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'Hardball with Chris Matthews' for Thursday, September 18

Read the transcript to the Thursday show

Guest: Rep. Debbie Wasserman-Schultz, Todd Harris, Steve McMahon, Jenny Backus, Ron Christie

CHRIS MATTHEWS, HOST: President Bush gives an economic speech today as short as a cuckoo clock. And Barack Obama takes a lead in the polls.

Let's play HARDBALL.

Good evening. I'm Chris Matthews. Leading off tonight: Who's got the answers? The troubled economy has been the story this week with the potential to throw the election to the candidate voters believe can solve the problem. Wall Street did bounce back today nicely, but the Dow gaining only 400 points, almost as much as it's lost all week.

Today John McCain made it clear that he would fire the chairman of the Securities and Exchange Commission, former Republican congressman Chris Cox.


SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: The chairman of the SEC serves at the appointment of the president, and in my view, has betrayed the public trust. If I were president today, I would fire him.


MATTHEWS: But Senator McCain has problems of his own. On Monday, he said on the "Today" show that taxpayers should not bail out the insurance giant AIG. Then yesterday, he did a 180. But the latest polls indicate that some voters are doing a 180 and are now back to supporting Obama. I'll play HARDBALL with two members of the United States Congress in a moment.

Also: Did Joe Biden really say it's patriotic to pay higher taxes? Well, no, he didn't. But that's what John McCain says he said. We're going to talk to two of our strategists tonight about how each side is trying to turn this economic crisis to its advantage.

And speaking of misleading statements, it's been said that truth is the first casualty of war. We'll break down some of the whoppers that are being told out there again and again in this race. And we've got a fresh new batch of national polls all showing Barack Obama now taking the lead. We're going to look at those and more in the "Politics Fix."

And what leader in Congress filled us with all the confidence-well, not much confidence about the nation's economic future when he said, quote, "No one knows what to do about the problem"? We'll have that on the HARDBALL "Sideshow."

But we begin with, who has the right plan to fix the economy. U.S. congresswoman Debbie Wasserman-Schultz is a Florida Democrat. Thank you, Congresswoman, for joining us.

REP. DEBBIE WASSERMAN-SCHULTZ (D), FLORIDA: Good to be with you, Chris.

MATTHEWS: This crazy, crazy economy-is the solution to fire the chairman of the SEC, as McCain says? Will that solve the problem? He likes to fire people, by the way, McCain. He fires-you know, he fires Rumsfeld. The war goes on, the same number of casualties. Now he wants to fire his former colleague, Chris Cox.

WASSERMAN-SCHULTZ: I think the question, Chris, that voters have to ask is, Which John McCain should voters believe and on which day should they believe him, the day that he said that the fundamentals of our economy are strong, which was Tuesday, or on Wednesday, when he said, No, no, I was talking about American workers? Or how about on Tuesday, when he said he would oppose a bailout of AIG, but then the next day said he supports it when he-because he didn't actually realize the impact that the failure of AIG would have on pensions and retirement funds?

This is John McCain proving over and over again that he is out of touch, that he doesn't understand what kind of impact the economy is having on working families, and even admitted a few months ago that he really doesn't have a terribly good grasp on the economy, which he continues to prove every single day. That's why we need Barack Obama and Joe Biden as president and vice president of the United States so we can move this country in a new direction.

MATTHEWS: Let's look at the president, who is president, George Bush, and what he said today very briefly. I'm not kidding. It was almost like a cuckoo clock, it was so brief. He came out for, like, two minutes and then split without taking any questions, not giving any answers, not exposing himself to the kind of scrutiny most Americans would like to submit to the man whose desk has the buck stopping on it.

Here he is, the president of the United States this morning.


GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES: The financial markets continue to deal with serious challenges. As our recent actions demonstrate, my administration is focused on meeting these challenges. The American people can be sure we will continue to act to strengthen and stabilize our financial markets and improve investor confidence.


MATTHEWS: What did you make of that statement today? I didn't make much of it. I think he really tried to avoid making any statement today, simply...


MATTHEWS: ... making himself visible for two minutes or so.

WASSERMAN-SCHULTZ: I think he's desperately trying to avoid the direct accusation that he's been asleep at the switch, as has his entire administration. And you know, we've got John McCain, the Republican nominee for president, who-I mean, his big-his big solution to the economic crisis we're in is to fire the SEC head? I mean, someone who proclaimed himself a deregulator, who fundamentally said he was a deregulator?

There is no track record whatsoever on the part of John McCain to be someone who has a commitment to shoring up this economy. He believes in deregulation, and that's what Americans could expect from him as president. It's the last thing we need right now.

MATTHEWS: Remember Denzel Washington in the movie "Philadelphia"? He said, Explain it to me like I'm your grandmother, OK?


MATTHEWS: Explain what Barack Obama would do as president to deal with this economic crisis as if I were your grandmother. Explain.

WASSERMAN-SCHULTZ: The kitchen table economics of this, that's what you're talking about.


WASSERMAN-SCHULTZ: Barack Obama's economic plan would give a tax cut to 95 percent of Americans and would raise taxes only on people who make more than $250,000 a year. There are no taxes that would be raised for anyone who makes less than $250,000 a year. John McCain's plan would leave out 101 million Americans.

And the bottom line is that Barack Obama understands that a gallon of milk is now $4 and more, that it costs almost $80 to fill up your gas tank, that that is real money and that we need to do things like investing in alternative energy research so that we can truly wean ourselves off our dependence on oil, so that when we have an economic plan in it place, put in place by Barack Obama and Joe Biden, that it directly impacts people in their pocketbooks on their day-to-day expenses. That's what we need in terms of leadership from the president.

