'Hardball with Chris Matthews' for ***

Guests Rep. Jim Moran, Rajiv Chandrasekaran, Margaret Carlson, Nancy Giles

CHRIS MATTHEWS, HOST:  Politics makes strange bedfellows.  In New Jersey, it apparently meant a very crowded bed.

Let‘s play HARDBALL.

Good evening.  We‘ll get to that little sugar plum about New Jersey in a moment.  But I‘m Chris Matthews.  Welcome to HARDBALL.  And of course, happy St. Patrick‘s Day, a day of special meaning to me and my family.  It‘s the date of my late parents‘ anniversary.  It‘s also a date of spiritual hope and not just for the Irish.

It‘s going to take more than luck of the Irish, of course, to turn the economy around.  Shares of financial firms are plummeting right now.  The mortgage crisis is deepening.  And credit markets around the world are jittery right now.  In the race for president, who does get a boost out of all this bad news and who gets a bump from all this financial woe we‘re facing?  In a moment, we‘ll talk about the economy and politics and how they fit together with CNBC‘s Jim Cramer, a man who makes me seem quite calm at times, and John Harwood, who‘s also with me here.

Plus, Catholic voters have been perhaps the swing vote in the last several presidential elections.  They made up a lot of the “Reagan Democrats,” so-called, who helped the Republicans dominate politics for quite a few years.  In a moment, we‘ll take a look at St. Patrick‘s Day and the Catholic vote with two Irish-American pundits who should know what they‘re talking about, and one of them‘s a U.S. congressman.

And just days before the five-year anniversary of the U.S. invasion of Iraq, Vice President Dick Cheney and Senator John McCain made separate trips to Baghdad to assess the progress, if you will, of the American surge program.  Meanwhile, in Karbala today, a female suicide bomber attacked a group of Shi‘ite worshipers near a mosque, killing dozens of people and wounding many more.

In a few minutes, we‘ll talk about the war and what it means for the presidential race.  Plus, our “Politics Fix” tonight has all the inside (ph) from the presidential campaigns, including the flap over Barack Obama‘s preacher out in Chicago and the latest poll numbers, which, by the way, show Barack up by 52 to 45 nationally over Hillary Clinton as of tonight on the CNN poll.

But we begin with the state of our economy.  Jim Cramer is the host, inimitable host, of “MAD MONEY” on CNBC.  Look how calm he is.  And John Harwood is CNBC‘s chief Washington correspondent.  He‘s also with “The New York Times.”

Jim, I just want to say my political axiom about economics is, if things are getting worse, the middle class begins to identify with people who very bad off.  If things are getting better, they identify with the rich and vote Republican.  They vote more Democrat if things are getting worse.  What do you see happening in the fall based upon what‘s happening now economically?

JIM CRAMER, HOST, CNBC “MAD MONEY”:  It would have to be just a total win for the Democrats.  The Republicans have been tone deaf about the decline in the value of your house and allowing different organizations, including, I know, the much despised Fannie Mae, to help out in this situation.  They‘ve delayed it.  Suddenly, you have situations, really, Chris, where you have a bank that was at 50, and you come in on Monday and it‘s at 2.  and that‘s frightening to people.  And they‘re going to identify more with “I‘m in trouble” than with “Things are getting better.”

MATTHEWS:  OK, as Denzel Washington said in the movie “Philadelphia,” Explain it to me, what‘s going on right now, and then tell me how it‘s headed between now and November, as if I were your grandmother, because I don‘t know much more than she does about this kind of financial stuff.

CRAMER:  Well, some banks just lend too much money and can‘t get it back.  Some banks get overextended, and periodically, there‘ll be a run at the bank.  Some banks do them both, and that was Bear Stearns.  They did not have enough capital on hand.  They were reckless.  They had loaned way more than they had.  And then the market got very, very tough and no one wanted to give them money, and so they went belly up, basically.

And a guy I‘ve been calling Potter, and not from the Harry Potter, but Potter from—I know because you‘re a great movie historian—“It‘s a Wonderful Life,” Jamie Potter Diamond (ph) from J.P. Morgan virtually steals this bank over the weekend in a back room deal that nobody likes, a bail-out for J.P. Morgan, not for the rest of us.  I got to tell you, Chris, it‘s going to make a lot of people angry.

MATTHEWS:  Well, it‘s not like bailing out George Bailey in “It‘s a Wonderful Life.”  Were the people at Bear Stearns bad guys, in terms of your economic story here?

CRAMER:  They were more reckless than others.  So I guess, in that sense, you would want to discipline them, yes.

MATTHEWS:  OK.  It‘s March 17, St. Paddy‘s Day, Mr. Cramer.  What‘s it going to be like the first week in—the first Tuesday after the first Monday in November, when people go to the polls?

CRAMER:  Well, first, I should have wished you happy St. Patrick‘s Day.

MATTHEWS:  Thank you.

CRAMER:  I was the proud emcee today of the annual St. Patrick‘s Day governor‘s breakfast in New York.  Of course, the governor was not there, but I was there.

I think that things are—you know, look, I think that—I‘ve got to tell you that if you wanted to ask me who is the candidate that says the most that I am doing really poorly and I want to make a statement against this particular regime, that‘s the guy who‘s going to get the most votes.

MATTHEWS:  OK.  So change is in the air.  Let me go to you, John Harwood, your sense of this economic picture.  I said the CNN poll last tonight, or came out late this afternoon, points out that Barack is up.  Other polls show different.  But this—the usual thing is the outs win—not just the Democrats, but the Republicans are out, they win.  The outs win when things are bad.  When they‘re getting bad, they really win big.


