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'Hardball with Chris Matthews' for Monday September 22, 2008

Read the transcript to the Monday show

Guest: Rep. Mike Pence, Rep. Debbie Wasserman Schultz, Bob Shrum, Pat Buchanan, Margaret Brennan, Ed Gordon, Michael Smerconish, Lynn Sweet, Richard Wolffe

CHRIS MATTHEWS, HOST:  Who do you trust, Paulson or the politicians?

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Leading off tonight, second thoughts.  The government‘s proposed $700 billion bail-out of the financial industry is hitting its share of road bumps today, a day the Dow dropped another heart-stopping 373 points.  Democrats want to aid home owners and limit executive pay.  Republicans are concerned about another huge leap in the size of government.  There‘s talk of progress, but nothing has been settled.

And the presidential candidates went at it, John McCain criticizing Barack Obama.


SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE:  Senator Obama has declined to put forth a plan of his own.  In a time of crisis, when leadership is needed, Senator Obama has simply not provided it.


MATTHEWS:  Reading notes there.  And Barack Obama ridiculing McCain‘s claim that he, John McCain, is an agent of change.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE:  Who do you think‘s been running the government for the last eight years?  Who‘s been in charge for the last eight years?


MATTHEWS:  Much more tonight on what‘s at stake, who pays, and my big question, where‘s all this money come from?  Where do they print $700 billion?  Where is it coming from?

Also: It‘s back.  Big government, that is.  More than a decade after Bill Clinton declared the era of big government over, we‘re talking about the largest government intervention in history, $700 billion worth.  Whatever happened to Ronald Reagan‘s idea that government isn‘t the solution to our problem, government is the problem?

Plus, unfortunately, it‘s the elephant in the room this election year, race.  Ethnicity, I like to call it.  Could Obama‘s race cost him millions of votes a white Democrat might be able to count on?  We‘ll look at that hot one, and the three states that may be even tighter than we first thought.

In the “Politics Fix” tonight, our panel will look at how each presidential candidate could turn the economic crisis to his advantage.  And you can find out what President Jed Bartlett of “West Wing” fame had to say about the election at last night‘s Emmy Awards.”  That‘s in the HARDBALL “Sideshow” tonight.

Here‘s today‘s poll numbers.  The Diageo “Hotline” tracking poll has Obama now leading by 5 points.  That‘s Obama up by 5, a 4-point jump in one day towards Obama.  The Gallup tracking poll, which we‘ve been watching for weeks now, is holding steady, with Obama again leading by 4.  So there‘s a pattern here.  And of course, the national average of all the polls out there has him up by 4.  So Obama‘s got a significant, if not great, lead.  That reflects a steady gain for Obama in the past week to 10 days.

But first U.S. Congressman Mike Pence is an Indiana Republican and U.S. Congresswoman Debbie Wasserman Schultz is a Florida Democrat.  I want to ask you both members of Congress to look at this new ad that‘s out from the Obama campaign.


UNIDENTIFIED FEMALE:  A broken economy, failing banks, unstable markets, families struggling.  To protect us in retirement, Social Security has never been more important, but John McCain voted three times in favor of privatizing Social Security.  McCain says, I campaigned in support of President Bush‘s proposal, cutting benefits in half, risking Social Security on the stock market.  The Bush/McCain privatization plan—can you really afford more of the same?


MATTHEWS:  Congressman Pence, would we be better off today if we had a portion of our Social Security benefits in the market, in the stock market?

REP. MIKE PENCE ®, INDIANA:  Well, near retirees would not have any change had the president‘s plan been enacted.  But younger Americans, 20 years from now, I guarantee it, if they were allowed to invest a small amount of their payroll taxes into a personal savings account, would receive many multiples—even with the ups and downs on the stock market that we experienced today, many multiples of the 1 percent return on investment that Americans get from Social Security today, Chris.

MATTHEWS:  So it‘s still a good idea to take a portion of our contribution, our payroll tax, and put it into the market?

PENCE:  Yes, you know, it is because, you know, as this bail-out suggests, there‘s a lot of people in Washington, D.C., that have given up on markets, that think the government ought to be coming in and taking the potential to fail out of the marketplace.  But most Americans know this nation is the strongest, the most prosperous nation in the history in the world because we have a free market.

And as we develop this bail-out plan or any other future reforms in any area, Chris, we have to do so in a way that doesn‘t put the burden on taxpayers and that also reaffirms our belief and commitment in the dynamic potential of the American free market.

MATTHEWS:  Congresswoman, you represent south Florida.  Would your constituents feel better to know that their money, or portions of it, would be on the stock market, rather than guaranteed by the government?

REP. DEBBIE WASSERMAN SCHULTZ (D), FLORIDA:  Well, let me tell you, Chris, any thinking, feeling human being with a pulse that watched the stock market last week would not believe that the right thing to do was to invest Social Security benefits into the stock market.  You would send our retirees on a roller-coaster ride, send the next generation of Americans into a risky privatization scheme that last week would have sent their retirement future security into the tank.

It is just unbelievable that Republicans like my good friend Mike Pence continue to cling to this privatization notion that sending every one of our future security benefits for Social Security into the private sector is the answer to all of our problems.

What we need to do is come together with a bipartisan solution to shore up Social Security, which, by the way, is not going to have a problem for another 47 years, when I‘m in my 80s.  So let‘s take a step back, get together, focus on what the real problems are with Social Security and how we can solve them together, instead of continuing to leave people twisting in the wind and leave them potentially without their safety net.

PENCE:  Well, it‘s a great...

SCHULTZ:  That‘s one of the differences between Republicans and Democrats.

PENCE:  Yes, it‘s a great election year issue.  Debbie is actually a real friend of mine, not just what we call it here, a good friend.



PENCE:  But look, we disagree on this.  But I really—I don‘t believe in government here.  I think most Americans, given a choice between investing in America and investing in the federal government—which this week, with this bail-out, it‘s the federal government that‘s failed us.  John McCain said today, you know, it‘s not just about greed on Wall Street. 

