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

'Hardball with Chris Matthews' for Friday September 26, 2008

Read the transcript to the Friday show

Guest: Sam Haskell, Robert Khayat, Adam Putnam, Barney Frank, Jeff Zeleny,  Jill Zuckman, Eugene Robinson

CHRIS MATTHEWS, HOST:  Finally, Barack Obama and John McCain face to face on America‘s future.  Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews coming to you tonight from Ole Miss...


MATTHEWS:  ... the campus of the University of Mississippi in Oxford, Mississippi, where, in just two hours now, the first presidential debate of 2008 will begin.  Yes, it‘s on.  McCain is here.  

We‘re broadcasting live from outside the student union and right next to the grassy area known as the Grove.  This is a beautiful campus, as you can see, here at Ole Miss. 

Tonight, the debate that almost didn‘t happen because one of the candidates, John McCain, said he first wanted to see action taken to avert a national financial collapse. 

Democratic Senator Barack Obama takes to the stage and debates Republican Senator John McCain.  So, tonight, you will be watching history.  And MSNBC will be here all night covering it. 

Our full debate coverage begins at 9:00 Eastern time.  At 10:30, David Gregory will join me for complete post-debate coverage.  Then it‘s “COUNTDOWN WITH KEITH OLBERMANN” at 11:00, a late-night edition of HARDBALL at midnight, and then the late-late-night version of “THE RACHEL MADDOW SHOW.” 

There‘s so much political news today, this would have been a big day even without the debate. 

And we will start with the latest on the bailout in Washington with U.S. Congressman Barney Frank, chairman of the House Financial Services Committee.

Mr. Chairman, thank you for joining us. 


MATTHEWS:  It is Friday night.  It‘s Friday night at 7:00 Eastern. 

Where do we stand? 

FRANK:  Well, we‘re hoping that the House Republicans have dropped their decision to cause a rejection of—of any effort to get something done.  And we think we‘re in negotiations. 

We—look, we have a situation where years of deregulation, which many of us opposed, allowed the private sector to make some bad mistakes that have clogged up our system.  And I—I think we do have to do something about it. 

You can argue about whether initially there was a better way to do it.  But, when the secretary of the treasury, the chairman of the Federal Reserve say, if you don‘t do this very soon, there will be a crisis, even if there wasn‘t going to be, there would be, although I think there probably was going to be.

And, then, to our surprise, we were all trying to work together.  Democrats said, OK, look, we think this probably has to be done, but we need to put some CEO compensation restraints on there.  We need oversight.  We need to make sure that, if the federal government buy these things, that it works well, and there‘s a return to profitability, we participate in that profitability. 

And we don‘t want to give $700 billion unrestrained all at once.  We were making progress on all of those improvements in the president‘s plan.  But, now, as Republicans announced yesterday, that, no, they didn‘t like that.  They have an entirely different plan. 

And, somehow, Senator McCain‘s campaign seemed to be involved.  And it really just slowed things down completely.  But I think there was enough of a negative reaction to that, so that we‘re now back in a situation where the House Republicans have joined Senate Democrats, Senate Republicans, House Democrats, and the White House, through the secretary of the treasury, in discussing it. 

MATTHEWS:  What would happen if you did go with a plan that offered insurance for private sector people to buy this—these mortgages up? 

FRANK:  Well, it...

MATTHEWS:  Do you think they wouldn‘t buy them up?  Or what would happen? 

FRANK:  Well, the Republicans don‘t even claim that that is what would work.  That should have some impact going forward.

By the way, we‘re willing to include that as an option.  Secretary Paulson says, it would not work.  And I just got through discussing this with the Republican Mike Pence.  And he acknowledges, look, one of the problems we have is that lending institutions don‘t have enough money to lend.  People pretty soon will be not able to buy cars.  They won‘t be able to buy furniture.  They won‘t be able to get their credit card extended, if they needed it. 

And that‘s not solved by an insurance thing that buys up the bad mortgages.  I mean, I don‘t know how you do that with insurance.  Mr. Pence agreed with me that that really doesn‘t solve the problems of the lending institutions not having enough cash. 

So, I said, well, what does?  The heart of that plan, frankly, which they have understandably not talked about, are corporate tax cuts.  He said, here‘s what we will do.  We have trapped capital.  Well, what is trapped capital? 

And he says, ironically, we‘re going to help Main Street, not Wall Street.  Do you know how they‘re going to help Main Street?  By allowing companies that have foreign tax profits to repatriate them, i.e., bring them back to America, at virtually no tax rate.  He wants to give businesses a capital gains tax rate. 

So, their answer is that you reward business, in my view, for having made these mistakes by cutting their taxes, so they can lend some more money.  We‘re saying, no.

I do agree with Paulson.  Let‘s buy up some of these assets.  Probably, they‘re lower now in price than they will be in a few years.  And we will be able to sell them and recover much of our money, if not all of it. 

MATTHEWS:  Can you see a way at this point where we get 218 votes for passage in the House...

FRANK:  Yes. 

MATTHEWS:  ... of a—any kind?  You can see our way to do it?

Would that require that the people like John Boehner push and corral half the Republicans?  What would it take to make it happen, after all is said and done, and this, what you think is a bogus option, is pushed away to the side? 

FRANK:  Well, it won‘t be pushed to the side. 

