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'Hardball with Chris Matthews' for Wednesday, October 29, 2008

Read the transcript to the Wednesday show


October 29, 2008


Guests: Tom DeLay, Rep. Debbie Wasserman Schultz, John Harris, Clarence Page, John Harris, Clarence Page, Todd Harris, Steve McMahon

CHRIS MATTHEWS, HOST: A new America? Is that what's coming after this election, an overnight change in the national spirit?

Let's play HARDBALL. c

Good evening. I'm Chris Matthews. Leading off tonight: With less than a week to go in the elections, both presidential candidates are storming the country, trying to close the deal. John McCain campaigned in Florida, saying Barack Obama isn't up to the task of protecting the country.


SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: The question is whether this is a man who has what it takes to protect America from Osama bin Laden, al Qaeda and other great threats in the world. And he has given you no reason to answer in the affirmative.


MATTHEWS: Wow! Obama held a rally in North Carolina and addressed McCain's recent attacks on him.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: Lately, he's called me a socialist for wanting to roll back the Bush tax cuts for the wealthiest Americans so we can finally give tax relief to the middle class. By the end of the week, he'll be accusing me of being a secret communist because I shared my toys in kindergarten.


MATTHEWS: Wow! And Obama's going national tonight with a half-hour political commercial airing on many networks, using his enormous financial advantage to reach as many voters as possible in primetime.

Plus: Is John McCain kind of a drag for Republicans running for reelection this year? McCain likes to mention "My friends" a lot, but are his friends in the GOP deserting him? Republican congressman Chris Shays of Connecticut says McCain has lost his brand as a maverick. Colin Powell, William Weld, former senator Charles Mathias of Maryland have all endorsed Obama, and former governor Mitt Romney warned in a fund-raising e-mail about, quote, "the very real possibility now of an Obama presidency." We'll talk about the fractured GOP brand and what it means for Republicans running in this election.

Plus: A new McCain internal polling memo said this race is tightening up and is functionally tied in background (SIC) states. We'll see what we think of that in a few minutes. We'll talk about the realities of the race and the strategies going on in the closing days with our HARDBALL experts.

Has Bill Clinton finally found a place in his heart for Barack Obama? They're campaigning tonight at 11:00 o'clock in Florida for a big one right at the news hour at 11:00 o'clock tonight. We're going to talk about that in the "Politics Fix." Is Bill Clinton going to deliver Florida for Barack Obama? And what chance do the big oddsmakers now give McCain of actually winning this thing? We'll break down the numbers on the HARDBALL "Sideshow" tonight.

And tonight also, after Obama's 30-minute ad buy tonight, Keith Olbermann will anchor a special "COUNTDOWN" tonight starting at 8:30 Eastern. I'm going to be on the show with him. It's going to be followed by Rachel Maddow at 9:00 and a special live edition of "COUNTDOWN" at 10:00 o'clock Eastern tonight. So stay tuned to MSNBC all night long tonight, another big night at the place for politics.

But first, a look at the state of this race less than a week before voters go to the polls beginning tonight with former the House majority leader Tom DeLay, Republican of Texas. Mr. DeLay, are you happy with the tone of the Republican campaign, phrases like socialist, communist, anti-American, all kinds of stuff being thrown at Barack Obama? Is it right? Is it fair? Is it smart?

TOM DELAY (R-TX), FORMER HOUSE MAJORITY LEADER: Absolutely, it is. I wish McCain would be a little more assertive, to be honest with you. I think what's going to win this is when people get to the polls, they just can't bring themselves to vote for a radical like Obama. It's deja vu all over again. He's more to the left than Gore or John Kerry put together, and the American people are starting to realize that. And that's what I think McCain ought to be focusing on, not that Obama's not ready. Hillary Clinton tried that. It's that he is too radical for the American people.

MATTHEWS: Where would you put him on that spectrum between-well, you're using terms like "socialist." You're not-you're happy, I guess, OK with words like "communist." We had somebody on the show the other day who said he ought to be checked out for being anti-American. Where would you put him? Do you think he's anti-American in his values?

DELAY: Chris, I tagged him as a Marxist months ago, particularly when you look at his relationship with Jeremiah Wright, his relationship with William Ayers. It's not that Wright makes outrageous sermons, it's that Jeremiah Wright is a black liberation theology preacher. And 20 years of association means that he must agree with the Marxist theology of black liberation theology. Same with William Ayers. It's not that he's a terrorist, it's that this guy is so anti-American, he wants to completely destroy America and build a new America. And yet...

MATTHEWS: What are you talking about? Are you talking about...

DELAY: William Ayers.

MATTHEWS: ... Barack wants to destroy-oh...

DELAY: William Ayers.

MATTHEWS: Where's Barack on this? Do you think Barack's anti-American?

DELAY: Well, that's-I'm not going to go that far, but the interview on NPR...

MATTHEWS: Well, you're going pretty far. You're calling him a Marxist.

DELAY: Well...

MATTHEWS: That's pretty far. You're calling him a radical. That's pretty far.

DELAY: Chris, all you have to do is listen to that interview in 2001 on NPR that came out this week, and that connects all the dots. I mean, he explained his world view. He explained his world view as it relates to the Constitution. He called the Constitution a charter of negative rights and that we need to rewrite the Constitution to broaden the scope of the government to work on your behalf. If that's not socialist, if that's not Marxist, I don't know what is.

MATTHEWS: So where are we at on this? Let me ask you about something that Congresswoman Michele Bachmann of Minnesota said on this show the other day. She said that she thought that the media ought to conduct a probe of anti-American thinking within the Democratic side of the Congress. Do you think that's smart to say something like that?

