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'Hardball with Chris Matthews' for **October 9, 2008**

Read the transcript to the Thursday show


October 9, 2008


Guests: Richard Stengel, Jim Moran, Chris Cillizza, Ed Gordon, Michael Smerconish

CHRIS MATTHEWS, HOST: From straight talk to trash talk. John McCain goes nasty.

Let's play HARDBALL.

Good evening. I'm Chris Matthews. Leading off tonight, a desperate candidate gets desperate in his charges. John McCain tries to save his campaign by tying his opponent to terrorists. With the polls caving in around him, John McCain goes on the attack, stirring the crowds, saying there's something suspicious, even dangerous about his opponent. Is the "Straight Talk Express" driving in a ditch?

Here's McCain speaking at a town hall event today in Wisconsin, questioning Barack Obama's ties to '60s radical William Ayers.


SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: The point is, Senator Obama said he was just a guy in the neighborhood. We know that's not true. We need to know the full extent of the relationship because of whether Senator Obama is telling the truth to the American people or not. That's the question.


MATTHEWS: Oh, he's pumping away there. It fits with the crowds he's exciting, those who call out Barack Obama's middle name now at all the rallies, those who call him a terrorist.

Let's listen to the rallies that have been excited by (INAUDIBLE)


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: I'm surprised that, you know, we've been seeing some pretty over-the-top attacks coming out of the McCain campaign over the last several days, that he wasn't willing to say it to my face.


MATTHEWS: Well, let's take a look at one of the crowd reactions to the kind of things being stirred up by the McCain campaign.


UNIDENTIFIED MALE: On November 4th, let's leave Barack Hussein Obama wondering what happened!


MATTHEWS: That Barack Hussein Obama commentary was offered Monday in Florida by that uniformed police officer. Later this week, it was used by the Republican chairman of the Lehigh County, Pennsylvania, Republican Party. Same thing. They're using his middle name. They're tying him to a '60s-era radical. They're going after the campaign contributions to Barack Obama's campaign. They're trying to link it to Arabs. The whole thing is being put together now.

Will doing dirty work, making the Illinois senator, Democratic nominee, into a suspicious person work for McCain in the final stretch? Will McCain get the vote of the low-information voter who thinks Obama's name sounds too foreign, who thinks he's a Muslim? McCain only needs to turn around, by the way, voters in states like Pennsylvania, Ohio and Florida, and that could do the job. Or is McCain blowing an opportunity here to show real leadership in dealing with the tricky economy right now, the major issue to most voters? We're going to talk about fear factor in this election later with Pat Buchanan and Michael Smerconish.

Plus, if the economy sinks, will it pull Republicans down with it? The Dow Jones Industrial Average dropped another 678 points just today, closing below 9,000. With less than a month before the election, Republican officials are nervous over predictions the election could be doomsday for their party. We're going to talk about the politics of this economic crisis later with Virginia congressman Jim Moran and Congresswoman Heather Wilson of New Mexico.

And politics in a time of crisis. The tough economic news has voters worried about their future and looking for leadership. So what do people tend to do when things get scary? In the "Politics Fix" tonight, new voter numbers on how voters perceive Barack Obama's candidacy.

Plus: John McCain's campaign might be on thin ice right now, but that's not stopping "hockey mom" Sarah Palin from getting into the game. We'll explain that in the HARDBALL "Sideshow" tonight.

But first, Pat Buchanan is a MSNBC political analyst and Michael Smerconish is a Philadelphia radio talk show host. I want to show you something from Peter Beinhart. It's in the latest edition of "Time" magazine, just out today. Quote, "In the past, Republicans often used race to make their opponents seem anti-white. In 2008, with their incessant talk about who loves their country and who doesn't, McCain and Palin are doing something different. They're using race to make Obama seem un-American."

So let's watch Senator McCain and Governor Palin last night on Sean Hannity. You watch and you decide.


GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL NOMINEE: Tells me again we need to question his judgment. And You know, not only those atrocious activities that Bill Ayers was involved in, but the questions need to be asked...

MCCAIN: I think they should care about Senator Obama's truthfulness. I don't care much about an old terrorist and his wife who are still unrepentant. It's about Senator Obama being candid and straightforward with the American people about their relationship.

PALIN: It goes right back again to the candidate's judgment and who he would choose to associate himself with in the past, perhaps the present, makes me question who he would associate himself with in the future.


MATTHEWS: Well, there you have it. Pat Buchanan, what's going on here? I watch this pattern. I predicted it last week here. It started with talking about this terrorist. They're calling him a terrorist now. He was a radical back in the '60s, a bomber. The word "terrorist" is-of course, has salience today. They're trying to tie him into 9/11 terrorists, foreign terrorists, the use of his middle name now by Republican surrogates up on the platform relentlessly this week, talk by the Republicans about investigating-in fact, by John McCain this week about trying to find out if Barack Obama is getting money from Arab sources. I connect the dots.

I can only assume the voters-certainly the people in the crowds are getting it. They're yelling it back with words like, Get him, He's a terrorist, things like that.


MATTHEWS: They're stirring up the crowd out there.

BUCHANAN: Well, I think what they're doing, basically, Chris, is they were winning this election, starting to move ahead until the economic collapse occurred three or four weeks ago. They're being dragged down not by Barack Obama and Joe Biden but by the Dow Jones.

And what their campaign strategy right now is, the country wants change and we've got to convince them this guy is unacceptable change. His ideas are radical. His record is liberal. And his judgment is dead wrong because you could look at the friends he associates with. And you can't trust this left-wing community organizer, basically, to run a country which is in two wars at this time and in the worst economic crisis since the Depression.