The insurance part of it will be included.  It has always been clear that they can be included as an option.  Our objection was to having that displace the whole plan.  Here‘s the way you do it.  You do the things we have talked about.  You have some restrictions on compensation for CEOs.  You have some warrants in there, so, if the federal government buys things up, it participates in the profit.

But the federal government made money with both the Lockheed and Chrysler interventions.  You don‘t give them money all at once, so you can sort of control how it is being spent.  And you also—and this is an important part of it—you say that, as we buy up mortgages, we, the federal government, will reduce foreclosures.

We will now own a lot of mortgages.  And where you have got these neighborhoods that are being hurt by these foreclosures that are also undermining the economy, we will reduce them.  So, that helps get you Democratic votes.

On the Republican side, look, there is the president of their party who is saying to them, my secretary of the treasury, my chairman of the Federal Reserve says, the economy will collapse. 

So, I think among all those people, you should be able to get 218.  But it‘s going to have to be bipartisan.  It can‘t be done by one party or another, or it won‘t work, even if it got passed, because you‘re trying to instill confidence in the country, and you don‘t do that in a partisan way. 

MATTHEWS:  I have to give you some bad news, Congressman Frank.

We have just learned from Massachusetts—on the Associated Press, we have just learned that your—your very close colleague, Senator Ted Kennedy, has been taken to the hospital.  Did you know about that? 

FRANK:  I did not, Chris. 


FRANK:  And it is very sad news. 

You know, you were talking about one of the heroes in American history.  This is a man whose record as a United States senator is unparalleled.  I have been a political historian, as well as a politician.  No one has ever, I think, in his political career, accomplished more on behalf of the causes of social fairness, of anti-discrimination, of economic justice than this man. 

MATTHEWS:  I agree with you completely.  And it is nonpartisan.  What a beloved man he is.  And I hope this isn‘t as bad as it might be. 

Anyway, thank you very much, U.S. Congressman Barney Frank.  Thank you for joining us tonight. 

U.S. Congressman Adam Putnam is the Republican conference chair.  He is one of the top people in the Republican Party. 

I guess I‘m trying to figure this out, like everyone else. 

Congressman Frank just now, Congressman Putnam, is optimistic that the

the push by the president, the call to arms by both parties, and to both parties, will bring about enough votes to get the 218 you need in the House. 

What is your assessment, sir? 

REP. ADAM PUTNAM ®, FLORIDA:  Well, before I answer, I certainly also want to offer my sympathies and prayers to the Kennedy family, and certainly hope that—that everything turns out well with Senator Kennedy, who is certainly the lion of the Senate. 

It is moments like these, and moments like the financial crisis, that we face that we do need to come together as a body, and adjust to the better angels of our nature. 

Chairman Frank laid out an awful lot of bipartisan principles that both parties can agree with.  The elimination of golden parachutes, the—the bipartisan joint oversight, releasing the money in batches, all of those things, I think, are correct. 

And I think that, if you eliminate some of the left-wing ideas, such as having required labor representation on the boards and having any profits to go ACORN, and also set aside some of the—some of the agenda items that the more conservative—that conservatives in the Republican Party would like to see as pro-growth policies, which, as good a policies as they may be, in the interest of getting this done by Sunday evening, are going to have to be set aside, I think you can build a bipartisan consensus, with Chairman Frank‘s understanding that some of the things laid out by the Cantor plan will have to be a part of the final bill. 

MATTHEWS:  Do you expect that the Republicans will be true partners in this, in other words, offer up, roughly, without getting into numbers, roughly half the votes that are necessary? 

PUTNAM:  Well, you—you can‘t get into numbers, but both parties do need to have skin in the game.  And I think that Chairman Frank was correct in saying that both parties need to move on something as important as this. 

But I—but I would say that, you know, there is a natural gag reflex from members of both parties to swallow a $700 billion bill.  And there are as many challenges in passing this on the Democratic side of the aisle as there are on the Republican side of the aisle, although for polar opposite reasons. 

And, so, that‘s why we need to really have a centrist approach, find the best route that is—that takes care of the American taxpayer, puts whatever upside may come from this investment, this acquisition of assets, back to pay off the debt, instead of the funding—instead of into funding groups, and—and really fund that middle ground and get this done before the Asian markets open Monday. 

MATTHEWS:  You know, when people at home ask you, Congressman, who are these checks being written to, if we‘re writing checks over hundreds of billions of dollars, who is getting the checks made out to them?  Who is getting the money? 

PUTNAM:  You know, that—that‘s a great question.  And, obviously, that—that concern is why there has just been overwhelming resistance in constituent contacts to their congressmen about this issue. 

But what we are beginning to see, as the week has gone on, is that it has now becoming real, as one of the largest car dealerships in the Southeast has gone out of business because they can‘t finance a floor plan, as McDonald‘s and Sonic restaurants are announcing that their franchisees don‘t have access to credit. 

People are not going to be able to have instant access to credit for furniture or for electronics.  And, so, it is...

MATTHEWS:  Right. 

PUTNAM:  This contagion is spreading, and the awareness is spreading to where the American people, I think, understand the need for this. 

But, by golly, they want to make sure that they‘re taken care of and that their interests are looked after, so that it is not just about bailing out reckless CEOs in Manhattan.  It is about making sure that this economy stays strong and our merchants and our farmers and our consumers are protected. 