DELAY: Well, I-I know Michele Bachmann. She is a brilliant congresswoman, and she's-I think she's going to be reelected in Minnesota. She thinks that there are particularly people like William Ayers that are Democrats that need-you need to look at who they are and what is behind all the rhetoric and the demagoguery. That's what she was talking about. And call it for what it is. I mean, you know, Barack Obama goes on offense when people start saying what he truly is.


DELAY: The real Obama is coming out, Chris, and we all know it.

MATTHEWS: I'm not going to let you get in as deep a hole as you want to dig here, Congressman, because I know you want to get deep in this hole because I know you don't believe this about everybody. Let me get-let me ask you to slice and dice this. Let's take a real liberal, like Barney Frank, who you worked with, OK?


MATTHEWS: Is he anti-American?


MATTHEWS: Is he anti-American?

DELAY: Not at all.

MATTHEWS: OK, then distinguish him...


DELAY: He's a legitimate liberal. He's a brilliant man. I disagree with everything he does, but I have great respect for him.

MATTHEWS: OK, distinguish him from the Democratic candidate for president this year, Barack Obama. Distinguish-just take a classic liberal like Barney, from Newton, Massachusetts, who would love the word liberal. He's got no problem with it. He would probably accept the same language you use about him. He'd say, Fine, that's me. And you'd probably like the language he would apply to you. Fine. But let's talk about this use of the word "radical," "Marxist," the other terms you threw at Obama tonight, applied to Obama. How's Obama different than Barney Frank, for example?

DELAY: Well, I've known Barney Frank for a very, very long time, and I know Barney Frank believes in the Constitution. Now, he may have a little bit different interpretation, but he doesn't want to go out and stack the Supreme Court so that the Supreme Court will allow you to completely shred the Constitution.

Obama wants that. Obama's world view is redistribution of wealth. Obama's world view is to attack people-I mean, you saw it in Joe the plumber-attack people and destroy them if they have a different point of view than yours. I mean, Obama is a radical. And at the very best, he is a socialist.

MATTHEWS: But we have a-we have a-let's talk about what we're stuck with, what we have. We have a tax system. The way the burden is distributed, as you know-you probably make a little more than a congressman makes now, maybe a lot more, but you realize this tax-the way this tax system works is if you make a good deal of money, you pay about 50 percent, if you count state and local and federal. It gets up to about 50 percent. If you don't make much money, if you're a working guy or working woman out there, you mainly pay payroll taxes. You don't pay a big chunk of income taxes. We have a very progressive tax system that really hits you harder at the top.


MATTHEWS: Are you against that?

DELAY: Oh, yes.

MATTHEWS: Are you against that?

DELAY: We ought to throw this tax system out and we ought to impose a fair tax system where every American is paying some tax and has some vested interest in America. But Obama wants to raise your taxes. And I guarantee you he will not cut taxes. He will come in as president, if he is president, along with Nancy Pelosi and Harry Reid, and the first thing they'll do is raise taxes and they'll forget about cutting taxes. And they want to get taxes back up to the rates that they were back when they were in control back in the '60s and '70s.


DELAY: And you'll be paying 80 percent and 90 percent...


DELAY: ... just like Europe. That's how you can redistribute the wealth.

MATTHEWS: OK, Mr. DeLay, a political question. You built a-you helped build the Democratic-the majority, the Republican majority, in the House of Representatives back in the '90s. It wasn't 100 years ago, it was fairly recently.

DELAY: Right.

MATTHEWS: Now it looks like the part-your party's about to take another beating, maybe lose 30 more seats...


MATTHEWS: ... next Tuesday. It's going to be down to the old shrivel of the Republican Party it was 20 or 30 years ago, down to 160 seats maybe, 170 seats. Who's...

DELAY: You wish, Chris. It may get down to 170...

MATTHEWS: I'm asking!

DELAY: ... at the worst.

MATTHEWS: Well, we compare numbers. OK, 170. I'm telling you, it's way down to where it was, out of 435. That's a small minority.


MATTHEWS: I'm just asking you, without getting into exact numbers-

I don't know you're doing this. You're a smart guy. OK, 170. How...


DELAY: Wait, wait, wait. I'm not saying 170.

MATTHEWS: OK. OK, I'm not-OK. You think I'm trying to pin you. I'm not trying to pin you. If your party takes a big loss next week, whose fault is it?

DELAY: Oh, there's lots of fault, and you can't point the fingers. The one thing I'm trying to do, and I have been for the last two years, is tell Republicans and conservatives to get over it. Everybody wants to blame each other and point the fingers at everybody. There was a lot of things that brought the party down, no one person, no one ideology, and what we need to be doing is understand that and start rebuilding again. We've been there before. We were there in the '70s and we came back very, very strong. So we can do it again.

MATTHEWS: Well, it must be tough to lose to people you think are Marxist radicals. I mean, that must really hurt.

DELAY: Oh, we're not going to lose. The American people are going to figure it out and vote against Obama.

MATTHEWS: OK. OK. It's great having you on, Congressman. You speak your mind.

DELAY: Thank you, Chris.

MATTHEWS: You do not speak with a forked tongue, that's for sure.

DELAY: That's for sure.

MATTHEWS: Former U.S. congressman Tom DeLay, once part of the brilliant leadership of the Republican Party in Congress, now in hasty retreat.

