Guests: John Harwood, Reihan Salam, Ruth Marcus, Noah Oppenheim
DAVID GREGORY, HOST: Tonight, what this election is all about, the sorry state of the economy, market meltdown, fears of a government bailout in the mortgage industry, and gas prices. How‘s it all playing politically? And has either candidate seized the moment?
The RACE FOR THE WHITE HOUSE rolls on.
Welcome to THE RACE. I‘m David Gregory. Happy to have you here, your stop for the fast-paced, the bottom line and every point of view in the room.
We‘re going to start tonight on the biggest story today and the biggest issue in this election, frankly, the state of the economy. Is there a bigger predictor of a November result than that?
This week was supposed to be when both candidates tried to own this issue. But have they succeeded? We will pick winners and losers tonight on the economy and other issues.
Later, inside the troubled McCain campaign. Has he successfully explained why he should be the president?
And veepstakes tonight. Who‘s up, who is down in the fight for number two?
The bedrock of our program, a panel that always comes to play.
And with us tonight, for the first time, Ruth Marcus, editorial writer and columnist for “The Washington Post.” Also for the first time tonight, Reihan Salam, associate editor of “The Atlantic,” and author of a terrific new book, “Grand New Party: How Republicans Can Win the Working Class and Save the American Dream.” I am actually reading this right now and loving it.
John Harwood, CNBC‘s chief Washington correspondent and a political writer for “The New York Times.” And Noah Oppenheim, co-author of “The Intellectual Devotional” series and former senior producer of “The Today Show” right here on NBC.
We begin as we do every night, with everyone‘s take on the most important political story of the day. It‘s “The Headline.”
Big headline today, “Economic Meltdown.” The Dow tumbled today to a two-year low on fears about the potential collapse of mortgage giants, Fannie Mae and Freddie Mac.
At the White House, the president tried to tamp down investor fears by calling those institutions which buy mortgages and pump money into the mortgage market, “very important institutions.” The question is, will taxpayers be called on to help keep these companies afloat?
Senator McCain said today the government may indeed have to act.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: There‘s no doubt there‘s a real significant, far-reaching problem that is going to have to very likely require some kind of government assistance, whether that‘s helping raise capital or whether it‘s what that course of action is. We need to examine very carefully, listening to smart people rapidly, perhaps congressional hearings, if necessary, but there‘s no doubt that we can‘t have these two institutions go under.
(END VIDEO CLIP)
GREGORY: Obama, the campaign at least, not Obama himself, issued a statement saying this today: “Senator Obama has long believed we should take all necessary steps to ensure affordable homeownership for millions of American families, and that includes an essential role for Fannie Mae and Freddie, Mac.”
An important disclosure here before we begin our discussion about all of this tonight. My wife, Beth, is the general counsel and an executive vice president at Fannie Mae.
The president, after meeting with his economic team today to discuss those companies, also addressed soaring gas prices. Listen.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The problem, of course, is that gasoline prices are up, which has affected the people here in our country. And one of the main reasons why gasoline prices are up is because crude oil prices are up. And one reason crude oil prices are up is because demand is outstripping supply.
And therefore, what can we do about it? And that ought to be the question the United States Congress asks. And one way to deal with supply problems is to increase supply here in America.
(END VIDEO CLIP)
GREGORY: Yes, that‘s what John McCain is talking about as well.
The question is, how is all of this playing politically? And has either candidate yet successfully found his voice on the issue that voters care about most?
John Harwood, you‘re up first. How is it playing?
JOHN HARWOOD, CNBC CHIEF WASHINGTON CORRESPONDENT: I think this is playing as a big advantage for Barack Obama. Anything that increases the sense at this critical point in the summer that the direction we‘re on is a bad direction, that the economy is melting out, that the problems are too big for this Republican White House, simply helps him position himself for the fall. It doesn‘t mean he‘s made the sale for himself, but it further adds to those preconditions for a potential breakthrough victory in November.
GREGORY: Does John McCain need George Bush to be an activist president on issues like Fannie Mae, Freddie Mac, issues like gas prices, supply and demand issues when it comes to energy? Does he need him to be an activist in the last few months of his presidency to help him?
HARWOOD: He needs whatever has to be done to prevent a collapse in the financial markets, a further collapse in the housing market. This is something that‘s hitting millions and millions of people. It‘s providing them tangible evidence that this is not a mental recession.
The people with shares in Fannie Mae and Freddie Mac, the people whose housing values have gone down, know that it‘s not in their heads. It‘s in their pocketbooks right now, and that‘s an advantage for Barack Obama.
GREGORY: Noah, the thing that I wonder about when it comes to Barack Obama is, why is he not beginning every day with a speech talking about what‘s wrong with the economy, how he uniquely can solve it, and how serious the issues are for America that it dwarfs everything else? He‘s got an ability to own this issue completely since, as John points out, it favors Democrats right now.
NOAH OPPENHEIM, CO-AUTHOR, “INTELLECTUAL DEVOTIONAL” SERIES: Yes, I mean, that is the baffling question. And if it weren‘t so sad, it would actually be funny.