MATTHEWS: Boy, you're on tonight, so I'm going to hit you with an ethnic question. I just got this story about a half hour ago. It is your constituency, a whole lot of Jewish voters in your constituency.

WASSERMAN-SCHULTZ: A whole lot, yes.

MATTHEWS: I just got the word today that the Republican-a Republican-backed group supportive of John McCain is push-polling...


MATTHEWS: ... that dirty little trick of asking people things that are rotten and then asking them to vote, really-basically, propagandizing. They're pushing the idea that Barack Obama is tied to Hamas in this latest push-polling out there. What do you make of it? And it's aimed at Florida voters, Pennsylvania votes, Michigan votes, Ohio voters, New Jersey voters, where there's large Jewish numbers-numbers of Jewish votes. They're pushing the idea he's part of some terrorist operation.

WASSERMAN-SCHULTZ: I think what's going on here is Republicans are divided, depressed, demoralized and desperate, and so they have to resort to these type of tactics to scare Jewish voters and to scare voters across America. It's a playbook that we're very familiar with, and we're not going to allow them to lie to the American people and distort Barack Obama's record.

He's been 100 percent on Israel. He stands side by side with Israel, would make sure that Israel's alliance with the United States is strengthened. And the Jewish community is going to overwhelmingly support Barack Obama and Joe Biden.

And you know why, Chris? Because Jewish voters want a president of the United States that supports all of our values, not just some of them. And that's Barack Obama.

MATTHEWS: Congresswoman Debbie Wasserman-Schultz of Florida, thank you for joining us.


MATTHEWS: Now let's take a look at an exchange I had with Virginia Republican Eric Cantor on last night's HARDBALL.


MATTHEWS: Do you take responsibility, Congressman Cantor, for the performance of this president the last eight years? Do you take responsibility for that politically, the performance of this president?

REP. ERIC CANTOR ®, VIRGINIA: I take responsibility...

MATTHEWS: Yes or no!

CANTOR: I take responsibility for my performance in the seat that I hold in Congress...


CANTOR: ... and our party in Congress.


MATTHEWS: We've got a new poll out tonight. "The New York Times" just came in this morning. You may have seen it if you buy "The Times," 48 percent Obama, 43 percent McCain. This is the first time that Obama has opened up a substantial lead.

By the way, this lead by Obama is confirmed by other polls. Look at that, it's turned around. He was behind, now he's ahead. But boy, this thing is tight as a drum. The interesting thing here is he seems to be winning on the argument that he's a real change agent, whereas the other fellow, John McCain, as good as he may be on other issues, like being commander-in-chief, doesn't look like a change agent.

According to "The Times" poll, 37 percent believe that McCain is a really change candidate, whereas 65 percent-almost two thirds-say Obama is your man if you want change.

Coming up: With a shaky economy the top issue on voters' minds, how are Obama and McCain shifting their strategies to adjust to it? And can McCain avoid the fact that his party is the party that's been running things for the last seven to eight years? The strategists, they're going to join us in a moment, a Republican and a Democrat going at it.

You're watching HARDBALL, only on MSNBC.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: We can't steer ourselves out of this crisis by heading in the same disastrous direction. We can't change direction with a new driver who wants to follow the same map. And that's what this election is all about.




MCCAIN: Let me offer a little advance warning to the big-spending, greedy, do-nothing, "me first, country second" crowd in Washington and on Wall Street. Change is coming. Change is coming, and frankly, you're not going to like it.


MATTHEWS: He's been there 26 years! Welcome back to HARDBALL. As polls begin to favor Barack Obama again, "The New York Times" poll, by the way, paints a bad picture for McCain. Here's an interesting number, 57 percent of the voters out there call McCain a typical Republican, which is not a good thing to be this year, 46 percent say he'll continue Bush's policies, as per. By the way, another 22 percent think he'll be more conservative. Only 37 percent think he can bring about real change in Washington.

Time to bring in the pros, strategists-"strategerists"-Democrat Steve McMahon and Republican Todd. Todd, I've got to start with you. It's very interesting...


MATTHEWS: We had Eric Cantor last night, a fine congressman from Richmond, Virginia, who basically aid, I'm not standing here to defend the policies of this Republican administration. I'll defend my own voting record, I'll defend the voting record of the majorities of Republicans in Congress, but I'm not defending Bush anymore.

And then Bush does this sort of cuckoo clock speech. It was like-like a Schwarzwald clock figure. It comes out very briefly and then disappears again. He's the leader of the country. Why did he do it? Look, he comes out and he says a couple of things-no cues, no aids-

I'm out of here. By the way, look at that backdrop. I'm not sure what that was about. Is he Smokey the Bear? What's he up to?

Anyway, what is going on? He's supposed to be leading us.

TODD HARRIS, REPUBLICAN STRATEGIST: Well, I'll tell you what's going on, a little bit of straight talk. You know, those poll numbers, that's not good news for John McCain. Now, the good news for McCain is that by rook (SIC) or by crook or just dumb luck, the Republican Party nominated the one guy who has a real shot this November of creating a separate identity...

MATTHEWS: Escaping.

HARRIS: Yes, of creating a separate identity for himself from the rest...

MATTHEWS: Escaping the Republican Party.

HARRIS: ... of the Republican Party. He is the one guy...

MATTHEWS: You saying that...

HARRIS: ... who can do it.

MATTHEWS: ... he's the "Great Escape"? I mean, he can actually be a

pull a Houdini here and escape his 26-year record as a Republican senator and congressman, as a man who supported President Bush the last two elections, voted for him, and who will bring in with him, if he gets elected, basically the same crowd (INAUDIBLE) all the Republican dances they have after the nomination-after the election, as were here before?