Thank you very much for that assessment, Adam Putnam, U.S.  congressman...

PUTNAM:  Thank you. 

MATTHEWS:  ... in the Republican leadership. 

Coming up:  After much uncertainty, it‘s time to debate.  John McCain is here. 

Here‘s the question a lot of the pundits are asking, I‘m asking.  Is John McCain too hot?  And everybody knows what that means. 


MATTHEWS:  Is Barack Obama too cool? 

What to look for in tonight‘s big debate—right here at Ole Miss.

You‘re watching HARDBALL, only on MSNBC.  


MATTHEWS:  Welcome back to HARDBALL at Ole Miss, site of the first presidential debate.


MATTHEWS:  The crowd is going wild here.  It‘s going to happen soon, in fact, 9:00 Eastern tonight, between Barack Obama and John McCain. 

With us now, a couple of my colleagues, NBC‘s Andrea Mitchell, and, up in New York, MSNBC political analyst Patrick Buchanan. 

This is an amazing night. 

You know, Andrea, my friend, I have been waiting for this for so long, and then, with three or four days of indecision now, and hard to get my head around it. 

Let‘s talk about John McCain.  He seems to be the man in the middle of the news right now.  What has he got to worry about tonight?  Is there any particular aspect of his behavior tonight, or his wording, that might get him into trouble? 

ANDREA MITCHELL, NBC CHIEF FOREIGN AFFAIRS CORRESPONDENT:  Well, I think he has got to be forceful, but perhaps not too forceful. 

And our pal and colleague Mike Murphy, who of course used to work for him and advised him in previous debates in previous campaigns, told me, when we talked about all of this, that what he needs to do is not be part of Washington.  He can‘t worry about playing to the base.  He has got to be the maverick John McCain and the John McCain who is seeking bipartisan solutions. 

His real challenge tonight is to recapture those independent voters and to broaden his base, because Murphy and others—and I agree with this -- don‘t believe that he can win this campaign if he is just appealing to hard-core Republicans. 


Pat Buchanan, is that—let‘s stay on McCain for a minute.  Is his biggest danger is that he looks part—look like part of the bailout team, he looks part of the Goldman Sachs recovery effort?

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  I think he has got a real danger there, Chris. 

He cannot be perceived as one of those who came back to Washington to save Wall Street.  I think he has got to be perceived as the defender of Middle America, something of a populist.  I think his—the way he conducted himself at the Rick Warren serial meeting there was outstanding. 

If he can do that, I think he can win this.  His problem is, Obama can win this by simply removing the negative image of Obama that Americans hold because of some of the comments and things Obama has said that have been reinforced by Republican attack ads, that he is really not one of us. 

So, McCain may have to go after Obama a little bit. 

MATTHEWS:  Well, let‘s talk about that, Pat, you first.

Can Barack Obama, a man of elite education, if not elite background, may—break into the middle class, and talk regular?  Can he talk to regular people in their kitchens tonight, in their living rooms? 


BUCHANAN:  I think he can do it, Chris, if he come off as a non-Adlai Stevenson, a Jack Kennedy, looking in the cameras, saying, this Republican philosophy, that is what caused this disaster.  They weren‘t thinking about Middle America, and to be tough, and to be a foreign policy leader. 

I‘m not talking about belligerent, tough, strong, disciplined, somebody that, when you look at him, you say, I think that guy can stand up to Putin, and he doesn‘t look like the radical I have been hearing about. 

That‘s the way Barack Obama can win this debate, if he does not let McCain rattle him and he comes off as a Jack Kennedy. 

MATTHEWS:  You know, back in the old days, we thought, because of Marshall McLuhan and our training in the media, Andrea and Pat, that the cool candidate always won, because Jack Kennedy was cool, and he seemed to win those debates. 

But everybody thinks that Barack is too cool.  In other words, there he is with the shades...

MITCHELL:  Right. 

MATTHEWS:  ... getting on the plane, a little bit too elegant, a little bit too proud of his own bearing. 

Is that a problem, that he is just too cool for words? 

BUCHANAN:  I think...

MITCHELL:  I think he‘s got to warm it up.

MATTHEWS:  In other words, elite. 



MITCHELL:  I think, Chris, that he has got to warm it up.  He has got to be passionate.  He has got to show how much he cares.  He has got to connect with Reagan Democrats and Hillary Clinton Democrats. 

And he has got to be Ronald Reagan.  This is the closest simile, I think, for what he has to do is be what Ronald Reagan was in 1980, when he said, there you go again, and showed that Jimmy Carter, the incumbent, the old-timer, if you will, even though their ages were not—Reagan was older than Carter—but he has got to show that the—the Washington insider is not the person relevant to America, and that he, as a newcomer to the national scene, was someone who is credible to be commander in chief. 

BUCHANAN:  Chris, I think he cannot...



BUCHANAN:  He cannot be a diffident, meandering wonk, like we saw over at that Rick Warren thing. 

MATTHEWS:  I agree.

BUCHANAN:  He has got to be focused.  He has got to be right on the issues, and again, tough, crisp, and cool.  Kennedy wasn‘t any wimp, but he was cool. 


Let me ask you, Andrea, because you‘re the news hound here.  You know better than any, of the three of us, about how news stories are developed. 

