IE 11 is not supported. For an optimal experience visit our site on another browser.

'Hardball with Chris Matthews' for Jan. 22

Read the transcript to the Tuesday show

Guests: Rev. Jesse Jackson, Rev. Marcia Dyson, Peter King, Tom Ridge, John Harwood, Linda Douglass, Jonathan Capehart

CHRIS MATTHEWS, HOST:  Getting to the deal.  The Democrats need someone who can win in November.  Is it Hillary, Obama or Edwards?  The fighting gets close and personal.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Fred Thompson, exit stage right.  Republican presidential candidate Fred Thompson announced this afternoon he‘s dropping out of the race for president.  Thompson did not say whether he will endorse any of the current candidates, but he did support Senator John McCain back in 2000.  More coming here on this point as in what it will—how it will affect the 2008 Republican contest.

Plus: Last night‘s Democratic debate in South Carolina turned high school between Hillary Clinton and Barack Obama.  Today, the two frontrunners are still going at it, with Clinton accusing Obama of, quote, “looking for a fight,” and Obama hitting back, accusing Hillary Clinton of distorting his record and playing word games.  More on the Democrats later with the Reverend Jesse Jackson.

And fears of a recession.  The stock market tumbled more than 400 points today before recovering most of its loss to close at 128 points down.  And the Federal Reserve before that lowered a key interest rate by three quarters of a percent.  We‘ll talk about the role the economy will play in the 2008 presidential race.

But first, let‘s talk about the action on the Democratic side with the Reverend Jesse Jackson, who supports Senator Barack Obama, and the Reverend Marcia Dyson, a supporter of Hillary Clinton.

Reverend Jackson, are you for Barack Obama?  Have you endorsed him?

REV. JESSE JACKSON, RAINBOW/PUSH COALITION, OBAMA SUPPORTER:  Early on.  I felt early on that he had the combination of a magnetic personality, a message of hope, money, machinery and timing.  And he has so far shown very well.

MATTHEWS:  Let‘s take a look at the action today.  He‘s Hillary Clinton today, talking about last night.


SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  Senator Obama came last night with a bunch of rehearsed points to make.  In fact, they were so rehearsed that he kept insisting I had mentioned President Reagan in what I‘d said, when I didn‘t mention President Reagan.


MATTHEWS:  Well, I don‘t know.  Let me go to Marcia for a second.  Marcia, clearly, last night there were some word games going on with Clinton and Barack Obama.  If you look back—let‘s take a look at what happened last night.  I want the Reverend Jackson to watch this, too.  Here‘s last night and what happened involving Senator Obama and Senator Clinton.  And this really gets to the problem I‘m getting in this debate, the inability to focus on one point and debating it honestly.  Here it is, Clinton and Obama.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  You just said that I complimented the Republican ideas.  That is not true.  What I said—and I will provide you with a quote.  What I said was, is that Ronald Reagan was a transformative political figure because he was able to get Democrats to vote against their economic interests to form a majority to push through their agenda, an agenda that I objected to because while I was working on those streets, watching those folks see their jobs shift overseas, you were a corporate lawyer sitting on the board of Wal-Mart.  I was fighting these fights.


CLINTON:  In an editorial board with the Reno newspaper, you said two different things because I have read the transcript.  You talked about Ronald Reagan being a transformative political leader.  I did not mention his name.


MATTHEWS:  She did say four days ago in Las Vegas, quote, “My leading opponent the other day said that he thought the Republicans had better ideas than Democrats the last 10 to 15 years.  That‘s not how I remember the last 10 to 15 years.”  Let me ask you, Marcia, why does Hillary Clinton deny, almost like in high school, I didn‘t say Reagan‘s name, when she clearly was talking and knocking Obama for what he‘d said about Reagan?

REV. MARCIA DYSON, CLINTON SUPPORTER:  I think that what you have here are two candidates who are finally able to be visible...

MATTHEWS:  OK, wait a minute.  Wait a minute.  Wait a minute.

DYSON:  ... a black man and a woman.

MATTHEWS:  Why—why does Hillary Clinton deny the obvious, that she was knocking Obama for quoting Reagan favorably?  Why doesn‘t she just admit that that‘s what she was doing?

DYSON:  I think that Senator Clinton made it very clear as to reading the statements of what she said, knowing that she (ph) was just heard (ph).  If she 100 percent knocked him, I don‘t think that that is absolutely the case.  She read his record.  And it wasn‘t actually knocking him.  She was just reading exactly what he said, so you can‘t knock somebody as to what they have on their record and what they have stated.  That is not actually a knock.  That is the—her reading (ph) what has actually been recorded by that individual and then given back to the public.  So it‘s not a knock.  You can‘t knock somebody about something that someone actually said.

MATTHEWS:  I‘m just trying to follow this, Reverend Jackson.

DYSON:  And I don‘t think that he refuted that.

MATTHEWS:  I don‘t understand why—you know, he said something about Ronald Reagan, which she could argue about, Why are you pointing to him as any kind of revolutionary change, or even if you disagree with him?  I mean, Obama‘s saying, Hey, look, we got to learn how to put coalitions together, Democrats, independent and some Republicans, just like Reagan put them together, Republican, independents and some Democrats.  Hillary Clinton knocked him for—that‘s fair enough, and then she denied ever doing that.  I don‘t get it.

JACKSON:  Barack Obama has found great success in flying above the fray, hope and healing and coalition.  So obviously, the tactic has been to pull him down into a fray (ph) where he is now in substance (ph) getting even, rather than getting ahead.  I would wish that he would get a surrogate to confront her surrogate and stay on his message in spite of being hit.  For example, in South Carolina, it‘s the number one toxic waste dump state.


JACKSON:  Sixty-two percent of working people have no health insurance.  In that state, students (ph) (INAUDIBLE) They brought a big acknowledgement to the (INAUDIBLE) here before (INAUDIBLE) student debt.  I mean, issues—the war—Issues that matter are being lost in this back-and-forth.