I think Jim is exactly right.  This is an unquestioned boon for the Democrats.  But I do think within the Democratic primary, potential for helping Hillary Clinton in a significant way.  You remember, Chris, you ran that 3:00 AM ad before the Ohio and Texas primaries, which she—which she won over Barack Obama, got herself back in the race.  We are now experiencing one long 3:00 AM phone call between Washington and Wall Street and the consequences of potential meltdown of big financial institutions.  I think that‘s got to benefit Hillary Clinton...


HARWOOD:  ... who‘s identified with her husband‘s success.

MATTHEWS:  Because she had—because they say, Better in the ‘90s than now.

HARWOOD:  People—two things.  One, there‘s a heightened sense of risk with voters, and that makes them less inclined to go with the new guy.  And secondly, the kind of—particular kind of experience that she is most long on is the association with her husband‘s successful economic stewardship in the 1990s.

MATTHEWS:  And I think people go back to the reliable.  They go to the hotel they liked to stay at before.  It was pretty nice, I‘m going back to that one again.

Let‘s take a look at Senator Clinton—comfort and avoidance of risk, her strengths.  Let‘s take a look at Senator Clinton today.


SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  What is happening on Wall Street may well affect the lives and fortunes of tens of millions of Americans who work hard every day.  They‘ve done nothing wrong but they will be impacted.  In my conversations earlier this morning, I raised my concern about the continuing numbers of foreclosures and my very strong belief that in the absence of addressing that‘s aspect of this subprime mortgage credit crisis, we will not be able to make the progress that we have to make.


MATTHEWS:  Well, that was a sound presentation.  NBC‘s poll, by the way, late poll last week just came out and said only 34 percent, about a third of us, think we‘re better off than we were four years ago.  A lot of people would like to meet that third, haven‘t met them yet.  That‘s the lowest number, by the way, since 1992 in July, the last time America dumped a presidential party.

By the way, if you go back to that, Jim, George Bush‘s father only got 38 percent in his reelection campaign, the rest going to Perot and to Bill Clinton.  They just wanted a change.

CRAMER:  Right.  Well...

MATTHEWS:  Is that the mood now?

CRAMER:  Yes, that is.  Now, I have to tell you, on Wall Street, we actually regard Hillary as much more sophisticated about the mortgage situation than Barack Obama.  We really don‘t know anything about where Barack Obama stands.  Hillary has put out some very sophisticated, very sound ideas about the issue.  She is really considered to be someone who is trying to find out what the right thing to do is for everybody.  She is not considered to be anti-capital at all, Chris, not at all.

MATTHEWS:  OK, let‘s take a look at Senator Obama today, again, a report from him today on this crisis facing the market.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  Wages, incomes, they hadn‘t gone up over the last seven years.  Corporate profits were great.  Wall Street was doing fine, but ordinary folks were struggling.  And so if you‘re really ready for change, we can‘t just tinker around the edges, we‘ve got to bring about a fundamental change to our economy, one that‘s not just about representing Wall Street but representing Main Street.  And that means we‘re going to stop giving tax breaks to companies that ship jobs overseas and start giving tax breaks to companies that invest right here in Pennsylvania.


MATTHEWS:  So does somebody from the market like you, a real capitalist like you, Jim—that sounds too much like structural change, doesn‘t it, as they used to say in the old left days that I was familiar with, structural change, real economic change, bottom to top.  Is that what you‘re afraid of up there on Wall Street?

CRAMER:  I got to tell you, the manufacturing economy in this country

we—we don‘t (ph) have enough people, the workers, it‘s so strong! 

That‘s precisely the wrong issue.  This is entirely having to do with the mortgage market and trying to get it so that the government refinances people who are in trouble.  It‘s not jobs!  I have companies on every night that can‘t fill their order book!  Businesses too booming!  They can‘t find enough workers!  Man, that is like the—that is the wrong way...

MATTHEWS:  OK.  OK.  It‘s time for a fight.  Look, Cramer, you know, last—what was it, two weeks ago, you said to—somebody said, Dear Jim, should I be worried about Bear Stearns in terms of liquidity and get my money out of there?  And you said, No, no, no, Bear Stearns is not in trouble.  If anything, they‘re likely to be taken over.  Don‘t move your money from Bear.  You‘re getting a dollar for $100 on stock in Bear Stearns now.

CRAMER:  No!  No!  If you had your money in Bear, the Fed bailed you out entirely!  If you were...

MATTHEWS:  At $2 a share.

CRAMER:  No, no!  If you had your money in Bear Stearns as a bank, you got out whole.  It was a question involving whether they would wipe out your savings, not the stock.  It‘s the same thing as CitiGroup.  I would not own a share of CitiGroup, but I‘d put my money in CitiGroup because you‘re going to get paid off.

MATTHEWS:  So in terms of what, depositors?

CRAMER:  The common stock is not worth anything at a lot of these banks.

MATTHEWS:  All right.

CRAMER:  But if you have money as a depositor—I didn‘t want to cause a run at Bear.  The Fed made you whole over the weekend.

MATTHEWS:  OK.  Let me—I want your forecast.  Is this thing going to get worse or better the next two or three weeks?

CRAMER:  I actually think that we‘re—I think it‘s going to get—the Federal Reserve meets tomorrow, Chris.  If they do the right thing and cut big and issue the right statement, we‘re going to get better.

MATTHEWS:  It‘s not inflationary.

CRAMER:  No!  Jeez, we got—your house is your ultimate asset.  It goes down in value every minute.

MATTHEWS:  OK.  Thank you.  Still bullish on America, Jim Cramer.  Thank you, sir.  And John Harwood, thank you, sir, for joining us.  I know we took up too much time there.