HARRIS: Because this is also the same guy that broke with the president on climate change. He's broken with the president on torture, broken with the president on Guantanamo.


HARRIS: He's been a perpetual thorn in the side of Republicans...


MATTHEWS: ... Nicolle Wallace, Charlie Black-I think these-

Charlie Black, Rick Davis, all the familiar faces, they're all Bushies and they're running his campaign.

HARRIS: You know, I love how the Democrats make such a big deal about who the operatives are. There's not a single voter out there who cares.

MATTHEWS: They're not operatives. OK, we're just asking you where the messages are coming from. What I find interesting is...


MATTHEWS: Here's a-here's a-you want to-I'm going to give you a quote from a Republican operative this week, just to turn the pillow over to the cold side so got a new discussion.



MATTHEWS: Karl Rove referred to the governor of Alaska, Sarah Palin, as a political pick-in other words, not the best person to put there in the number two spot if the number one guy can't do it.

But here's Senator Chuck Hagel of Nebraska, and here's what he said about the credentials of Sarah Palin. "She doesn't have any foreign policy credentials. You get a passport for the first time in your life, what, last year? I mean, I don't know what to say. I don't know what you can say. You can't say anything. I think they ought to be just honest about it and stop the nonsense about, I like out my window and I see Russia, and so therefore, I know something about Russia? That kind of thing is insulting to the American people. I think it's a stretch in any way to say that she's got the experience to be president of the United States."

That's a Republican from Nebraska.

STEVE MCMAHON, DEMOCRATIC STRATEGIST: That's my man. That's my man, Chuck. Of course, I'm from Nebraska so-I mean, but I'm a Democrat, so...

HARRIS: Did you vote for Chuck?

MCMAHON: No, no, no. But I admire-if you want to talk about straight talk, that's what you're getting from Chuck Hagel. And it's...

MATTHEWS: Is that a fair assessment of the foreign policy credentials of the governor of Alaska? Fair enough or not?

MCMAHON: It is a fair-it is a fair assessment.

MATTHEWS: Is it fair? Did he say it right? Did he say something wrong?

MCMAHON: It's accurate. It's accurate, Todd.

HARRIS: Look, I don't think...


MATTHEWS: ... give a chance. Did he say something wrong?

HARRIS: I don't think anyone can argue that she's got decades of foreign policy experience. But what gets...


HARRIS: No. Hold on. No, no. What gets me is all these people who suddenly think that Barack Obama wrote the book on foreign policy experience. This is a guy who was in the Illinois state senate, got elected, hung around Washington for a couple of weeks and then started running for president. So the idea that he is some, you know, Henry Kissinger of this election is just ridiculous.

So she has limited foreign policy experience at the bottom of our ticket. Barack Obama has extremely limited experience at the top of your ticket.

MCMAHON: OK, but here's what you have. First of all, Barack Obama is running against John McCain, and the major issue in this race is change and who's going to change Washington. John McCain, after 26 years here, is acting like he's never been in Washington, like he just got his Washington passport last year.

Foreign policy is an important issue in this race, and look at the two candidates at the vice presidential level-Joe Biden, who's been around for a long time, who was a governing pick, not a political pick, and Sarah Palin, who was obviously a political pick. And the notion of Joe Biden being a heartbeat away from the presidency, I think for most people, isn't the least bit concerning. The notion of Sarah Palin being a heartbeat away from the presidency is why you're seeing these poll numbers begin to deflate for John McCain. People have figured out the joke. They've seen her interviewed by Charlie Gibson. They're starting to see her answer questions...

MATTHEWS: Let me ask you a tough question...

MCMAHON: ... they saw Tina Fey...

MATTHEWS: ... both of you. If you had all your money in the market, or you were a typical American, and you are, at some point, typical Americans, at some point-you're looking at the market today, it bounced up 400 points, it could go down 400 points tomorrow, we have no idea-this thing is the rockiest thing we've ever looked at. It's lost a huge amount of money. I mean, up until yesterday, a trillion dollars lost in one week, huge amounts of money blown out the window. Nobody's jumping out the window yet, but the money's flying out the window.

Who do you-are either one of these people, John McCain or Barack Obama, the kind of economic person that you would really say, Now, that would be a Mike Bloomberg or that would be a Warren Buffett or-do either one of them know what they're talking about, really, or do they have to go find somebody that knows what they're talking about?

MCMAHON: I think they probably would both have to go find people to deal with the Wall Street mess, but you have to look at...

MATTHEWS: Why don't they tell us now who they're going to listen to? You know, when they go on that-what was that show that was on for years, you got a lifeline, you call the guy (INAUDIBLE) would help you with? Shouldn't they tell us now who they're going to call? I mean, seriously, if it's going to be Bob Rubin, he should say-I'm not maybe making him secretary of the Treasury, but if I got a crisis, he's in the room with me.

MCMAHON: I think-I think...

MATTHEWS: Or Warren Buffett's in the room.

MCMAHON: I think that's been pretty clear...

MATTHEWS: Shouldn't they all make it clear who they're going to be listening to? Because it's not them. They don't know jack.

HARRIS: Well, you know, I-as far as who they're going to listen to, I find it ironic that Obama all week has been critical of Gramm-Leach-Blyly, this deregulatory measure that came through in the late '90s, but it was shepherded through by Bob Rubin, by Gene Sperling, by Larry Summers, who are Obama's top three economic advisers.


HARRIS: So who's he going to listen to? The same guys that got us into this deregulatory mess in the first place.