It‘s greed on Wall Street and greed here in Washington, D.C....

SCHULTZ:  Chris...

PENCE:  ... that has created the bail-out we have today.  So yes, I do believe in had America.  I believe in markets.  I think this bail-out or Social Security has got to be built on preserving the strength and dynamism of the American free market.

MATTHEWS:  Well, Congressman, whose greed?  Whose greed in Washington?  Fill me in on that.  I don‘t know that.  Who‘s greedy in Washington in this regard?

PENCE:  Oh, gosh, come on, Chris.  All roads lead back to Fannie Mae and Freddie Mac.  I mean, the truth is...


PENCE:  ... over the last 10 years—and there‘s been some on both sides.  But quite frankly, as you know, many liberals in Washington, D.C., have pushed Fannie Mae and Freddie Mac over the last decade to get into a portfolio...

SCHULTZ:  Chris...

PENCE:  ... with more and more bad loans, pushing them into more and more parts of the economy.  That now is the infection that has gone throughout our economic sector.  I think we need to hold...

MATTHEWS:  Boy, I agree with you completely.

PENCE:  I think we need to hold...

MATTHEWS:  I think this has been a mess.

PENCE:  ... people in government and the private sector accountable for the catastrophe at Fannie Mae and Freddie Mac.

SCHULTZ:  Chris...

MATTHEWS:  I‘m suspicious of all the money people have been making in the market down here in Washington, Fannie Mae, the money they make in investment banking, all this easy money.  And I wonder, isn‘t it so derived from a virtual universe that‘s built on a house of cards?

Let me ask you, Congressman—you first.  This is an idea from Bill Kristol.  And Bill Kristol always surprises us in “The New York Times.”  He‘s a conservative, but here‘s what he said.  Quote—he suggests this as a possible solution to the way we deal with this banking crisis.  Quote, “Any institution selling securities under this legislation to the Treasury Department shall not be allowed to compensate any officer or employee with a higher salary next year than that paid the president of the United States.”

That sounds like a reasonable control.  Why give to these big institutions that we‘re bailing out with taxpayer-borrowed money down the road salaries bigger than they deserve, which is pretty minimal, it seems to me, based on their performance?

PENCE:  Well, Chris, if I‘m first, let me say, you know, I think it‘s morally wrong for people that run companies into the ground who are going to benefit from this bail-out that many conservatives are trying to stop to be heading out of those companies with a golden parachute.

SCHULTZ:  That‘s right.

PENCE:  John McCain condemned that today.  In that respect, I agree with Bill...

MATTHEWS:  What about Carly Fiorina?  What about Carly Fiorina with her, what, $20-something...

SCHULTZ:  Her $21.5 million.

PENCE:  Look, I believe companies...

MATTHEWS:  Well, what about that kind of a golden parachute?

PENCE:  Companies ought to be able to decide...

MATTHEWS:  And she‘s advising him.

PENCE:  Chris, companies ought to be able to decide what they pay people, but these companies are going to take advantage of what the Bush administration wants to create in this $700 billion fund...

SCHULTZ:  Well, wait second.

PENCE:  ... ought not to have people parachuting out in golden parachutes.

MATTHEWS:  Congressman?

SCHULTZ:  You know, this is so unbelievably—it‘s so unbelievably frustrating to listen to Mike say, on the one hand, that he thinks that CEO pay should be limited and that they shouldn‘t be able to leave with these golden parachutes, but on the other hand, say that corporations should be able to pay their CEOs what they want.

Look, if we are going to be considering a bail-out, which, you know, I hope will be bipartisan—and we have to make sure that we work together and focus on bailing out—if we‘re bailing out Wall Street, also taking care of Main Street, the folks that are facing foreclosure and losing their jobs.

But you know, I really think that the Republicans under John McCain and George Bush have been totally inconsistent.  Where were the alarm bells a few years ago?  No one—I didn‘t hear my good friend Mike, who really is my good friend, like he said, sounding any alarm bells.


SCHULTZ:  I served on the Financial Services Committee when, under Barney Frank‘s leadership as the ranking member when we were in the minority, we talked about the need to limit CEO compensation, make sure that there was a greater...

PENCE:  Chris...

SCHULTZ:  ... less of a gap between employees...

PENCE:  Chris, let me tell you...


SCHULTZ:  ... all of a sudden, they‘re all for it.  It‘s not really credible.

PENCE:  This is a conflict of visions.  And Debbie and I have very different views on almost everything.


PENCE:  Not everything, almost everything.


PENCE:  Look, people better get used to Democrats in Washington, D.C., deciding what‘s going to happen in the marketplace...

SCHULTZ:  No, what we need to do is...

PENCE:  ... because this federal bail-out is going to come in—if it comes in like the Bush administration and liberals here in Washington, D.C., want it to happen, you‘re going to fundamentally change the freedom of our free market...

SCHULTZ:  Gosh, Chris, I don‘t know what kind of phone calls...


PENCE:  ... absolutely have to do this...

MATTHEWS:  I‘m sorry...

PENCE:  ... in a way that protects taxpayers and preserves the free market.

MATTHEWS:  Let me blow the whistle on you for just a—ask you to pause on this question.  It seems to me back in 2001, right after 9/11, the Patriot Act was rammed through Congress because there was a national concern, close to an hysteria after what happened on 9/11.  Of course, I understand it.  We all were there.  Then in 2002, right before the elections for Congress in 2002, they whipped through the authorization supporting the war in Iraq.

Are we going to get that kind of whip-through, where you members of Congress and senators are going to have to vote in a matter of a few hours on some humongous, humongous new behemoth, $700 billion to a $1 trillion bill throwing into the power of one guy, Hank Paulson, this enormous power over our economic destiny?  Are you going to have enough time to think about this?

You first, Mike Pence.  Then you, Debbie Wasserman Schultz.  Do you feel personally you‘ll have enough time to think about this thing before you have to vote?  You first, Congressman.