MATTHEWS:  Do you think, Marcia, that Hillary Clinton, Senator Clinton, is trying to make this a pretty dirty campaign—not dirty, a very tough campaign?  Do you think that‘s what‘s going on here, a very tough campaign?

DYSON:  No.  I don‘t.

MATTHEWS:  It seems to be getting...


MATTHEWS:  ... more and more like fighting each other over who said what, and I don‘t know who‘s responsible.  You tell me.

DYSON:  I don‘t think that Senator Clinton is trying to fight a dirty campaign.  I think that what we have is overstimulation of media in a very, very historic presidential run for the Democratic party.  I think that both candidates have great issues, and I wish that the media would allow them to address it.

Senator Clinton has always been on point about her concerns for education, health care, Head Start, equal pay for women.  She‘s concerned about the economy not only in the United States but the impact that global markets have upon our economy here.  She‘s concerned not only about the war in Iraq, but she‘s also concerned about the galvanizing of forces through economic gains in Latino markets, which people cannot even allow these candidates to talk about because we‘re keeping them on the block as if they‘re playing the dozens.

And so you agitate the two people in the corners.  They may come out with that form of agitation, but I know that these are two very credible candidates.  And my candidate definitely—not only does she have the experience—you know, we who call ourselves Christians says, Can you testify?  Well, I can testify I‘ve been working for Reverend Jesse Jackson, who I consider a great mentor, a man of the Civil Rights, not a book that you have to read but the episcopal (ph) that lives before us, that I came on his true (ph) list (ph) convicted for his gain (ph).

And I have that same conviction for Hillary Clinton.  And just because she happens to be a white woman, that is no of interest to me.  I believe that she has the same wherewithal, the same perseverance and experience and dedication as many men have had.  And I think that she should be able to have her say, and I think that the media should allow them, and I hope in the next debate, to let the issues come on table without them bringing, you know, their woof (ph) tickets...


MATTHEWS:  Marcia, Reverend, you blame it on the media.  But you know, last night, Senator Clinton did this—and I‘m not—dirty—I shouldn‘t have used that word—tough.  Let me just put it this way.  This is HARDBALL, OK?


MATTHEWS:  She goes after him and she says, I was fighting against those ideas when you were practicing law and representing your contributor, Rezko, in his slum landlord business, inner city Chicago.  Reverend Jackson, that‘s a pretty strong shot against—talking about slumlords, going after Reverend—Senator Obama.  That‘s pretty tough stuff.

JACKSON:  It‘s tough, but...

MATTHEWS:  I thought that stung last night, watching that.

JACKSON:  It reminds me of triangulation because she feels, I think, that Barack has certain advantages and affinity in South Carolina.  She may have been using South Carolina to be talking across the country.


JACKSON:  And in fact, Barack gets pulled into that.  What was most—the breakthrough for him was this huge white vote in Iowa.  That‘s different.  Blacks vote for whites all the time.


JACKSON:  Blacks seldom vote for blacks.  That made him unique.  In that state, if he wins the state, the 70 percent black vote and the 20 percent white vote, he wins but he loses.  And so if he gets pulled off his message of hope and toxic waste and the war and—and the economic growth, then he could be damaged by that.

MATTHEWS:  Reverend, do you think that‘s Clinton‘s strategy, to draw him into a kind of an ethnic box?

JACKSON:  Well, certainly, South Carolina invites that kind of struggle.  You know, race is not the problem.  Race disparity is.  And they should discuss that very openly.  In that state, you look at from infant mortality to life expectancy...


JACKSON:  ... there‘s race disparity.  You look at employment.  You look at college enrollment.  I mean, that state‘s the—the number one industry is the jail (ph) industrial complex for profit.  And so race is not an issue, race disparity is, and they should all commit themselves to closing those gaps with what?  With investment.  And guess what?  In that way, they can move from racial battleground...


JACKSON:  ...  to economic common ground.  And that becomes a great goal of South Carolina, it seems to me.

MATTHEWS:  Well, I‘m trying to figure out what the rules are these days in politics.


MATTHEWS:  Marcia, let me ask you about the—I‘m sorry.

DYSON:  Gentlemen...

MATTHEWS:  I just want to ask you...

DYSON:  No, no.  Let me say this...

MATTHEWS:  -what the rules are because...


MATTHEWS:  OK, go ahead.

DYSON:  No, you said that—about the Rezko thing—she did not (INAUDIBLE) You can do an instant replay, since we‘re in the Super Bowl (ph) hype of the moment in a couple of weeks.  You play back that replay, you will see that I think that it was Senator Obama who threw the football called Wal-Mart into the field.  So she was responding to him, whether you want to call it reaction or not...


DYSON:  ... to that particular play.  So go back and do the instant replay on that game, all right?

MATTHEWS:  Well, we just showed...



MATTHEWS:  ... we just showed the part about Wal-Mart.  We just already showed the part about Wal-Mart, hitting her for Wal-Mart.


MATTHEWS:  Let‘s now show him—or rather, Senator Clinton going after Senator Obama on the Rezko issue.


CLINTON:  I‘m just (INAUDIBLE) to the fact, yes, they did have ideas and they were bad ideas, bad for America.  And I was fighting against those ideas when you were practicing law and representing your contributor, Rezko, in his slum landlord business in inner city Chicago.


MATTHEWS:  Well, what do you make of that, Marcia?

DYSON:  I think that, you know, when Wolf came out for the second half of the debate, maybe our candidates took him literally when he said, We‘re taking off the gloves.  I think that the fact that you have an African-American man and a woman having to fight so hard that if these three men—persons were all on the stage white men, then it would seem as politics as usual.  So it‘s closely scrutinized a little bit more because of the first time...