Let's bring in U.S. Congresswoman Debbie Wasserman Schultz, a Democrat from Florida. Keeping the air lively here, Congresswoman, you're one of my favorite people on this show.


MATTHEWS: Can you respond to the charge from the former leader of the Republican Party-the former ramrod, "the hammer," said that your candidate for president, who you've been supporting ever since Hillary lost this baby, is a Marxist radical basically out to change the American Constitution? I think he's talking about bringing in "red rights," rather than "blue rights." Instead of having negative things the government can't do, I think he's charging Barack with trying to create rights of things the government has to do for us-in other words, socialism. What do you think?

SCHULTZ: Well...


MATTHEWS: ... to respond to.

SCHULTZ: With all due respect to Tom DeLay, I think we do have to consider the source. I mean, we're talking about someone who just made those comments that left the Congress in disgrace and presided over the biggest culture of corruption that's ever hung over the Capitol of the United States House of Representatives. So you know, we are...

MATTHEWS: That's with all...

SCHULTZ: ... in the process of moving this country...

MATTHEWS: ... due respect. Is that how you stand, with all due...

SCHULTZ: With all due respect.


SCHULTZ: Well, he spewed a lot of hate in that last few minutes...


SCHULTZ: ... and threw a lot of nasty things around, so-I mean, really. The reality is, is that we're talking about a Republican Party that is in the death throes, at this point, and they are trying to throw as much stuff up on the wall, Chris, as they possibly can and hope something sticks.

I mean, Barack Obama in the last few days of his campaign is going to ask people to, you know, reach into their heart and think about what it is they want for this country and to think about not only whether they're better off now than they were four years ago because we know the answer to that. Certainly, the vast majority are not. He's going to ask people before they vote to think about, based on their choice, whether they will be better four years from now. And that's the decision that people need to make.

People know that we need to turn this economy around, and John McCain really has been incredibly erratic on the economy. They know we need to bring our troops home from this misguided the war in Iraq and set a timetable for withdrawal, and John McCain thinks that we should pursue whatever his definition of victory is.

They know we need to wean ourselves off our dependence on foreign oil, and John McCain wants to give $4 billion in tax breaks to the oil industry. So stop the ride, we want to get off. It is time to move this country a new direction. That is what Barack Obama would do. And the nasty name calling and finger-pointing...

MATTHEWS: What do you make of this?

SCHULTZ: ... people are sick of it.

MATTHEWS: Congressman, you're younger than me by many decades, and I just want to say, what do you think of people who are calling...

SCHULTZ: I don't know about that.

MATTHEWS: ... your party socialist, communist, sometimes suggestions of anti-Americanism, radical, we've just heard it now, Marxist we've been hearing now from your own-from the senator from Florida, Martinez, now comparing the Democratic candidates and party to Castro, to Castro's communism in the Cuban community. A lot of brickbats being throw out there. And yet I look at the latest poll, just comes out from "Time" magazine tonight, which shows that Florida, 4 percent advantage for your party. You're moving up. I guess Sarah Silverman's making her mark down there with the schlep and...

SCHULTZ: We're schlepping the vote.


MATTHEWS: ... the word's getting out. So I guess-I have to guess that the people aren't buying these brickbats. They're not accepting them.

SCHULTZ: Listen, what's going on here with the name-calling and the finger-pointing on the part of the McCain campaign is that they are divided, depressed, demoralized and desperate, Chris, and don't know what else to do. They don't have the issues on the side. They're not right on the issues that matter to Americans. So they have to try to sow seeds of doubt.

And you know, people are done-the American people are done with that. They know that they want to embrace change and John McCain represents more of the same. And that's why on Tuesday, we're going to win Florida, we're going to win Virginia and Colorado and Nevada and North Carolina, and this is going to be a fabulous election night. We can finally move this country in a new direction and cast off the culture of corruption that my good colleague from the previous interview presided over.

MATTHEWS: With all due respect. Thank you very much, U.S.


SCHULTZ: With all due respect, yes.


MATTHEWS: I love that phrase! Debbie Wasserman Schultz, well said.

SCHULTZ: I mean that in a most affectionate way, Chris.


MATTHEWS: OK. Well said. Thank you.

Coming up: Republican candidates down ballot-that means people running for reelection this year-are running for cover, away from President Bush and now away from John McCain. They're not looking for coattails, they're looking to avoid them. How tarnished is the Republican brand? Tom Davis, the former head of the Republican Party, running for reelection in the House, said if it were dog food, they'd take it off the shelf. Is this going to help the Democrats win 60 seats in the Senate, or close to it?

You're watching HARDBALL tonight, only on MSNBC.


MATTHEWS: Welcome back to HARDBALL. Are President Bush and John McCain becoming a dual drag on the Republican Party? Joining me is Clarence Page of "The Chicago Tribune" and John Harris of Politico.

Well, let's go through these things right now. We've got some interesting quotes here, gentlemen. Here's Chris Shays, the last Republican member of Congress from New England. It is like-I mean, this is like the Whig Party up there. There's one left. Quote-here's what he says about President-or presidential candidate John McCain. This is a Republican congressman, the last one in New England, Chris Shays of Connecticut. Quote, "He has lost his brand as a maverick. He did not live up to his pledge to fight a clean campaign."

John Harris, it looks to me like Chris Shays is out there on his own. He's sinking or swimming on his own. He's not riding with the Republican ticket in New England anymore.

JOHN HARRIS, POLITICO.COM: Well, this is politics, and it truly is every man or every woman for himself, at this point, with McCain's campaign, obviously, in real trouble and Bush long since at toxic levels of popularity.