I mean, if you look at what these two guys said today, these guys are running for the president of the United States, and John McCain, all he has to say is, let‘s listen to smart people. Well, guess what? Smart people kind of got us into this mess to begin with, and that‘s not exactly inspiring.
Barack Obama releases a statement saying he believes in affordable homeownership. Find me the politician or, for that matter, the person who doesn‘t believe in affordable homeownership. That‘s not particularly helpful either.
I mean, neither one of these guys has emerged as somebody who understands the gravity of the situation and is actually offering solutions that seem like they could provide real relief. I think they‘re both completely asleep at the wheel.
GREGORY: And that‘s what‘s interesting, Ruth, is what do you have to do if you‘re running for president right now? Because these are big issues.
Everybody agrees on that. They may not be able to be fixed right away.
But if you‘re a voter out there, you‘re feeling it.
You know, you don‘t like talk about a potential government bailout. You don‘t like the fact that you‘ve got to pay so much for gas. You don‘t like the fact that you‘re looking at your portfolio and seeing it pulling back.
There are some real problem that are make people very nervous. Do you just need empathy from somebody running for president?
RUTH MARCUS, “WASHINGTON POST”: I think you need empathy-plus. And I think the striking thing this week was that John McCain through in, some sense, no fault of his own, did not convey the empathy message through Senator Gramm.
And you asked a good question, and I take your point about, where‘s Barack Obama in stepping up to the plate here? In a sense, he could have won this week if he had just spent the week at home in Chicago with his family, giving the McCain campaign kind of stepping on itself.
HARWOOD: And David...
GREGORY: The one thing—I want to get Reihan in here.
GREGORY: The one thing that McCain has done successfully in the last couple of weeks is he has been activist on an issue that people do want some activity on, and that is energy prices. You may be opposed to drilling and more domestic supply, but he was out there, at least week prior, going on this every day, saying this is something that we ought to start doing.
REIHAN SALAM, “THE ATLANTIC”: Drilling, drilling, drilling. This is an absolute rocket ship for Republicans, that they just keep talking about this because it‘s straightforward.
We understand the idea that there are domestic oil supplies. I don‘t think this is a real solution, but I do think it‘s something that definitely works politically.
But on the broader question, what I don‘t get is, John McCain‘s central brand is this idea that he is fundamentally a reformer. He wants to reform our big institutions. He wants to make hard choices. And that‘s exactly what the country needs right now.
If you look at the Fannie Mae, Freddie Mac situation, this is a situation where we only address the problem when it becomes a full-blown crisis. And there are a lot of other ticking time bombs when you look at the broader policy landscape. And that‘s what he needs to talk about, how he can reform them, how he is the only person who has the integrity and the chops and the experience to do that.
GREGORY: John Harwood, finish off this discussion at this stage. Is there a bigger predictor of who‘s going to win in November than the state of this economy?
HARWOOD: No. That‘s the biggest one that we have got, although we‘ve seen in the past, like in 2000, when it appeared in the middle of the year that the economy was in reasonably strong shape, it didn‘t end up awarding Al Gore, but of all the factors out there on the horizon, it‘s what‘s driving the train right now.
I‘ve got to say, I disagree with Noah a couple of minutes ago about Barack Obama being asleep at the switch. Look, this is a problem that Ben Bernanke, Hank Paulson and the White House are grappling with right now. I don‘t think there‘s much upside for a presidential candidate to either substantively make an impact by saying things that would move the market in some beneficial way, and he would simply get in the way of the effort to provide whatever liquidity is going to be needed to keep this thing afloat.
GREGORY: All right. We‘re going to take a break here.
OPPENHEIM: Well, he can step back and let those guys...
GREGORY: Go ahead, Noah. Go ahead.
OPPENHEIM: He can step back and let those guys trip over—he can let them trip over themselves and look like fools. But that‘s not exactly leadership. It may be advantageous...
GREGORY: Yes, but what could he do, politically speaking? What could he do?
MARCUS: It was not a substantive statement though.
OPPENHEIM: He could be starting every single day saying no other issue matters more to the American people than the state of this economy, and here‘s what an Obama presidency will mean for that economy. Here is what I will do to make sure...
HARWOOD: Well, he‘s been doing that an awful lot.
OPPENHEIM: I don‘t know. I don‘t—yes, but it‘s not breaking through in any meaningful way. It gets muddled and lost in the rest of the things that he‘s doing.
GREGORY: All right. Let me break in here.
We‘re going to take a break here. We‘re going to come back.
Our next segment, we‘re going to pick some winners and losers here. McCain and Obama on the economy, plus other issues as well. Who‘s up and who‘s down this week?
Later on, your turn to play with the panel. You can call us at 212-790-2299, e-mail us at email@example.com.
Are you thinking about the economy? Tell us about it. If you‘re talking about it, we‘re talking about it here.
RACE FOR THE WHITE HOUSE comes right back.
GREGORY: We are back on RACE FOR THE WHITE HOUSE.
Inside the War Room now, looking at who won, who lost this week, the contest between Barack Obama and John McCain on the issues as this general election rolls on.
Back with us here, our panel tonight, Ruth Marcus, Reihan Salam, John Harwood and Noah Oppenheim.