PENCE:  Chris, absolutely not.  Your point is extremely well made.  And let me say, the president was right to step in the gap and say Congress and Washington should do something.  That calmed the markets at the end of last week, didn‘t have a good day today, but there‘s stability back there.  People know something should happen.

But Congress needs to take the time not just to do something but to do the right thing.  And piling on $700 billion on a $9.6 trillion national debt, passing that along to American taxpayers, passing legislation that vests all of that control over...


PENCE:  ... a trillion dollars in the hands of one unelected bureaucratic treasury is not what the American people want.


PENCE:  And it‘s all we‘re going get this week.

MATTHEWS:  On that point, will you not—will you deny the president the 218 vote in the Congress if he calls you and says, Congressman Pence, you‘re a good friend of mine, I need your vote to pass this thing?  Would you stop it from passage personally, or would you just stay corralled out there and not be relevant?  It‘s easy to vote against something that‘s going to pass.  Would you stop it from passing, Congressman Pence, yourself?

PENCE:  Let me tell you, I would stop it from passing, as I did in that three-hour vote when the president pushed through the first new entitlement in 40 years in the Medicare prescription drug bill.  I was one of the 25 Republicans that dug in and fought my president.  I respect him, I admire him, but I will dig in and fight an effort to transfer over a trillion dollars in a massive bail-out to the executive branch.

We got—one thing Debbie and I agree on, we got to take care of Main Street here while we‘re trying to deal with Wall Street.  The way we deal with Main Street, make sure not to pile debt on our children and grandchildren.

SCHULTZ:  Chris...


MATTHEWS:  Do you believe him, Congresswoman, that he would stand in front of his president, stand on those tracks and say, This train‘s not moving?

SCHULTZ:  You know what?  I know Mike Pence, and so I believe Mike Pence.  Unfortunately, he‘s just not backed up by a Republican caucus that is going to stand there with him.  They have let corporate America run amok under their leadership.  In the last two years, under Nancy Pelosi‘s speakership, we have finally reined in the corporate greed and tried to really focus on accountability.


SCHULTZ:  And that‘s what we‘re going to make sure we do this week.  We are not going to give away the store.  We‘re not going to just give all this...


SCHULTZ:  ... unchecked authority to the Treasury secretary.  You will see Congress deliberate carefully under Democratic leadership this week.


SCHULTZ:  And unfortunately, we‘ll hear more of the same or...

MATTHEWS:  Will you, Congresswoman—I hate to interrupt, but we‘re out of time.

SCHULTZ:  That‘s OK.

MATTHEWS:  Will you stand on the—will you stand on the railroad tracks and stop the 218?  Would you prevent the Congress from passing this, if it was your vote?

SCHULTZ:  Unless it takes care of Main Street and average families so that we can focus the economy on working families again, then, yes, I will.


PENCE:  Chris—Chris, nationalizing every bad mortgage in America is not the solution.

SCHULTZ:  We have to work together in a bipartisan fashion.

MATTHEWS:  Finally, the voice of a true conservative.  Thank you, sir, U.S. Congressman Mike Pence.  We don‘t hear many of you lately, but that‘s the old breed.  Barry Goldwater lives!


MATTHEWS:  And U.S. Congresswoman Debbie Wasserman Schultz.

SCHULTZ:  Thank you.

MATTHEWS:  Thank you both for joining us.

PENCE:  Thank you, Chris.

MATTHEWS:  In four days, it‘s the first presidential debate—I can‘t wait—between Barack Obama and John McCain.  This is almost like Christmas morning.  Election night‘s really, of course, Christmas morning in my world.  It‘s Friday night at the University of Mississippi, “Ole Miss.”  And I‘ll be there with three editions of HARDBALL, two before and one after.  What a great night for HARDBALL.  What a great night to watch America debate.  Let‘s hope this is a heavyweight bout between two heavyweights worthy of our attention and our judgment and not nickel and dime-ing stupid arguments about bubble gum and lipstick.

When we return, what each candidate needs to accomplish in this crucial first debate.

You‘re watching HARDBALL, only on MSNBC.


OBAMA:  Let‘s be clear.  When it comes to regulatory reform, Senator McCain has fought time and time again against the common-sense rules of the road that could have prevented this crisis.

MCCAIN:  And the truth is that we don‘t have time to wait for Senator Obama‘s input for our nation to act.  I think it‘s clear that Congress must act and act quickly.




RONALD REAGAN, PRESIDENT OF THE UNITED STATES:  In this present crisis, government is not the solution to our problem, government is the problem.

BILL CLINTON, PRESIDENT OF THE UNITED STATES:  The era of big government is over.


MATTHEWS:  Well, there they were, the words that will live in infamy perhaps.  Welcome back to HARDBALL.  Ronald Reagan and Bill Clinton said government was not the answer back then.  Is it the answer now?  How can John McCain and Barack Obama convince voters that one of them is the better person to run the government?

Pat Buchanan‘s an MSNBC political analyst and Bob Shrum is a Democratic strategist.  And you first, Bob.  You know, sometimes I wondered during the last couple of days of reading everything you can read to try to understand this thing, try to understand short selling, trying to understand the whole thing—I begin to wonder, Are we still of, by, and for the people, or has government and finance gotten so complicated that the average member of Congress, the average of philosopher or right or left, can‘t even fathom the mess we‘re in?  Bob Shrum?

BOB SHRUM, DEMOCRATIC STRATEGIST:  Well, I think finance has always been complicated.  I mean, short selling was something most people in America didn‘t understand as the Great Depression hit.

But what‘s interesting as you watch this debate unfold is that people have to deal with the reality, understand the government has to step in.  There‘s no time for a stale argument about ideology.  It‘s like FDR‘s attitude during the Great Depression—Don‘t bother me with theories, I‘ve got to face some hard facts.

We have to face some hard facts now.  I think this bail-out is going to pass in some form or another, probably with greater transparency, probably with more accountability and with some help for home owners.  But it‘s going to pass because it has to pass.  Otherwise, the whole economy‘s in terrible trouble.