I'm not sure that I agree with Chris Shays that, if McCain had just run as a-the so-called 2000 -- the 2000 version of McCain, as a maverick independent, he would necessarily be doing a lot better. Remember, it was the choice of Sarah Palin that energized conservatives and seem to give him a-leave him looking pretty good look in September.

MATTHEWS: So, do you agree with that, Clarence? It's not a question of which John McCain we got; we just got a Republican in a non-Republican year?

CLARENCE PAGE, COLUMNIST, "THE CHICAGO TRIBUNE": Well, John is right about Sarah Palin energizing McCain's base. But he abandoned the middle. That's the thing. You have got to be able to hold both of them.


CAVUTO: Would he have won the nomination if he ran on the middle?

PAGE: If he-if he could have kept the base and kept the middle, and it would have been tough, but, you know, this ain't an easy game to play, especially in a year when your brand is damaged.

MATTHEWS: I agree.

Catch this line. This is Jon Kyl, who is definitely a sidekick and total ally of John McCain. Here is his fellow Republican U.S. senator from Arizona-quote-"Unfortunately, I think John McCain may be added to that long list of Arizonan who ran for president, but were never elected. Maybe we will be able to say Arizona is the only state where your child can't grow up to be president. Let's hope that doesn't happen."

Clarence, this is death knell stuff.

PAGE: Don't blame Arizona.



MATTHEWS: Well, I see like he's out there basically saying...

PAGE: Arizona is a nice state.


MATTHEWS: He's basically saying, his state is jinxed.

PAGE: But, you know, I remember Barry Goldwater very well. And I certainly remember John McCain very well. And, in both cases...

MATTHEWS: Mo Udall, too.

PAGE: Well, Mo Udall was-all three of them were mavericks in their own way. And that is a tough game to play.

Again, you have got be able to hold your base. It's the first law in politics. But then you have got to be able to hang on to the middle. Goldwater certainly didn't do that. He lost the middle.


PAGE: McCain is losing the middle. It's a tug-of-war.

MATTHEWS: Well, I have a-gentlemen, I have a Pandora's box of these quotes, and they're just pouring out today.

Here's David Frum, who was on the show a lot over the years. Quote-he was a speechwriter, one of the big ones, for George W. Bush, the president-"There many ways to lose a presidential election. John McCain is losing in a way that threatens to take the entire Republican Party down with him."

John, he is damning this guy as a party destroyer, not just as a guy who has a bad year.

J. HARRIS: Right.

No question, the circular firing squad is not waiting until after the election. It's waiting before. And there are people like David Frum, who care a lot more about the conservative movement than they certainly care about John McCain. A lot of conservatives care more about the conservative movement than they care about how the Republican Party, not just the presidential level, but the House and Senate, do in any particular year.

So, yes, it's-there's a bloodletting. It's already beginning, even within the McCain campaign, over who is responsible for all of these decisions.


Clarence, they used to call it fragging in the Vietnam War...

PAGE: Oh, yes.

MATTHEWS: .... where you shot your own guys, here, your own officers.

Catch this. This is Scott McClellan, who was, fairly recently, the White House spokesman.

PAGE: Right.

MATTHEWS: All right.

Here he is-quote-"From the very beginning, I said I'm going to support the candidate this year who has the best chance of changing the way Washington works and getting things done. I will be voting for Barack Obama."

This is Scott McClellan, who used to stand at that presidential lectern speaking for President Bush.

PAGE: Joining the other folks who are-who have been deserting the ship.

You know, fragging, yes. Fragmentation, that is what the Republican and the conservative movement are going through right now. They have gone through it before. And there are some conservatives and Republicans who says that maybe it's just as well if McCain loses, because people will sort of reassess and regroup, begin that process again that happened after Barry Goldwater.

I'm not saying is going to lose.


PAGE: You know, it may still-he may still pull it out.


PAGE: But...


PAGE: This is what-this is how people are talking now.

MATTHEWS: John, do you hear any Republican saying, this is a good year to kick the football and let the other side receive, rather than take the football? Is anybody willing say it's better to lose in these economic environment right now-this environment right now?

J. HARRIS: I don't hear people saying that publicly. I hear a lot of people, Chris, operatives and some elected officials, saying that privately, because they feel like that the party, not just John McCain, but, you know, back over the past several years, has not followed the genuine conservative principals.

So, they-they-what Clarence says-there's sort of a ritual cleansing that some people feel the party needs.


J. HARRIS: It will be tough, though, because they will get more than a cleansing if the current trends stay on course for big House and Senate gains.



J. HARRIS: It could take them years to get back to power from that kind of defeat, if in fact we see huge margins like that.


MATTHEWS: Well, in-in Africa, they used to burn the field, so that it would come back green.


MATTHEWS: Is that-is that what this is about?


PAGE: But Democrats are familiar with this, aren't they?


PAGE: ... after every loss.

MATTHEWS: I want to talk about the slaughterhouse, the charnel house that is coming for Republican senators.

We will be right back.

Oh, and thank you, by the way. We won't be back. Thank you, Clarence Page.

Thank you, John Harris.

Up next: Barack Obama is warning his supporters not to count their chickens before they hatch.




MATTHEWS: I love that commercial. We're going to see that whole thing in a minute.

Plus, what do Will Smith, Julia Roberts, and Tom Cruise have to do with this election? We will see that in the "Sideshow." That's-oh, she looks great. That's-you're watching HARDBALL, only on MSNBC. There is Will Smith from Philly.