Reihan, take a shot at it. Who is the winner this week?
SALAM: The winner is Barack Obama, definitely. When you look at what happened with the Jackson remarks, when you look at what happened with Phil Gramm, and that meltdown, Barack Obama simply has won by not losing the week. And that‘s what John McCain did.
GREGORY: It‘s interesting. On a week when the economy, again, defined everything, you have got Phil Gramm out there, who is an economic advisor to John McCain, who looks like he‘s having his wings clipped a little bit here by the McCain campaign, we‘re learning tonight.
He was out there saying that this is only a mental recession. A mental recession. That‘s not the politically deft thing to say at the moment.
HARWOOD: I should say not.
SALAM: Absolutely not.
HARWOOD: Not only is it not a mental recession, I mean, it‘s—well, it‘s an incredible problem for John McCain. Phil Gramm is co-chairman of his campaign. So, you know, you can‘t even just dismiss it as a marginal player.
HARWOOD: This is why Barack Obama—Reihan is exactly right, Barack Obama won this week, and he won it big.
GREGORY: How—hold on. We‘ll go one at a time here.
John, pick up from there. Make your case here for what he did right this week.
HARWOOD: Well, Barack Obama didn‘t have to do all that much. Circumstances went south for John McCain, both substantively, in terms of what happened in the markets today, and in terms of the imagery from John McCain‘s campaign.
GREGORY: Yes. And McCain‘s campaign still looking like it‘s in turmoil.
HARWOOD: It‘s in turmoil, and it‘s got the—precisely the wrong message at precisely the wrong time coming from Phil Gramm. That was the last thing John McCain needed this week.
GREGORY: All right, Ruth. Pick it up. Who won, who lost this week, and why?
MARCUS: Well, definitely, Barack Obama won this week. And if you think about the star of the week, it looked like a week that could have been one that played to John McCain‘s strength.
We started with launch of the missiles in Iran. That is to the extent that people can get made nervous about national security, that helps Senator McCain. And so, it looked like that was going to be the playing field for the week. And then it veered.
It was going to veer anyway because of the economy, and then two things happened, as we‘ve all said. Senator Gramm‘s remarks. And I think it‘s really important to understand the close friendship between these two.
MARCUS: So, when John McCain distances himself from Senator Gramm, that‘s very painful.
And then Senator Obama, most of the time, you know, people‘s surrogates and outsiders have hurt them. He was helped, I think, by Jesse Jackson‘s ill, overheard remarks.
GREGORY: Yes. But you know what, John—I‘m going to get to Noah in a second, but John, I made the suggestion last night that, what Jackson really represented was more problem for Barack Obama with his base about his tacking to the center, about whether the glow is gone, whether this is the same candidate that progressives who nominated him really thought that they were getting.
HARWOOD: I get the...
GREGORY: And this is all when he could be taking greater advantage of McCain‘s weakness.
HARWOOD: I get the theory, David, but I don‘t see it in practice. I think the part of the base that Jesse Jackson speaks to is the African-American voters. They are on fire for Barack Obama. They are not going to be dissuaded by a few attacks to the center.
Look, there are two words that are going to trump at the end of the day most of this shifting by Barack Obama. The two words are “black president.” Never happened. This is very, very powerful, and nobody should confuse the impact of that with a little tacking on a surveillance -terrorist surveillance bill.
GREGORY: All right, Noah. Who one the week?
OPPENHEIM: When I‘m asked that question, I think of the end of “Rocky II,” where Apollo Creed and Rocky hit each other simultaneously and they both fall down to the canvas.
You know, certainly, you could argue that John McCain kind of had the worst week, and I guess hit the canvas harder, but neither one of these guys had a good week. And I thin it‘s because neither one of them are playing up to their strengths.
Barack Obama came into this as being this guy who was going to transcend politics, a different kind of candidate. All I‘ve seen for the last few weeks is a guy gradually becoming more and more a simply conventional politician. The bloom is off the rose. You know, even something as trivial as the interview with his kids.
HARWOOD: Guess what? He‘s ahead.
OPPENHEIM: He is ahead, but he could be a lot more ahead. He should be. By all accounts, with the unpopularity of George Bush, with the economy tanking, Barack Obama should be up by much more than he is. And you sort of feel a little bit of drag on him, and I do think it‘s because...
HARWOOD: When‘s the last time a Democratic president...
GREGORY: Hold on. Hey, one at a time here. One at a time here, John.
OPPENHEIM: There is no doubt—John, we could sit here from now until November and say Barack Obama has the advantage. That‘s absolutely true. We could say that every day from now until the election.
But the fact of the matter is, is that despite that advantage, he is not doing as well as he could be doing. And he‘s making some serious mistakes.
The guy looks like just another pol. Sure, you can interview my kids. You know what? I shouldn‘t have let you interview my kids.
I‘m against FISA. I‘m for FISA.
I‘m going to get you out of Iraq in 16 months. Well, actually, it kind of depends on what the situation is. He is very much—he is very much—people used him as like a Rorschach for what they hoped politics could be, what they hoped a politician could be, and they‘re realizing he‘s just another guy.