To me, it is not illegitimate to hit him. The people who are going to be the judge of these tactics, of these charges, et cetera, are the American people. Now, if you trust the American people, then you say, Look, you've chosen to go this course. That's your course. The American people will be the judge.

MATTHEWS: Let me ask you, do you think they're trying to portray him as anti-American, as a foreigner?

BUCHANAN: I think-I don't-a foreigner? The people...


MATTHEWS: ... hangs around with terrorists, who gets money from foreigners who are from Arab countries. You don't see that connection?

BUCHANAN: Well, no. Ayers is an American.

MATTHEWS: No, but the use of the word "terrorist," the use of his middle name...


MATTHEWS: No, the way they're putting it together, Pat, what is the message? The message isn't he hung around with '60s radicals, the message is he hangs around with terrorists. That's the message.

BUCHANAN: The message is, he hangs around with a '60s bomber. He's got no problem with it, a guy who said on 9/11, Should have been bombs. And he also-he hangs around with an anti-American Afro racist named Reverend Wright, which is true.


BUCHANAN: That charge is true. But the American people...

MATTHEWS: They're not pushing that charge right now.

BUCHANAN: Well, they're not pushing it. But let me say this. They got every right to make the charge, and the American people can say that's nonsense.

MATTHEWS: No, they're not going after the (INAUDIBLE) They're going after a slice of the American people who are susceptible to believe what those people are yelling out at crowds.


MATTHEWS: Why are people...

BUCHANAN: Why are you...

MATTHEWS: Why are people at every one of his crowds now introducing him as Barack Hussein Obama? Why has that become the normal way to introduce him now? What's going on, Pat?

BUCHANAN: Well, what's going on is they're probably trying to associate his name as a radical name, a Muslim name.


BUCHANAN: No doubt about it. They're using...

MATTHEWS: Why all of a sudden are the people on the platform doing that? All of a sudden now, a month before the campaign (SIC)...

BUCHANAN: They're trying to...

MATTHEWS: ... they've tried everything else and now they're going back to that.

BUCHANAN: They're trying to say, This is not a mainstream American. Look, the American people-Chris, you've got to let the American people be the judge. Those folks in...

MATTHEWS: The slice he's going after.

BUCHANAN: Well, the slice he's going after are in central Pennsylvania...

MATTHEWS: Right? He's going after people who are willing...

BUCHANAN: They voted...

MATTHEWS: ... to believe, if a major candidate suggests it is, that this guy's some kind of a foreigner.



BUCHANAN: No, they're not saying the guy's a foreigner. They're saying he's out of the mainstream. His wife used that term about not being proud to be an American.


BUCHANAN: He's got Reverend Wright. He's got all these things. It is perfectly legitimate, in my judgment. But the American people are going to judge whether Buchanan's right or Chris is right.

MATTHEWS: Well, the way the crowd-the way the crowds are reacting

the way the crowds are reacting is as follows-He's a terrorist, is one guy yelled out the other day. And both of the guys-we will continue to show this, Pat. By the way, if I'm right, that this is what they're pushing-not that he hangs around with bad guys on the street corner or ministers who are mad at the country, but there's a consistent pattern of hanging around with terrorists, of having these Arab associations, of having a middle name he was born with, of getting money from Arabs overseas. It seems to me they're working a line here, which is he's-they're trying to de-Americanize the guy.

BUCHANAN: Chris, is it true-you know...


MATTHEWS: Do you think I'm right? Do you think I'm right? Am I right?

BUCHANAN: Are they trying-yes, are they trying to associate him with, really, people who are unsalable in American politics? You bet. Everybody does that, Chris. In California...


BUCHANAN: ... congressional campaigns, they go down, look for the Arab names on the lists...

MATTHEWS: I've never heard of anybody...

BUCHANAN: ... and publish them.

MATTHEWS: ... accusing John McCain of being un-American.

BUCHANAN: Well, no, he's not.

MATTHEWS: So everybody doesn't do this.


MATTHEWS: You just said everybody does this.

BUCHANAN: No, what I'm saying, running down lists to find suspicious...


BUCHANAN: ... characters or names on contributors' lists.

MATTHEWS: OK. I think-look, Pat...

BUCHANAN: Chris, I've had this stuff done to me.

MATTHEWS: I know. But let me tell you something. Well, let me go to Smerconish. Michael, you just talked to the candidate of the Democratic Party for president. How's he reacting to this new use of his middle name, to this the whole kit and caboodle of things that seem to tie him into something foreign? It seems like something's going on here. And I noticed this start last week, when they went after Ayers out of nowhere, calling him a terrorist who wanted to bomb the Capitol.

I know how they put this together, just like the 9/11 people, going after his middle name on platform after platform, trying to investigate his source of funding overseas. They're trying to build a case that he's somehow foreign, a suspicious person. But your thoughts?

MICHAEL SMERCONISH, RADIO TALK SHOW HOST: Well, I did just speak to him 10 minutes ago. And I said to him, Senator Obama, my interpretation of the use of your middle name-and by the way, think of this, Chris. When was the last time that someone made reference to John Sydney McCain?

I said to him that my interpretation of this is that it's intended to further the Internet lore about him that he's a radical Muslim and some kind of a Manchurian candidate. What's your interpretation? And Senator Obama-and I'm paraphrasing-said, There's no doubt that that's what this is all about. It is a distraction.

I mean, are you aware of the fact that the Dow just got hammered again today? They don't want Americans talking about the economy. They want them distracted on these sort of issues.

And I would say to my good friend, Pat, that not only do I think it's unfair to focus on those issues because they're just not accurate-the man's not a radical Muslim and he's not a Manchurian candidate-but it's dumb politics.