But coming up: Pennsylvania‘s the big battleground, five weeks away.  Can Barack Obama start cutting into Hillary‘s big lead there?  She‘s about 19 points up, and she‘s bullish on the economic issue up there—rather, she‘s bearish and good (ph) at it.  On this St. Patrick‘s Day, which way will the Catholic vote go?  I‘ve got to talk about that with a couple people that know.

And at 7:00 Eastern time, the live edition of HARDBALL, the “Power Rankings” tonight.  You‘re going to get it big tonight at 7:00 o‘clock.  Who has the best shot to actually win the White House?  I‘m going to tell you.  We‘ve gone through all the poll data.  We‘ve gone through all the delegate counts and everything, and we can tell you how‘s it going to go, one, two, three.  I‘m not telling you yet.  We‘ll be right back.

You‘re watching HARDBALL, only on MSNBC.


MATTHEWS:  Welcome back to HARDBALL.  On this St. Patrick‘s Day, both Hillary Clinton and Barack Obama are tipping their caps to the Irish vote up in Pennsylvania.  And according to exit polls in primaries held so far, a trend is emerging among voters according to religion, particularly Catholics, who seem to be for Hillary Clinton in this one.

Joining me right now are two Irishmen—Irish-Americans, as we say politically correctly—MSNBC political analyst Pat Buchanan and U.S.  congressman from Virginia Jim Moran, sir.


MATTHEWS:  What do we do when we look at numbers that show—everything‘s—everything now is a voting bloc now.  White men‘s a voting bloc.  Everybody‘s a voting bloc.  Catholics—we‘re not used to being treated as—I‘m Catholic, too, as most people know—Patrick, you are—very “old church”...


MATTHEWS:  ... I think it‘s safe to say.


MATTHEWS:  But why are Catholics now moving toward Hillary Clinton in the Democratic fight?  What‘s that about?

MORAN:  I do think it‘s generational.  Hillary does appeal more to ethnic groups.  But you know, I am Catholic, 100 percent.  The inbreeding is probably something I ought to be worried about.  But you know, my grandparents were very confined and limited by it.  My parents were very conscious of it.  It means less to me.  But my kids don‘t care at all.  And I don‘t think these polls really apply to the younger generation, to your kids, my kids.  But in terms of the Baby Boom generation...


MATTHEWS:  ... my kids.

MORAN:  No.  Nor am I.  But the Baby Boom generation, I think they are conscious of it.  I think she goes after that vote, and I think she‘s been fairly successful.

MATTHEWS:  Older Catholics, why are they for Hillary, if that‘s the difference?

BUCHANAN:  They‘re Catholic.  They‘re ethnic.  They‘re traditionally social conservative.  They‘re FDR, Harry Truman, John F. Kennedy Democrats.  They‘re not McGovernites, not Mondale.  In the east of—you know, in the east of Pennsylvania, Chris, they‘re Irish, Italian.  Out in the west, where my mother came from, they‘re German and Slovak.  That‘s Ditka country, Stan Musial...

MATTHEWS:  (INAUDIBLE) Kanjursky (ph), by the way, from Wilkes-Barre (INAUDIBLE)

BUCHANAN:  That‘s the kind of name you get out there, Stan Musial, Ditka, Lujak (ph) Montana, all these names out there.  And I think they‘re very traditionalist, socially conservative people.  They‘re by and large Democrats, but I don‘t think Catholics—I think Catholics are the least bloc vote in America.  They‘ve split both ways in national elections.  They tend to be working-class ethnic Democrats, but I don‘t—I wouldn‘t consider them a bloc vote going one way 90 percent.

MATTHEWS:  Well, they are going pretty overwhelmingly for Hillary.

BUCHANAN:  Well, they‘ll go for her I think because Barack Obama is not their kind of candidate.  Frankly, Barack is more...

MATTHEWS:  He‘s your kind of candidate.

MORAN:  He is my kind of candidate...


MORAN:  ... because I do think he is more of a uniter, and I think we need to expand the base.  And you know, the Catholic vote that President Reagan went after, I think that‘s the last—the 20th century.  And I think things have got to change.  And I do think a lot of people, though, while they may be with Hillary—some things have changed.  For example, voting on the basis of abortion, or you know, gay rights or the flag, those kinds of cultural issues do mean less and she...

MATTHEWS:  Who would get a bigger crowd at Notre Dame or Georgetown or Holy Cross tomorrow morning, if they had a rally?

BUCHANAN:  Obama.  Obama...

MATTHEWS:  Yes.  OK...


MATTHEWS:  ... they‘re all Catholic schools.

BUCHANAN:  Well, they‘re all...


BUCHANAN:  There‘s a question about that!

MORAN:  Younger generation.

BUCHANAN:  You‘re talking about young college students.  They‘ll go for Obama, whether they‘re Catholic, whatever.  If you‘re talking about the broad mass in Pennsylvania, from Philadelphia and its suburbs and South Philly or anywhere, all the way over to Pittsburgh and Cleveland, these are natural traditionally socially conservative FDR Democrats...

MATTHEWS:  OK, let me try something by you.  Catholic—Irish politics—forget Italian, German, Polish and all the other Catholic groups, Latin groups, Latino groups.  Irish have a simple politics.  It‘s basically about personal relationships.  It‘s friendships.  It‘s the old machines, if you will.  It‘s not always particularly savory, but it‘s always about friendships and old relationships.  The Clintons in Pennsylvania, from what I can tell, are working old relationships with the mayors, with Doherty (ph)...


MATTHEWS:  ... up in Scranton, with—with Michael Nutter in Philly, with Eddie Rendell, the governor, Anorata (ph) up in there—just a minute.  They‘re working old relationships.  So they get the older mayors and these guys.  Hey, look, we helped you out in the ‘90s.  Same thing with Tommy Menino up in Boston, old relationships.