That being said, of course John McCain is screwing up. The Phil Gramm episode is a huge mistake. The guy has not found a coherent message for his campaign.
I don‘t think either one of them are doing well. But it‘s too easy to simply say Barack Obama is ahead. Well, congratulations. That‘s not a great insight. He‘s going to be ahead until George Bush leaves office.
GREGORY: All right. I‘ve got to take a break here.
At the half tonight, we are going to talk about the McCain campaign, the mechanics going on internally, the turmoil. All of the reporting bears that out this week. What‘s the future for him?
But coming up next, are “Smart Takes” tonight. It seems Hillary Clinton is sorely missed now that she‘s out of the race.
We‘ll talk about it when we come back.
GREGORY: Back here on “Smart Takes” tonight. I‘m David Gregory.
We‘ve got a great panel with us tonight. We‘re going to talk about the most provocative, insightful, sharpest thinking out there.
And here again, Ruth, Reihan, John and Noah.
I want to point something out. I talked about Reihan‘s new book.
John, “Pennsylvania Avenue: Profiles in Backroom Power,” is your book. My wife, Beth, who‘s getting a lot of press and a lot of air time on this show tonight, she just bought your book last weekend. She was so intrigued by it. And I didn‘t even tell her to do that; she just found that out on her own.
Pretty good, huh?
HARWOOD: You‘re the man.
GREGORY: All right.
MARCUS: Everybody should do that.
GREGORY: Our first “Smart Take” tonight, Associated Press reporter Beth Fouhy, who covered Hillary Clinton‘s campaign, writes about having Clinton withdrawal.
To the quote board.
“I miss Senator Hillary Rodham Clinton‘s puzzling, infuriating electrifying Hillary. I miss her story. The former first lady freighted with baggage, trying to return to the White House in her own right. I miss watching her morph from entitled, inevitable nominee to scrappy underdog. I miss the drama which comes in such abundance around the Clintons.”
“Most of all, I miss the historic nature of the primary and the part of my disillusionment which comes from watching the two unconventional nominees, Obama and Republican John McCain, behave like garden variety politicians.”
Ruth, it‘s pretty interesting here, that they have sort of morphed into a couple of candidates who are not everything that they were built up to be, as being so unconventional.
MARCUS: What ever happened to that civil campaign that we were promised?
I have some good news for Beth. I think, stay tuned. Your soap opera has only gone into kind of summer reruns. It will be back.
The Clinton story never dies. We‘ll have more.
And I do think that one thing that‘s interesting is, I thought we were going to have—we had a lot of interesting kind of personal fireworks. I thought once we got to the general election, we were going to be talking about the serious issues that divide these two candidates. Well, silly me.
GREGORY: Well, we‘re getting in there. We‘re doing it on this program, Ruth. We do it here. OK?
MARCUS: I know you do.
GREGORY: Our second “Smart Take” tonight comes from our own panelist, Reihan Salam, tonight. Have I mentioned that he co-authored an essay in “The National Review” based on his new book, “Grand New Party,” on how the GOP can become a national party again.
To the quote board.
“Since 2004, the GOP has lost ground on nearly every demographic and geographic front. White collar and blue collar, Hispanic and redneck, Catholic and Evangelical, the GOP must consolidate and energize its base, especially the middle class and working class voters. But on the other hand, Republicans need a set of issues and candidates that can do what Democrats Travis Childers and Don Cazayoux just did in Mississippi and Louisiana respectively—win elections in areas that have been trending to the other party for years or decades.”
“If the challenge for the Democrats‘ 50-state strategy has been to win over the vast middle American constituency that has been termed ‘Sam‘s Club conservatives,‘ the challenge for a Republican 50-state strategy is to win over a very different demographic—the affluent, well-educated, increasingly liberal upper middle class.”
In other words, Reihan, there has to be reinvention in these parties.
SALAM: Absolutely. When you look at the Republican Party, it had its greatest success when it was the party of the suburbs, it was the party of rural areas. And also, it had a fighting chance in some of the big ethnic cities. You look at those Reagan Democrats.
So, the idea here is that the party needs to become a national party again, not a sectarian, not a regional party. The problem with Republicans now is that people think of it as really a southern party, or a party of the mountain West, a party that doesn‘t really get the needs of today‘s suburban voter.
So, you look at the Philly suburbs, for example, where, you know, our friend Chris Matthews is from. That‘s an area that used to be very solidly Republican. These were white ethnics who, you know, were concerned about taxes, they were concerned about crime. And now Republicans can barely speak to these voters. It‘s a big, big problem.
GREGORY: But Noah, I thought the idea was that John McCain was the guy who could deliver these new kinds of voters, who could expand the map, expand the electorate for the party.
OPPENHEIM: Well, the critical word there is he could. I mean, I think Reihan hit the nail on the head in the first block, which is that John McCain was the straight talker and he was the reformer. And if he could reconnect with that message and really, really push it, I think he has a shot.
Because the bottom line is, why are we in this economic mess? One of the big reasons is because all of these lenders were out there making ridiculous loans to people that nobody could afford, at completely inflated home values. And now the whole pyramid is collapsing.
