to the man to—

LIZZA:  Might go to Obama.  So it pays to be nice. 

MATTHEWS:  I think I know this game.  It‘s you guys.  You young men, you‘ve brilliantly out-thought me.  I want you to take the first stab at this; we now know that dozens of baseball players in the majors have been engaged in elicit drug use.  Is that going to decline the public‘s view of the direction of this country one more notch? 

LIZZA:  Look.  It‘s just—think about the last decade of institutions that we‘ve seen one foul after another.  This is just another institution that‘s once been revered in America that‘s now completely scandal-plagued. 

MATTHEWS:  Right, one more chase for change.  One more case for change.  Anyway, thank you Chrystia Freeland.  Thank you, Ezra Klein.  Thank you Ryan Lizza out there in Iowa.  Anyway, join us tomorrow at 5:00 and 7:00 Eastern.  Right now, it‘s time for “TUCKER.”



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