MATTHEWS:  Pat Buchanan, you know, many years ago, when we bailed—we—the country bailed out the S&Ls, to the tune of about $90 billion, we thought that was a lot of money.

And Mario Cuomo, whatever you think of him, had an interesting question.  Where did it come from?  Two weeks before, we couldn‘t fix a train, we couldn‘t fix a road, we couldn‘t put a school together that was coming apart, but, all of a U.S. , there was $90 billion. 

Well, this time, there‘s $700 billion, close to a trillion dollars, available for borrowing.  Let me ask you a simple question.  Where did it come from?



MATTHEWS:  Where‘s the $700 billion coming from?

BUCHANAN:  It‘s going to come from one of two things.  Either, you print money, the Fed does, or you go abroad and borrow, because we don‘t save anything.

So, the Chinese...

MATTHEWS:  At what rate are we paying?

BUCHANAN:  Well, the Chinese are going to demand a little higher rate.  And then we take the money from the Chinese into the United States, and then we‘re going to buy the rotten paper that the Chinese bought. 


BUCHANAN:  What is happening—look at what happened in the market today...

MATTHEWS:  You mean the rotten mortgages...


MATTHEWS:  ... useless mortgages...

BUCHANAN:  Yes, exactly. 


MATTHEWS:  ... which will never be paid back. 

BUCHANAN:  They‘re all over the world.  But look what happened today, Chris.  You had—gold went up $84 on Friday.  It went up today.  Oil went up $25.

MATTHEWS:  What does that mean? 

BUCHANAN:  That means people are buying real things. 

MATTHEWS:  Things—because our dollar isn‘t there. 

BUCHANAN:  They know what—because your credit rating of this country is going down the toilet, along with the currency, which government is supposed to defend.

MATTHEWS:  OK.  Bob says we have to do what we have to do. 

BUCHANAN:  Bob‘s right. 


MATTHEWS:  But you‘re saying it‘s taking us down the toilet, as you say.


BUCHANAN:  Look, what I‘m saying is, as of Friday...



MATTHEWS:  That‘s not a good situation to be in.

BUCHANAN:  It‘s not.

MATTHEWS:  We have got to go down the toilet?


BUCHANAN:  No.  Well, here‘s the thing.  We‘re all going to lose, Chris.  But what has—but what happened...

MATTHEWS:  Not everybody. 

BUCHANAN:  If we hadn‘t stepped in there, I think these banks would have gone under...


SHRUM:  Yes. 

BUCHANAN:  ... and millions of innocent people who put money in solid banks would have been wiped out, the way they were wiped out in 1929. 


MATTHEWS:  OK.  Is it this bad?  Here is a smart guy, who writes about economics.  Both of you guys probably respect him, Fareed Zakaria of “Newsweek.”

Here, he said: “Modern capitalism depends on credit.  And credit depends on confidence.  By the middle of last week, fear was pervasive, and no one was ready to lend to money to anyone for any purpose.  It turned out only government intervention could change this psychological paralysis.”

Bob, it‘s that bad. 

SHRUM:  Yes, it‘s that bad.

Look, what we did after the Great Depression is, we put a whole series of reforms in place to try to keep this from happening again.  It hasn‘t happened as badly as it happened in 1929. 

But, if we don‘t act now, it could. 


SHRUM:  And the real difficulty here is that people—and I was listening to the first segment of the show, Chris—people like Mike Pence, who say, they‘re against this, they‘re against this, they‘re against this, don‘t say what they‘re for. 


SHRUM:  And, if we don‘t act, we could have a depression in this country. 

That‘s why I think the president did the right thing.  You haven‘t heard me say that very often.  He let Paulson be the face of it, which I think was smart. 

MATTHEWS:  Right. 

SHRUM:  I think Paulson is also the engine driving it. 

And, in the end, I think Congress will come up with some amendments to this, and it will pass in pretty short order. 

MATTHEWS:  Look at this quote.  Look at this.  My wife pointed this out, who is a corporate executive now.  She pointed this out.  This headline is the scariest headline perhaps of our lifetimes, “Worst Crisis Since the ‘30s With No End Yet in Sight,” on the front page of “The Wall Street Journal” last Thursday.

Worst crisis since the ‘30s, to make your reference point.

BUCHANAN:  Financial crisis.

MATTHEWS:  Pat—but you say, Pat, we don‘t have to do it their way -

or we do.  You both agree we have to do it.

BUCHANAN:  No.  Yes, I agree.  It‘s potentially the worst financial crisis since the Great Depression, which, incidentally, lasted 10 years.  In 1937, we had 17 percent unemployment of full-time workers. 

Yes, you have got to bail out the financial system.  But, Chris, government is riding to the rescue of a crisis and a disaster created by government. 

SHRUM:  I agree with you.

BUCHANAN:  This is the Federal Reserve.  This is Fannie Mae and Freddie.  This is the SEC. 

MATTHEWS:  Too much cheap money?

BUCHANAN:  Oh, they poured the money out at 1 percent. 

MATTHEWS:  Because?  What was their goal? 

BUCHANAN:  Well, because they...

MATTHEWS:  To get people to buy houses.

BUCHANAN:  Not simply to buy houses.  The economy is going well.  Keep pushing it out, pushing it out.  That‘s what creates bubbles.

Only government can create a bubble by inflating the currency, which is what we have done.  This was asset inflation. 

MATTHEWS:  So, by keeping the interest rate below the inflation rate, they encouraged people to borrow money. 

BUCHANAN:  Sure, why not?

MATTHEWS:  It makes sense.


MATTHEWS:  Isn‘t that it, Bob?  Isn‘t that simple common sense?

SHRUM:  No, I‘m—actually, I‘m in favor of—I‘m in favor of...

MATTHEWS:  Is that what—is that what Alan Greenspan and everybody was pushing?