DYSON:  ... that you‘ve had all three represented on stage for a very particular and very important office.  So I‘ll take it just what it was, their words.  They (INAUDIBLE) points.  They‘re reminding people, If you said this about me, then I‘m going to put your record straight, as well.  And so you know, we got to kind of pardon them for that.

But I think the Reverend Jackson would agree, along with everybody in the Democratic Party, that we have to stand true blue and make sure that people know that our Democratic Party is a party with a purpose, that (INAUDIBLE) holds true...

MATTHEWS:  Yes, well...

DYSON:  ... but not only the blue, but the red, white and blue...

MATTHEWS:  The only...

DYSON:  ... the whole democracy, OK?

MATTHEWS:  The only problem with that, Reverend, is that three different people speaking for Hillary Clinton, Senator Clinton, all (INAUDIBLE) off the drug issue of...

JACKSON:  That‘s why Barack would be wise...

DYSON:  You have three people...

JACKSON:  ... to get his surrogate to confront their surrogate and choose to get ahead and not get even.  That‘s a big point that you get...

MATTHEWS:  I think you‘re so smart.  In other words, don‘t get involved in the back-and-forth, get somebody else to do it.  But he doesn‘t have a Bill Clinton.

JACKSON:  (INAUDIBLE) but he has other senators.  He has some very high-profile surrogates...


JACKSON:  ... who maybe should be engaged surrogate-surrogate, candidate-candidate.  And right now, if he is reacting to surrogate, it gives a candidate the free lane, when he, in fact, he had the free lane by being above the fray.  His strength is his wings...


JACKSON:  ... and not his feet, as it were.  But I would hope that this thing will not become so bitter until you have a candidate Carter debacle.  By New York, Kennedy and Carter couldn‘t embrace...


JACKSON:  ... and they never recovered.

MATTHEWS:  I remember that.

JACKSON:  So in the tense moments as they go towards crunch time, don‘t win a war—a battle in South Carolina and lose a war for Super Duper Tuesday.

MATTHEWS:  OK, Reverend—I have to ask both of you Reverends.  Oh, I was going to ask you—well, I want to ask you.  I guess I can.  If at the end of this big fight, Marcia, will Hillary Clinton hold Barack‘s hand...

DYSON:  Yes.

MATTHEWS:  ... in the air in victory, and will Barack hold Hillary‘s hand in victory, if she wins?

JACKSON:  Well, they should have.  I mean...

DYSON:  Absolutely.

JACKSON:  ... it‘s two years ago, I can remember...

DYSON:  Absolutely so.

JACKSON:  I certainly hope so.  I remember Hillary and Bill campaigning for Barack for senator and...


MATTHEWS:  ... South Carolina.  We‘re about to lose our bird.  I‘m sorry, Marcia.  Thank you very much for joining us tonight.  And thank you, Reverend.

We‘ll be right back...

DYSON:  Thank you.

MATTHEWS:  ... with more on the Democrats, as well as the Republican race getting hot.  Boy, it‘s getting hot down in Florida, with Rudy making his—perhaps his first and last stand.

But up next, the issue that may define this presidential campaign, the economy.  In the midst of a global stock selloff, the Fed makes an emergency interest rate cut.

You‘re watching HARDBALL, only on MSNBC.


MATTHEWS:  Welcome back to HARDBALL.  Well, the economy has overtaken Iraq and the war—well, certainly, Iraq is the war—as the most important issue to voters in choosing the next president.  Look at how the numbers have flipped since last September, just September.  So how will the economy affect the race?  Look at that, the economy has gone way up and Iraq war concerns have dropped below it.

I‘m joined right now by CNBC‘s Melissa Francis.  Melissa, thank you very much for joining us.  Tonight, a lot of people who own stock, a lot of people worry about it.  Should they feel a breath of relief or what?

MELISSA FRANCIS, CNBC:  Well, you know, I was talking to people yesterday as we were seeing this huge selloff across Europe and Asia.  And they were saying, OK, I‘m ready.  You know, it‘s like a heart operation.  You prepare yourself to go in, it‘s going to be painful.  They thought we‘d see a huge washout today in the U.S. markets, maybe even 1,000 points, but they were ready to get it over with.

Of course, when we came in this morning, the Fed cut interest rates by 75 basis points, and we saw the stock market after that sink 464 points, and we all held our breath.  But it came back rather quickly and it ended up finishing the day almost like any other day.  So it‘s unclear whether we really got that washout that a lot of traders were looking for.

MATTHEWS:  Well, can the United States government fix the problem by simply changing—the Fed changing rates?  Can they solve the problem we have of a huge—it looks like looming recession coming at us worldwide?

FRANCIS:  You know, it‘s really unclear...

MATTHEWS:  Not worldwide, but here, I should say.

FRANCIS:  Yes.  I know.  It‘s unclear.  I mean, they‘ve cut interest rates several times.  A lot of people say that they needed to do it sooner and quicker.  I mean, I think the political candidates would like to fly over each of the cities where there‘s voters and just drop cash on them with their pictures on it and call that economic stimulus to try and turn the economy around.

The bottom line is, you know, that we have a lot of bad mortgages in the system and we have a lot of credit problems to work out, and it‘s unclear that anyone can really do anything to prevent a recession.  Maybe they can soften the blow with both the fiscal stimulus and the monetary stimulus, but I don‘t know.  It‘s a large ship and it‘s very difficult to turn.

MATTHEWS:  Let‘s take a look, Melissa, at this new Hillary Clinton ad.  It‘s about the economy.  It airs on Super Tuesday markets—in other words, all the states that are going to vote February 5.


UNIDENTIFIED MALE:  Our economy is in real trouble, and while George Bush helps his friends, the middle-class gets slammed.  Hillary Clinton warned Bush last March to act before homes would be foreclosed.  Bush did nothing, and two million homes may be lost.