So, that‘s a classic case of an institution gone amuck. You could call it incompetence, you could call it corruption. Call it whatever you will. But you need a reformer to tackle it. And John McCain could cast himself as being that guy, and it would be a very effective message.
GREGORY: Quick though here, John?
HARWOOD: Well, the big problem is, he‘s got an “R” after his name. And the Republicans have been in power for the last eight years. That‘s a big burden for him.
GREGORY: All right. We‘re going to take a break here.
Coming up, is John McCain doing an effective job in convincing voters to pick him in November? We‘re going to get into it, “Three Questions,” as the back half starts in just a couple of minutes.
GREGORY: Welcome back to RACE FOR THE WHITE HOUSE. I‘m David Gregory. Happy to have you here. Now on to the back half, the big questions in THE RACE FOR THE WHITE HOUSE. We‘re going inside the McCain campaign, troubled the last few weeks; how does he get it back on track? Where are the problem area‘s.
We‘re going to take it on with our panel. With us tonight, for the first time, Ruth Marcus, editorial writer and columnist for the “Washington Post,” also for the first time tonight, Reihan Salam, associate editor at “The Atlantic,” and author of “Grand New Party, How Republicans Can Win the Working Class, Save the American Dream,” John Harwood, cNBC‘s chief Washington correspondent and a political writer for the “New York Times,” and Noah Oppenheim, co-author of “The Intellectual Devotional Series,” and former senior producer of “The Today Program” here on NBC. Is there any better summer reading than that?
First up, McCain‘s message. Just for you, buddy. Just for you. McCain spent the week outlining his economic plans in five key battleground states, Colorado, Pennsylvania, Ohio, Michigan and Wisconsin. But as our panel concluded earlier, McCain didn‘t exactly own the week, even though the economy was the story. Brings us to the broader question, first question tonight, has McCain successfully explained to voters why he should be elected? John, take it on.
HARWOOD: Well, neither of these guys has successfully explained. We have a long time for them to try to close the deal. What happens is these candidates go out and they attempt to have message weeks and they get over-taken by events. The events we‘ve had include the meltdown today, financially, all of these missteps. It was banana peel week for all of their surrogates during the week.
So, no, he hasn‘t been able to break through. Look at the extent of the problems he has got, David. His base is shrunk. He has to both consolidate the base, reach out to the middle. Very, very difficult for him to do that, to assemble the coalition, such as it still exists, and transform it when he has problems on so many fronts.
GREGORY: Go ahead, Ruth.
MARCUS: I would argue that John McCain has successfully explained to voters why he thinks he should be elected president. He thinks he should be elected president because the United States is in a long, global struggle with international terrorists, that he‘s the one who understands how not only to bring the war and operations in Iraq and Afghanistan to victory, but to protect the country in other area‘s. That‘s fundamentally why he believes he should be president. That‘s what he wants to talk about. That might not be what the country wants to hear.
GREGORY: Right, but the other problem is, Reihan, I talked to a top adviser for McCain this week, who said, the problem is that his own campaign has gotten in the way in giving too many choices for people to chose from, instead of a core message for McCain. has he got a core argument for why he should be there?
SALAM: I think Ruth makes a great point, actually. The reason, certainly, why I support John McCain is that I have the sense he has the experience it takes to lead us during a tough time. The trouble is, as Ruth points out, Republicans are always trying to change the subject from what the country cares about. Right now, the country is not in a generous mood. The country cares about health care, education, jobs, jobs, jobs. These are not issues that McCain really understands on a gut level.
When you are talking about the women who are going to determine this election, the married women in Ohio and Florida and states like them, they want desperately want to know if you‘re going to right the ship on the economy, and they want to know if they are going to be able to put food on the table for their families? We‘re in the middle of a food, fuel, credit crunch. McCain doesn‘t really know how to talk about this stuff.
GREGORY: Coming up, next up, this week marks a new phase inside the McCain campaign, the first full week under the tutelage and the guide of Steve Schmidt who was brought in, as the “LA Times” put it,” to run McCain‘s stuttering presidential campaign and save it from himself. What changes has Schmidt made? The Time reports that this week McCain has started working with a coach on the delivery of his stump speeches. The campaign hired a new advance guy, a former cable news producer, a guy who worked for Bush II, George W. Bush, Greg Jenkins, did his advance work back in 2000, to spiff up those McCain events.
McCain also hired a former Giuliani guru, Mike Duhane (ph). What‘s important there is he is a disciple of Ken Mehlman, who ran Bush‘s successful reelection campaign, to be the campaign‘s political director, a position primarily responsible for honing the candidate‘s message, and a position which didn‘t previously exist on Team McCain.
Second question tonight, where has McCain‘s campaign failed him? Noah, that‘s the issue. You have a candidate and a campaign. As one Republican told me this week, a campaign is like running a company. Your product is politics and you‘re serving one master, in terms of the candidate. Has the campaign let him down?
OPPENHEIM: The campaign has absolutely let him down. I don‘t think there‘s really any question about that. I have some experience dealing with tweaking sets and trying to coach people to present themselves better. I can tell you that‘s almost always a losing battle. I mean, John McCain is John McCain. He will never be the electrifying presence that Barack Obama is. I think the problem this campaign has had is that they have spent these last couple months fighting who McCain naturally is.