Will the headline that runs tomorrow on the networks, in the big newspapers tomorrow, in “The New York Times,” across the country, will the headline be on foreign policy, or will the headline be on domestic policy, or will it be on the behavior generally of the candidates? 

MITCHELL:  You know, I think it will be on domestic policy. 

I think that they have got to address this economy.  And, secondly, on their behavior, on the affect.  You know, think about George Bush 41 looking at his watch, and, in that same debate in Richmond, Bill Clinton crossing over and putting his arms around that woman who had lost her job. 

Those are the moments, and the zingers, the “There you go again” or “Are you better off than you were four years ago?” those are the moments that resonate with the voters and are the winning or losing moments in these presidential matchups. 

BUCHANAN:  I think the lead, Chris, will be...

MATTHEWS:  Pat, what will it be? 

BUCHANAN:  The lead will be on the hard news, which is, I think, what they say about the bailout, will they support it, something like that, which is hard news. 

I do think the back pages will be talking about, who was cool?  Who won?  Who lost and all that?  The key thing is, who gets the clip, the decisive clip, the Lloyd—the Bentsen clip on Dan Quayle that is repeated again and again and again...

MATTHEWS:  Right. 

BUCHANAN:  ... which summarizes or encapsules who won and who lost for the millions or tens of millions watching the debate. 


Chuck Todd is now joining us.  He‘s of course our chief political director for the—for the whole network right now. 

And, Chuck, thanks for joining us.

I‘m trying to find out, look ahead, what is going to be the focus tonight, foreign policy, economic policy, or behavior, just general body language behavior of the two candidates? 

CHUCK TODD, NBC NEWS POLITICAL DIRECTOR:  Oh, look, I think it is absolutely going to be the economy and how they handle—how they explain the bailout to the American people. 

I think the opportunity here for both candidates is to do something that President Bush was incapable of doing over the last 10 days.  And that is explain the reason why we‘re in this situation where the government is being asked to rescue or bail out the entire credit industry. 

And, if one of them figures out how to do it, that is going to be the lead.  That‘s the lead, how is it—there‘s no other part of this is the lead, unless there‘s a big gaffe or just a drubbing from one candidate or the other. 

If there is no drubbing, this is going to be about how each of them handle the bailout and how they sort of maybe physically dealt with each other, in how they maybe barbed each other about their leadership during this little 48-hour thing. 

MATTHEWS:  Right. 

TODD:  But it‘s going to be about the economy. 

MATTHEWS:  Pat, the whole goal, it seems to me, of Barack Obama will be to tie his opponent, John McCain, like with sticky glue, basically, crazy glue, to George W. Bush. 

How does—how does McCain break that hold?  How does he separate himself from the president, who is not doing well in the country right now?


BUCHANAN:  Well, the way I would do it, Chris—and Chuck Todd is correct—as I said earlier, this is going to be about the bailout. 

If I were McCain, I would go in and talk about the greed and the corruption and the arrogance of people that got us into this, of these subprime loans, and the people that gave them, and of all this, and say, this is what got us in here, this type of attitude, and that is not—you know, that is not my philosophy.

In other words, make it a passionate, populist, but not saying in effect, we are going to kill the bailout...

MATTHEWS:  Right. 

BUCHANAN:  ... but go after the people responsible, who got us—these guys are going to be punished...


BUCHANAN:  ... and we‘re going to save the good guys. 

MATTHEWS:  Andrea, how can he do that and still sign on to the bailout, when he has to? 

MITCHELL:  Oh, you can do that by saying that you—first of all, he could try to make a virtue of what some people thought was a series of missteps. 

I mean, you can argue whether the gamesmanship in the last 24, 48 hours worked for him.  But he can say, look, I went there.  I got buy-in for the House Republicans, who had been shut out of these talks.  I am going to make the product of these talks better and more representative for you, the taxpayer, for you, the guy, the woman who is getting messed up by all this, and not getting bailed out. 

So, he can try to make a virtue out of this and show that he was an activist, and that he was willing to stop his campaign, even though, of course, the Obama folks say that he never did stop the campaign.  But that‘s a debate that is along the margins. 


MITCHELL:  He‘s got to punch...


MATTHEWS:  You know—you know...


MITCHELL:  ... that show how much he cares. 

BUCHANAN:  Chris, I think he has to show...

MATTHEWS:  Well, you know, I have got to go, Pat. 

BUCHANAN:  ... and reflect the anger.

MATTHEWS:  OK.  Great.  That‘s a hard one.

By the way, I always learn something from you guys.  I mean.

Thank you very much, Chuck Todd.

Thank you, Andrea Mitchell.

Thank, you Patrick J. Buchanan. 

Up next, we‘re going to talk to the crowd here at the University of Mississippi about what they‘re looking to hear from the candidates tonight.


You‘re watching HARDBALL, only on MSNBC.  


MATTHEWS:  Well, this is a treat.

I‘m here with the chancellor of Ole Miss University. 


MATTHEWS:  How did you guys pull this off? 

I‘m here with Sam Haskell, a buddy of mine, who is one of the big boosters of this place.


MATTHEWS:  How did you—I know everybody who is watching there who is the president of the university right now, how did they get this first big debate? 