Time for the "Sideshow."

Have you ever seen a campaign that has enough time to create an ad to keep itself focused? Catch this Web site number the Obama people put together to keep them up right to the finish line.




MATTHEWS: Message: Don't go hotdogging it until you cross the goal line.

As an example of the nonsense the Obama people are-are trying to knock down with that commercial, catch this from the pro-Obama newspaper "The New Mexico Sun News"-quote-"Obama Wins" is the headline already. The editors of the biweekly said they simply wanted to be the first ones with the headline.

I don't agree. If you're on Obama's side, don't jinx the thing. If you are a real newspaper, wait for the news.

With just two days left-actually, six days left now, more celebrities are encouraging people to vote.

Look at this new video by Leonardo DiCaprio and Steven Spielberg, where they use reverse psychology to get out the vote.


WILL SMITH, ACTOR: Get out and vote.

STEVEN SPIELBERG, DIRECTOR: No, no, no. Say, don't vote. Don't vote.

HARRISON FORD, ACTOR: Wait a second. You want me to say, don't vote?

BEN STILLER, ACTOR: I'm sorry. What am I supposed to say?

JULIA ROBERTS, ACTOR: Don't vote. That doesn't make any sense.

TOM CRUISE, ACTOR: Oh, sarcasm.

SPIELBERG: It's sarcasm.


SPIELBERG: You can do sarcasm.

CRUISE: Yes, I can do sarcasm, right?

JUSTIN TIMBERLAKE, MUSICIAN: I can do anything. I was in a boy band,


FORD: Five hundred and thirty-seven people decided the 2000 election, and you want me to tell people that one vote doesn't count?

SCARLETT JOHANSSON, ACTRESS: Five hundred and thirty-seven?

TIMBERLAKE: That's it?

RYAN REYNOLDS, ACTOR: There's more Baldwin brothers than that.









MATTHEWS: Next up: Just about everyone wants to grab Obama's coattails. But what if you are a Republican?

No problem. Illinois Congressman-who is a Republican-Peter Roskam has created a Web site called Obama Voters for Roskam. And he is a Republican. It's complete with testimonials from constituents who plan to vote for their Republican congressman-that's him-and their home state favorite, the Democrat Obama.

Now, while the McCain campaign takes whacks at the media, check out what one reporter has to say about McCain.

Scholastic News' 13-year-old reporter tells "The Concord Monitor"-quote-"I interviewed McCain so many times, he starts to notice my red shirt, because I have a uniform, and says, 'I have answered your questions too many times." He is little grumpy with me now."

Senator, Senator McCain, you have got to be nice to the kids.

Friction now between politicians and reporters is hardly an American monopoly. Overseas this week, the tension got physical. There is-look at this picture-there's Czech Prime Minister Topolanek trekking to party headquarters with his son after a rough weekend. His party had just suffered its second successive loss in elections.

Watch, though. That's right. He actually shoves that photographer. There it is. What do you think? Whoa. Was the prime minister right to insist on some personal space for him and his baby boy?

And, by the way, can you imagine an American president or candidate pushing a baby carriage down the street, like a regular person?

Now for tonight's "Big Number."

It was only in September that the online traders over at John McCain a 52 percent chance to win on November 4. What chance do they give him now? Well, that was 52 back in September. Sixteen now. Sixteen. Needless to say, John McCain has beat the odds before. We will find out next week if he can do it again. McCain's 16 percent chance now to win the White House-that's one in six-tonight's not so "Big Number."

Up next: Will first-time voters be the difference for Barack Obama, and will they really turn out? Our strategists tackle that question.

Plus, an internal McCain campaign memo suggests they think the race is functionally tied right now. Well, we will find what that's all about and whether to believe it or not.

You're watching HARDBALL, only on MSNBC.


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

A complete reversal of fortune in the final few minutes of trading, after a report General Electric was forecasting a flat profit in 2009. But a GE spokesman says the report was-quote-"inaccurate," that chief executive Jeff Immelt's comments were taken-quote-"completely out of context," and there was no forecast. GE is the parent of MSNBC and CNBC.

Still, the Dow Jones industrials finished down 74 points. The Dow had been up more than 250 points about 15 minutes before the close. The S&P 500 lost 10 points, while the Nasdaq gained seven.

The markets had all been higher, after the Federal Reserve cut a key interest rate a half-point, as it seeks to review the economy. The cut was in line with expectations. The Fed also left the door open to another rate cut next month.

And oil prices surged today. Crude rose $5.18, closing at $67.50 a barrel.

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

MATTHEWS: Welcome back to HARDBALL.

The McCain campaign released a memo from its pollster Bill McInturff today, which reads in part-quote-"The McCain campaign has made impressive strides over the last week of tracking. The campaign is functionally tied across the battleground states, with our numbers improving sharply over the last four tracks. As other public polls begin to show Senator Obama dropping below 50 percent, and the margin over McCain beginning to approach the margin of error, the margin of error with a week left, all signs say we are headed to an election that may easily be too close to call by next Tuesday."

Why was this memo released? Why was it written? What does it mean, really? How is McCain functionally tied in the battleground states?

Todd Harris once tonight-once more is in the barrel tonight.


MATTHEWS: He's the Republican strategist having to defend the undefensible, and former McCain spokesman. He is also-and, also, he's joined by Steve McMahon, who has once again an easy job of hotdogging it in the end zone tonight.

STEVE MCMAHON, DEMOCRATIC STRATEGIST: I'm going to just sit back and enjoy it.

MATTHEWS: Because, Todd, you have to answer this question.