MATTHEWS:  Well, you know, it seems—that is an appeal to the problem.  Is that a solution to the problem?

FRANCIS:  Yes.  I mean, I couldn‘t even ferret out of that ad really what the proposed solution was.  I think everybody recognizes there‘s a problem, and it‘s unclear what anyone can do.  The candidates aren‘t really even, at this point, in my opinion, differentiating themselves that much in what they want to do.  It seems like they would all like to put cash in the hands of consumers.

You know, it‘s unclear from past evidence what consumers would really do with that money, if they would really go out and spend it or if they would save it and pay down debt, and what impact that would have going forward.  So I think it will be a hot button issue among the candidates.  It worked well in ‘92.  But if you want to cut to the reality of the problem, I don‘t know that anyone has a better fix on what can actually be done than anyone else.

MATTHEWS:  If you were a political god and you were a monarch, rather, in this country, and you just wanted to fix the problem without any voting or anything, would you just simply increase the supply of money by reducing the interest rate?  Would you have an instant tax cut through withholding pay, which would reduce withholding, something that would give people more cash every week right now in their paycheck? 

What would be the way to stimulate economic consumption at this point and investment? 

FRANCIS:  Well, you know, I‘m a supply-sider.  I studied economics at Harvard.  You know, I think that tax cuts big across the board and corporate tax cuts, which is really an unpopular thing to say, and you are not going to hear the candidates say it.

But I believe, based on the models that I have seen, that the evidence shows that that is the biggest bang for the buck.  But I think tax increases across the board would have the biggest impact.  But everybody has a model why their theory would have...

MATTHEWS:  Tax cuts.


MATTHEWS:  You say tax cuts would work? 

FRANCIS:  That—that is my own personal belief, yes.

MATTHEWS:  God, Giuliani is talking corporate tax cuts.  I‘m not sure that‘s a popular idea with most people.


MATTHEWS:  But it might be a Republican good idea.

Anyway thank you, Melissa Francis, very much for joining us. 

FRANCIS:  My pleasure. 

MATTHEWS:  Still ahead:  What are Republicans up to down in Florida?  That‘s the last and first stand for Rudy Giuliani.  He‘s been playing rope-a-dope so far.  Is this the round he‘s going to punch and maybe win?  The primary is one week away.  Can anyone survive a second place down there?  Is this all about first place finally on the Republican side?  Are they getting ahead of the Democrats in picking a nominee? 

You‘re watching HARDBALL, only on MSNBC.  


MATTHEWS:  Welcome back to HARDBALL. 

So, what else is new out there in the campaign? 

Well, Mitt Romney wants to be a hard-liner when it comes to illegal immigration.  Like many like-minded people, he‘s a big opponent of what‘s called bilingual education in this country, teaching some kids partly in Spanish. 

Well, here‘s a bite from an early Romney television ad that makes that point.


NARRATOR:  Mitt Romney insisted on teaching our kids in English. 


MATTHEWS:  And, yet, being nimble on matters of policy, Romney‘s all too happy to use pure Spanish when it comes to getting votes.  Take a look at this new TV ad, which is in Spanish, voiced over by his son Craig.  






MATTHEWS:  So, Spanish isn‘t OK to teach, but it‘s OK to reach for votes. 

Speaking of Romney, take a look at this practical-joke video on which his son Matt has him convinced that Arnold Schwarzenegger is on the telephone line. 



M. ROMNEY:  Yes?

UNIDENTIFIED MALE:  It‘s the governor of California. 

M. ROMNEY:  Governor, Mitt Romney.  How are you? 


M. ROMNEY:  I‘m just fine, Governor.  How are you doing today? 


M. ROMNEY:  What can I do for you? 

SCHWARZENEGGER:  First, I would like to just get to know you. 

M. ROMNEY:  Well, we have we have had the chance...

SCHWARZENEGGER:  I‘m going to ask you a bunch of questions, and I want to have them answered immediately. 

M. ROMNEY:  Go right ahead and shoot. 

SCHWARZENEGGER:  Bipartisanship always. 

My principles of leadership, progress over politics. 

M. ROMNEY:  Well, I don‘t think anyone can disagree with that. 

SCHWARZENEGGER:  Who is your daddy, and what does he do? 



MATTHEWS: “Who is your daddy?”

It‘s fascinating watching this to try and see that nanosecond when Romney shifts gears from complete credulity, believing he‘s talking to Governor Schwarzenegger, and I‘m not listening—I‘m listening to some idiotic tape recording.  He just casually puts it down. 

Anyway, Hillary Clinton is whacking Barack Obama for being too rehearsed in last night‘s debate. 

Here she is. 


SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  Senator Obama came last night with a bunch of rehearsed points to make.  In fact, they were so rehearsed that he kept insisting I had mentioned President Reagan in what I had said, when I didn‘t mention President Reagan. 


MATTHEWS:  No, just referred to him.

Anyway, charging Obama with being too rehearsed might be a tough sell for someone like Senator Clinton, who is notoriously well prepared. 

Anyway, Obama delivered one of the great retorts of the campaign last night.  Here he is responding to whether or not he agrees with Toni Morrison, the author, that Bill Clinton was the first black president. 


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  I think Bill Clinton did have an enormous affinity with the African-American community, and still does.  And I think that‘s well earned.

I would have to, you know, investigate more of Bill‘s dancing abilities...


OBAMA:  ... you know, and some of this other stuff before I accurately judge whether he was in fact a brother. 


OBAMA:  But...


WOLF BLITZER, MODERATOR:  Let‘s let Senator Clinton weigh in on that.

CLINTON:  Well, I‘m sure that can be arranged.



MATTHEWS:  That wasn‘t bad either by her, a great comeback by Hillary. 

Anyway, the Oscar nominations are out, and, sadly, no best picture nomination even for one of my favorites this year, “Charlie Wilson‘s War.” 