MATTHEWS:  Is that what Fannie Mae and Freddie Mac were pushing? 

SHRUM:  No, I—listen, I think the search for scapegoats here has led us in all sorts of directions that are wrong. 


MATTHEWS:  OK.  How about policy mistakes?  What were the policy mistakes? 

SHRUM:  Well, mistakes.  The fundamental mistake is that, for eight years, we have had a government that didn‘t believe in regulation or didn‘t believe in oversight. 

We have a Republican candidate for president who, despite everything he‘s now saying, actually sponsored a moratorium on regulation.  And we‘re at a moment in the country‘s history when we need government.  The free market is not going to without the active intervention of government. 



MATTHEWS:  And, by the way, is that wrong? 


MATTHEWS:  I mean, your hero, Dutch Reagan, said government is not the solution; it‘s the problem. 


MATTHEWS:  Bill Clinton, a big liberal hero, said, the era of big government is over.

Now, I‘m asking you guys, did we get the balance wrong?  Don‘t we need a balance, mixed economy between public and private, regulatory power? 

SHRUM:  Yes. 



BUCHANAN:  There‘s no question of that.

Look, but—look at what happened.

MATTHEWS:  We lost that balance. 


BUCHANAN:  Look what Clinton and Reagan did.  Between the two of them, they created more than 40 million jobs.  The economy was phenomenal from 1980 to year 2000. 

MATTHEWS:  Was it a bubble? 

BUCHANAN:  No, there was a temporary bubble in the dot-coms.  There was too much money pushed out there.

MATTHEWS:  The ballooned mortgages.

BUCHANAN:  But there‘s no doubt you need regulations of markets, these markets.  And it hasn‘t been done.  There‘s no question about it. 

MATTHEWS:  Pat Buchanan, that‘s an amazing statement. 


MATTHEWS:  Let me ask you about the two candidates. 

David Broder has once again show what he‘s—why he‘s the dean around here.  He had Balz and I guess Brownstein are the best print guys.

You‘re chuckling.  They are, Pat.  I‘m sorry. 

BUCHANAN:  No, I didn‘t chuckle.



MATTHEWS:  You‘re chuckling.  They are—they—because they tend to be great.

BUCHANAN:  Balz is an outstanding reporter and a good friend of mine.


SHRUM:  You‘re going to hear from “The New York Times,” Chris. 


MATTHEWS:  No, these guys are good.  These guys—“McCain must somehow convince voters that he would be fundamentally different than George Bush, whose policies and methods have been overwhelmingly rejected.”

Bob, is that what he has to do, the other guy, the guy you don‘t root for?  Does McCain have prove he‘s not Bush this Friday night in those—in that—there may be 100 million people watching Friday night?

SHRUM:  Well, this debate is a little different because it‘s about foreign policy...

MATTHEWS:  Yes, supposedly.

SHRUM:  ... although I think they will build a bridge...


SHRUM:  ... as Kennedy, who was in a domestic policy debate in ‘60, but wanted to talk about foreign policy did...

MATTHEWS:  Right. 

SHRUM:  ... by saying, we can‘t be strong abroad if we‘re weak at home.

MATTHEWS:  Right. 

SHRUM:  McCain‘s fundamental problem is, he created an indelible impression last week when he said, the fundamentals of the economy are strong. 

His problem wasn‘t the recurrence of, “It‘s the economy, stupid.” 

It‘s that he literally sounded stupid and frantic on the economy. 


SHRUM:  And he‘s got to figure out in that debate how not only to prevent Obama from getting over the threshold on foreign policy and national security, but how to reestablish some credentials of his own on the economy. 


MATTHEWS:  So, he has to be separate.

Pat, I want to ask you this question about the other guy.


BUCHANAN:  That‘s a fundamentally correct point.  McCain—I think McCain does still have a maverick image.  People, even conservatives, don‘t think of him as Bush.  There‘s no doubt those fellows are right.  He‘s got to maintain a real distance from Bush, Cheney, and that—that crowd entirely. 

But Obama still has to overcome those doubts.  Let me tell you. 

That‘s the last hope for...


MATTHEWS:  OK, let me ask you what Broder said.  Respond to what Broder said.


MATTHEWS: “Obama must show that people can trust him to look out for their interests.”

Real basic, is he their guy? 


MATTHEWS:  Is he the guy that will look out for the average guy, the average woman out there? 

BUCHANAN:  Exactly. 

And it‘s not only that, that he‘s their guy, he‘s one of us, he is going to look out for us, but is he capable, competent, or is he this strange left-wing radical figure? 


BUCHANAN:  That‘s what Republicans‘ last chance, I think, is to deny Obama this victory.  It‘s again become Obama‘s to lose, but he‘s got to win it by making—giving us that reassurance. 

MATTHEWS:  How can you be more socialistic than Hank Paulson? 


MATTHEWS:  He‘s just taking over the private sector.

I wonder what liberal and conservative mean.

BUCHANAN:  This is a dictatorship.


MATTHEWS:  I know that was a little strong from Pat.  But we expected it.  What is Obama—it says, he has to win our trust, that he can look out for our interests, real basic here. 


SHRUM:  I think that‘s right.  I think he‘s got to do that over the course of three debates. 

But, in this debate, he‘s got to get it back to the economy to some extent.  He‘s got to pass the threshold on national security.  And I think Pat‘s right.  The only thing, if he does that, that‘s left for the Republicans is to try to smear Obama, because he will command the high ground on the economy, and he will block off McCain‘s chance to slip away on national security because he won‘t have passed the threshold. 

I think he will pass that threshold.  And I think McCain will have nothing but sort of the negative attacks and the smears. 

MATTHEWS:  OK.  Very smart show tonight.

Thank you, gentlemen, Pat Buchanan. 

Thank you, Bob Shrum.

Up next:  John and Cindy McCain have seven houses between them, but how many cars do they own?  That‘s our big—we‘re getting to the micro here, not the macro—next in the HARDBALL “Sideshow.”