KHAYAT:  We worked really hard, submitted a strong proposal, and communicated our profound desire to host this event. 

MATTHEWS:  How big was your case that this was a school that had so many problems about desegregation back 40 years ago? 

KHAYAT:  Big part of it.

MATTHEWS:  Was that a big part of it? 

KHAYAT:  Oh, absolutely.  The transition that has occurred, the progress that has taken place, the role that we‘re playing in leading the nation in racial reconciliation was a big factor. 

MATTHEWS:  Let me ask you, is there any chance that Mississippi will vote for Barack Obama, Sam Haskell? 


HASKELL:  I think there‘s a chance Mississippi could vote for both of them. 


HASKELL:  Just not sure in what percentage. 

MATTHEWS:  OK, let me ask you about the students here.

How many people here are registered to vote? 


MATTHEWS:  How many of you are going to have some damn excuse why you didn‘t vote? 

Yay, they are actually to vote. 

So, what are you going to do on Election Day to make sure these students actually do vote?  You going to make it a big deal, or what? 

KHAYAT:  We are, but we don‘t have to make it a big deal.  They‘re engaged.  They are really involved in the process. 

MATTHEWS:  Let me ask you about—Sam, you‘re an old pal of mine.

Tell me about this school, and Southern education, and diversity, and the whole thing about the past and the future.  What is it headed—where is it headed down here?  Because I know you have put a lot of time into this place. 

HASKELL:  The big word is perseverance. 

And, if you have seen the civil rights memorial in front of the Lyceum, you know that, since the James Meredith incident, we have persevered.  And what won‘t then is no longer the case.  We have moved forward in such a way that this university is now the great public university of this country, and racism is no longer an issue. 

This man right here has had more to do about it than anybody I know.  And we appreciate him for it.

MATTHEWS:  OK, thank you, gentlemen.  I want to go in the crowd here now.  Thank you, sir.  Thank you, chancellor.  What do you think about coming here?

UNIDENTIFIED FEMALE:  I think this is a wonderful thing to do.  And to have something like this happen in Mississippi, you just don‘t know how excited we are here. 

MATTHEWS:  Come up here.  You get up here.  What do you think about this?  You‘ve got change.  What do you think about Barack Obama?

UNIDENTIFIED FEMALE:  I think he is a great guy.  I think he‘s going to be our new president.  I think he is a great leader.  I appreciate him having the guts to come up here and take this debate, as opposed to McCain who had, iffy, questionable about coming up here.  So I‘m thinking—

MATTHEWS:  Can we get a close-up on your hand again? Let me get a close-up on that iffy thing.  OK, young lady, who is going to win the debate tonight?


MATTHEWS:  I love it!  I love it.  Who is going to win the debate tonight?


MATTHEWS:  Who is going to win tonight?


MATTHEWS:  McCain, McCain, Obama.

Who is going to win?


MATTHEWS:  McCain? Obama?  OK, now we‘re going to have a poll.  We‘re going to have our first poll tonight.  Nobody cheat.  How many here think McCain will win tonight?  How many think that Barack Obama will win tonight?  Tell me about what is going to happen tonight, make a prediction.

UNIDENTIFIED FEMALE:  I think the debate has a big deal with what has to do with who wins the election.  And I‘m voting for McCain all the way.

MATTHEWS:  Make a prediction, sir. 

UNIDENTIFIED MALE:  I think it‘s going to be great.  A great event, a great time of the year when everybody is out enjoying themselves.  Obama rocks.

MATTHEWS:  We‘ll be back with more HARDBALL right after this.


MATTHEWS:  I let it slip my mind.  Welcome back to HARDBALL.  We‘re at the University of Mississippi for the first presidential debate.  Now for our virtual view of the latest NBC poll numbers, let‘s go to MSNBC chief Washington correspondent Norah O‘Donnell who is in New York. 

NORAH O‘DONNELL, MSNBC CHIEF WASHINGTON CORRESPONDENT:  Hi there, Chris, and welcome back to our virtual reality set.  Tonight‘s debate is slated to focus on foreign policy and national security.  But it is the economy that is on voters‘ minds.  In fact, whoever is elected in November is going to inherit some challenging economic times.  This week, our NBC News/”Wall Street Journal” poll asked, which of the four issues was most important?  In more than half, 57 percent say it is the economy, 17 percent say domestic issues like health care, education, and the environment are the most important, 15 percent say it is foreign policy, including Iraq, Russia and the war on terrorism.  And another 10 percent say issues related to social and moral values like gay rights, gun rights and sex education for young children are the most important. 

All right, Chris, let‘s go inside the number on the economy.  These are the numbers that John McCain‘s campaign is probably looking at tonight and saying, we‘ve got some work to do.  The uncertainty over the economy has benefited Barack Obama.  Among those who say the economy is the number one issue, 52 percent support Obama, 40 percent support McCain.  And Obama also has an advantage on the specifics of dealing with the financial crisis as well. 

We asked voters who they thought would be board a series of issues.  And when it comes to who would be better at dealing with the Wall Street crisis, Obama has a five-point advantage over McCain, 57-42 percent. 

As to who would be better on the mortgage and housing crisis, Obama‘s advantage increases to 50 percent to McCain‘s 42 percent.  Now by an even wider margin, they picked Obama over McCain as better able to deal with energy and the cost of gas by 54-45 percent.  The only economic issue where McCain is dominant is on taxes, where he bests Obama 49-45 percent. 