Take a look at my home state of Pennsylvania-you've already got those conservatives-the central part of the state, the conservative T that James Carville made reference to. This will have a boomerang effect and you will lose those Philadelphia suburbs. Bucks, Chester, Delaware, Montgomery Count folks are going to be repulsed by these references.

And the McCain campaign needs to rein in these knuckleheads and say, You're not doing us any favor when you make reference to Hussein as his middle name, nor if you shout out in the crowd. I think it's just dumb politics.

BUCHANAN: Well, OK. Let me say that I think you very well may be right. I mean, using the Hussein thing, yelling that out. I don't think that's particularly smart politics. I do think they're going to have to discredit Barack Obama as a credible change candidate any way they can that's legitimate.

But the ultimate judge is just what you say, Smerc. The ultimate judge is the people of Pennsylvania and the people of America. And if this is the decision they make...


BUCHANAN: ... I'm confident the people...

MATTHEWS: OK, well, the people...

BUCHANAN: ... of America will make the right call.

MATTHEWS: ... that make this decision may be getting bad information. Look at this. Pat, there's a pattern here. Michael Dukakis was de-Americanized. He was the guy that hated the flag, the Pledge of Allegiance. Come on.


BUCHANAN: ... the Pledge of Allegiance!

MATTHEWS: Bill Clinton was a guy that visited-wanted to visit Russia when he was in school. That whole thing was-his passport-all this stuff by the Republicans to go after his passport and to prove he had visited Russia, that John Kerry was some kind of a traitor in action.

BUCHANAN: John Kerry...

MATTHEWS: And all this stuff was...

BUCHANAN: Chris...

MATTHEWS: ... to de-Americanize the Democratic candidate...

BUCHANAN: John Kerry came...

MATTHEWS: ... no matter who he is!

BUCHANAN: John Kerry came home and said the guys he fought with were committing atrocities left, right and center...


MATTHEWS: Well, he was there and you weren't.

BUCHANAN: Yes. And the American people heard him say it...


BUCHANAN: ... and they believed that what he said was un-American and that's...

MATTHEWS: You guys turned him into French. It's the de-Americanization of these guys. It's a consistent pattern.

BUCHANAN: Well, what did you do with Barry Goldwater?

MATTHEWS: Dukakis had to go back to Ellis Island when you guys were finished with him.

BUCHANAN: You ran a full-page...

MATTHEWS: You keep taking guys that-it's like-you form-the Republican Party has begun to do what Ellis Island does in reverse. You come here, you assimilate, you become an American until the Republican bally (ph) boys get ahold of you, and they turn you back into a foreigner!

BUCHANAN: Let me tell you, I came into politics with Barry Goldwater, 1,200 psychiatrists signed a full-page ad...


BUCHANAN: ... saying he was...

MATTHEWS: Two wrongs don't make a right.

BUCHANAN: ... he was nuts~! You guys started it with the daisy ad, and you're getting it back in spades...

MATTHEWS: Let's go back to Michael. He's changing...

BUCHANAN: ... and you have been for the last 40 years.

MATTHEWS: ... the subject. The de-Americanization of every Democratic candidate, with the exception of Al Gore, I guess, who was so homegrown from-I guess he was accused of being from St. Alban's or somewhere.


MATTHEWS: Michael, there is a pattern here of de-Americanizing every Democratic candidate, starting with Michael Dukakis...

BUCHANAN: It's neutralizing (ph).

MATTHEWS: ... Clinton went to Russia, he did something over there...


MATTHEWS: All that stuff is-Michael, you're so quiet. By the way, I like your jersey.

SMERCONISH: Yes, and by the way...

MATTHEWS: And we got...


MATTHEWS: ... and go fishing (ph) tonight against the Dodgers...

SMERCONISH: Hey-hey, I got him to weigh in on Dodgers versus Phils. He's a Phillies man, so that scores big points.

Listen, you know what the difference is...


SMERCONISH: ... in this case? Hey, Chris here's the difference in this particular case. It's the 11th hour, and to raise all these issues now with such vengeance I think displays a certain desperation, coming in the aftermath of Gallup showing Obama opening up the largest lead of the campaign. And I think that's the way in which it's going to be interpreted, against the backdrop...


BUCHANAN: You may be right, Smerc!

MATTHEWS: ... pennant series go, Michael?

SMERCONISH: Say it again, Chris? I'm sorry.

MATTHEWS: How many games are we going to have in this pennant series?


MATTHEWS: OK. Thank you very much.

BUCHANAN: Smerc, it may smack of desperation. It may very well do that. Can't the American people-aren't they intelligent enough, wise enough, that they can hear me and Chris...

MATTHEWS: But it's not just the American people!

BUCHANAN: ... and you...


BUCHANAN: ... and make their own decision?

MATTHEWS: Pat, I love your confidence in the people. If you give people who have low information bad information, we go to war in Iraq. You've learned that. I've learned that. So the American people can be deceived. Don't give me your theory that they cannot be deceived. You and I agree on the war.


MATTHEWS: We were deceived. Lots of people were deceived.

BUCHANAN: Lots of people made a mistake on that. They can make mistakes in judgment...


BUCHANAN: ... and they did that when they elected Clinton.

MATTHEWS: So keep telling the people who opposed the war, like you and I, that we're all anti-American, right?



BUCHANAN: They're not saying...

MATTHEWS: The game should be played on you.

BUCHANAN: Well, look, if they're telling lies about him, why doesn't Barack say, It is a lie. I had nothing to do with this guy Ayers?

MATTHEWS: What's your middle name?


MATTHEWS: OK. Mine's John. We're safe.


MATTHEWS: ... Sydney.