You‘re watching HARDBALL. 

We do the big picture here, and we do the very small picture.  We do it all, only on MSNBC.



Time for the “Sideshow.”

Last night, at the Emmys, even Hollywood took a shot at the topic we love, 2008 politics. 


KATHY GRIFFIN, COMEDIAN:  The world hasn‘t seen a pairing like this since John McCain and Sarah Palin. 


JON STEWART, HOST, “THE DAILY SHOW”:  I really look forward to the next administration, whoever it is. 


TOM HANKS, ACTOR:  You know, the election between Jefferson and Adams was filled with innuendo, lies, a bitter partisan press, and disinformation.  How great we have come so far since then. 


CHARLIE SHEEN, ACTOR:  That decisions are made by those who show up.  And that‘s why I‘m encouraging everyone to take part in America‘s finest hour, and, on November 4, vote for the candidate of your choice at least once. 


MATTHEWS:  He was a good president. 

Anyway, it was Woody Allen who said—and this is the accurate quote,

by the way—“Eighty percent of life is just showing up.”

On Election Day, by the way, you can make that 100 percent. 

Next, “Saturday Night Live” takes on the McCain TV ads.  Watch this.  It was the opening skit.  It showed the Republican nominee, John McCain, agreeing to one questionable attack after another in his ad campaign. 

Here is an example. 


UNIDENTIFIED ACTOR:  Barack Obama says he wants universal health care. 

Is that so?  Health care for the entire universe? 


UNIDENTIFIED ACTOR:  Including Osama bin Laden? 


UNIDENTIFIED ACTOR:  I think we will pass.  No way, no how, no-Bama. 

DARRELL HAMMOND, ACTOR:  My friends, can I ask a question? 


HAMMOND:  Is this ad true? 

UNIDENTIFIED ACTOR:  Well, universal has more than one meaning.  We take it to mean the entire universe. 


HAMMOND:  Works for me. 

I‘m John McCain.  I approve this message. 


MATTHEWS:  I wonder, myself, what such moments are like, when a candidate has to decide how far he will go in putting his or her name to a negative, too often distorted version of the truth. 

And speaking of sideshows, John and Cindy McCain continue their tour of the daytime programs with an appearance on this morning‘s “Rachael Ray Show,” where the senator rolled up his sleeves to show off his grilling technique.  What a barbecuer he is.

Bill Clinton, meanwhile, yucked it up with the ladies on “The View” before being put on the spot. 

Here he is, Bill Clinton.


JOY BEHAR, CO-HOST:  Who‘s going to win the election, Obama or McCain? 





BARBARA WALTERS, CO-HOST:  ... McCain will win?

CLINTON:  No, because I‘m a loyal Democrat.

I genuinely like both of them.  I genuinely admire both of them.  I genuinely—I think that we make a terrible mistake believing that we have to find something wrong with the people we can‘t vote for. 


CLINTON:  I just...


MATTHEWS:  President Clinton went on to make it clear why he thinks Obama is the favorite. 

Now for tonight‘s “Big Number.”

After last month‘s flap about how many had houses the candidates own, “Newsweek” decided to take a look at what they have in their garages. 

Well, it turns out the Obamas own but one car, a Ford Escape Hybrid.  That‘s an American car, of course.  The McCains, however, have more, a lot more.  How many?  Thirteen cars, the McCains have.  Two of them, by the way, are foreign-made, a Volkswagen and a Honda. 

McCain once said in Detroit that he only bought American-made cars.  Well, not quite literally.  The McCains, 13 cars, tonight‘s big unlucky number. 

Up next, race in the ‘08 race.  Will Obama‘s race hurt him among white work people? 

And, with six weeks to go before Election Day, is there anything he can do to win them over? 

You‘re watching HARDBALL, only on MSNBC.  


MARGARET BRENNAN, CNBC CORRESPONDENT:  I am Margaret Brennan with your CNBC “Market Wrap.”

We saw a sharp sell-off, as Congress and the White House work out those details of the $700 billion Wall Street rescue plan.  The Dow Jones industrial average plunged almost 373 points.  The S&P 500 fell by 48.  And the Nasdaq dropped almost 95 points. 

Oil prices surged $16.37.  That‘s the biggest one-day gain on record, with crude closing at $120.92 a barrel. 

That‘s it from CNBC, first in business worldwide—now back to Chris and HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

Barack Obama talked about the effect his race could have on the presidential race in an interview with CNBC.  John Harwood asked the candidate if he thought race was a big barrier between him and swing voters. 


OBAMA:  Look, if you‘re asking me if there are somebody who might not vote for me because of my race, of course.  Are there some who might vote for me because of my race, you bet.  I think ultimately the question is going to be decided by a guy or a woman who is working hard every day, trying to save enough to send their kid to college, trying to pay the bills. 


MATTHEWS:  It‘s hard to quantify racial attitudes, of course, because people don‘t like talking about them.  It‘s a commonly held belief that race will some role in how Americans vote this November.  To address the issue of race in this race, I‘m joined by Ed Gordon, who is host of “Our World” with Black Enterprise, and radio talk show host Michael Smerconish, who is one of my colleagues now.  Ed, it seems to me when you look at this


let‘s try to do this positively because we‘re all guessing at this.  We know people who talk about it honestly and those who don‘t talk about it honestly.  You‘re Barack Obama and it‘s this Friday night, Ed, and you‘re trying to reach a big audience, including some people who are resistant to you because of ethnicity; is there had anything you can do about it in terms of jumping that line, getting across, building that bridge to somebody else? 

ED GORDON, “OUR WORLD” HOST:  I think he‘s been doing that all along, Chris, to those who aren‘t truly bigoted.  There are some who are just not comfortable quite yet with an African-American in this position.  He has to be—we call it the black tax—black enough for black folks, and not too black for white folks.  He has been doing that masterfully.