And you know Chris, with the economy the number one issue and with Obama ahead on this issue, McCain has a challenge tonight to try and show some leadership on this issue.  It has been a difficult 48 hours.  He has a chance to make that case tonight before what is expected to be an audience with as many as 100 million people.  Chris?

MATTHEWS:  OK, thank you, Norah. 

With me right now, the “Chicago Tribune‘s” Jill Zuckman and the “New York Times” Jeff Zeleny.  It seem to me, if Barack wants to win the argument tonight, quite simply, find a way in each exchange to remind the public that he is a Democrat, the party out of power for the White House.  And the other guy is a Republican, the party of the power, the people holding the White House now.  Just keep reiterating that over and over again.  Because McCain can‘t really say that‘s not true.  He has to sort of live with that, doesn‘t he?

JILL ZUCKMAN, CHICAGO TRIBUNE:  Sure.  There‘s nothing Senator McCain can do to change the fact that he‘s a Republican and the Republican are in power right now.  But I think that Senator Obama is going to go much further beyond that to talk about the things that he thinks are important, like transparency, like accountability to voters. 

I mean, voters are really stressed out about the idea of the government just writing a check for $700 billion like it is nothing while they‘re struggling and hurting.  And I think both have to show empathy for what voters are feeling right now.

MATTHEWS:  I‘d ask, who is getting the check money, the Republicans or the Democrats?  I would be a complete populist on this, Jeff.  I don‘t know how you win saying, my party got the money. 

JEFF ZELENY, NEW YORK TIMES:  Senator Obama has been doing that for the last few weeks, increasing his populist rhetoric.  He is not as much of a fire brand about it as some other Democrats have been.  But one person‘s name you‘re going to hear a lot tonight is President Bush.  There is no question on foreign policy, specifically, Senator Obama is going to raise that again and again and again. 

MATTHEWS:  Who is going to speak those words, Bush?

ZELENY:  I think Senator Obama is going to say Bush, Bush, Bush.  And Senator McCain will not, he‘ll try to distance himself from that.  One thing I think tonight will also sort of be reprised is Senator Obama‘s foreign trip.  It was viewed at the time as not a good political move necessarily, but I wouldn‘t be surprised if he makes a few references to that tonight, in terms of backing into his experience.  Because that is after all, what voters tonight will be looking at, is he experienced enough to handle these issues? This is still Senator McCain‘s issue, foreign policy.

MATTHEWS:  And you think that McCain will try to husband that?  He will focus on that a lot, foreign policy.  Will he shift to the economy?

ZELENY:  I think Senator McCain is thrilled to talk about foreign policy.  Of course, there will be a few economic questions.  But this is one of the remaining issues that voters tell pollsters that they view Senator McCain as a favorite on.

MATTHEWS:  He said it in his acceptance speech, Barack Obama, that he wants to have a debate about who has got the temperament and who has the judgment?  Why wouldn‘t he just elevate this discussion beyond particular issues and say, you thought it was a great idea to take the American army, the body of the American army and put it in Arabia in an occupying role, in a defensive deployment in perpetuity? There‘s still there.  You thought that was a smart move.  I thought that was a bad move.  That‘s my judgment.

You think it is funny to sing songs about bomb, bomb Iran using “Beach Boys” music.  You think that‘s funny.  You think it‘s OK to talk about a 100-year occupation in Iraq.  Why doesn‘t he just keep sticking it to him and sticking it to him until McCain explodes?  And then you have the temperament issue out front, the judgment issue out there and Barack wins.  Why doesn‘t he play HARDBALL?

ZUCKMAN:  Senator McCain is not going to explode at the debate.

MATTHEWS:  He‘s not?

ZUCKMAN:  Chris, no he‘s not, because he knows that‘s what you want him to do. 

MATTHEWS:  Everybody does. 

ZUCKMAN:  And furthermore, I think what he is going to do is say, look, I‘m the one that who have knew what needed to be done to win the war in Iraq.  Of course that‘s what he‘s going to say.  He is going to say he has the judgment, he has the experience and the knowledge to bring things to a successful close in Iraq.  And Senator Obama opposed those things. 

MATTHEWS:  Does Barack have the guts to say, we‘re still there? You know when you‘ve won a war it means you can come home.  Stop saying we‘ve won this war, senator.  If we‘ve won the war, the president says we can‘t spare a single soldier in Iraq right now.  That doesn‘t sound like we‘ve won if you can‘t bring a single soldier out of that theater.

ZELENY:  We‘ll see if Senator Obama is able to make that point as succinctly as you were.  That has been one of his problems during debates, he meanders around a bit and then he finally gets to his point.  So we‘ll find out if he can do that or not.  But he‘s still a Democrat.  And Democrats still have the challenge the Democrats always have, being tough on national security.  So I bet he won‘t be quite that strong.

MATTHEWS:  I know, it‘s always a challenge and therefore I would keep bringing it back to the economy.  As Norah O‘Donnell just displayed in those internals, in those polls, Democrats are trusted because they‘re not held responsible for what has happened in the last several years. 