MCMAHON: Look at what happened just in the last year at the SEC. They repealed the "uptick" rule, which I don't frankly understand, but I know that it makes it a lot easier now to short stocks and to drive the price of stocks way down. And there are other rules that protected investors that have been taken off the books.

And I think what you have to ask yourself is which of these two candidates has a philosophy that's going to enable a reasonable amount of regulation on Wall Street? Because you know, John McCain stood there today and blamed Christopher Cox, and I think Christopher Cox certainly has-the SEC chairman-has a lot to be held accountable for. But the fact of the matter is, the banks were making loans to people on perhaps fraudulent bases, and they were making loans to people who couldn't afford to pay them back. And then the rating agencies were rating those loans in a way that wasn't accurate.

So there was-there was a mess at every single step, and it's because the Republicans walked away from the regulatory responsibility of the federal government, both at Wall Street and at the banking level. And that has to change.


MCMAHON: John McCain won't change it. Barack Obama will.

MATTHEWS: I just wanted a simple political question. I don't understand this market thing. I have got a guy who advises me.

MCMAHON: What he saying? On a relative basis, we're doing well.


MCMAHON: ... we're not doing well.


MATTHEWS: You will be all right in the long run. They all say that.

HARRIS: Buy gold.

MATTHEWS: But I put a lot of money into T-bills and things like that, like everybody else has lately, because it's the only real safe place.

We're in a horrendous economic situation place right now, whereby you can't borrow money, but, if you lend money, you don't get any interest on it. So, it's a crazy time. It's a scary time. And I'm just wondering who do you blame? Everybody says no finger-pointing. Damn it, election time is a time to point fingers. It's called accountability.

You find the guy who has been in charge for eight years and you kick him out the door, unless he can give you a damn good argument that it's not his fault.


MATTHEWS: I watched Jimmy Carter get kicked out the door. I happened to be working for him at the time. You know why he was kicked out the door? Because gas prices went up, and you had to wait in line. Interest rates went up. Inflation rates went up. And we had hostages taken. Nobody said, oh, it's not Carter's fault they got grabbed over there just because it happened to be his watch.

You got to pay. If it's your watch, and you blow it, you pay for it.

HARRIS: I agree with that.

MATTHEWS: This is the first time in history where a candidate like McCain has been able to say, oh, yes, I'm a Republican, I have been with Bush all these years, but I'm not going to-I'm going to start saying fire everybody now and save my butt.

HARRIS: But, Chris, this where I disagree with you, because I don't think that this is about party. The people who are going to vote Republican are already going to vote I know you're shocked to hear that.

MATTHEWS: No, because the only reason John McCain is up there is he was nominated by your party.


HARRIS: Hold on.


HARRIS: The people who are going to vote Republican are voting Republican. The people who are going to vote Democrat are going to vote Democrat. Those swing voters, for them, it's not about party, and it's about record.

And if you look at John McCain's...


HARRIS: Hold on.


HARRIS: If you look at John McCain's record, five years ago...

MATTHEWS: OK. Respond to that.

MCMAHON: It's about who's going to walk away from it, who has walked away from it, who has abdicated their responsibility, and who's going to do something?

And I think, when the swing voters take a look at that, they know Republicans are the party of deregulation, and laissez-faire, and letting Wall Street take care of the money. And that's-that's what we have had for eight years. And people are tired of it, and they're ready for a change. That's why Barack Obama is going to win. It's why you see his poll numbers today.

HARRIS: Five years ago, John McCain stood on the floor of the Congress and said, we have got to do something about-in terms of regulation of Freddie Mac and Fannie Mae.

MATTHEWS: Fifty-seven percent of the American people in the last "New York Times" poll believe that John McCain is a typical Republican. Is that a good thing?

HARRIS: No, I just said earlier that that's not a good thing.


HARRIS: ... beat a dead horse.


MATTHEWS: You're not dead.


MATTHEWS: Thank you, Todd Harris.

Up next: a "Big Number" that could be a big deal for Barack Obama in what is traditionally a very red state, the "Sideshow" coming up straight ahead.

You're watching HARDBALL, only on MSNBC.


MATTHEWS: Back to HARDBALL. Time for the "Sideshow."

Last night, Jay Leno had a little fun with Sarah Palin and her outdoorsy image.


JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": Now, Sarah Palin, you know, did you see her interview with Charles Gibson on ABC? You know, boy, she really is an outdoorswoman. You know, a lot of people pretend to be.

Show-show what she did with Charles Gibson during her interview.

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL NOMINEE: Get taxes under control, but, at the same time we're cutting taxes, you have got to reduce the growth of government.





MATTHEWS: How do they do that? Anyway, I guess that's one way to audition for Dick Cheney's job.

And if you were looking to Congress to come in like the U.S. cavalry to save the scared stockholders, don't wait. Yesterday, Harry Reid, the Senate top Democrat, was asked about possible regulatory actions to stem the credit crisis.

His response?


SEN. HARRY REID (D-NV), MAJORITY LEADER: No one knows what to do. As I indicated in an earlier question, we are in new territory here. We-this is-this is a different game. We're not out here playing soccer, basketball, or football. This is a new game, and we're going to have to figure out how to do it.


MATTHEWS: How would you like to hear the pilot on your airplane telling you that during turbulence?

Anyway, so, Congress is waiting for the administration and the regulators to do the job, and the president is standing back and doing the same thing. You have to wonder what happened to government of, by and for the people.

Time now for tonight's "Big Number."

We have talked a lot this year about the changing electoral map, how some predictably Republican states are up for grabs, how the same is true of some usually Democratic states. Well, there's one big reason for that, a surge of new voters who may lack the party loyalty of past voters.