But we just saw a poll that came out, one that I don‘t give my credence to, that suggested that maybe one-third of Democrats, white Democrats, won‘t vote for him because of that.  I don‘t buy that.  But what I do buy is there are a number of whites who will not simply vote for an African-American.  He has conceded that, and I believe he and his camp suggest that they‘re not going to go after those voters.  They‘re not going to turn them around in 40 plus days.  They‘re going to go after people who are not that far gone. 

MATTHEWS:  Michael, what do you think about this?  Do you think there‘s certain things—you deal with a lot of different ethnic people, all kinds of people Philadelphia, black, white, brown.  You know a lot of people in that city, for example, the suburban people as well.  Is there any way he can jump it, he can say, OK, I‘m going to reach that person who is a little hard to reach on ethnic grounds? 

MICHAEL SMERCONISH, RADIO TALK SHOW HOST:  The hard-core bigot is off limits.  He‘s not going to reach them.  It wouldn‘t be worth making the move toward that individual.  And I agree with Ed in so far as we all saw that survey.  AP and Yahoo! I think generated it.  I‘m disbelieving of those numbers. 

I would hate to think that 20 percent of whites think that most blacks can be ascribed as violent.  Chris, whatever those numbers are, I always think they‘re under-reported, because I think folks are lying about their worst instincts to pollsters.  That really has a sense of foreboding for Barack Obama.  I don‘t think we‘re going to know until the morning after and we wake up and we really dissect some of these numbers, what really played itself out. 

Are there some issues in had which he can gain ground with working class whites?  And I don‘t mean bigoted white folks.  I mean working class whites who are clear headed on these issues?  I think so.  I‘ve been waiting for one or the other of them to talk about porous borders.  But, you know, the minute you talk about that, you are ascribed as a right-wing talk show host or a xenophobe or a racist.  Yet, I think that‘s a legitimate issue. 

MATTHEWS:  Let me try something by you, totally seat of the pants.  You first Ed, then Michael.  It seems to me there‘s a portion of white people, we all know, they‘re older people, some of them, maybe one-fifth, who just aren‘t going to vote for a black guy running for president, or a black woman.  They‘re just not going to do it.  You can argue with them.  They get in that booth and they‘re not going to do it.  Then there‘s another fifth who would vote for General Powell because he‘s a war hero and he‘s a conservative Republican and they‘re very comfortable with him culturally, politically, professionally, militarily, nationalistically.  He‘s their guy. 

How does Barack Obama reach that quintile, that fourth fifth, the one that‘s reachable?  Again, I‘m going back to the question, Ed, is it trimming his sales or is it finding common ground with that guy or woman? 

GORDON:  Quite frankly, I think he‘s got to find some common ground, but one would have to think, if ever there was an African-American man who had that entree to these folks, it would be Barack Obama.  He‘s half-white.  He‘s Ivy League. 

MATTHEWS:  But does that help with working guys?  Does that Ivy League piece help or hurt? 

GORDON:  I don‘t think the Ivy League necessarily helps it.  But we haven‘t seen those same Ivy League guys run away from the vote for the white guy.  They may not want to have a beer with the white guy who went to the Ivy League, but they darn sure voted for him. 

MATTHEWS:  I‘m talking about guys like Kerry, Gore, those people, Dukakis.  He has a little of that whiff around him, doesn‘t he, Michael, a little bit that elite problem?   

SMERCONISH:  I think it does.  I think it matters not what his race is on that issue, that effete quality.  To answer your question, I‘ve always liked how they‘ve taken the bull by the horns and gone after the Internet lore that surrounds Senator Obama, because, Chris, there‘s not a day I don‘t open up my website and have one of those e-mails, usually written in a crayon, if it were a written version, you must read this.  And he‘s taken that head-on.  I think that sort of stuff has had an effect.  The only thing I haven‘t heard is he put the first alligator in the New York City sewer. 

MATTHEWS:  You know what?  I think he can win this if he reaches out to people and proves to them on this debate night, this Friday night, that he‘ll look out for them, that his job as president is to look out for them and he‘ll do a great job, because he‘s a smart guy and he‘s a lucky guy and we like lucky guys looking out for us. 

GORDON:  What he has to do, Chris, is counter balance those people that he will not get.  Sure, there‘s some people on the fence who may not know enough about Barack Obama, albeit having nothing to do with his race.  What he‘s going to have to do is counter balance those that will not have those problems, i.e. other minorities, young people, who I think have been under-reported throughout this whole campaign.  If he gets them out to vote in record numbers, I think he goes to the White House relatively easily, quite frankly. 

MATTHEWS:  I think it‘s great the country has gone this far.  I hope it comes down to the content of his character.  That‘s what I want this about, both of these gentlemen, McCain and he.  The content of their character, what a great way to judge a president.  Thank you, Ed Gordon.  Thank you, Michael Smerconish. 

Up next, with four days to go before the presidential debate, and it‘s going to be watched by maybe 100 million people this Friday night, can McCain distance himself from President Bush?  That‘s his challenge.  And can Obama earn voters‘ trust?  That‘s his challenger.  The politics fix is next.  This is HARDBALL.


MATTHEWS:  Welcome back to HARDBALL and the politics fix.  Tonight‘s round table, Richard Wolffe of “Newsweek” and Lynn Sweet of the “Chicago Sun Times,” two professionals.  Let‘s talk about how this all fits together.  What a week.  Trash compactor; biggest economic crisis since the 1930s, converging on a debate which maybe 100 million people will watch about a totally different topic, foreign policy.  How will it converge this Friday night for an hour an a half? 

LYNN SWEET, “THE CHICAGO SUN TIMES”:  It will converge because economics can‘t be ignored in this debate.  There will be a part of it.  The argument will be made that you can‘t have American stability unless you have economic stability.  I‘m sure—it doesn‘t matter who brings it up first.  It is going to come up. 

MATTHEWS:  Is that the battle, who jumps it first, and says, damn it, you can‘t talk about Putin and terrorism and oil unless you talk about our economic dependence on that part of the world. 