However, Philip Seymour Hoffman was nominated for supporting actor for his performance as the CIA agent Gust Avrakotos in the movie.  Let‘s watch him.  This guy is amazing. 


TOM HANKS, ACTOR:  Do you drink? 


HANKS:  Well, should we try this Scotch or is it going to release sarin gas when I open it? 

HOFFMAN:  I don‘t think so.  But open it over there. 

HANKS:  How did a guy like you get into the agency? 

HOFFMAN:  What, you mean a street guy? 

HANKS:  You ain‘t James Bond. 

HOFFMAN:  You ain‘t Thomas Jefferson, so let‘s call it even. 



MATTHEWS:  You can smell the cigarettes and dirty clothes on that guy. 

What a performance. 

Anyway, my money says he will win it anyway, despite the fact Hal Holbrook, Andy Griffith, the great Andy Griffith, Max von Sydow, all three guys didn‘t even get nominated for best supporting actor, and all three were fabulous this year. 

Anyway, finally, it‘s time for the HARDBALL “Big Number” tonight.

It‘s not impossible—it‘s not impossible that February 5 could decide the entire presidential race on both sides.  And the campaigns on both sides know it.  That‘s why February 3 could be vitally important.  I‘m talking, of course, about the Super Bowl. 

Today‘s “Washington Post” reports that at least two campaigns might save their cash to buy just a single 30-second ad during this year‘s game.  How much would that cost?  Two-point-seven million dollars for 30 seconds to reach the world.  Remember, Iowa victor Mike Huckabee only spent half that much in his whole fight for the caucuses in Iowa, which he won. 

So, here‘s our magic number: $2.7 million for a 30-second ad in the Super Bowl.  God, you could cough during that and miss it.  Anyway, $2.7 million, that‘s tonight‘s magic number that one of the candidates may spend to reach everybody. 

Up next: Florida, Florida, Florida.  Can any Republican survive a second-place finish?  So well-written, that line, because it‘s possible that only first matters in Florida, especially for the Republicans.

You‘re watching HARDBALL, only on MSNBC.  


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

And stocks ended a very turbulent day lower, but a surprise three-quarters-of-a-point interest rate cut by the Fed stopped the hemorrhaging this morning.  The Dow Jones industrials finished down 128 points.  But the Dow had plunged 465 points this morning, sparked by a two-day global sell-off.  The S&P 500 lost 14 points, and the Nasdaq dropped 47. 

The Fed‘s interest rate cut was the biggest in 23 years, and many experts believe Fed policy-makers will cut interest rates again when they meet next week, possibly another half-a-point. 

Meantime, after meeting with President Bush, congressional leaders say an economic stimulus package could be approved by Congress in just three to four weeks. 

And, after the closing bell today, Apple reported, quarterly earnings jumped 57 percent, but its outlook is disappointing investors.  In after-hours trading, shares of the iPhone- and iPod-maker are down 10 percent. 

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


MATTHEWS:  Lots of talk so far tonight about Hillary and Obama, but let‘s take a look at the stakes for Republicans down in Florida in next Tuesday‘s election down there. 

Giuliani has bet his entire candidacy on the Florida results.  And, of course, his big challenger is John McCain, who is coming in off a big victory in South Carolina.  And the big question is, can he win this thing all? 

Let‘s take a look at David Shuster‘s piece on the Republican play right now. 


DAVID SHUSTER, NBC CORRESPONDENT (voice-over):  Hoping to energize the public originally from New York, today, Rudy Giuliani campaigned at a deli in Palm Beach. 

Giuliani is counting on moderate Republicans in the Sunshine State.  And, after a sixth-place finish in Iowa, fourth in New Hampshire and sixth in both Michigan and South Carolina, Florida, for Giuliani, has become do or die. 

RUDOLPH GIULIANI ®, PRESIDENTIAL CANDIDATE:  We know this area.  We know your communities.  We know your people very, very well.  And we, of course, have a very big primary coming up on January 29, and we want your support and we want your vote. 

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE:  Hey, thanks for serving, my friend. 

UNIDENTIFIED MALE:  Do you mind if I have a picture with you?

SHUSTER:  For John McCain, a Florida win could make his current momentum unstoppable, a surge noted repeatedly last night by the Democrats. 

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE:  I think that John McCain is going to be the Republican candidate. 



CLINTON:  ... to take on John McCain.

EDWARDS:  ... against John McCain. 

OBAMA:  We have been sort of like John McCain, but not completely. 

MCCAIN:  I noticed that they mentioned my name with amazing frequency. 

I was flattered. 

SHUSTER:  On the campaign trail today in Florida, McCain stressed his conservative principles. 

MCCAIN:  And we need to fix this tax code, scrap it, throw it in the scrap heap, and give Americans a tax code that‘s that thick, not this thick. 

SHUSTER:  But several Republican establishment figures don‘t trust McCain.  They haven‘t forgiven him for opposing the Bush tax cuts and for working with Ted Kennedy on an immigration plan.  According to Rush Limbaugh, if McCain gets the nomination:


RUSH LIMBAUGH, RADIO TALK SHOW HOST:  It‘s going to destroy the Republican Party.  It‘s going to change it forever.  It‘s going to be the end of it. 


SHUSTER:  Limbaugh has also blasted Mike Huckabee for raising taxes and compromising with a Democratic legislature in Arkansas. 

MIKE HUCKABEE ®, PRESIDENTIAL CANDIDATE:  But, tonight, I love Iowa a whole lot. 


SHUSTER:  But since Huckabee won in Iowa, his momentum has stopped.  And financial problems have forced his campaign to consider bypassing Florida in order to focus on Super Tuesday primary states one week later. 


SHUSTER:  By contrast, Mitt Romney is planning to campaign in Florida every day for a week.  Today, he focused on the ailing economy. 