MATTHEWS: We're going to talk-why is your middle name Sydney? OK.

Anyway, thank you, Pat Buchanan, buddy. Thank you, Michael Smerconish.

SMERCONISH: Thank you.

MATTHEWS: You spoke the truth. And good luck tonight up there at the stadium. Coming up...

SMERCONISH: I'm headed to the ballpark.

MATTHEWS: Where you-I wish I could.

Coming up: As the Dow Jones goes down another 700 points, roughly, today, so go the Republicans. Why is the plunging stock market doing such a thing? We don't even know that. And what's it doing to the Republicans this November? We think we know what's happening there. John McCain-what's he going to do about it?

You're watching HARDBALL, only on MSNBC. We know what he's doing...


MATTHEWS: Welcome back to HARDBALL. The Dow Jones dropped 678 points today to close below 9,000. And with just 26 days to go to election day, is the falling economy hurting McCain's and all Republicans' chances of winning in November? U.S. Congressman Jim Moran is a Democrat from Virginia, and U.S. congresswoman Heather Wilson is a Republican from New Mexico.

Congresswoman Wilson, you're on the show all the time. I want to ask you-let's just look at this comment here from Obama first. It's what he said today about Senator McCain's plan for the government to buy bad mortgages.


OBAMA: His first response to the housing crisis in March was that home owners shouldn't get any help at all. Then a few weeks ago, he put out a plan that basically ignored home owners. Now, in the course of 12 hours, he's ended up with a plan that punishes taxpayers, rewards banks, and won't solve our housing crisis. But this is the kind of erratic behavior we've been seeing out of Senator McCain.


MATTHEWS: Well, there we go, Congresswoman. Where are the Republicans going to go on this economic situation between now and election day?

REP. HEATHER WILSON ®, NEW MEXICO: It sounds like Senator Obama is getting more and more desperate. The fact is that it was Senator Obama who said he didn't see a problem with subprime loans, and the bill that we passed in the Congress and that John McCain supported allows the government to go in and not just buy the paper, the securities, but buy the mortgages and allow people to reduce their payments and stay in their homes.

I don't understand why Barack Obama wants to bail out banks, but doesn't want to help the homeowners. Those should-that should be our top priority. And John McCain said that should be our top priority in the debate on Tuesday night.

MATTHEWS: Congressman, how does-Congressman Moran, how does this war over the economy-I mean, we're on like the Titanic, it seems. It just keeps sinking. Every afternoon, we get the bad news.

REP. JIM MORAN (D), VIRGINIA: Yes, the market is crashing. This is a stock market crash. And it's in the middle of a recession. We have got to present a global depression.

But, with regard to this plan, Chris, of course, you know, we will probably have a new plan next week, because we have had three different plans in about three weeks.



MATTHEWS: ... do something like Senator McCain wants to do?

MORAN: Well, what I want to tell you is, this is insane.

What Senator McCain would do is to have the federal taxpayer buy every bad loan at 100 percent of value, and then guarantee it. What we passed was legislation that said, if a bank is willing to write down the loan, as much as-as much as 15 percent, and make the terms so that the homeowner can pay them, then, in return, we will guarantee that loan.

That's what the-the Treasury Department can do. It's what Fannie Mae and Freddie Mac can do. We're already doing that. But to say we will buy up every bad loan in the country for hundreds of billions of dollars? What we are doing...

WILSON: Jim, you know that's not the proposal.

MORAN: ... is rewarding the very people that shouldn't have made these loans in the first place.

WILSON: OK. What is the proposal, Congresswoman, that McCain is offering in this regard?

MORAN: What is it ?

WILSON: The proposal is to look at people who, through no fault at their own, end up upside down on their mortgages, where they have got a down payment, where they had good credit, didn't lie on their forms, and they-they end up with a house that is-with a bigger mortgage than what it's worth.

I think that those folks should be a priority to work out that mortgage, rather than just defaulting on it, declaring bankruptcy, so they can stay in their homes. And that is part of the bill the treasury secretary has...


MATTHEWS: Well, isn't this...


MATTHEWS: I thought that that was what he was proposing.


WILSON: ... focus on keeping their homes, and not on Wall Street.

MORAN: His plan would pay 100 percent of the mortgage's value. These mortgages are trading at 50, sometimes 20 percent of value. Why should the taxpayer pay 100 percent, rewarding the banks themselves? That's the problem. They're not worth 100 percent today.


WILSON: No. No, Jim. Mortgage-backed securities are trading at that...


MORAN: No, I looked at the plan, Heather. What we did makes sense.

The other problem is, it is not practical. These mortgages have been broken up into different tranches. They have been sliced and diced. You can't put them together.

What-what Senator Obama wanted to do was this write down the loan, and, in return, a bank will get it guaranteed by the government, but not have the taxpayer on the hook for every single mortgage that's out there around the country. It's insane.


WILSON: That's not the proposal, Jim, and you know it.

MORAN: It is. I read it.

WILSON: Senator Obama...


WILSON: ... kick people out on the street while he's saving his Wall Street friends.


MORAN: Well, that's rhetoric. I want to see the plan.


MATTHEWS: I guess the problem we have is that, you know, we have lost $9 trillion in wealth over the space of a year in the market, $9 trillion in value.


MATTHEWS: And a lot of that's retirement money, 401(k) money, perhaps $3 trillion to $4 trillion of that.


MATTHEWS: This is real loss of dreams for people. This is something that they worked 30, 40 years. They got the kids through college. And then they start saving money for themselves, maybe five or 10 years, if they're lucky, of that kind of saving, drying up almost a third, or more of that. Almost 40 percent of that is now gone.