BUCHANAN:  Well, this...

MATTHEWS:  That‘s what Catholics seem to like.

BUCHANAN:  It‘s also always material.  It‘s Social Security, Medicare for the old folks, things like that.  It‘s not blue sky, you know, “the fierce urgency of now.”  These people—What the—you know, What is he talking about?  So they‘re...

MATTHEWS:  You believe more in the fierce urgency of yesterday, don‘t you!


BUCHANAN:  But no, these folks are really into their New Deal, even parts of the Great Society.

MATTHEWS:  Yes, they don‘t want...

BUCHANAN:  What is government going to do for the family, Joe‘s job? 

Is the kid‘s factory going to be moved out of town?

MATTHEWS:  Well, look at Hillary here.  We‘re watching...


MATTHEWS:  There‘s Hillary Clinton, looking like a million bucks out here, having the time of her life with the Irish out here in Scranton, with the motorcycle cop in front of her.  This is like—this could have been 1955.


MATTHEWS:  There‘s Eddie Rendell.

MORAN:  But Chris...

MATTHEWS:  Look at this kind of politics!  This is old stuff.

MORAN:  Yes, it is old stuff.  And you‘re not going to see many young people there.  And even listening to this—this conversation, there are not many young people who could care less about what we‘re talking about, about ethnic divisions and so on.

BUCHANAN:  Well, then, they‘re at Haverford.


MORAN:  Well, they may be.  But you know, I do think, in many ways, we‘re talking about an old style of politics.  And maybe it‘ll prevail this time, but it‘s not going to prevail for long.

BUCHANAN:  But in terms of generations, Chris, if you said—if you took it 30 and younger, my guess is Obama wins that there in Pennsylvania and he certainly wins the African-American vote.  He‘ll win the college town vote.  But if you talk about the rest, the great mass of the old Democratic bulwark, I think it goes with Hillary.

MORAN:  I think the kids are more likely to bring their parents and to convince their parents how they want them to vote, than vice versa. 

BUCHANAN:  Well...

MORAN:  I think you are going to see the change happen this time around. 


MORAN:  And I think ethnic politics are behind us.


MATTHEWS:  If he‘s right, he‘s right.  If he‘s not, you‘re right.


BUCHANAN:  I think Hillary wins it by 10 points. 

MATTHEWS:  Pennsylvania?


MATTHEWS:  That‘s a—you might be right there.


MATTHEWS:  But that doesn‘t mean she won...


MATTHEWS:  ... because, if she wins by 10, she doesn‘t pick up the delegate strength she needs to overcome this guy.


MATTHEWS:  She‘s way behind in delegates.  She has got to win big. 

She has got to win by 20. 


MATTHEWS:  Eddie Rendell has got to deliver a 20-point majority to make this thing work, if it‘s about delegates. 


BUCHANAN:  Obama has got more problems than you imagine, my friend, with this Wright thing.

MATTHEWS:  OK, good.  Thank you. 


MATTHEWS:  Thank you, Pat Buchanan, for that—for that morbid, menacing thought from the future. 


MATTHEWS:  Thank you, Congressman Jim Moran of Virginia.


MATTHEWS:  Up next:  In a campaign in which every delegate counts—delegates—Barack Obama has a big weekend.  He keeps winning this thing.

Plus, if you thought the expose of New York Governor Eliot Spitzer was bizarre, wait until you hear the latest claim about former New Jersey Governor Jim McGreevey.  I think the phrase in French is (SPEAKING FRENCH).

You‘re watching HARDBALL, only on MSNBC.  



TRACY MORGAN, ACTOR:  In conclusion, three weeks ago, my girl Tina Fey, she came on this show and she declared that bitch this is new black. 


MORGAN:  Now, you know I love you, Tina.  You know you my girl, you know?  But I have something to say.  Bitch may be the new black, but black is the new president, bitch. 



MATTHEWS:  Black is the new president. 

Welcome back to McHARDBALL.  That was, of course, Tracy Morgan on “Saturday Night Live” this weekend.

So, what else is new out there in politics?  Well (SPEAKING FRENCH. 

What is going on in New Jersey?  Remember former New Jersey Governor Jim McGreevey, who left office after revelations he was having a secret gay love life with his hand-picked state anti-terrorism director? 

In her new book, “Silent Partner,” McGreevey‘s estranged wife, Dina, says she missed the signs that he preferred men over women. 

Well, really?  Theodore Pedersen, McGreevey‘s former driver and traveling aide, body man in the political parlance, is now saying that, before McGreevey was elected governor, he had three-person sexual trysts with McGreevey, Dina, and himself. 

Dina McGreevey denies the threesome claim.

Get this.  Remember when Hillary Clinton apologized for Bill‘s racially loaded remarks in South Carolina, comparing Barack Obama‘s campaign to that of Jesse Jackson back in 1990 -- 1988? 

Here‘s what Hillary said. 


SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  Well, I want to put that in context.  You know, I am sorry if anyone was offended.  It was certainly not meant in any way to be offensive.  And I think that we can be proud of both Jesse Jackson and Senator Obama. 


MATTHEWS:  So, Hillary allows that some folks might have been offended by her husband‘s marginalizing of Obama.  Bill doesn‘t allow that. 

Here‘s what he had to say about it today on “Good Morning America.” 


ROBIN ROBERTS, ABC ANCHOR:  You say chill out, but Geraldine Ferraro, Reverend Wright, I mean both sides, things that are being said by surrogates.  People point back to South Carolina and the comments that were made at that point.