ROMNEY:  It‘s critical that we have a strong economy, that we rebound and that we make sure we keep good jobs in this country.  I believe that, when things like this occur, it points out just how important it is to have a president who actually has had a job in the private sector becoming our next president. 

SHUSTER:  Romney says his campaign will continue regardless of the Florida outcome. 

(on camera):  But, again, with Rudy Giuliani, the pressure is on.  And even at his events now in Florida, Giuliani‘s campaign music is from the film “Rudy,” a song titled “The Final Game.” 

I‘m David Shuster for HARDBALL in New York. 



MATTHEWS:  That‘s David Shuster. 

Former Homeland Secretary—Security Secretary and former Governor of Pennsylvania Tom Ridge is the national co-chair of the McCain campaign.  And U.S. Congressman from New York Peter King is a homeland security adviser for the Giuliani campaign. 

So, the battle is joined, gentlemen. 

I ask you, Governor, who will better protect this country, if he‘s elected president, as commander in chief, Rudy Giuliani or John McCain? 

TOM RIDGE, FORMER HOMELAND SECURITY CHIEF:  Well, I certainly think that any focus group taking a look at 20-plus years of public-sector experience of both candidates would conclude, hands down, that the man that‘s ready from day one to be commander in chief, because he understands the role of America in the world and the responsibilities of America in the world, is John McCain. 

MATTHEWS:  And what—Congressman King, what is Rudy Giuliani‘s experience in foreign policy and national defense? 


Well, as far as national defense, as far as foreign policy, when he was in the Justice Department, he was involved in negotiating treaties with countries in Central America.  Certainly, his being mayor of New York, he dealt often with leaders from the United Nations. 

But on the initial issue of who would be best in the war against terrorism, I think, clearly, Rudy Giuliani.  I have a great regard for John McCain, but I believe Rudy—and, certainly, I have been—I have known Rudy for many years.  We have discussed this issue intently.  And he is absolutely focused on it.  He would strongly enforce the Patriot Act.  He believes in tough interrogations. 

He would not be—like, for instance, the way John McCain goes out of his way to talk about waterboarding.  You wouldn‘t find that from Rudy Giuliani.  He knows that Islamic terrorism is everywhere.  He knows it has to be stopped.  And he was on the front lines in New York, and he will continue to be.  This is his passion. 

MATTHEWS:  Governor? 


RIDGE:  Well, I would have to respond to my friend, Congressman King. 

MATTHEWS:  Is torture the issue of this campaign...

RIDGE:  Well, I think...

MATTHEWS:  ... who is willing to torture?

RIDGE:  I think there‘s no presidential candidate on either side that understands the use and the necessity from time to time of military power, but also understands its limitations.

But the other qualities of leadership that John would bring as commander in chief dealing with the rest of the world is he understands the value of smart power, that is diplomacy and developmental assistance. 

He also understands, unlike some of these other candidates the value of NEVILLE: e soft power of American values.  He said a long time that water boarding is torture.  It‘s inconsistent with how we train our soldiers.  It‘s not in compliance with Geneva Convention.  So you have a man who understands the military, but understands soft power and hard power. 

MATTHEWS:  But he says he doesn‘t understand economics; isn‘t that a hell of an admission at this time? 

RIDGE:  I think he understands --  

MATTHEWS:  He says he doesn‘t. 

RIDGE:  It‘s part of the Straight-Talk Express.  He understands what you need to have a pro-growth, pro-family economic policy, and that‘s cutting taxes and eliminating the alternative minimum tax. 

MATTHEWS:  But he says he doesn‘t understand economics.  He said it twice recently. 

RIDGE:  You know, one of the challenges with John McCain is he does it

I‘m sure he would be the first guy to tell you that he didn‘t get an A in economics in the Naval Academy, but he understands what drives growth.  He understands the coalitions you need to build in the House and in the Senate, Republicans and Democrats, to deal with fiscal policy.  And I‘m quite confident that with the assistance of people like Phil Graham and Jack Kemp and others, he quite understands what we need to do to get out of this mess we‘re in now and move forward. 

MATTHEWS:  Congressman, do you think that Rudy Giuliani is up to beating Hillary Clinton if she‘s the nominee?  I mean, last time they were supposed to go at it in New York State, it didn‘t actually happen.  He didn‘t go—he didn‘t actually run against her.  Do you have a sense that he‘s really got it in his gut to take on Hillary Clinton in a debate? 

KING:  Absolutely.  Chris, he absolutely has it. 

MATTHEWS:  Do you think he can beat her in a debate?  You believe he can beat Hillary Clinton in a debate? 

KING:  Absolutely.  Absolutely. 

MATTHEWS:  I wonder. 

KING:  Maybe you do, I don‘t.  I‘m absolutely convinced—

MATTHEWS:  She‘s done in almost every debate so far, with some exceptions. 

KING:  Rudy Giuliani, his record as a trial lawyer, his record as prosecuting attorney; he‘s an outstanding debater.  Let me go back to what Tom Ridge said about economics and John McCain.  The fact is, as mayor of New York, Rudy Giuliani cut taxes 23 times.  He has the most comprehensive tax-cut policy on the agenda right now. 

John McCain he voted against the Bush tax cuts.  And even though he‘s saying it was because there wasn‘t enough spending, the fact is if those tax cuts had not gone through -- 

MATTHEWS:  Enough spending cuts, I think he said—

KING:  What‘s that? 

MATTHEWS:  I think he said not enough spending cuts, congressman. 

KING:  Without that—Having said, without spending cuts, the fact is, if he would rather not had the tax cuts because there were no spending cuts, that would have been bad economics, bad for the country, and against Republican philosophy.  At the time, also, Senator McCain said it wasn‘t just because a lack of spending cuts, but also because he said they favor the rich, favor the upper class.  That is classic liberal Democratic talk.  That goes against the policies of Ronald Reagan and that goes against decades-old Republican tax cut philosophy. 