It might come back in some kind of rebound, but people are looking to elected officials to try to do something dramatic.

Do you-congresswoman, do you believe that something dramatic has been done or not? Have we done the heavy lifting yet-yet?

WILSON: Well, I think that, you know, we have got to-what we tried to do is stabilize the credit markets.

And what-in some ways, the stock market is a trailing indicator. That's people looking forward and saying, are these companies going to be profitable in the future?


WILSON: The big problem on-with small business was, they weren't getting the lines of credit to be able to-you know, you have got to do a plumbing job. If you don't have a line of credit from your bank, you can't buy the pipe to hire the guys to do the job.



WILSON: And, so, the real key is unfreezing the credit markets.


WILSON: And it's going to be a rough road, but it's a whole lot less rough, given the bill that the Congress passed last week.

MATTHEWS: Do you think, Congressman Moran-I'm sorry, I have got to move.

Congressman, do you believe we have done the heavy lifting yet? Have we done the big part of the job yet by passing that bill last week?

MORAN: No, we haven't.

As Senator Obama said in that famous White House meeting, which was pretty much the same point that you just made, we have got to help out the homeowner. This has to be about the homeowner.

And that's why we put provisions into this bill to enable the Federal Reserve to help these homeowners stay in their home. That was something Democrats put in at Senator Obama's request. We just need to implement it. The problem is that it's going to take two weeks at least to implement it, and then over six weeks before we see the impact.

WILSON: And now he's turning his back on them. I don't get it, Jim.

MATTHEWS: Well, wait a minute.

Let me ask you, Congresswoman, to make a political estimate. Do you believe a Republican can win the presidential election in these times? Is it possible?

WILSON: Absolutely.

I mean, when there's problems with the economy, it always kind of doesn't help the party in power in the presidency, even though the real responsibility for this, Jim, rests primarily with Democrats in Congress, who refused to regulate Fannie and Freddie, when Republicans said...


MORAN: I was on the Banking Committee, Heather, when...


MORAN: ... Senator Phil Gramm, the chairman of the Banking Committee, insisted upon deregulation. That's nonsense.


MORAN: You had the Congress for 12 years. You have had the administration, the White House for eight years.




MATTHEWS: Generally speaking, are the Democrats pro-regulation, the Republicans anti-regulation, Congresswoman, generally speaking? I thought Republicans were laissez-faire, less government in our lives, less regulation, less taxes. I thought that was your party philosophy?

WILSON: In general, that is true.

But it was Republicans in the Congress and also the administration that said we need to change the way in which we monitor and regulate these institutions, and we need to tighten up on Freddie and Fannie. And it was the Democrats in the Congress who said, no, we think this is fine, including a guy named Senator Barack Obama.



MORAN: The administration filled every regulatory post with someone that had an anti-regulatory bias. And that's why we're in the situation we're in.


WILSON: The heads of Freddie and Fannie are supporting Barack Obama and have given more to his campaign than any other senator in the last 20 years.

MORAN: That's not a regulatory agency.

MATTHEWS: OK. All this is interesting and factual, in most cases.


MATTHEWS: Thank you, U.S. Congresswoman Heather Wilson.

Up next: Is hockey mom Sarah Palin smart to skate with the Broad Street Bullies? The "Sideshow" is next.

You're watching HARDBALL, only on MSNBC.


MATTHEWS: Welcome back.

Now it's time for the HARDBALL "Sideshow" again.

There's nothing funny about this economy, but here's Jay and Dave on the second McCain-Obama debate.


JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": You know, I don't want to say the debate was boring, but I never thought a political event in Tennessee could be that dull without the help of Al Gore.


LENO: Boy, that was dull, wasn't it? Just-oh, my God.



DAVID LETTERMAN, HOST, "THE LATE SHOW WITH DAVID LETTERMAN": At one point, Tom tells Obama and McCain that they're going to now answer questions that came in over the Internet. And you know what McCain said?

He said, "Uh, Tom, is that the same as the telegraph?"



MATTHEWS: And now John McCain's campaign may be skating on thin ice right now, but that's not stopping Sarah Palin from making the most of her hockey mom street cred. This Saturday, Palin will be in Philadelphia to drop the ceremonial first puck at the Flyers game.

Flyers fans, by the way, are known to be somewhat tough, and they can get rowdy. With the polls in Pennsylvania moving towards Obama, my advice to Palin is to drop that puck and don't mess it up. All those Broad Street Bullies aren't out there on the ice.

And check this out. We all know politicians like to spin. It's in their DNA, but what would happen if they were forced to tell the truth? That's what two challengers in an Indiana House race want to do. The Republican and the libertarian candidates want to be hooked up to lie detectors in their upcoming debate. I love it. And they want the incumbent Democratic congressman to do the same.

A Democratic official has called it pretty bizarre. Actually, it is bizarre. But we could just get a moment of truth in this 2008 campaign.

And, yesterday, Senator Joe Biden was campaigning in Florida. Check out the introduction to Senator Biden.


UNIDENTIFIED MALE: Are you ready for the change that we all need?


UNIDENTIFIED MALE: And, no matter what your party, gender, race or religion, please help me today in welcoming the next vice president of the United States, John McCain!




MATTHEWS: John McCain.

Hey, everybody gets nervous. Didn't John McCain refer to his audience the other day as, "my fellow prisoners"? He really did.

Now, speaking of John McCain, he thinks he's got a-he's quite a can-do guy. We hear it on the campaign trail. We hear it from him at the debates.

Now check this out.


MCCAIN: We've got to give some trust and confidence back to America. I know how the do that, my friends. And I know how to get America working again and I know how to fix this economy. I know how to do that.

That I know how to handle these-these crises.