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES:  They made up a race story out of that.  There was no disrespect to Senator Obama in that.  So, I think that—that our side got a bum rap over what was said about South Carolina.


MATTHEWS:  I like the way he aggressively puts the hands out there when he doesn‘t like the question.  I guess Bill didn‘t get the memo.  You‘re supposed to say, it might have offended some people. 

Remember the Iowa caucuses back in January?  Well, they happened again this past weekend—sort of.  That state held what is called a county convention re-caucus, which is another step in this complicated caucus process.

It‘s more good news for Barack.  He picked up an additional nine delegates, while Clinton lost one.  That puts the grand total so far—and this includes committed superdelegates—at 1,625 for Obama, 1504 for Clinton.  Those are the numbers as of now.

Those are big numbers, but they‘re not the “Big Number” tonight on


Hillary Clinton voted to authorize the Iraq war back in 2002.  She has spent the campaign, however, attempting to soften that record and to soften the impact of rival Barack Obama‘s statement against the war, back when it mattered. 

But Senator Clinton has leveled so many attacks at Obama on this war issue, you would wonder why she missed a chance to speak out against the war herself, again, back when it mattered. 

As you listen to this fusillade of attacks from her Iraq address today, think of how powerful a Hillary Clinton speech against the war would have been had she made it before the invasion, again, back when it mattered. 


SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  Senator Obama holds up his original opposition to the war on the campaign trail.  But he didn‘t start working aggressively to end the war until he started running for president. 

Giving speeches alone won‘t end the war.  The American people don‘t have to guess whether I‘m ready to lead.  He is asking us to judge him by his words.  And words can be powerful, but only if the speaker translates them into action and solutions. 


MATTHEWS:  So, how many attacks did Hillary Clinton wage against Obama in her Iraq speech today?  Eleven -- 11 attacks against Obama on an issue that should be her biggest liability, Iraq—tonight‘s “Big Number.” 

Up next:  Five years after the U.S. invasion of Iraq, a deadly suicide bombing serves as a grim reminder of how far Iraq still has to go.  Will voters agree with John McCain, who wants to stay the course in Iraq, or will they say it‘s time to get out and back to Democrats?

You‘re watching HARDBALL, only on MSNBC.  


REBECCA JARVIS, CNBC CORRESPONDENT:  I am Rebecca Jarvis with your CNBC “Market Wrap.”

Stocks closing mixed after a wild day in the wake of a fire sale of Bear Stearns to J.P. Morgan Chase.  The Dow Jones industrials closed up 21 points, after being down almost 200.  The S&P 500 lost 11 points.  The Nasdaq dropped 35 points.

Some Bear Stearns employees are apparently already packing up their desks.  CNBC has learned that J.P. Morgan Chase expect to cut about half of Bear Stearns‘ 14,000 employees after buying the struggling investment bank for the bargain-basement price of $2 a share. 

A year ago, Bear Stearns was trading at $171 a share.  Today, Bear Stearns shares closed at $4.81, while J.P. Morgan Chase jumped more than 10 percent. 

Oil prices plunged, though.  Crude fell $4.53, closing at $105.68 a barrel. 

And the Federal Reserve is widely expected to get interest rates tomorrow between a half and a full percentage point. 

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


MATTHEWS:  Five years ago, President Bush gave Saddam Hussein 48 hours to relinquish his power.  Back then, nearly everybody in the administration and Congress thought the war would go quickly.  It has not. 

And now, with the U.S. presidential election approaching fast, the debate is back over whether to keep the war going or end it. 

Here‘s HARDBALL‘s David Shuster. 


DAVID SHUSTER, NBC CORRESPONDENT (voice-over):  Nearly five years since the U.S. invasion of Iraq, today, Vice President Cheney toured parts of Baghdad and argued against a drawdown of U.S. forces. 

RICHARD B. CHENEY, VICE PRESIDENT OF THE UNITED STATES:  I think that would be a—that would be unfortunate. 

SHUSTER:  Cheney‘s visit came just hours after John McCain met with U.S. soldiers in Iraq and on the same day that a suicide bomber killed at least 39 people in the town of Karbala and a roadside bomb killed two U.S.  soldiers north of Baghdad. 

Despite the spike in violence, supporters of the war tried to draw attention to improvements in security.  Since the escalation last year of 30,000 U.S. additional troops, the number of violent attacks on U.S. forces has gone from 1,500 last June to fewer than 500 last month. 

Civilian deaths are down.  And U.S. military deaths have dropped from 110 last May to 15 last February.  War supporters chalk it up to the heavier U.S. troop presence and a smarter counterinsurgency factor.  But U.S. military officials acknowledge the drop is also due to Shiite leader Muqtada al-Sadr that declared a cease-fire a year ago and has kept it going.

And, for all the improvements in security, basic services, like water, electricity, and garbage pickup, remain haphazard.  Furthermore, the goal of the U.S. surge was to give Iraq leaders the breathing room to make political progress and eventually lead to the withdrawal of U.S. forces.  But most of the benchmarks set out by the Bush administration have not been met. 

There has been no Iraqi constitutional review, no oil-sharing

legislation, and no disarming of Iraqi militias.  And, just last week, the

top U.S. commander in Iraq, General David Petraeus, told reporters—quote

“No one feels that there has been sufficient progress by any means in the area of national reconciliation.”

Today, 3,988 American soldiers have been killed in Iraq, and the war has cost the U.S. Treasury $650 billion and counting.  Meanwhile, American views of the Iraq war have not changed.  The latest NBC News/”Wall Street Journal” poll found that most Americans, 53 percent, continue to say victory is not possible, compared to 40 percent who say it is possible. 