I have looked at all the objective numbers, including the most recent numbers from "TIME" magazine, which came out tonight, that show, in all the states that really are going to decide this election, in Pennsylvania, Ohio, New Mexico, Iowa, you know, the ones are really going to decide whether Barack Obama gets the 270 votes he needs to win, he is ahead by double-digits.

It's only in states like North Carolina, Florida, and Indiana, which he would need to really roll up a score, where he is even.


MATTHEWS: Is that what they mean by the memo that says the battleground states are even?

T. HARRIS: Well, in, whether it's Ohio, Pennsylvania, a lot of these states, if you look at Obama's vote history during the primary, he did lose support in the closing days in a lot of these places.

But this memo has two purposes.


T. HARRIS: No, no, it-it does.


T. HARRIS: Number one, I guarantee you, that memo was e-mailed to every Republican county office, every McCain campaign headquarters across the country that is being used to rally...

MATTHEWS: For morale.

T. HARRIS: ... to rally the troops.


T. HARRIS: Right.

And, secondly, every single person who has ever looked at a poll knows that you can slice and dice these numbers 1,000 ways. These numbers are meant to put-whether it's even a moment's hesitation in sort of the chattering class, to give them at least another way to look at what's going on, on Election Day.

Look, the campaign knows that they are behind, but we also know it's not over yet, and they need every one of their supporters out knocking on doors, making those phone calls.

O'BRIEN: Is this like one of those Arab news broadcast during the Six Day War with Israel? They said, we have sacked Jerusalem. We have we won the war. It's over. Is this one...


MCMAHON: This is one of those memos where, if you take the money, you have to put your name on it.


MCMAHON: And that's exactly what is going on here.

Now that we have had that moment of pause that we were supposed to have as a result of the memo, can we talk about what's really going on out there?



MATTHEWS: ... so fine.


MCMAHON: Every single battleground state, including states that John McCain should be able to take for granted-this is my little-my little note card here, yes.


MCMAHON: In Colorado-in Colorado, Obama is ahead. In Ohio, Obama is ahead. In Florida, Ohio-Obama is ahead. In Nevada, Obama is ahead. In Virginia, Obama is ahead. In Pennsylvania, he's ahead by 11.

So, notwithstanding the fact that in, a Democratic primary-of course, this is a general election, which even Todd will admit-Senator Obama didn't do as well in Pennsylvania as he is doing right now, he's ahead everywhere. And if the people at home are looking for an early clue to next Tuesday...

MATTHEWS: OK. Let's talk about early clues.

Todd, your chance. A lot of people have voted already. I voted already. Something like 25, 30 -- well, close to a third of the voters have voted already. All the indications are that younger voters are-everybody is voting early. And the numbers are very positive for the early voters. What does that tell you?

T. HARRIS: Well...

MATTHEWS: According to the new NBC/"Wall Street Journal" poll, MySpace, 69 percent of first-time or lapsed voters-I love that-it's like lapsed Catholics-favor Obama, with just 27 percent going to McCain.

So the people that don't normally vote, the ones that separate the registered voters list from the likely, the ones that don't ever show up have shown up.

TODD HARRIS, REPUBLICAN STRATEGIST: This is why Gallup has two different models. They have got their expanded model, including all of those people, and their traditional model, that excludes them. And.

MATTHEWS: Right. Which one would you bet on?

HARRIS: I'd bet on the expanded model.


MATTHEWS: This is an honest man. This is an election which is probably the most exciting-I got a briefing on it which is off the record. But let me tell you something, everything I hear in all-this is going to one of the most rock 'em, sock 'em, world-changing elections in our history.

It's going to include a really good turn out, nobody is going to be saying election night or three days after, the old people are always meowing over this, how come people didn't vote? Everybody is going to vote. You are going to have 130 million-plus voters out there, a huge sampling of American opinion, young people, minorities, lapsed voters. It's going to be huge, right?

STEVE MCMAHON, DEMOCRATIC STRATEGIST: If you are a political scientist and you love campaigns and politics, this is a really exciting time, because it is going to be a huge election. It probably will be 130 million people or more. And the new people that are coming in-this is why it's a very bad omen for John McCain, the new people that are voting were registered by the Obama campaign. And they favor Barack Obama if you look at the numbers that you were quoted just a moment ago.

New voters favor Obama by a margin of two-and-a-half to one. And lapsed voters favor him by a margin of about the same. So if those people vote, and it looks like they are voting. His margin is going to grow, which is going to affect the House and the Senate. And.

HARRIS: Well, and along those lines, if I were a Democrat, the only thing that I would fear more than Obama losing would be Obama winning and the Democrats taking a filibuster-proof majority, the 60-seat majority in the Senate, because the old Colin Powell rule, if you break it, you own it.

And if Democrats are in control of every single branch of government, that is a good omen for 2010 for Republicans to start coming back.

MATTHEWS: Are you worried that the Republicans might win all branches of government this time? Are you worried that that might happen? In other words, if it's a bad thing, you must be worried it might happen.

HARRIS: I don't think that's in the cards.

MATTHEWS: Would it be bad for your party to win everything this time?

HARRIS: I'm going to guess.

MATTHEWS: No, I'm just asking you, would it be bad for your party to win everything?

HARRIS: I will be happy to take it.


MATTHEWS: Now, see, see? This is the way it goes. It's so terrible to win.

HARRIS: Secretly hoping that they get just to 59.