ZUCKMAN:  What every single poll has shown is that the economy is the No. 1 issue on every single person‘s mind in America.  And my guess is both candidates are going to segue away from foreign policy and move it back to the economy every single time.

MATTHEWS:  By the way, the commander in chief of the economy is a bigger job title right now than commander in chief of our forces overseas, right now tonight.  Thank you “New York Times” Jeff Zeleny.  Thank you Jill Zuckman of “Chicago Tribune.”

All day long, we‘ve been asking you the text message question.  We want to know your thoughts about the following question.  How important are the debates to your vote?  Well the results are in, 55 percent of those who answered say the debates are extremely important to their vote, 23 percent say somewhat important.  Well that adds up to a lot.  It sounds like everybody is going to be watching tonight and making up their minds, to a large extent, what they think of these two candidates.  Up next, much more from the University of Mississippi as we get ready for the first presidential debate just an hour away.  This is HARDBALL, only on MSNBC.


MATTHEWS:  We‘re back live from the University of Mississippi in Oxford, Mississippi.  Ole Miss, it‘s been called forever, it‘s the host of the first presidential debate tonight, that‘s coming up at 9:00 Eastern.  Which candidate has the edge going into this debate?  We‘re back with Jill Zuckman and Jeff Zeleny.

Jeff, you cover it for the “New York Times,” which has been closely covering John McCain, sometimes to his discomfort, you‘re so close.  What is it about his behavior the last week or so?  It has been called uneven, even erratic.  Calling for the firing of the head of the SEC, then in a sense, calling for a firing of the debates.  It‘s sort of like a petulance.  It‘s almost, somebody said in one of your columns, I think Gail Collins, who‘s one of your columnists, an opinion piece, said it is like a guy throwing darts 10 minutes before the bar closes, desperately.

ZELENY:  In some respect, this is what sort of defines John McCain.  But he‘s never been in this position before.  He is running for president during a time of crisis.  It is making a lot of Republican we talked to this week uneasy.  Republicans across the country this week, some congressional candidates, some Senate candidates have expressed concern about how his, how he has handled himself through this economic crisis.  Some Republicans may find it reassuring.  We‘re all talking about it a lot as though he‘s been uneven in things.  We‘ll see how voters like it.  But this has given people a time to see Senator Obama and Senator McCain head to head.  And Senator Obama often time has looked like the more stable one. 

MATTHEWS:  Right, but to wit, where is Thad Cochran today?  Thad Cochran is the senator from the state and we all know he has had his kafuffles with John McCain in the cloak room.  He doesn‘t speak out publicly, but how come we all know that he has had fights with the guy?

ZUCKMAN:  Because he did speak out publicly.  Because he did he say what he thought.  Let me just—

MATTHEWS:  What did he say?

ZUCKMAN:  He complained about Senator McCain‘s treatment of other senators.  I think Senator McCain has offended a few senators.

MATTHEWS:  Kay Bailey Hutchison is another one you hear about.

ZUCKMAN:  Senator McCain often says he‘s never going to win Miss Congeniality.

But let me just go back to what Jeff was talking about.  If you look at 1996 when Bob Dole was running for president, the biggest mistake he did was getting sucked back into the Senate over and over again.  Ted Kennedy kept bringing him back in.  He was humiliated over and over again until he finally quit his Senate day job.  I think that may be the biggest mistake Senator McCain made this week.

MATTHEWS:  Getting back into the pool.

ZUCKMAN:  Yes.  I mean, it‘s a snake pit.  It‘s so easy for the opposition to undermine you once you go there, even if you go with the best of intentions. 

MATTHEWS:  You know, Pat Buchanan, Jeff, last night made an interesting point.  He said there‘s a choice facing Senator McCain.  If he supports this bailout package, then to all the populist conservatives in the country, he‘s another establishment figure.  He looked out for the rich boys.  He will make all of them more money than most people can imagine.  The least paid guy at Lehman makes more at what exponential piece of the average income of a family. 

So any money they get is more than most people get.  If the federal government is writing checks for $700 billion, those checks aren‘t going to regular people.  They‘re going to money people.  How does he win politically in a populous environment where people are angry about economics by signing on to a bill like that?

ZELENY:  Well this definitely gave Senator McCain something to put his hands around in terms of reform.  More people are paying attention to this campaign now than ever before.  He‘s been talking about reform.  This gave him something to reform, more oversight on things.  But also gives a sense of responsibility though. 

MATTHEWS:  But he‘s marrying it. 

ZELENY:  If this president supports it, if he generally knows it‘s the right thing to do, he does not want the crash of Wall Street or the markets on his hands.  So he‘s got responsibility, versus being a reformer and he‘s tried to walk that line.  We‘ll see how he votes.

MATTHEWS:  What‘s the most dangerous hot potato for him to hold?  Say I back this $700 billion bailout of rich people at a time everybody is angry at rich people, or I let the thing go down or I was blamed for letting the thing go down?

ZUCKMAN:  Well, he has already said that he thinks it needs to be done, that you can‘t allow the credit to dry up. 

MATTHEWS:  So he‘ll take the hit?

ZUCKMAN:  Every member of Congress is going to take the hit. 

MATTHEWS:  But Obama I still say doesn‘t have to vote for this thing. 

Can‘t he wait until the last to not vote for it? Why should he vote for it?

ZUCKMAN:  I think he will be criticized roundly if he skips this vote. 