For the U.S. presidential election, the choice is stark.  Republican John McCain is convinced the surge has worked and that a continued American troop presence is necessary. 


SHUSTER:  Democrats Barack Obama and Hillary Clinton both argue, continuing the war is a mistake and that it‘s time to get out.  And, today, Clinton charged that a vote for McCain would be another vote for President Bush. 

H. CLINTON:  They both want to keep us tied to another country‘s civil war, a war we cannot win. 

SHUSTER (on camera):  The McCain campaign today hit back at Senator Clinton, accusing her of mischaracterizing his Iraq policy and of looking only to score political points.

Meanwhile, the war grinds on, with more than 150,000 U.S. troops in Iraq nearly five years after the U.S. invasion. 

I‘m David Shuster, for HARDBALL, in Washington. 


MATTHEWS:  Thank you, David. 

MSNBC Middle East bureau chief Richard Engel is in Baghdad right now. 

And Rajiv Chandrasekaran is the national editor of “The Washington Post.”  He‘s also written a book about Baghdad‘s Green Zone called “The Imperial Life in the Emerald City.”

Let me go to Richard Engel.

Sir, what does victory mean, when you hear that word over there?  Does it mean we can come home?  What does it mean to you as a correspondent, that word, victory, because most Americans believe it‘s unattainable? 

RICHARD ENGEL, NBC MIDDLE EAST BUREAU CHIEF:  It‘s been one of these very hard words to define. 

There is generally a common definition among the U.S. military.  And that is an Iraq that is at peace with its neighbors, at relative peace with itself.  And they always say there will be a sustainable level of violence here.  It‘s something of a defeatist attitude.  They‘re not even hoping to maintain or reach for a zero violence, but something that can be sustainable, not necessarily threaten the very fabric of society.  That is now what most people here consider victory. 

For me personally, I think a victory would be just if the—the viewers are more interested, more engaged with the war.  There‘s been a tremendous decrease in—in interest in the war over the last few months, and I would like to see that.  That would be a personal victory. 

MATTHEWS:  Well, let me ask you about the usual definition of victory.  When you get to Berlin, you get to Tokyo, you leave a few troops behind to keep the occupation, but you leave.  The war is over.  The fighting, the killing, the casualties are over. 

Is there such a light at the end of the tunnel in Baghdad? 

ENGEL:  It feels right now similar to where we were five years ago, in that this is a—a turning point—or it could be a turning point. 

Five years ago, U.S. troops were on their way, quite literally, at this time, and we knew something was about to change.  Right now, we have this window of opportunity.  Violence, compared to a year ago, is down 60, 70 percent, depending where you are in Iraq right now. 

We have not seen—I don‘t see any real signs of political reconciliation.  There have been some—some laws passed.  But when I talk to Iraqi politicians, Iraqis on the street, this new I guess you could call it militia force that the U.S. military has created, the Sons of Iraq program, the former Sunni insurgents that are now fighting alongside the Americans, they don‘t talk about reconciliation.  They talk about maintaining some sort of truce, so they can settle scores later. 

So, there is a—a lull in the violence.  There is an opportunity, but the fundamental problems, I think, are still very much rooted here. 

MATTHEWS:  Are we the cork in the bottle? 

ENGEL:  Right now, we are keeping the two sides apart. 

And the only hope is that the people here get used to this relative calm enough, that they will want to keep it going.  Right now, Muqtada al-Sadr would love to come back to the fight.  He‘s staying out because, if he did come back, his own movement would blame him for having destroyed the cease-fire that is going on right now.  People‘s lives are getting back to normal. 

So, if that momentum can maintain, then perhaps we won‘t have to be the cork in the bottle.  But we are certainly right now keeping the two sides apart.  And, if we pulled back, it would be—I don‘t know how long it would take.  Perhaps it would be quick.  But it would certainly get ugly very quickly. 

MATTHEWS:  Thank you very much, Richard Engel, in Baghdad.  Thanks for that report.

Hillary Clinton tied McCain to President Bush‘s Iraq policy today. 

Let‘s take a look. 


CLINTON:  Senator Obama holds up his original opposition to the war on the campaign trail.  But he didn‘t start working aggressively to end the war until he started running for president.  So when he had a chance to act on his speech, he chose silence instead. 

Out campaigning, Senator Obama tells voters that as president he would withdraw combat brigades from Iraq within 16 months.  But one of his top foreign policy advisors told a different story.  She told a British television reporter, and I quote, he will of course not rely on some plan that he has crafted as a presidential candidate or a U.S. senator. 

Senator Obama has said often words matter.  I strongly agree. 

President Bush is determined to continue his failed policy in Iraq until he leaves office.  Senator McCain will gladly accept the torch and stay the course, keeping troops in Iraq for up to 100 years, if necessary.  They both want to keep us tied to another country‘s civil war, a war we cannot win.  That, in a nutshell, is the Bush-McCain Iraq policy; don‘t learn from your mistakes, repeat them. 


MATTHEWS:  Let me go Rajiv Chandrasekaran, who‘s at the “Washington Post” now.  Sir, I trust you in so many ways to help me out here.  Is this a cork in the bottle situation, whereby, we stay in there long enough to keep the two sides apart?  The minute we leave, they go to war with each other so this president, our commander in chief is keeping our troops there long enough so he can leave office having not faced complete disaster? 

RAJIV CHANDRASEKARAN, “THE WASHINGTON POST”:  And then there becomes a really tough issue for the new commander in chief, be it McCain, be it one of the two Democrats running.  Yes, fundamentally, the surge is a two-step dance.  The first step, creating some additional security there, that‘s happening under Petraeus.  But that political situation that Richard Engel was talking about, that‘s not happening. 