Instead of trying to pander and try to get the base going, John McCain is the maverick reformer. That is who he is. John McCain is not somebody who‘s going to light an arena on fire. John McCain is not a guy who is going to excite James Dobson. It‘s just not going to happen. John McCain does have a message that could resonate with the things Reihan pointed out people are caring about right, which is that the institutions in this country are failing the average American and they need to be fixed.
GREGORY: Does the McCain campaign have to emulate Bush of ‘04? Does it have to be run like a Fortune 500 company when that‘s not who he is?
HARWOOD: Any campaign has to have message discipline to try to succeed. The problem is that John McCain‘s message is not inherently coherent because of who he is. Yes, he‘s a maverick. Yes, he‘s also a conservative Republican. He makes it difficult for his campaign as well. Let‘s face it, the John McCain that Noah is talking about, the maverick reformer, is not particularly popular within the Republican party. He needs an enthusiastic Republican party if he‘s going to win this election. It‘s very, very tough spot that he‘s in.
OPPENHEIM: Maverick may not be popular, but reformer certainly is and can be. He doesn‘t have to be some loose cannon. I think reform is a message—
HARWOOD: Campaign finance reform is one of the big places where he got his reputation. That‘s not popular within the Republican party.
OPPENHEIM: Campaign finance is not popular with the RNC, but reforming institutions that affect people‘s access to health care, reforming institutions that get us into huge economic messes like the one we‘re in now, that is popular with the average Republican voter.
GREGORY: Let me move on. Hold on. Let me move on. The Republican brand, even if the candidate and its campaign are at their best, running as a Republican in 2008 is a challenge to say the least. A new Pew poll finds the Democratic party has a staggering advantage going into November. Only 28 percent of Americans now identify themselves as Republicans, the lowest percentage in 16 years. By comparison, 37 percent of Americans now identify themselves as Democrats, the highest percentage in 20 years.
Third question then today, how does McCain the maverick reinvent the Republican party? Ruth, take that on?
MARCUS: I almost think he shouldn‘t worry about reinventing the Republican party. I think he should worry about getting elected president. If you look at those Pew numbers, there‘s some really daunting numbers in there for Senator McCain; 14 percent of Republicans are very strongly supporting him. That‘s just a sad, sad number.
GREGORY: How can you win without reinvention? That‘s the question. Everyone, whether it‘s Ronald Reagan, whether it‘s George W. Bush, they do reinvent, they do recalibrate the party on their way to victory.
SALAM: Here‘s the tough news for Republicans: reinvention is a very long, grueling process. It‘s going to take a decade. It might take more than that. John McCain doesn‘t have that luxury. He doesn‘t have that time. That‘s why Obama and McCain, both fascinating candidates, are running a cookie cutter campaign. McCain is not the strongest candidate in the world. He has a very weak campaign. What the McCain campaign needed was Mike Murphy. They needed someone creative, who was vain, who understood McCain at a gut level. They are not getting him. That‘s a big, big problem.
GREGORY: Go ahead.
HARWOOD: Reihan makes exactly the right point about reinvention taking a long time. You don‘t do it within one campaign. Look at the reinvention that got Ronald Reagan elected in 1980. You know where it started? With Barry Goldwater and he got slaughtered in the election. Republicans may have to lose a presidential election, and maybe lose it big, before they produce something new.
GREGORY: We‘re going to take a break here. Hillary Clinton, is she on Obama‘s VP list or off? It all depends on who you ask. We‘re watching RACE FOR THE WHITE HOUSE, coming right back.
GREGORY: We‘re back, special edition of the war room tonight, looking at the search for number two, the VP stakes. What are voters looking for in a vice president candidate? According to the latest Pew Pol on the Democratic side, it‘s this: 22 percent of voters think experience with the economy most important quality; 21 percent say they want someone with military and foreign policy experience; 13 percent want someone who can appeal to Clinton supporters. On the Republican side, 27 percent of voters want someone with a strong social and economic conservative, movement conservative; 16 percent want someone with experience on the economy; 16 percent want someone with administrative experience.
Not exactly resounding numbers that‘s going to tip the scales one way or the other, but an important insight. So who‘s looking at whom. Whose on the list and who is off? Back with us to look at it all, Ruth Marcus, Reihan Salam, John Harwood and Noah Oppenheim. First up, Republican Senator Chuck Hagel will now join, we‘re told, Barack Obama on his upcoming trip to Iraq, to the Middle East and to Europe. Obama‘s new sidekick—I think he may just be on the Iraq portion of it, because it‘s a delegation of law makers. Obama‘s new sidekick now stirring speculation as a potential VP contender, as David Axelrod talked up the Nebraska senator on “MORNING JOE.”
(BEGIN VIDEO CLIP)
DAVID AXELROD, OBAMA CAMPAIGN MANAGER: Senator Hagel I think has been very courageous in speaking out on the issue of Iraq and the misguided policies that we‘ve had from the beginning.