Here's just one example. How many new voters have registered this year in Indiana? Over 500,000. That's an incredible number for a state that only had four million voters on the rolls at the beginning of the year, and now explains why McCain is having trouble locking up the Hoosier State. Half-a-million new voter registrations in Indiana this year-tonight's "Big Number."

Up next: There's been a lot of charges and countercharges from both sides in this presidential fight, and a lot of what you're hearing just isn't true. We will sort out the facts from the falsehoods, as best we can, coming up next.

You're watching HARDBALL, only on MSNBC.


JULIA BOORSTIN, CNBC CORRESPONDENT: I'm Julia Boorstin with your CNBC "Market Wrap."

Stocks soaring CNBC's Charlie Gasparino reported Treasury Secretary Hank Paulson is working on a proposal to create a government entity to take on bad debt from financial institutions. It would be similar to what was done 20 years ago during the savings and loan crisis. With that, the Dow gained 410 points, the S&P up 50, and the Nasdaq up 100 points.

That's it from CNBC, first in business worldwide-back to HARDBALL.

MATTHEWS: Welcome back to HARDBALL.

Negative ads and false claims have been dominating the presidential race over the last couple weeks.

HARDBALL's David Shuster separates fact from fiction.



DAVID SHUSTER, NBC CORRESPONDENT (voice-over): Today, as John McCain campaigned in the Midwest, the controversy over false claims erupted again.

McCain's latest radio ad blames Barack Obama for scuttling comprehensive immigration reform because he backed poison-pill amendments. But the fact is, the Republican base killed immigration reform, not amendments supported by Obama.



OBAMA: How are you?

SHUSTER: Obama, though, is also running a false ad, and this one is on Spanish television. The spot quotes Rush Limbaugh saying Mexicans are stupid and unqualified. The narrator then says, "John McCain and his Republican friends have two faces, one that lies to get your vote and another that continues the failed policies of George Bush."

The problem is that John McCain and Rush Limbaugh don't agree on the issue of comprehensive immigration reform. And, today, a McCain spokesperson said-quote-"It is offensive and dishonest for Barack Obama to lie."

There have been a string of whoppers over the past week, but mostly from the McCain/Palin ticket. This ad focused on education.


NARRATOR: Obama's one accomplishment? Legislation to teach comprehensive sex education to kindergartners.


SHUSTER: But the legislation was to teach-age appropriate sex-ed to kindergartners, not comprehensive sex-ed. And the program was intended to help kids avoid sex predators.

PALIN: Thank you so much, Iowa.

SHUSTER: In stump speeches, Sarah Palin has portrayed herself as a reformer by bringing up the proposal $400 million Alaska bridge to nowhere, and declaring repeatedly:

PALIN: And I told the Congress, thanks, but no thanks, for that...

SHUSTER: But that is not true. Palin supported the project while campaigning for governor, and opposed it only after Congress had already killed it.

Furthermore, she kept the money for other projects, as most governors would.

Last week on "The View," John McCain argued that Palin's record is pristine.


SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: First of all, earmark spending, which she vetoed a half-a-billion dollars worth in the state of Alaska.


BARBARA WALTERS, CO-HOST: She also took some earmark spending.


MCCAIN: No, not as governor, she didn't. She vetoed...

WALTERS: As mayor.


SHUSTER: In fact, Palin cut earmarks in half, but, this year, the state asked for $197 million in earmarks.

On energy policy, there was this.


PALIN: The governor of this state, that produces nearly 20 percent of the U.S. domestic supply of energy.


MCCAIN: She knows more about energy than probably anyone else in the United States of America. She represents-is a governor of the state that 20 percent of America's energy supply comes from there.

SHUSTER: The U.S. Energy Information Agency says it's actually 3.5 percent.

(on camera): Barack Obama has also fudged some numbers, saying that his tax relief would go to 95 percent of Americans, when, in fact, it's about 80 percent to 85 percent.

Still, it's McCain and Palin who have been generating controversy. And a string of columnists who have long praised John McCain now say his campaign has crossed the line.

I'm David Shuster for HARDBALL in Washington.


MATTHEWS: Thank you, David Shuster.

Jenny Backus is a Democratic strategist. And Ron Christie is a very successful Republican strategist and former aide to Dick Cheney.

I have got to ask you both, because I used to be a speechwriter at the White House, do they still get paid full salaries over there?


MATTHEWS: The president's speech today was the shortest speech. It was like a cuckoo clock, "Cuckoo, cuckoo," and he's gone.


MATTHEWS: Gone, no questions, no answers. In the biggest financial crisis since whenever, since '87, and he just-in and out, gone. What is this all about?


CHRISTIE: Well, look, the president of United States has relegated a lot of the day-to-day responsibilities for this to the treasury secretary.


CHRISTIE: And you guys laugh. You're looking at a former chief executive officer.

MATTHEWS: I laugh because he's supposed to be running the country.


CHRISTIE: He is running the country. And he's smart to have gotten the former person from Goldman Sachs, who is a very bright man, who understands the markets and liquidity.


CHRISTIE: This is not a political sideshow. This is putting the right person, Jenny, in his administration to deal with this crisis.


This is-this is almost as serious a time as, you know, going into war with Iraq. The president did speeches from the Oval Office to address the nation when people were concerned and worried. Right now, he's, like, running for the door as fast as he can. And John McCain is...


CHRISTIE: He's not-he's not running for the door.


BACKUS: Where is the leadership?

CHRISTIE: I will not allow the Democrats-I will not allow the Democrats...


CHRISTIE: ... to say he's running for the door.


CHRISTIE: He found the right person...