So A Hillary Clinton, a Barack Obama, a John McCain, they‘re going to have to deal with these very vexing issues.  It‘s not going to be easy.  Any draw down plan that a Democratic candidate might seek to implement in their first months in office would have to be counter balanced with the very real costs of what that would mean in terms of Sunni/Shiite sectarian violence.

A reduction in U.S. forces could very well mean an increase in violence in Iraq, if the political leaders don‘t engage in real compromise.  We have seen no real signs that they‘ve done so, so far. 

MATTHEWS:  We set that up, Rajiv, by going in five years ago.  We set up that scenario.  Inevitably, if you took down the authoritarian regime of Saddam Hussein, you created a situation of the hatreds of Shia and the Sunni going against each other, eventually killing each other, if there wasn‘t somebody stopping that from happening. 

Didn‘t we set up this awful scenario you just described by simply going in there in the first place? 

CHANDRASEKARAN:  I don‘t believe that it was inevitable.  I think that if we had gone about the basic job of governance and reconstruction in that first year in a slightly more sensible way—I write about this fairly extensively in my book—had we listened to the Iraqis, had we not sought to engage in micro-management from the Green Zone, I think it wouldn‘t be perfect, Chris, but we would not have the same sort of problems we have today, in terms of sectarian violence. 

MATTHEWS:  Who made the bone head decision to disband the Iraqi army? 

CHANDRASEKARAN:  Well, it was largely on Ambassador L. Paul Bremer‘s shoulders.  He was the one who had crafted that order, sent it back to Secretary of Defense Donald Rumsfeld, informed the president he was going to do it.  But, truth be told, the president was informed about this the day before Bremer signed that order and there was not any sort of significant opposition from the White House or even a meaningful discussion about this. 

MATTHEWS:  We‘re the first country in history to create its own enemy.  We created the insurgency by disbanding the army, which was then the insurgency made up by people who were once in the Iraqi army, under orders, under pay.  We could have controlled them.  We could have owned that country through it‘s own authorities.  Instead, we started from scratch and here we are five years later, basically where we started. 

Thank you, Rajiv Chandrasekaran, author of “The Emerald City.”  Thank you.   

Coming up, breaking news, Florida‘s Democratic party says there will not be a second primary in Florida to resolve the state‘s delegate dispute.  We‘ll sort that one out next.  This is HARDBALL, only on MSNBC.


MATTHEWS:  We‘re back.  Now, it‘s time for the politics fix.  Our round table tonight, MSNBC senior campaign correspondent Tucker Carlson, “Bloomberg‘s” Margaret Carlson, and Nancy Giles, the social commentator.  Thank you, for joining us. 

Let me look at this latest poll, a new CNN poll, just out tonight.  Barack Obama now leads Hillary Clinton 52-45.  That‘s a seven-point lead for Barack Obama, versus last month when Clinton led by three.  He‘s gone up, God, ten points.  What do you make of that, Tucker, my friend? 

TUCKER CARLSON, MSNBC SENIOR CAMPAIGN CORRESPONDENT:  That will change.  This is a snapshot in time.  Hillary‘s whole plan is to convince the super delegates she is more electable than he is and she has two factors working in her favor; saying that Obama, unlike her or John McCain does not have the experience to be president.  That will be used in an ad by Republicans.  Democrats know it makes him less electable.

And Jeremiah Wright; this will reverberate throughout the weeks.  We‘re going to stop covering this.  We‘re sick of it in the press.  This will have a big effect on the belief the Democrats have that he‘s electable.  Those numbers will change. 

MATTHEWS:  Margaret, the numbers, I‘m surprised they‘re still moving up, but they are.  Barack Obama, despite all the fussing that we do on around these kinds of programs, keeps gradually moving up over the last year up to face Hillary and now passing her in this poll? 

MARGARET CARLSON, “BLOOMBERG NEWS”:  Every time Hillary wins, her numbers go down, partly because when she comes out and starts doing stuff, it doesn‘t look as good as the way she was to get the win, before New Hampshire, before Ohio and Texas.  The aggressive, the fighting, the mud and whatever—

MATTHEWS:  The familiar. 

M. CARLSON:  It pulls her down.  Yes, when she isn‘t who she is that, you know, she surges ahead.  I hate to put it that way. 

MATTHEWS:  I was amazed to see Bill Clinton—I always say that somewhat sarcastically.  I don‘t mean to be sarcastic.  I saw Bill Clinton on “Good Morning America” this morning said that he had nothing to apologize for when he compared Barack Obama‘s victory in South Carolina with that of Jesse Jackson.  He wasn‘t marginalizing the minority candidate.  He was doing nothing wrong.  Whereas Hillary said, if I did something wrong or my husband did something wrong, please forgive him. 

Different points of view, obviously, here on the campaign trail by Bill and Hill. 

NANCY GILES, SOCIAL COMMENTATOR:  Absolutely, and the funny thing to me is, if you watch and you remember the moment when sort of standing there saying, Jesse Jackson won South Carolina, Jesse Jackson, Jesse Jackson; he never said anything about him winning with a biracial coalition like he claimed this morning.  He just kept repeating Jesse Jackson in this kind of wild-eyed crazy way like, remember, Jesse, Jesse. 

It‘s totally disingenuous for him to say that today, I think. 

MATTHEWS:  Let‘s start about the latest development with regard to Jeremiah Wright.  I agree with you completely, Tucker, it‘s a big problem.  It‘s hard to believe that over 20 years of membership in a congregation, he wasn‘t aware of the radical points of view and tough language, let‘s put it at that, of the Pastor Jeremiah Wright out in Chicago.  However today Bill Kristol, who writes for the “New York Times”—he‘s a neo-conservative, a conservative, if you will, a hawk, has came out—he doesn‘t like Barack Obama. 