I will get Osama bin Laden, my friends. I will get him. I know how to get him.


MATTHEWS: So, why doesn't John McCain go catch bin Laden, or tell General Petraeus how to do it, or fix the economy, or tell President Bush how to do it, or end the wars? Oh, I forgot. He doesn't want to just end them. McCain should just do it.

Now it's time for tonight's "Big Number."

Both campaigns are trying to win as many voters in swing states as they can. Voter registration rolls are surging. But, today, "The New York Times" reports there may be a big problem in those swing states. Thousands of voters are now missing from the rolls or have been blocked from registering in ways that look illegal.

According to the report, how many states? Six, tonight's HARDBALL "Big Number." Six states, Colorado, Indiana, Ohio, Michigan, Nevada, and North Carolina, six states with tens of thousands of voters who might not get to vote-tonight's HARDBALL bad news "Big Number."

Up next: How does America vote in times of crises? With the economy on the brink, is this Obama's election to lose? Or, when times get really scary, do we go to the right? Let's talk about whether we go right or left during a storm.

You're watching HARDBALL, only on MSNBC.


MARGARET BRENNAN, CNBC CORRESPONDENT: I'm Margaret Brennan with your CNBC "Market Wrap."

Another stunning sell-off on Wall Street, with the Dow Jones industrial average plunging 678 points, closing at 8579, the lowest level since May of 2003. Exactly a year ago today, the Dow closed at an all-time high above 14000. What a difference a year makes.

Meantime, the S&P 500 dropped 75 points, also closing at an all-time high a year ago. And the Nasdaq fell 95 points.

General Motors share plunged 31 percent, to less than $5 a share, their lowest level in almost 60 years, that on concerns about the future of the company amid declining sales. Standard & Poor's also warned that it may cut GM's long-term credit rating.

And oil fell another $2.36, to $86.59 a barrel. That's the lowest level in almost a year.

Meantime, OPEC announced an emergency meeting on November 18 to consider a production cut and boost those prices.

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

MATTHEWS: Welcome back to HARDBALL.

The economy is one of its worst periods since the Great Depression, and voters pick a new president in less than four weeks now. In a time of crisis, which way do voters tend to go, right or left?

Joining me are two of the smartest people I know, NBC News presidential historian Michael Beschloss, and Richard Stengel, who edits "TIME" magazine.

Just give me your sense. When the economy-not bad times. We have been through bad times before. But, when you have a situation where things are crashing, like now, when it's scary, what's the impulse of the voters, Michael?

MICHAEL BESCHLOSS, NBC PRESIDENTIAL HISTORIAN: They go to the party that does not own the White House, Roosevelt in '32, Ronald Reagan 1980, Bill Clinton in 1992.

MATTHEWS: They go to the other party?


MATTHEWS: What do you think? What about the ideology? Do they go to the right or left, generally, Richard Stengel?

RICHARD STENGEL, MANAGING EDITOR, "TIME": Well, Chris, I know you're concerned about whether voters opt for change or security.

I think, when-when people are this scared and this nervous, change equals security. I think that's what Michael was suggesting. I mean, if you move away from the party that has brought you that fear, that conveys a certain amount of security.

MATTHEWS: The reason I ask it is, I have a sense that Barack Obama emphasizes the bad times, and John McCain emphasizes the crisis, making me think he figures, during a time of crisis, you embrace security.

BESCHLOSS: I think that's right. And, also, I think...


MATTHEWS: Like the old hand, the old hand, the right-the man of the right.

BESCHLOSS: I think that's right.

And, also, there's a difference between economics and foreign policy. In-when there's an economic crisis, like the ones I mentioned, you basically throw out the party that owns the White House. When there's a foreign policy crisis, oftentimes, it's the opposite.

You know, one example is, you and I have talked about Franklin Roosevelt in 1944. He won against Thomas Dewey, but Roosevelt, in private, after that election, said: "If the war had ended before this election, I would have been thrown out, because people would have been voting not, we need security from our great leader who has been fighting the war. They would have been angry about postwar economic dislocations."

That's what happened to your hero, Winston Churchill, in '45.

MATTHEWS: Right. He sure did get bounced. Let me ask you, Richard, the same question-back to you afterwards, Michael. Richard, the question is, America has a history of electing people of a certain type. But for almost 200 years, it was white Protestant males to the presidency. Now we've broadened it, in 1960, to white Christians, if you will. And now we may broaden it further to males this time around. Do we broaden it to people like ex-movie actors and people of perhaps second-rate minds, as what's-his-name was referring to?

In other words, do we broaden the standard of admission when times are rough?

RICHARD STENGEL, TIME: Well, it's interesting, I mean, whether people opt for something familiar or something different. I think what's happening now is that even though Barack Obama seems foreign to some people, seems unfamiliar to some people, people are so questing for-needing change that their anxiety about the present trumps their anxiety about someone that is foreign or someone that is different.

I mean, we've seen the Republicans do this time and time again. I mean, even with John Kerry. John Kerry was a French wine, baguette-loving windsurfer, you know? Michael Dukakis was someone with an unfamiliar name who was slightly foreign. I mean, what the McCain-Palin ticket is doing now is trying to tar Obama with that brush and try to make him seem others, seem foreign.

And in a period of anxiety and nervousness, they're thinking maybe people are too nervous to embrace something that seems unfamiliar. That's.

MATTHEWS: So who wins in a time when you have to choose between the familiar but that seems like the status quo and the different that seems too foreign? It does put you in a conflict bind. Is that what the Republicans are trying to do here?

STENGEL: Well, yes, but I think.

BESCHLOSS: They are. And it hasn't-I'll defer to Rick.