MATTHEWS: OK. Let me ask about 8:00 tonight on TV. I didn't want to get to it, but I am going to get to it. Barack Obama has the money. I mean, he has so much money, so much gelt, he can just buy what he wants. He is buying a half hour of prime time television at the cost of a fortune. Is he going to make good use of it? Are we sure that that half hour is going to be in his interest?

MCMAHON: I think so, because at the end of a campaign like this one, you're somebody that everyone is now looking at as a possible president of the United States. What's most important is to get people comfortable, as comfortable as they can get or more comfortable than they currently are.

MATTHEWS: Could he get too intimate where people...

MCMAHON: I don't think so.

MATTHEWS: . look at it tonight and say, he is a little too close to me, I'm not sure I like him so much.

MCMAHON: I don't think so. I think there is going to be a dose of bio. And he is going to again reemphasize the values that he was raised with are the values that America believes in. And he is going to basically give people confidence that when he steps in, he is going to be presidential and he's going to know what he is doing and he's going to do a good job.

And the more he can do that, at the end of the day, people already agree with him, he has got the tailwind, he is going to be in good shape.

MATTHEWS: Todd, anybody want a half hour of free television time to say how great they are? Who wouldn't want it?

HARRIS: Oh, I hope he opens up this half hour by saying hi, I'm Barack Obama, and I paid for this half hour because I broke my promise on taking the public financing.

MATTHEWS: I don't think he will do that.

HARRIS: Probably not.

MATTHEWS: But you really-you just dumped on his parade there nicely. Anyway, thank you for the rain showers. Todd Harris, good sport. The man in the barrel (ph), Steve McMahon.

And up next, does Barack Obama's 30-minute ad coming up tonight run the risk of making him look presumptuous or is this a smart way to win over undecided voters? I think it's a chance to get up close and personal. Let's see if we like him as much-or if people like him as much. The "Politics Fix" is next. This is HARDBALL, only on MSNBC.


MATTHEWS: Coming up, Barack Obama hits the airwaves tonight for a 30-minute special. Will this help him close the deal? Plus, Obama finally campaigns with Bill Clinton tonight. What took so long? HARDBALL returns with the "Politics Fix" tonight, next.


MATTHEWS: Welcome back to HARDBALL and the "Politics Fix." Tonight's roundtable, MSNBC political analyst Michelle Bernard, and Joan Walsh of Salon.

Joan, I want you to talk about the political future of Governor Palin. Is it bright? Is it dark? Is it nothing? Where does it stand in your light right now? Is she going to go on and become the big nominee, the talk of the town after this election whatever happens?

JOAN WALSH, EDITOR-IN-CHIEF, SALON.COM: It's not nothing. I think it's bright. I don't know exactly what it is. You know, as long as she is not shot in this circular firing squad before November 4th, I think she has a bright future. It has been ugly out there.

And they've really-you know, to watch the McCain campaign, I say today on Salon that they tried to turn her into "Veepzilla," this awful creature who has run amok and she is a diva and a rogue and a whack job. And we have never seen anything like it.

On the other hand, I think it represents a fear that she developed this independent power base and it's very right-wing. I think it's very limited, but people-if you love her, you really love her, you are very loyal to her, and I think she is going to come out of the gate a star, you know, after what I assume is going to be a serious Republican defeat.

MATTHEWS: Yes. With all of this talk, Michelle, about Barack Obama being ahead in the numbers, anything can happen next Tuesday. But also not everybody wants unity in this country. There is a lot of money to be made in division, and in parsing your own share, your niche marketing.

It seems like the governor of Alaska speaks to at least 20 to 30 percent of the Republican Party, maybe 50 percent.



BERNARD: I mean, people-you know, I have got to tell you, people love a woman with moxie. And we-there are people who feel that Sarah Palin is a complete disaster and there are other people who feel like she has got a very bright, shining future in front of her.

People are enjoying-particularly Republican women and libertarian women, are enjoying watching her sort of break out from the McCain campaign and being herself. She has given these two policy speeches. You know, she has offered to give people copies of her medical records, do things outside of the McCain campaign.

MATTHEWS: Oh, that's tasty. She's saying, look at my medical records, because nobody else will show you theirs. That's one way to show them up. Let's take a-so you see her as a real Cat Ballou, a real-you know.


MATTHEWS: OK. Somebody really exciting. Well, here, let's take a look at her on energy and see if we can spot that greatness in a speech today in Ohio.


GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE: We cannot leave ourselves at the mercy of foreign suppliers. To confront the threat that Iran, too, might seek to cut off nearly a fifth of the world's oil supplies, or that terrorists might strike at vital refining facilities in Saudi Arabia, or to consider that Venezuela might shut off its oil deliveries as Hugo Chavez likes to threaten sometimes, we Americans need to produce more of our own oil and gas, and we can do it because we have it here.

God has so richly blessed our land with the supplies that we need.


MATTHEWS: Well, there you have the evangelical and the energy together. There God has blessed us with energy supplies. I mean, not that he didn't, but this is really.

WALSH: And it happened not to really be true. I mean, it is really an exaggeration to say that we'll ever be able to produce enough of our own energy. And you know, I think the speech, she didn't really embarrass herself. But again, it was very pedestrian and you know, if that's the sort of thing you like, you're going to like it. But I don't think she.


WALSH: . for something, anyway.

BERNARD: Well, I completely-I disagree. I think that Sarah Palin stood up today and she said, I'm not a Republican Barbie Doll. There is substance to me. I have been painted in a very bad light over the last few weeks since the Republican Convention. She put John McCain's campaign back on track and she has come out-she's saying, there is substance here, I'm not just an attractive woman. I'm not stupid. I don't spend $150,000 on clothes voluntarily. Listen to what I have to say. I think she gave a great speech today.