MATTHEWS: Does Paulson know as much about the economy as the president says-as John McCain says his running mate knows about energy?

He said that Sarah Palin, the first-year governor, second-year governor of Alaska knows more-we just saw the ad.


MATTHEWS: It wasn't an ad. It was him.

John McCain just said that his running mate knows more about energy than anyone else in the United States. Where do we go from there, when someone makes a statement like that, such a statement? Well, do you think it's true, first of all?


MATTHEWS: Is it true?

CHRISTIE: Do I think it's true? I'm not a position to say.


MATTHEWS: Yes. Does she-do you think she knows more about energy than anyone in the United States?

CHRISTIE: I am not in a position to say. I have never spoken with Governor Palin about her record or her positions on energy.

What I can tell you, to answer your first question, is that...

MATTHEWS: Is it probable?

CHRISTIE: ... George Bush found the right person to be the treasury secretary and to deal with a good crisis we have confronted...


MATTHEWS: But the judgment about-John McCain's judgment.

What do you make of this? Is Sarah Palin the energy-she should be energy czar. I mean...

BACKUS: No. Sarah Palin is from a state that has a lot of oil in it, not as much as Sarah Palin has been claiming that is in there, but she's not an expert on that.

I think McCain is going down a dangerous-and you-all you have to do is listen to Chuck Hagel today. I mean, Chuck Hagel, Republican senator, supported McCain's 2000 race, said that it's stretch to think she's ready to be president. Their idea of...


MATTHEWS: No, he was tougher than that.



CHRISTIE: Well, OK, but, again...

BACKUS: But their idea of-of fixing the economy-let's go back to the economy here-John's McCain-John McCain's idea of fixing the economy is to give more tax breaks to oil companies.

CHRISTIE: Jenny...


BACKUS: Barack Obama's idea of fixing the economy is to give more tax breaks to people.


MATTHEWS: Let him respond. Let him respond.

CHRISTIE: Get off the talking points.

On September 11, 2003, George Bush's treasury secretary went up to the Hill with a plan that said that we should put Fannie Mae and Freddie Mac under the control of the Treasury Department, because Fannie and Freddie was, in-in fact, insolvent and was not working.


CHRISTIE: If fact, Barney Frank, the chairman, at that point the ranking member of the House Financial Services Committee, said, that, oh, no, the Republicans are trying to exaggerate the claims of Fannie and Freddie, and, in fact, they're fine.

BACKUS: There's...

CHRISTIE: The Republicans tried to lead on this issue five years ago, Chris. And I'm answering your question, rather than talking about talking points that the Republicans are in the pockets of big oil.

BACKUS: It's not talking points. It's fact.


CHRISTIE: The Republicans-no, the fact of the matter is...

BACKUS: If you look at John McCain's...


CHRISTIE: I'm not talking about John McCain. I'm talking about the fact of the matter is...


MATTHEWS: The trouble with arguing about talking points is that you use them, too.


CHRISTIE: No, I'm not using talking points, Chris.

I'm saying, the fact is, five years ago, this administration brought forth a plan, because it said Fannie and Freddie was not in a very good financial situation. And it was blocked in the Congress. That's a fact.

BACKUS: Do you really want to sit here and have an argument with me about the Republicans...


CHRISTIE: Yes, I will.



CHRISTIE: I would enjoy the-I would enjoy the opportunity.


MATTHEWS: You made the point.

Let me go back to a couple points that were raised by the Shuster package, number one, immigration. Did Barack Obama, as attested in-in the McCain ad, kill immigration reform? Is that true? He killed it?

CHRISTIE: Did Obama kill it?

MATTHEWS: The ad says he killed immigration reform. Is that true?

CHRISTIE: No, I don't think it is.

MATTHEWS: OK. Sex ed; does he want five-year-olds and six-year-olds taught about the birds and the bees?

CHRISTIE: Yes, I do think he does, because I actually read the bill, Chris. Not only does it deal with-

MATTHEWS: It says age appropriate.

CHRISTIE: It deals with sex education and it deals with HIV/AIDS. I would rather have school children who are five years old learning how to read and write, learning about age-appropriate sex education.

MATTHEWS: I thought it was to warn them against predators.

CHRISTIE: That's part of it.

BACKUS: I have a two-year-old. I don't-I want my kid to be protected everywhere I can. I read the bill, too.

CHRISTIE: I would encourage you to read the bill.


MATTHEWS: -- has been told by the Illinois legislature to go into a classroom with five-year-olds, pre K and K kids, and start talking birds and bees with them? Do you really believe teachers would do that?

CHRISTIE: Yes, in this country, the way that our society has loosened the limits and allowed teachers to go --

MATTHEWS: Why would they do it? The kids wouldn't know what they're talking about.

CHRISTIE: Chris, do you think-

MATTHEWS: Five-year-olds?

CHRISTIE: Yes. I think children these days are inundated with sex on television.

MATTHEWS: You believe they're really trying to push this bad culture.

CHRISTIE: I think there's a decline in the American culture and there are a lot of-

BACKUS: That is a sad statement.

CHRISTIE: I actually have nieces and nephews who are six and eight years old.

BACKUS: Are you attacking the morals of teachers.

CHRISTIE: No. Actually, Jenny, what I'm attacking is the morals of the American society that we have slid in the society. And I do think it's inappropriate to teach-

MATTHEWS: If a teacher were ever to walk into a classroom of five or six-year-olds to talk to them about how to behave in sex in ways that protects their health and whatever, it would be an insane person.

CHRISTIE: I think you're right.