I go back to my other position I said before, we are in a war against Islamists terrorism and you have to have tough interrogation.  I don‘t want to see 5,000 or 10,000 Americans die because we don‘t want to put anybody through 30 seconds of discomfort, which is not going to cause them any lasting damage.  A presidential candidate shouldn‘t be talking about it.  We shouldn‘t be saying publicly what we should do or not do. 

MATTHEWS:  Last word, governor. 

RIDGE:  Well, Senator McCain is consistently—remember, he was part of the Reagan Revolution way back when, and supported the Reagan tax cuts. 

KING:  But he voted against the Bush tax cuts. 

RIDGE:  Under Ronald Reagan—Ronald Reagan also limited the growth of the government.  Since Ronald Reagan left the presidency, and unfortunately there have been a lot of Republicans on watch, the average tax payers—the government has risen about 2,500 dollars per man, woman, and child.  And John McCain has said, look, you can cut taxes, but at the same time, you have to reduce spending. 

Quite clearly, he wants to make the Bush tax cuts permanent, exactly, and we know he will cut spending. 

MATTHEWS:  Congressman King, have you ever seen a candidate engage in a rope-a-dope as long as Rudy has?  Is he waiting for the eighth round like Mohammed did against Foreman?  Isn‘t it a little late in the match to be winning a round? 

KING:  Chris, this is the first all Republican primary.  It should be Republicans who pick the nominee.  This is the first all-Republican primary. 

Senator McCain can‘t have it both ways.  He said he was against the Bush tax cuts and now he wants to extend them.  If you‘re going to have straight talk, you can‘t be saying you are against them and now you are for them when he‘s running for the presidency.  Those tax cuts, we as Republicans believe—we invigorated our economy and produced the many jobs we‘ve had over the last several years.  

MATTHEWS:  Let‘s not forget, you can do almost anything if you‘re running against Romney.  Thank you, Congressman Peter King, and thank you Governor Tom Ridge. 

Up next, fight night in South Carolina.  Much more from the Democratic side, their hottest one yet.  Boy, that debate last night was something.  We‘ll talk about what Hillary is—I can‘t tell.  She talked about Obama and he said she didn‘t talk about Reagan or he—It‘s very complicated.  This is HARDBALL, only on MSNBC.


MATTHEWS:  Welcome back to HARDBALL.  Some sad news breaking late today; actor Heath Ledger, the Heath Ledger, has died.  The Australian-born actor who starred in “The Patriot” and was perhaps best known for his Oscar nominated performance in “Brokeback Mountain” was found dead had in a New York City apartment by a house keeper.  According to police, pills were strewn all around him.  Believe it or not, Heath Ledger was just 28 years old.  Anyway, what a sad story. 

Jonathan Capehart is with the “Washington Post.”  Linda Douglass is with the “National Journal.”  And CNBC‘s John Harwood is also with the “New York Times.”  John, congratulations on joining the Times.  What‘s the name of that paper, the gray old lady of Times Square?  What‘s the nickname of that place? 

JOHN HARWOOD, “THE NEW YORK TIMES”:  It is the Gray Lady. 

MATTHEWS:  It is the gray lady. 

Let me ask you all about a scene last night that—I‘m used to politics and HARDBALL.  And I just wonder what‘s below the belt these days and what‘s not below the belt, what‘s in and what‘s out of the Hoyles Rules of what is acceptable.  Jonathan, you can start her.

Here‘s Senator Clinton going after Senator Obama last night in a kind of—I think they call it a round house punch, a right cross kind of thing.  Here it is—


OBAMA:  While I was working on those streets, watching those folks see their jobs shift overseas, you were a corporate lawyer sitting on the board of Wal-Mart.  I was fighting these fights.  I was fighting these fights. 

CLINTON:  I was fighting against those ideas when you were practicing law and representing your contributor, Rezko, in his slum landlord business in inner city Chicago. 

OBAMA:  No, no, no. 


MATTHEWS:  I don‘t want to use the word dirty, I shouldn‘t use it, because what is dirty anymore and what is tough?  She had a more evocative punch than he did.  Wal-Mart doesn‘t sound evil.  Slum lord in inner city Chicago has a certain ring to it. 


MATTHEWS:  She punched him hard.  He hit her.  OK, she hit him back much harder.  What is OK? 

CAPEHART:  Well, I think this—we‘re talking about president of the United States. 


CAPEHART:  And, you know, Wal-Mart for a lot of people is a dirty word. 

MATTHEWS:  How so? 

CAPEHART:  Well, in terms of unions, for instance. 

MATTHEWS:  That‘s right. 

CAPEHART:  It‘s not—I mean, it‘s the largest corporation, but it doesn‘t have the greatest reputation in the world.  So, he goes at—

Senator Obama goes—

MATTHEWS:  Puts a lot of business out of business. 

CAPEHART:  Well, there‘s that, too.  He goes at her with, well, you were on the board of Wal-Mart.  This is the first time I think we‘ve ever heard of this company in the national discussion.  So he hits her with Wal-Mart, which isn‘t—which isn‘t a good punch.  And so she says, you know what, bam, I‘m going at you, too.  I mean, --

MATTHEWS:  You know what they used to say about the Israeli Army, the IDF, you hit us, we hit you back ten.  It‘s almost like she kneecaps the guy.  I don‘t think he was ready for that.  And by the way, it does open up the door to more discussion of that guy, that sort of unsavory guy who is up under charges now, who apparently helped them buy his house, by buying the land next door and making it easy for him to buy his house.  He‘s admitted that was a mistake. 

LINDA DOUGLASS, “NATIONAL JOURNAL”:  I guarantee you they have been ready for that since day one because that was the first really negative story that ever came out about Barack Obama, exploring—the Chicago papers explored the relationship at length. 