MATTHEWS: Where do fundamentalists stand? I'm not sure if you're a fundamentalist, but where do they stand on the creation of oil? Didn't oil get created by fossil fuels? By millions of years ago in the ground that come about because of organic growth and then decay and the degeneration, the creation of coal? Does anybody believe that the coal that's on the Earth right now was created in the last 3,000 or 4,000 years as it was written in the Bible, literally? Does anyone believe that? I guess they must.

BERNARD: I have absolutely no idea. Maybe Sarah Palin does. I don't know, Chris.

MATTHEWS: I'm just curious about how these-I know, Joan, you are giggling because you wonder how all of these things work together in this ideological symmetry here where you have a.

WALSH: I do, Chris.

MATTHEWS: . religious belief that goes in one direction and your politics goes in the same direction. I just wonder if anybody ever compares notes in these two categories.

WALSH: Well, you know, if you ever get to.

MATTHEWS: Like oil was put here as a blessed event, but maybe it was put here millions of years ago, and if so, let's reconsider some of our literary interpretations these days. Go ahead.

WALSH: When she comes on HARDBALL, I look forward to you getting to the bottom of that, to all of those questions. That is going to be great.

MATTHEWS: Well, we don't usually get the scriptural interpretation here. But we'll do the Dead Sea Scrolls, should she ever show, I promise, because the chances of me getting Sarah Palin in the next week are as good as me finding more of the Dead Sea Scrolls. I'll be right back.

WALSH: But after that, I promise you she'll be here. She'll be here.

I bet she'll be here after that.

MATTHEWS: I think she's around, she'll be around a long time. I think she has got the spark of political stuff, whatever that is.

BERNARD: Absolutely.

MATTHEWS: It doesn't have to be greatness, but she has got something. We'll be right back with Michelle Bernard and Joan Walsh for more of the "Politics Fix." We're going to talk about Bill and Barry tonight. Barry, of course, being Barack Obama's nickname, Bubba being Bill's. I should say, correctly, Bubba and Barry are on the road tonight at 11:00. Let's talk about the fact that they're finally getting their act together. The Blues Brothers are back. You're watching HARDBALL, only on MSNBC.


MATTHEWS: We're back with MSNBC political analyst Michelle Bernard and Salon's Joan Walsh with more of the "Politics Fix." We just got this in. Apparently we were right, Sarah Palin is here to stay politically on the national stage. "I think if I were to give up and wave a white flag of surrender against some of the political shots taken against me," blah, blah, blah, "I'm not doing this for naught."

Clearly she's here for the long run, Joan.

WALSH: Well, all right, Chris.

MATTHEWS: Around a long time. Let me ask you, let's go to the Democratic court right now to you, Joan. And you take over here to some extent. What do you make of the politics of this? It's very interesting. Bill Clinton has offered to do whatever he can to help Barack Obama on call. Whatever he is called to do, he will do, given whatever.

Tonight at 11:00 East Coast time, he is going to be campaigning with Senator Barack Obama in Florida. It seems like a late night for both of them. But they're out there together, Barack, AKA, Barry, and Bill, AKA, Bubba, together. What do you make of the strange timing and lateness of this get-together?

WALSH: I don't understand the lateness. But you know, I'm looking forward to it. I think it's going to be great political theater. And you know, I was watching you yesterday, and you were very gracious to Hillary Clinton and talked about how much she has done for Barack Obama despite what people thought and the worst fears of people who said she is going to destroy the party and destroy him, et cetera.

Now President Clinton has been out on the trail separately. We haven't seen him with Obama. I think tonight is very interesting. I think, none of us know what history-what fate will present us with. And I think that Barack Obama, ironically, is a way for President Clinton to really secure his legacy, helping elect this young black man, our first actual first black president who will usher in and restore a lot of the good things about what the Clintons were about, not the bad things.

And really, I think, bring about a kind of return to how do we make this economy work? How do we make it fair for people? I think that could be part of his legacy, helping to get this man elected. And I think he has got to throw his heart into it in the next few days.

MATTHEWS: The interesting part is the iconography of the 11th hour.

I mean, you're just talking about coming into a campaign in the 11th hour. Here he is literally in the 11th hour tonight, just a couple of days before the election.

BERNARD: Absolutely. It is very interesting. You know, these fellows don't seem to really like each other, but as I recall from the Clinton years, Clinton is a night owl, you know? They don't.


BERNARD: They don't like each other. They're going to go out late tonight. It's not prime time television. Who knows what the body chemistry is going to look like between the two of them.

MATTHEWS: I'll bet it's good.

BERNARD: But-you know, but on the other hand, I mean, President Clinton did a lot of damage to his legacy during the primary season. And I think that if he goes out and he campaigns hard for Barack Obama tonight, and continues to do so through Tuesday, if Obama is elected, he will do a lot of, you know, repair work to his legacy, particularly within the African-American community.

WALSH: I think that's a little bit unfair.

MATTHEWS: Well, I'll repeat my words that I spoke tonight, Hillary.


WALSH: I think he was treated unfairly.

MATTHEWS: Go ahead.

WALSH: I think he was treated unfairly during the primaries. I think that there was a lot of exaggeration, and the idea that he is a racist and he was called a racist is really one of the shocking abominations of this campaign.

MATTHEWS: OK. On that note, Michelle Bernard, than you, Joan Walsh.




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