MATTHEWS: We agree on that. The Bridge to Nowhere, did she ever support the bridge to nowhere, as attested to or denied in the latest argument here? The argument I heard is she originally supported the Bridge to Nowhere. Then, when it was made a fool of, she changed her mind.

CHRISTIE: No, actually she supported the bridge to nowhere and when it came to Ted Stevens trying to pass this through, she said no.

BACKUS: She was for it before she was against it?

CHRISTIE: Actually, to be a fiscal conservative, one can actually be a governor of a state and look at a project and say, you know what? This doesn't stand up on the merits.

MATTHEWS: One last one. I go for a golden olden here. I'm reaching back into the stacks here. Last week; does John McCain, who you endorse, believe that his rival for the presidency, Barack Obama, called his running mate, Sarah Palin, the governor of Alaska, a pig? Do you believe that John McCain believes that?

CHRISTIE: No, I don't believe that.

MATTHEWS: Why did he run ads saying that? Why are all these ads making that point if it's not true?

CHRISTIE: Let me answer your question. If you look very carefully what the ad says, and if you look very carefully at what Senator Obama said, he said that's like putting lipstick on a pig.


CHRISTIE: That's Governor Palin's signature line. She used it at the convention. He was trying to get a cheap shot when he was giving a speech. Everyone knew what he was trying to say. You knew what he was trying to say. Do I think he thinks she is pig personally? No, but I think he was going for a laugh. That's what he was doing.

BACKUS: Can I ask you a question?

MATTHEWS: She never used that phrase.

CHRISTIE: She was talking about a hockey mom.

MATTHEWS: And pit bulls.

CHRISTIE: That's right. When Obama was-when Obama made that comment and everyone in his audience knew what he was saying-

MATTHEWS: You believe he was making fun of her.

CHRISTIE: Yes, absolutely.

MATTHEWS: At least you believe it.

CHRISTIE: Strongly. It's true.

BACKUS: It's not true.

CHRISTIE: Tell me how it's not true.

BACKUS: How it's not true? It's a phrase that John McCain used against Hillary Clinton. It's a phrase a bunch of-let's talk about the --

MATTHEWS: It's not a phrase that most people I know use, but we went through a list last week. You weren't here. But so many Republican-

Tory Clark wrote a book with a cover a telling people how to use it. She was-I'm sorry. She was McCain's press secretary. She told people how to use that line.

CHRISTIE: Let's rewind the videotape for what you're saying. Sarah Palin mentioned something in a convention where she says a hockey mom and a pit bull. You fast-forward to where Senator Obama says that. Everyone in his audience got the gig, got the laugh. Senator Obama has been making fun of her and insulting her ever since she's been on the ticket.

MATTHEWS: How has he done that?

CHRISTIE: I just demonstrated that.

MATTHEWS: Everybody watching has to make their own judgment. This is something we're all able to make. If you believe that he was talking about Sarah Palin, you believe it.


MATTHEWS: There was no way to find out whether it's true or not.


MATTHEWS: By the way, it used to be in society that you were innocent until proven guilty under any standard. You believe you know what he was doing. You have no evidence that's what he was doing.


CHRISTIE: What are you talking about we have no credibility? I watched it.

BACKUS: You don't have any credibility. The Republicans-


MATTHEWS: That's why you're here, to express your view.


MATTHEWS: I think you have to assume nothing when you don't know.

Anyway, Jenny Backus, thank you. Ron Christie, thank you.

Up next, new polls show new voters think McCain is prepared to be president, Obama is the one to bring change. Interesting decision there, change versus experience. Which one will win? We'll see what happened in the primaries. We'll see what happens in the general. The politics fix is next. Were going to figure out how all this poll data comes up to the truth, perhaps on what's going to happen. This is HARDBALL, only on MSNBC.



SEN. JOE BIDEN (D), VICE PRESIDENTIAL CANDIDATES: Nowhere, nowhere has Senator McCain been more out of touch than on the current financial crisis. At 9:00 a.m. on Monday he said the economy is strong. At 11:00 a.m. he was saying the economy was in crisis. We Catholics call that an epiphany.


MATTHEWS: Welcome back to hardball. Now to the politics fix. Tonight's round table, two people, Jonathan Martin of Politico, which is always right, and Clarence Page of-what do you call your paper?

CLARENCE PAGE, "THE CHICAGO TRIBUNE": "The Chicago Tribune," world's greatest.

MATTHEWS: World's greatest newspaper. That's right. Let's take a look at the latest polling here. It has shown pattern now over the last couple of days. Obama leads by five points in the CBS/"New York Times" poll. That's five points. He was down by two just last week. So that's a seven point turn around in a week.

What's it got to do with what? We'll figure that out in a minute. Obama leads by four points in the Quinnipiac poll, which is not a lot, but he was down in that one, too, last week. The Pew polls have them still even, but overall there's a pattern here, Clarence. He's gaining. Is it because we're looking at the economy rather than lipstick?

PAGE: It's the post-convention bounce back that makes a bounce a bounce. Things are settling back to the way they were before. And isn't this monotonous?

MATTHEWS: Is the shine off the nomination of Governor Palin? Has that lost its interest?

PAGE: What these polls have shown is that Palin helped immensely with Republicans, especially Republican women. Not so much with non-Republicans.

MATTHEWS: Not Hillary people?

PAGE: Definitely not Hillary people.

MATTHEWS: There is a still a problem he faces, Barack, despite these good numbers for him, older white women have a problem. I have to think some of it might be age and ethnicity, put it together nicely. But some people aren't used to this new situation of a candidate like Barack. I'm trying to say it as nice as I can.