MATTHEWS:  No, vote against it.  Say no, I don‘t like the politics.

ZUCKMAN:  If he votes against it, I think he‘ll be criticized because both of these guys are involved in this.  They need to step up, make a decision and bear the consequence. 

MATTHEWS:  If it passes and it doesn‘t stop the economic collapse, Barack is in good shape for having voted against it.  If it stops the economic collapse, there is no collapse, nobody to blame, Barack is still in good shape.  That‘s my logic. 

ZELENY:  I think they both are going to vote the same way regardless on this.  I don‘t think this will be an issue in terms of this specific bailout proposal for the next five weeks. 

MATTHEWS:  Thank you, guys.  You know, Jeff Zeleny, Jill Zuckman.

Earlier, we reported that Senator Ted Kennedy was taken from his home on Cape Cod to the hospital.  We have a statement now from the senator‘s office.  “Senator Kennedy experienced a mild seizure at his home in Hyannisport today and was taken to Cape Cod Hospital for examination.  Doctors believe the incident was triggered by a change in medication.  Senator Kennedy will return home tonight and looks forward to watching the debate.”  So things look pretty good up there.  We‘ll have much more from Ole Miss when we come back.  You‘re watching HARDBALL, only on MSNBC.


MATTHEWS:  We‘re back.  As you can see, at Ole Miss, University of Mississippi.  Tonight is the big debate, Ole Miss is hosting the big debate at 9 Eastern tonight, just about an hour from now.  MSNBC chief Washington correspondent Norah O‘Donnell joins us right now from New York again and the “Washington Post‘s” Eugene Robinson both with us.

Norah, it seems to me, this is a tough one, but John McCain said earlier this week he would not come to the debate until there was action to stop the collapse, this fiscal collapse of the country, financial collapse.  There hasn‘t been.  I‘ve been interviewing Barney Frank, Chris Dodd.  The action is not there.  They are still talking about it, they‘re still finding their way to getting something done.  How can he change tune and say I‘m coming to the debate?

O‘DONNELL:  In fact, he used the word resolved, Chris, in terms of dealing with this crisis.  His campaign made a decision that they had to go to this debate tonight.  They said today that they believe enough progress was being made and that he‘s going to quickly return to Washington, perhaps even tonight, to work on it. 

But this is clearly something that he is going to have to use tonight‘s debate to explain.  Why this shows that he is best to lead, why this is an example of country first.  And I think for Obama, this is an audience of 100 million people.  Obama has got to show that he can pass the commander in chief test and Obama can also raise the question about how McCain responds to crises.  And that is how can play into the headlines that I think are going to be big tomorrow. 

MATTHEWS:  Do you think, Gene, that he will try to portray John McCain as Captain Queeg in the Caine Mutiny, as a guy who‘s playing with ball bearings because the ship‘s listing.  Do you think he‘ll have the nerve to go where Norah said he will go?  But she doesn‘t know, we don‘t know how far he is willing to go.  Is he willing to play with the temperament issue?  He said in his acceptance speech out in Denver that he was going to make it a debate over temperament as well as judgment.  Is he willing to risk merely sticking it, gigging I guess is the right word, gigging McCain on these issues like his change of mind about coming to this debate?

EUGENE ROBINSON, WASHINGTON POST:  Well you know, I think he clearly wants something like this to come up.  Ideally for Obama‘s point of view, there would be some point in the debate, which McCain either erupts, which he probably won‘t do or somehow becomes demonstrative in a way that suggests as you said, Captain Queeg.  But, I think that‘s unlikely to happen.  I think Obama will probably try to suggest the issue rather than hit McCain over the head with it.

MATTHEWS:  OK.  Let me go back to Norah.  You‘re sense as it seems to me, who do you think - I know it‘s a great old reporter‘s question.  I‘ll say it, I‘ll ask it.  Who has the got the most to prove tonight? I mean, how many times do we ask this of ourselves?  Who‘s got the most to prove tonight?

O‘DONNELL:  Chris, Honestly, they both do.  Honestly, they both to.  They have an enormous about to prove.  And I mean that.  For McCain, it is about tone and temperament.  And for Obama, it‘s about proving that he has substance and not just style. 

ROBINSON:  That‘s absolutely right.

MATTHEWS:  Same question to you, Gene. 

ROBINSON:  You know, that‘s absolutely right.  You know Chris, I was just down in Alabama, in Birmingham giving a talk.  People are really hungry for this debate.  They want to hear these two guys.  They‘ve got questions about both of them.

MATTHEWS:  OK, got to go.  Gene, I‘m sorry, we‘ve got to go.  Didn‘t time that right.  Thank you, Norah O‘Donnell, thank you Eugene Robinson.  One hour until the first debate.  “COUNTDOWN” with Keith Olbermann starts right now.



Transcription Copyright 2008 ASC LLC ( ALL RIGHTS  RESERVED.

No license is granted to the user of this material other than for research.

User may not reproduce or redistribute the material except for user‘s

personal or internal use and, in such case, only one copy may be printed,

nor shall user use any material for commercial purposes or in any fashion

that may infringe upon MSNBC and ASC LLC‘s copyright or other proprietary

rights or interests in the material. This is not a legal transcript for

purposes of litigation.>

Watch Hardball each weeknight