MATTHEWS:  Is it clean or dirty to rip the scab off that in politics? 

Is that just the way we do it these day?

DOUGLASS:  Well, certainly he brought up Wal-Mart and they had some opposition research ready to go today that showed that there was a story from the “Los Angeles Times” that she just sat around while Wal-Mart engaged in policies that may have been not the most worker-friendly policies.  So, does she really care about the little guy?  They were ready to go with that.  And the Rezko thing was absolutely ready to go. 

The use of the word slum lord inner city, that was an interesting way of phrasing it. 

MATTHEWS:  Very evocative. 

DOUGLASS:  Yes, that was the part of it that was a tougher punch. 

MATTHEWS:  Let‘s not get too complicated, John, but let‘s get a little complicated here.  You are appealing for African-American votes and there you point to the fact that he‘s doing business with a slum lord. 

HARWOOD:  Exactly. 

MATTHEWS:  He‘s doing business with the bad guy.  I don‘t know what—

I should never say dirty because I can‘t tell what is anymore.  What is OK? 

Your response to this incident, first? 

HARWOOD:  You know, I don‘t think it was dirty.  I think it was a mistake on Obama‘s part, because it opened his—as you said, she had the more evocative come back.  She looked a little more shrill than Obama did in delivering it.  But, nevertheless, it was a content-free shot that Obama took that invited her counter-shot.  And it came in a debate, Chris, where he was arguing that Clinton and her husband were taking cheap shots against him. 

And they had good reason for some of that.  Some of this stuff, you said you like Reagan‘s ideas or the Republican ideas.  He didn‘t say that.  He made an unobjectionable comment about Republicans sort of gaining the upper hand in the ideological warfare for the sort of political center of gravity in the country.  Many people would say the same thing, but they used that against him. 

If he‘s going to complain that sort of stuff is unfair, that Wal-Mart thing was something that didn‘t do him any good. 

MATTHEWS:  Explain to me the complication.  Why did Senator Clinton, who had done—who with her husband had both taken shots at him for saying Ronald Reagan at least had put together a brilliant coalition back in 1980?  Why did she deny doing so, clearly having done so, by saying, almost in a high school fashion, I didn‘t say the name Reagan.  What‘s the point of denying the charge after making the charge? 

HARWOOD:  I didn‘t quite get her I didn‘t say the name Reagan, because I think she actually didn‘t say the name Reagan. 

MATTHEWS:  It‘s the definition of is.

HARWOOD:  I agree with you.  The reality is Bill and Hillary Clinton right now are looking for any sort of brick in the street and they want to hit Barack Obama with them.  And, you know, that‘s the way the fight goes.  And Barack Obama‘s complaining about that.  But they are pretty good at it. 

MATTHEWS:  I like your references to brick in the street.  All right, thank you.  We‘ll be right back with the round table.  You‘re watching it, HARDBALL, only on MSNBC.


MATTHEWS:  We‘re back with the round table for more of the politics fix. John Harwood of the “New York Times,” I got to ask you—someone wrote in the script tonight something I hadn‘t seen before.  I looked at it earlier today and said  god, that is really smart.  Is there a second place in Florida? 

HARWOOD:  In the Republican race? 


HARWOOD:  I don‘t think so.  It depends on who it is.  Look, if John McCain wins Florida, he has a very good chance of sort of stepping away from the rest of the pack going into Super Tuesday.  But if he doesn‘t—you know, if Mike Huckabee wins Florida, and John McCain finishes second, then different story.  Same with Rudy Giuliani. 

MATTHEWS:  But between McCain and Giuliani, does one have to go after this? 

HARWOOD:  Well, I think if Rudy Giuliani does not win Florida, his chances are de minimus.  If John McCain—although it does matter a little bit who does win, because if John McCain‘s defeated, then you‘ve got more of a wide-open field.  But if McCain can win this primary, and he seems to be running neck and neck with Rudy Giuliani right now, he‘s got a chance to step away. 

MATTHEWS:  OK, I‘m looking for simplicity here.  I‘m trying to get to the end game.  I guess we‘re not there yet, according to John. 

CAPEHART:  I don‘t think there is a second place for Rudy Giuliani. 

DOUGLASS:  I think there may be a second place for Mike Huckabee.  Mike Huckabee continues to move along, bringing in a certain kind of religious conservative voter.  You can‘t count out that voting bloc in several states. 

MATTHEWS:  Are you trying to scare your friends? 

DOUGLASS:  I think he lives to fight another day if he comes in second. 

MATTHEWS:  Some people think it has come down to McCain, Romney and, just because Giuliani hasn‘t been beaten yet, Giuliani. 

CAPEHART:  I would agree with that.  But, again, if Rudy Giuliani comes in second in Florida, I don‘t see how he goes on.  He‘s thrown all his—

MATTHEWS:  Give me a quick answer, John.  How do the Republicans get the deal together if McCain does win in Florida next Tuesday?  How do they circle the wagons and say it‘s over, the deal‘s been made? 

HARWOOD:  Well, if, me, John, is what you‘re talking about, I think that the Republican establishment will somewhat reluctantly line up behind McCain and recognize that he is a fairly electable candidate and he‘s the guy that seems to have the most juice in this field. 

MATTHEWS:  OK, OK.  Thanks, great.  Great to have you, John Harwood of the “New York Times,” Jonathan Capehart of the “Washington Post,” and Linda Douglass of the “National Journal.”

On Thursday I‘ll be in Florida for coverage of the Republican Presidential Candidates‘ Debate moderated that night by Brian Williams and Tim Russert of NBC.  See you then.



Copy: Content and programming copyright 2007 MSNBC.  ALL RIGHTS RESERVED.  Transcription Copyright 2007 Voxant, 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 Voxant, Inc.‘s copyright or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.


Watch Hardball each weeknight