(END VIDEO CLIP)
GREGORY: Noah, what do you think? Chuck Hagel has always been somebody who has broken with the president on the war, and would certainly have, as a veteran of the Vietnam War, a strong bit of military and foreign policy experience for Obama.
OPPENHEIM: He certainly would. I‘m not sure Obama‘s base would agree with Chuck Hagel‘s position on certain social issues. It certainly would be a dramatic choice. When you look at all the polling, when you compare Barack Obama and John McCain, people seem to like Barack Obama more. A good percentage of people who say they are going to either vote for McCain or are undecided are doing so not because they like John McCain, but because they have these reservations about Barack Obama. He just needs to pick a guy an old white guy with gray hair, that projects a certain stability, experience, that reassures those people who kind of have weird reservations that they might not even know where they come from. I think that might be enough for him. I don‘t think he needs to do anything as bold as pick a Republican.
GREGORY: Yes, Ruth, I think the problem at Hagel is you can look too narrowly at the war and forget about the fact that the guy is very conservative.
MARCUS: Exactly. I think voting for FISA was one thing for the base. Picking a Republican might be a little bit too far. Senator Hagel is every Democrat‘s favorite Republican. I know actually that the Clinton campaign had thought very seriously about him as a potential running mate, just to shake things up. Yes.
SALAM: Chuck Hagel is the least courageous Republican in Washington. I‘m sorry, but this guy would be a disastrous pick, because the Republicans would pick him apart. He voted for the war, despite the fact that he was against it, because it was popular. Then he turned against the surge when it was unpopular. Now that the surge seems to be working—this guy is a disaster. He doesn‘t know what he‘s talking about. He‘s self-important. He‘s narcissistic. He would be—
MARCUS: How do you really feel?
GREGORY: Doesn‘t mean he‘s not a good guy in all the other departments. Next up, who‘s getting crossed off the list? Howard Wolfson says his former candidate is out of the running. Watch this?
(BEGIN VIDEO CLIP)
SEAN HANNITY, FOX NEWS ANCHOR: Everybody wants to know, the rumors have been swirling, has Hillary been asked to participate in the process, the vetting process for VP?
HOWARD WOLFSON, FOX NEWS CONTRIBUTOR: Not as far as I know.
(END VIDEO CLIP)
GREGORY: But, Terry McAuliffe, who was the campaign chairman, he‘s got his money on Clinton, saying, quote, if Senator Obama picks Senator Clinton, I honestly believe we would control the White House for 16 years. Do you buy that, John?
HARWOOD: I would side with Howard Wolfson in that dispute. My guess is that it‘s extremely unlikely, not impossible, but extremely unlikely that she‘s going to be picked. I think there are much more appealing chances for him. I agree with Noah‘s reasoning. I think Hagel would be a risk. I think he wants an uncontroversial, a white male who wouldn‘t ruffle feathers.
MARCUS: Didn‘t I see Terry McAuliffe saying his gut was that it was going to be Senator Biden? Even the most die hard Clinton supporter is saying—
OPPENHEIM: Terry McAuliffe is not exactly an objective political analyst.
GREGORY: I‘ve had this debate again today, Noah. Make the case for why Obama can‘t do without Hillary Clinton at this stage.
OPPENHEIM: Why he can‘t do without her?
OPPENHEIM: I don‘t see the case. You could argue that if he does pick her, that he comes up with a sort of—he gets the benefit of her experience, the perception of her stability, her connectedness with blue collar voters, her connectedness with the country‘s economic suffering, also her connectedness to the Clinton years of economic prosperity. Somehow that combination of everything, the women, her blue collar appeal, Pennsylvania, Ohio, et cetera, makes them an electoral juggernaut. I guess that‘s the argument. I don‘t think it‘s necessary, though.
GREGORY: Moving on. Who‘s still in? Democratic Senator, former rival for the presidential nomination Chris Dodd confirmed that he‘s currently being vetted. His work as chairman of the Senate Committee on Banking, Housing and Urban Affairs could make him a major contender in light of the current housing crisis. If you go over to the McCain campaign, the VP contender who is making headlines this week, former Hewlett Packard CEO and adviser to the campaign, Carly Fiorina. But her remarks on birth control could knock her down the list, also her misstating his position on abortion.
Reihan, start with the issue of Chris Dodd. If you look at Biden and Chris Dodd, they do seem to fit a mold for Barack Obama as filling that weakness on experience and foreign policy.
SALAM: There‘s one great thing about Chris Dodd. That‘s the fact that he‘s a regular guy. He‘s a regular guy from a regular community. Both Obama and McCain are both really weird, when you think about it. They are both unconventional figures. Dodd is like a regular—he‘s like a dad.
OPPENHEIM: He‘s the son of a senator. That makes him regular?
SALAM: He‘s the son of a senator, but he‘s rooted in a regional culture. It‘s hard to put it together.
MARCUS: Never though Connecticut had a culture.
SALAM: But it does. It‘s this northeastern thing that he seems to get. He‘s a pol. He‘s a guy who is going to be able to press the flesh. He is also someone who understands Washington very, very well. Whereas Obama is someone who‘s an outsider, and that‘s an attractive quality, but it also means that Dodd is going to understand the legislation process. He is a very, very good pick.