MATTHEWS: Go ahead, Rick.

STENGEL: What I'm saying, though, now is that the change-the need for change is so strong that that will trump the fear of the unfamiliar, I think it's-that's sort of what Obama is banking on. That's what the Democrats are banking on. That's what recent polls show too.

MATTHEWS: And that's what happened in '32 where you had a dilettante and the Republicans had been in power roughly since the Civil War. And all of a sudden in '32 they went with the Democrats who had been on the wrong side of the Civil War. And then of course with Reagan who was described as a B-movie actor, what it meant, he made B-movies, not that he was a B-actor, all of a sudden a man of that background was acceptable, in fact, incredibly popular.

BESCHLOSS: Yes, and go up to '92. You know, you were talking earlier, Chris, about George H.W. Bush raising aspersions against Bill Clinton having gone to Moscow, campaigned against the Vietnam War.

MATTHEWS: Yes. I love that, don't you? He went to Moscow. He must be a red.

BESCHLOSS: Yes. And you remember the third debate between Bush, Clinton, and Ross Perot, Ross Perot, when George H.W. Bush brought that up, said, let's stop it, that's something that happened a long time ago, it's not important given the basic important issues we're facing as a country.

MATTHEWS: I haven't heard John McCain say that yet.

BESCHLOSS: No. I don't think you're going to hear him say that, either. But Americans might.

MATTHEWS: Well, I like to believe-ask if I'm wrong, tell me if I'm wrong, I believe Americans are up to the challenge of making a change when they know they don't like what they've got. Your thoughts, Richard?

STENGEL: Well, here's the thing.

MATTHEWS: That's why they came to America in the first place. What they had wasn't good enough. That's why people emigrated.

STENGEL: Right. And we are a nation of immigrants, but we also are a nation that is changing its face. Look, by 2040, we will be a country that no longer has a white majority. Barack Obama looks like the America that we're becoming. As Richard Rodriguez said, we're no longer white or black, we're a brown country. And Barack Obama stands for that.

The question, you know, on some people's minds, I think, and the Republicans, is that, are other people-other people, are older people, are Baby Boomers, are certain working class people so afraid of that nation that's coming, that's inevitable, that they'll turn away from that and embrace a past which in some ways is nostalgic?

I mean, part of what Ronald Reagan did.

MATTHEWS: And that's what they're encouraging-excuse me, that's exactly what the McCain campaign, led by what's-his-name, Steven (ph) Schmidt, is aimed at doing right now, get people to look backwards, not forward. They know exactly what they're doing.

Go with the old people in Florida, the ethnic people in Pennsylvania and in Florida, I know what they're doing, they're scaring them backwards. Anyway, Michael Beschloss, Richard Stengel, thank you.

Up next, can John McCain slow down Barack Obama's momentum with negative attacks? Or does he need to start talking about the big issue that matters most to Americans, the economy? This is HARDBALL, only MSNBC.


MATTHEWS: Welcome back to HARDBALL, and the "Politics Fix." Tonight's roundtable, Chris Cillizza of The Washington Post, and Ed Gordon of "Our World with Black Enterprise."

Thank you, gentlemen. Let's take a look at Barack Obama with Charlie Gibson of ABC. This is fascinating. He doesn't usually talk like this.


CHARLES GIBSON, ABC ANCHOR: Were you surprised that he didn't bring it up last night at the debate and use that line of attack?

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Well, I am surprised that, you know, we've been seeing some pretty over the top attacks coming out of the McCain campaign over the last several days, that he wasn't willing to say it to my face.


MATTHEWS: Well, actually, there's more of that tape, I wish we'd show it. By the way, what do you guys make of this, Chris Cillizza, that Barack Obama is now saying, accusing his opponent of this scurrilous attack on him, making him seem like a foreigner, a guy who hangs out with Arab terrorists?

That's basically what they're putting together, going after his middle name, going after the Ayers connection, going after contributor lists, but not being willing to say it upfront during an hour-and-a-half debate the other night.

CHRIS CILLIZZA, THE WASHINGTON POST: Well, you know, to quote the current president, Chris, that was sort of like a "bring it on" moment for Barack Obama, essentially saying, well, if you want to say something, say it to my face. I do think there is some value in that line of argument.

People don't like negative attacks generally. We know this in politics. Although they do work and they really don't like it if it looks like the candidate isn't willing to talk about it but his campaign cronies are. So it's actually, I think, a relatively smart line of attack.

I do, however, think October 15th you're almost certain to see John McCain utter the words "Bill Ayers" and probably "Tony Rezko," too. Just before I came on, Chris, the RNC, the Republican National Committee, up tomorrow with ads in Indiana and Wisconsin in which they try to link Obama to, among other people, Tony Rezko, Bill Ayers, and Bill Daley, sort of, you know, trying to play that Chicago connection there.

MATTHEWS: Bill Daley or Richard Daley?

CILLIZZA: I believe Bill Daley.

MATTHEWS: I think it's boss Richard Daley from the last generation.


ED GORDON, "OUR WORLD WITH BLACK ENTERPRISE": If you think about the style of debate.

MATTHEWS: And by the way, Richie Daley is one of the most conservative people I know on the planet. So I don't know what they're going after there.


MATTHEWS: Go ahead, Ed Gordon, your thoughts.

GORDON: If you think of the style of debate, I don't think it was that surprising by virtue of it being a town hall meeting. Many people before suggested that we weren't going to see the kind of attacks.

But what we are hearing from the McCain camp, without question, is the language of political desperation. And we are going to hear it. It is going to ratchet up from now until either these polls start to change or until the decisive day of November 4th, there's no question about it.