But he has come out and said his column was wrong yesterday in the “New York Times” when he attested that Barack Obama had been in the audience, in the church when Jeremiah Wright gave one of his more incendiary speeches.  He said, he was not there, it turns out. 

M. CARLSON:  There‘s a scramble to find him there on a particular day when some of the incendiary language was used because Obama made the claim that he—

MATTHEWS:  I‘m waiting for that flashlight picture, where they go in on the guy in the crowd and show him there.  They haven‘t found it this time.  Where‘s Waldo continues. 

T. CARLSON:  Wait, Obama has played up his membership in that church, understandably, as a way to refute the claims that he‘s a Muslim.  He has talked more about his church membership and his faith in Jesus and his pastor and his spiritual guide than any other candidate short of Mike Huckabee, maybe more than Mike Huckabee, because he had to. 

I don‘t think there‘s any question we are going to find that moment where he was in the church.  It‘s just a matter of time.  And we‘re going to compare that to the sermon.  At this point, Obama‘s response has been we need to teach black history more.  Kids need to have Holocaust awareness courses.  That‘s not a sufficient response to what I think a lot of people were shocked by last week. 

MATTHEWS:  Let me ask you Nancy Giles, what do you make when you hear someone like Jeremiah Wright give a fair and brimstone social speech, anger at white America, anger at America itself for it history with regard to racial oppression, if you will, angry at U.S. foreign policy in the Middle East, just a really tough testament against us, some people will see that. 

GILES:  My biggest problem with what he said was the tone was really awful, and then the stuff, the god-D America, totally inappropriate.  I think Barack Obama really did distance himself from that kind of talk.  But I can‘t believe this, Chris, I actually agree with a little bit of what Tucker Carlson just said.  I don‘t know if the planets are going to collide or what.  But the thing about it is that kind of incendiary talk is really, really bad. 

But again, the black church involves a lot of activism in a lot of ways that people might not realize.  I have to ask is what Jeremiah Wright said at least considered equal to the kind of incendiary language Geraldine Ferraro used about Barack Obama only being where he is because he‘s black.  I‘m looking for some kind of even scale to weigh these things and see if anything cancels out anything.  I don‘t know.

T. CARLSON:  May I tip it in one direction?  Jeremiah Wright accused the federal government of the United States, our government, of creating the AIDS virus in order to kill black people.  Now that seems to me—there‘s no way Obama can shade it.  I sort of agree.  That‘s crazy.  You‘re either crazy or you‘re not.  He has to reject the entire corpus of what Wright has said. 

GILES:  Don‘t you think he‘s done that?  He hasn‘t done that completely and deliberately enough. 

T. CARLSON:  No.  I wish he would. 

GILES:  I felt like his remarks really stated clearly that he agrees with none of this and that yes, this was a man who years ago married him and baptized his children, but -- 

MATTHEWS:  I‘m not happy with it, but I do agree with Tucker. I think it‘s a real problem. 

M. CARLSON:  I lived next door to a black church.  The windows are open.  I can hear it. 

MATTHEWS:  -- sectarian argument about this stuff.  I agree why a black church would be a little more incendiary about the history of this country than other churches because the people in the pews haven‘t had it as well as the people in the other churches.  We‘ll be right back with the round table for more of the politics fix. 

I‘m trying to be understanding of all points of view, especially Tucker‘s.  You‘re watching HARDBALL, only on MSNBC.


MATTHEWS:  We‘re back with back with the round table and more of the politics fix.  Margaret, it looks like we are not going to have another Florida primary come June.  Isn‘t that interesting?  They are just going to work it out, negotiate this thing.  It is back room time. 

M. CARLSON:  It does seem like it will be a huge expense and all Howard Dean‘s fault.  Better not to spend the money, but better to try to find out some way to make it fair.  I think what‘s—one of the deals on the table is to give Senator Clinton half of the delegates she would have gotten out of there and move on from there, which I think is the most alive negotiated settlement at moment. 

MATTHEWS:  Tucker?

T. CARLSON:  The Democratic party is getting more aristocratic with every passing day, more like the House of Lords.  Get some wise men.  It‘s less democratic.  I‘m not against it.  I actually think it‘s probably a pretty sensible choice.  But the truth is, if you want to make it Democratic, which is to say, reflecting the will of the people, you let the people decide. 

MATTHEWS:  The other candidates didn‘t campaign.  Nobody campaigned in Florida, as far as—

T. CARLSON:  At this point, it is an open question.  Why not just let Barack and Hillary duke it out in the state.  Why not?


MATTHEWS:  Let‘s go.  Nancy? 

GILES:  Yes, I was just going to say, again, I kind of agree with Tucker.  It is becoming a House of Lords.  What I don‘t get is Howard Dean isn‘t acting like a leader.  More and more I‘m grateful that the rebel yell took him out of the 2004 campaign, because I think he has been a really lousy DNC chairman.  The rule was established.  They broke the rule.  That‘s it. 

Why not just stick with the rules as established? 

MATTHEWS:  It looks they—like I have been saying for a couple days now, look at the poll data coming out of Florida, get a rough estimate of it.  Polls are probably as accurate as what the Democrats are doing lately anyway.  Thank you, Tucker Carlson, for being agreeable with Nancy Giles at least twice tonight.  Margaret Carlson, thank you very much.  Happy St.  Patrick‘s day, Margaret. 

Join us again at 7:00 Eastern for the HARDBALL power rankings.  We‘re going to have a lot tonight, picking whose going to be the next president.  Right now, it‘s time for the premier of “RACE FOR THE WHITE HOUSE” with David Gregory.



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