He‘s also very big with the net roots. Those liberals love him. They‘re very loyal to him. He‘s going to be a signal to them that you can trust Obama about going to the center. He‘s on your side. He‘s a regular Democrat. Very, very good pick.
GREGORY: John Harwood, what‘s the read in the financial community and beyond that in the political community about Carly Fiorina? How‘s she playing?
HARWOOD: I think Carly Fiorina would be a big risk for John McCain. We saw some of that this week. By the way, her comments on Viagra and abortion at that Spirling breakfast this week illustrates some of the problem we‘re talking about. Carly Fiorina talked about choice in health care. She talked women wanting the right to be able to have reproductive health benefits in their insurance policies. Those are all fine for appealing to some of those affluent suburbanites that Reihan was talking about. But, guess what, it‘s not popular at all with the Republican social conservative base. That‘s the vice John McCain is in, trying to figure out which way to go, how to compete with Barack Obama.
I want to add one other point on Hillary Clinton. Here‘s the case for Hillary Clinton. I have heard Hillary Clinton supporters make it. Barack Obama is too cocky, that he‘s got a lead, but it may not grow. He may be in a danger zone throughout the campaign. He needs somebody who can actually get him votes, not somebody who is a safe pick like Noah and I were talking about before. That‘s the argument for picking her, demonstrated capacity to actually add votes, which most vice presidents don‘t do.
GREGORY: Finally, as a contender on the Republican side for John McCain, you hear again and again the name of Mitt Romney. The big question about him, because he has a lot of advantages, especially in this kind of economy. The question, Ruth, is can McCain get over the fact that they seem to strongly dislike each other?
MARCUS: I think he could get over it, but I think there‘s another issue, which is so much of the anti-Obama McCain campaign narrative has been he doesn‘t know who he is. He‘s a flip-flopper. You take away that if you pick Governor Romney as your running mate. I would say, the person who we haven‘t mentioned yet very much who‘s stock should have risen this week, and who should send up a bunch of flowers, some really good flowers to Senator Gramm, is Tim Pawlenty. He‘s the guy who has made the Sam‘s Club Republican argument. He‘s not talking about mental recessions.
GREGORY: Why is he not being vetted then Reihan? He actually said today, I believe, that he‘s not being vetted at this point.
SALAM: There‘s one big issue, and it‘s whether or not he can really carry Minnesota. If he was a guy who could carry the upper Midwest for McCain, he would be a lock. The trouble is that he‘s very strong on rhetoric. It‘s not clear that he‘s always delivered. I really like Sarah Palin. She‘s the governor of Alaska and she‘s the mother of three kids. She is someone who can really connect with female voters. That‘s something -- good grief, five, my god, she‘s even more impressive than I thought. That‘s someone who can help McCain where he needs the most help.
HARWOOD: David, if Pawlenty has not been vetted yet, he will be.
Trust me, he is on the list for John McCain.
GREGORY: Got to take a break here, coming back. Our play date with the panel; don‘t go away.
GREGORY: Not much time left here, we want to get to your e-mail, your play date with the panel. With us, of course, our panel back with us here tonight, Ruth, Reihan, John and Noah. Jake writes this about the economy:
“the candidates should channel Oprah Winfrey, who has empathy for Americans. When Gramm said that whiners bit, it was disgraceful. When Obama commented on it, it was funny but inappropriate. Obama missed an opportunity, if you ask me.”
Noah, what could he have done with this opportunity given him by Phil Gramm saying there was a mental recession that was dragging the economy down?
OPPENHEIM: First of all, the best way they could channel Oprah, I guess, would be by giving away free stuff, which she does that well. I think people would respond to that. Obviously, there is an opportunity for empathy that both these guys have not quite taken advantage of. There‘s also an opportunity for being honest with the American people. The reason we‘re suffering economically is because we‘re too dependent on oil and because people bought houses they couldn‘t afford. Those are two hard facts that need to be addressed in a concrete fashion, or all the empathy in the world is not going to matter.
GREGORY: John, do you think as a political matter—I remember thinking about this at the beginning of the Iraq war and whether the White House could have done more to really take the American people to school on geographically, strategically—do you think these candidates can and should do that now or is that just a losing proposition, in other words, talk about what government can do at this point, talk about the forces that are really sort of dragging down the economy, and what voters should reasonably expect and what they should, essentially, vote on when it comes to this issue? Or should they just pander?
HARWOOD: Honestly, I think they are doing a lot more than we give them credit for. These guys, they give speeches on this every day. They don‘t necessarily get covered by us. And we may talk about different stuff on these shows. Both of these guys are attempting to speak to the economic problems. The question is how much is breaking through? We‘ve got to admit, some of it is our fault.
GREGORY: Final comment, Ruth?
MARCUS: Sorry, I think that one of the interesting things is that I think the American people are not ready to be told hey, you spent too much on your house. You‘re out of luck. They are ready to be told, look, we‘ve got some serious problems and we can‘t do everything.
GREGORY: We have to leave it there. Thanks to the panel. Have a peaceful Friday night and a great weekend. See you Monday.
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