JONATHAN MARTIN, POLITICO: No, you can say it. Look, Chris, there is still an age gap. This past Tuesday, I was in Youngstown, Ohio, Trumbell Country, Ohio, a 62-38 John Kerry county in '04, thousands of folks there, Democratic county for John McCain and Sarah Palin. Like you said, older, middle class, blue collar, some working class folks, NRA people, Chris. That's the kind of element that is going to be tough for Obama to get in places like Ohio and Michigan.

MATTHEWS: Clarence, did you see the numbers? It is astounding. If you only let people 45 and younger, neither-we can't vote then. Only they were allowed to vote, Barack wins by 16 points. If only people 65 or older vote, John McCain wins by 17 people. It is not ethnicity-it is ethnicity, obviously, but it is age. My argument is, why don't the old people think about the future and why don't the young people think about their future.

PAGE: It's age. It's income. It is also education. People with more education are more likely to vote for Obama as well.

MATTHEWS: Why is that? Why is education a factor?

PAGE: Look at Ohio, Chris. My home state, economically devastated. A lot of older people have seen change in Ohio. It has all been bad for the last 30 years, going on 40. You say change, they say, not again.

MATTHEWS: Yes. But usually if we have a lousy economy, people want anybody else. They want the outs in and the ins out.


MATTHEWS: Ohio looks better for Barack than it did. You don't have that marriage issue, the gay marriage on the ballot.

MARTIN: Chris, it is still going to be a very competitive race in Ohio, because if you look at 2006, where did Sherrod Brown, Ted Strickland, the senator and governor, blue collar Democrats, where did their votes come from? A lot of these places like Youngstown, like Appalachia, that are Democratic culturally and traditionally, but that Obama could have a problem there.

I think Clarence is right. These numbers reflect McCain and Palin coming down to Earth from the convention. They got a huge bounce out of St. Paul. I think the race righting itself back to where it should be given the contours.

MATTHEWS: John, one of the things McCain is trying to do is say, I'm not the incumbent. He's taken off his Republican uniform. You don't even hear the word Republican or Bush at the convention. I'm one of the new kids on the block. I've been here 26 years. Let's see if that's working. Here are the new "New York Times: numbers when it comes to who will bring real change to Washington, Obama leads 65 to 37.

So if you want change-you say change scares some people. You say that, I'm sorry. But if you want that word change, you know where to go.

PAGE: That's right.

MATTHEWS: McCain is not succeeding by saying I'm the new kid on the block, even with the company now of Governor Palin.

MARTIN: If you look at every one of John McCain's ad, he's now putting out the kicker, and all of them is some form of the word change. McCain is getting on the change bandwagon.

MATTHEWS: It's not working.

MARTIN: Because of these kind of numbers. He is doing his damndest to try to change that, Chris.

PAGE: Now he is throwing Bush's SEC chairman under the bus, a fellow Republican, former member of the House.

MATTHEWS: What is that strategy? He wanted to fire Rumsfeld. He never wants to change the policy. He also wants to fire the executive.

PAGE: I think he was hoping that this bold stroke would change the narrative.

MATTHEWS: I tell you the big story this week, the president of the United States was finally forced out into the public. He was finally forced out on Thursday like with Katrina. It took three or four days to get him out. He came out, and I say this again, like a cuckoo clock. He is a smart guy, but why is he hiding and why does he come out for juts two minutes, with no questions, no answers and then go scurrying right back in the White House again? It was a strange performance. It was the performance of a constitutional monarch, not a Democratic leader. It was like the queen comes out to read the government letters.

PAGE: I don't think he knows what to do. He and McCain have both been pro-dereg up until now.

MATTHEWS: Did you see what Harry Reid, the Senate Democratic leader, said today, I don't know what to do either.

PAGE: That's right.

MATTHEWS: We will be back with Jonathan Martin and Clarence Page with more of the politics fix. You are watching HARDBALL, only on MSNBC.


PALIN: Americans are tired of those who just want to run with the Washington herd. That's why we need to take the maverick of the Senate and put him in the White House.


MATTHEWS: We're back with Jonathan Martin and Clarence Page. This final bout here tonight. Let's hear what Barack Obama said here today responding to McCain's call to fire the SEC Chairman Christopher Cox.


OBAMA: Well, I think that's all fine and good, but here's what I say:

in the next 47 days, you can fire the whole trickle down, on your own, look the other way crowd in Washington who has led us down this disastrous path. Don't just get rid of one guy. Get rid of this administration. Get rid of this philosophy. Get rid of the do-nothing approach to our economic problem and put somebody in there who is going to fight for you.


MATTHEWS: Who put the tiger in his tank?

MARTIN: Where has that guy been?

MATTHEWS: Tony the Tiger.


MATTHEWS: Where does the juice come from?

PAGE: The polls.

MATTHEWS: He's up, so he's happy.

PAGE: Nothing concentrates the mind like falling behind for a couple weeks.

MATTHEWS: You think falling behind scared him a bit.

PAGE: More than that-besides he read my column yesterday too, where I said dumb it down, Barack.

MARTIN: The fierce urgency of now.


MATTHEWS: -- next Friday night when they get together in Ole Miss and we might see a duke out. They might come to terms?

PAGE: Don't we hope so. That first debate is always most important, isn't it?

MATTHEWS: I hope they are not as cerebral as Jim Lehrer.


MATTHEWS: Jim will be very calm and he will ask calm questions.

MARTIN: There is no love lost there.

MATTHEWS: We'll see. It should be great. I love it when it gets, well, visceral. Jonathan Martin, thank you, sir. Thank you, Clarence. Join us tomorrow night at 5:00 and 7:00 eastern for more HARDBALL. Right now it's time for "RACE WITH THE WHITE HOUSE" with David Gregory.



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