RICHARD WOLFFE, “NEWSWEEK”:  I give them three minutes.  First of all,

Obama is going to say the cost of the war in Iraq is money we should be

spending at home.  He‘s going to make a he pivot right there.  Both of them

are going to be rushing to say, the economy is globalized.  It is one world

together.  Have you noticed the banks have collapsed?  They‘ll both pivot -

MATTHEWS:  How quickly will Barack jump on him and say, you said the economy is fundamentally strong?  Three minutes, two minutes? 

SWEET:  If that much.  This is possibly the words that if McCain could take back just a few in this long campaign, these are the ones that he should wish to put back in. 

MATTHEWS:  James Carville said those words were definitive, that if nothing dramatically upsets them, he will lose because of saying the economy is fundamentally strong on the eve of the worst financial crisis since the ‘30s. 

SWEET:  It is.  And this financial crisis, which for the moment has taken both candidates presidential candidates off center stage, because it is really the president and Congress who is doing something.  I think the job for both of them on Friday is to explain what they will do in a way that people can make a decision.  This debate is really for just the people who haven‘t decided. 

MATTHEWS:  Will Jim Lehrer give them the latitude to do that?  Given the situation, and they say, I want to explain how we deal with this crisis; will he say, sorry, it‘s only about foreign—he won‘t do that, will he? 

WOLFFE:  I don‘t think so.  Remember, they have a chance to talk to each other as well.  It is going to be interesting how Lehrer plays with that.  The interesting contrast here is that when it come to foreign policy, Obama is talking about change.  He has the change argument right there.  McCain is going to be saying experience and stability.  When it comes to economic policy, completely the reverse.  Obama is the guy talking to Paulson, saying I want him in my transition or whatever it is.  And you have the reform-minded, let‘s fire every one John McCain.  How do they pivot in tone?

MATTHEWS:  Here‘s the question—I‘ve been so impressed by Lincoln‘s words this week, government of, by and for the people.  It isn‘t government of, by and for the people.  This is being decided, the biggest issue of our time, this economic crisis, the worst according to the “Wall Street Journal” since the 1930s, by people so much bigger headed than most voters, most members of Congress, certainly than me.  This is being decided by people like Hank Paulson.  Thank god this president has this secretary of the treasury and not the other ones he had before, perhaps. 

But Richard, the people can‘t vote on things like this.  We can‘t understand it.  I‘m one of them.  I don‘t get it.  What are all these derivatives and all this short selling, and all this complicated financial skigamadoo (ph) or whatever you call it?  What is it? 

WOLFFE:  Even the candidates have a problem getting their way through the alphabet soup.  They both mangled the terms of the key players involved here.  Are they talking about firing the right person when he talks about Chris Cox?  Is it Fannie Mac or Freddie Mae? 

MATTHEWS:  I just—I‘m just wondering—remember that phrase, above our pay grade?  I think Carly Fiorina may have been right.  These guys can run for president, but they can‘t be secretary of the treasury. 

SWEET:  That phrase, by the way, was one of Obama‘s.  If we talk about McCain‘s low point in fundamentally sound, when Obama couldn‘t answer that question -- 

MATTHEWS:  The first presidential debate, by the way, is Friday in Oxford, Mississippi.  There could be 100 million people watching.  We‘re going to be covering it.  We‘ll be there, three hours of HARDBALL that night, two hours before, one after.  We‘ll be right back with Richard Wolffe and Lynn Sweet with the politics fix.  You‘re watching HARDBALL, only on MSNBC. 


MATTHEWS:  We‘re back with more on the politics fix.  This week taught me, as I said a moment ago, that even elected politicians, elected presidents can‘t master this financial game.  It is too complicated.  Shouldn‘t they come out and tell us who their economic team is going to be? 

SWEET:  It wouldn‘t hurt.  Obama, interestingly, previewed it.  Most of them hands from the Clinton administration.

MATTHEWS:  Robert Ruben.

SWEET:  Robert Rubin, Larry Summers.  So it‘s—it negates a little bit his argument that he is an outsider when he turns to these ultimate Washington insiders. 

MATTHEWS:  Isn‘t that—the other guy is talking about Buffet.  He‘s talking about Andrew Cuomo, the former HUD secretary, the governor of New York‘s son.  Are they going to start showing us some of that in the next couple days, because we obviously need economic geniuses? 

WOLFFE:  I think they have got to.  The difference here is that Obama can reach to the Clinton team, and those were the good years economically.  You can debate about whether the bubble started there and whether it should have burst under Clinton.  But that‘s a pretty solid team to be able to draw on.  McCain does not have that luxury. 

MATTHEWS:  The reason I ask this is because we saw with the president this week—Bush has all the native intelligence you can have.  He doesn‘t want to touch it.  For a layman to start talking about the economy right now is very dangerous, right? 

SWEET:  It is tough.  That‘s why what is interesting, who would have thought that the treasury secretary would emerge from this crisis. 

MATTHEWS:  The third treasury secretary.  The first two are gone.

SWEET:  Right, that he would emerge from this looking as the strong person in that administration who is pulling it together and we‘ll see if Congress gives him all that power to run the finances of the country. 

MATTHEWS:  Is Congress willing to make him King Henry, as they put it on one of the magazine covers? 

WOLFFE:  The cover of “Newsweek.”

MATTHEWS:  Will they let him be king, a man with that much power?

WOLFFE:  They‘re already talking about oversight.  You have to think that the regulatory side of this going to kick in pretty much.  The devil area is really in the details. 

MATTHEWS:  Best idea of the week was Bill Kristol this week in his column, said don‘t pay them any more than the president of the United States if they‘re living off a bail out.  That‘s pretty good.  That‘s like 400 a year, right. 

WOLFFE:  That‘s pretty good. 

MATTHEWS:  That‘s a pretty good salary for a loser.  Thank you, Richard Wolffe.  Thank you, Lynn Sweet.  Join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL.  Right now it‘s time for “RACE FOR THE WHITE HOUSE” with David Gregory.



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