MATTHEWS: By the way, I just got the word here. He is going after William Daley, who is the brother of Richie Daley, who, they are both, of course, the sons of the late boss Dick Daley of Chicago.

Let me show you something that shows how rough this campaign is getting. Usually first lady candidates, if you will, the spouse of the candidate, does not attack. They usually leave that for other people in the campaign. Here, Cindy McCain is going after Barack Obama.


CINDY MCCAIN, WIFE OF JOHN MCCAIN: The day that Senator Obama decided to cast a vote to not fund my son when he was serving.


C. MCCAIN: . sent a cold chill through my body. Let me tell you, I would suggest that Senator Obama change shoes with me for just one day.


C. MCCAIN: . and see what it means-and see what it means to have a loved one serving in the armed forces, and more importantly, serving in harm's way.


MATTHEWS: Well, the problem with that argument is that the only control Congress has over war policy is whether to cut the funding. It is the only way they can have use of their constitutional authority.

Therefore, if you ever oppose a war, you are the bad guy under that argument. I just wonder whether that is fair ball to begin with, especially since her husband, John McCain, also voted against various provisions for war funding. And I don't know if there was a cold chill at that moment.

What do you think, Chris Cillizza?

CILLIZZA: Well, I was.

MATTHEWS: Is this below the belt, having the spouse come in and go after the opponent on such a raw charge of almost treason here?

CILLIZZA: I hesitate to say anything is below the belt now in politics since I feel like every time I say...

MATTHEWS: Well, don't hesitate, because I think something is going here.

CILLIZZA: Well, I do think, Chris, you make a good point, which is Cindy McCain, who has really not been all that active a surrogate for her husband-she is at his side a lot, but she is not out there as much.

It's very interesting, because she and Sarah Palin have really carried the really negative stuff, this troop vote, the Bill Ayers stuff. They've carried it, not John McCain. I don't know if the campaign is trying to draw some sort of distinction between the vice presidential candidate and the candidate's wife versus the candidate, you know, that allows John McCain to say, well, I don't talk about Bill Ayers.

But I do think with the RNC now going on TV with this, it is a signal, it's sort of a leading indicator that we are going to see more Bill Ayers, more Tony Rezko, rather than less in the last 26 days of this race.

MATTHEWS: Is this velvet glove stuff, Ed? Is this velvet glove, saying that somehow female attackers are somehow nicer even though the attack is objectively the same? In fact, it seems to be even harsher when it comes from a spouse or a surrogate like this.


GORDON: . if it is, I think it backfires because it does sound harsher, particularly coming from Mrs. McCain. One of the things that I still go back to, what I said initially. I think we are seeing out front the first level of political desperation.

With the economy going as it is, the only thing he has to hang his hat on is the war issue. And as you suggested, and almost any member of Congress, you can see an up-or-down vote as the war has gone on depending on what was on that provision.

And we've seen it from McCain. So I do think that this camp is reeling and throwing spaghetti on the wall at this point to see what's sticking.

MATTHEWS: You know, how many NBA games have we all watched where the team that is losing by 10 starts to foul to get the ball back. It's a tactic that's understandable in sports, but when the fouling contains charges of treason, you have got to wonder.

We'll be right back with Chris Cillizza and Ed Gordon with more of the "Politics Fix." You're watching HARDBALL.


MATTHEWS: We're back with Chris Cillizza and Ed Gordon for more of the "Politics Fix."

Part of this story here I think might be not just the bad economic times, which is hurting the Republican ticket and forcing John McCain to this questionable new tactic of going after his opponent's "Americanness," but it's also this new TIME magazine poll that suggested when it comes to Obama's candidacy, 5 percent-Ed, you can start here, say he is a traditional black candidate for president, 57 percent say he is a candidate of a new generation of Americans.

I wonder if people aren't consciously or subconsciously connecting him to the two activist candidates we've had in recent years, the Reverend Jesse Jackson and the Reverend Al Sharpton, who began as activists, not as sort of mainstream elected politicians. And they're comparing him to that. What do you think is going on there?

GORDON: I think there are some who are going to compare him to that simply because of his race. But I think that most astute political watchers will see that this is a, quote, "new generation of African-American politician" that did not travel that same road.

And as Mr. Stengel said in the previous segment, this is just a changing of America. And here we see the changing of an African-American politician who will represent the generation heretofore. That's all that is.

CILLIZZA: And you know, Chris, I do think-just to pick up on Ed's point, I do think it is possible that we could look back on November 6th-or November 6th or whatever day we start looking back on this thing, if Barack Obama gets elected, and think that we may have overplayed the importance of his race. That people believe change-you know, they just wanted new faces, whatever that new face looked like, they wanted different people.

MATTHEWS: Young man, young man, you are one young man, Chris Cillizza.


MATTHEWS: I salute your youth and optimism.

CILLIZZA: I'm hopefully optimistic about race in this country.


MATTHEWS: I have lived here a bit longer than you. And I just salute your optimism, sir. Because I hope we look back on this race and say that race had no role, and it was all about policy and politics.

Ed, your last thought.

GORDON: But that won't be the case. But what we are seeing, Chris, is here was a man, in McCain, who suggested he was a leader. He was going to be calm in the eye of the storm. And this desperation makes Barack Obama seem even more unflappable than he normally does. And it's hard to say that you are going to be a leader in the eye of the storm when you are reeling.

MATTHEWS: Right. And makes him all the more charming.

CILLIZZA: Chris, one last-Chris.

MATTHEWS: Chris, I've got to go. I'm sorry.

CILLIZZA: No problem.

MATTHEWS: Time is up. Chris Cillizza, Ed Gordon, gentlemen, thanks for coming on. Join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL.




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