HARDBALL
December 4, 2008
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
Guests: Rep. Gregory Meeks, Rep. Dan Lungren, Robert Nardelli, Steve McMahon, Todd Harris ,Dan McGinn, James Gattuso, Steve McMahon, Todd Harris, Roger Simon, Jill Zuckman
CHRIS MATTHEWS, HOST: Spinning their wheels. Why the American auto industry can't catch a break, even from Congress.
Let's play HARDBALL.
Good evening. I'm Chris Matthews. Leading off tonight: Pony up or belly up. Last time, they asked for $25 billion. This time, they asked for $34 billion. Last time, they came to Washington in private jets. This time, they drove hybrids. Last time, they just asked for money. This time, they offered plans. A lot of things have changed since the CEOs of Detroit's big three auto makers came with their hands out two weeks ago, but it's not clear they changed many minds.
(BEGIN VIDEO CLIP)
SEN. RICHARD SHELBY ®, ALABAMA: I intend to oppose bailing out the big three auto manufacturers. Industry analysts contend that the firms continue to trail their major competitors in almost every category necessary to compete and to make a profit.
(END VIDEO CLIP)
MATTHEWS: So what would happen if the big three were allowed to simply go belly up? Could the economy survive that kind of shock? We'll look at the bail-out and just what's at stake in a minute.
By the way, is there some sort of class warfare being waged against the auto makers and their workers? When Wall Street executives who don't actually produce anything beg for $700 billion to help them out of a crisis that they created, they got their money. So why are the big three being given such a hard time? As one person put it, People who shower before work are getting bailed out, people who shower after work aren't. Tonight, bail-out politics, white collar versus blue collar.
Plus, a few weeks ago, we had a lot of fun with our HARDBALL strategists, asking them to rule on those disputed ballots out in Minnesota in that Senate race. Well, the election still hasn't been decided, so we thought we'd give them another look-we'll give you another look at some of these crazy ballots. People obviously didn't take the SATs. They're not used to these ballots that they have to fill out, and some of them are remarkable. I think you can tell who the person wanted to vote for. Let's see what the Democrat and the Republican strategist think when they look at it. Most importantly, what are you going to think when you look at these ballots if you're the election judge? Take this one at home tonight, this judge.
Anyway, look who's back in the news again, Sarah Palin. We know all about her $150,000 spending spree during the campaign. Well, as they say in all those infomercials, but wait, this there's more, much more. We'll have that his on the "Politics Fix." And which member of the U.S. Congress hung up on President-elect Obama, and did it twice? We'll have that on tonight's "Sideshow."
But we begin tonight with the debate in Congress over whether to bail out Detroit's big three auto makers. U.S. Congressman Gregory Meeks is a New York Democrat and U.S. Congressman Dan Lungren is a Republican from California.
Congressman Meeks, are you for or against giving these auto industry people something like $30-some billion in bail-out money?
REP. GREGORY MEEKS (D), NEW YORK: I think that the industry is too important to let fail, but we've got to have some mechanisms in place so that we can make sure that they are going to have a real change of how they've been doing business and that the taxpayers will be able to get their dollars back this the long run. So we've got to look, and I think that maybe the administration from the Treasury Department should have someone that is going to be on the look-out and looking at what's taking place, looking at a plan. But I think that we can't allow the industry to fail.
MATTHEWS: What car do you buy, sir?
MEEKS: Well, I have had-there's a number. I have...
MATTHEWS: No, what do you have right now? What do you have? What do you have right now?
MEEKS: I have a Honda and...
MATTHEWS: A Honda?
MEEKS: That's correct.
MATTHEWS: And what?
MEEKS: I have a Honda.
MATTHEWS: You have a Honda?
MEEKS: Yes.
MATTHEWS: You don't have an American car, but you want us to bail out the American car industry. Why didn't you invest in an American car?
MEEKS: Well, I have invested in American cars previously.
MATTHEWS: Not lately.
MEEKS: But my point is that they need American cars to compete. They do need to compete...
MATTHEWS: Well, isn't the reason they're not being able to compete is that gentlemen like you, consumers like you, choose to buy Hondas...
MEEKS: No.
MATTHEWS: ... rather than American cars because you choose to think -
well, you decide they're better cars?
MEEKS: No. What we've decided is that they have been building-I believe that foreign manufacturers have been building better cars, and that's why we better make sure there's a new plan so that they can compete...
MATTHEWS: OK. Fair enough.
MEEKS: ... with foreign cars.
MATTHEWS: Let me ask Congressman Lungren-I have to be fair and square here. What do you drive, Congressman Lungren? It's not my business, except if you're going to ask to bail out the industry, I got to know whether you want to do your bit your bit or not and buy one of their cars.
REP. DAN LUNGREN ®, CALIFORNIA: Well, I have one Ford product and I have two Toyota products.
MATTHEWS: OK.
LUNGREN: I believe all three of them were made in the United States by American workers.
MATTHEWS: Oh, no! You're hedging! But we're...
LUNGREN: No, I'm not hedging.
MATTHEWS: ... talking about bailing out the U.S. industry, the U.S. industry.
LUNGREN: Absolutely.
MATTHEWS: You obviously made a 2-to-1 bet against them in your personal consumption habits. Why should the United States government give 34 billion bucks to companies that you don't really trust with your car-buying decisions?
LUNGREN: I don't think the Congress ought to be doing that.
MATTHEWS: OK.
LUNGREN: What Congressman Meeks just said about having somebody looking after this problem is precisely what I say we ought to do. It's called a bankruptcy judge. We have Chapter 11, which was established for situations precisely like this. We've done it with airlines and we've done it with other large corporations. There's no reason why we cannot do that. In fact, it is the only way you're going to get all the parties at the table and have everybody actually...
MATTHEWS: OK...
LUNGREN: ... have to accept what the overall agreement is. That's the only way you can do it legally.
MATTHEWS: Congressman Meeks, I'm confronted now with the fact that it seems to be, for some reason, there's a lot more hesitancy to give money to the auto industry than there was to give to Wall Street. Wall Street got a heck of a lot more money, you know, something like $700 billion in bail-out money, compared to the relatively puny one twentieth of that that the auto industry is asking. They're asking for about $30 billion. These guys got $700 billion, about 20 times as much.
Why is Wall Street a better-well, a better beggar than the auto industry? Why did they get the money quick without any plans at all, by the way? We still don't know how that money's going to them. We are asking for these guys in Detroit to give us engineering plans of how they're going to produce a more attractive, sellable car.
MEEKS: I think, to some degree, what Congress is doing, you know, is trying to make sure maybe some of the mistakes we made in the past as far as oversight.
MATTHEWS: Right.
MEEKS: People forget that, initially, when the secretary of the Treasury came to us, he came with a three-page document. And there was more going over what the money was going to be utilized for, and we thought that that money was going to be to buy the bad toxic assets. And then the Treasury changed his mind at the last second, and that left all of us for the first $350 billion. I think that when you see even on the financial industries, for the second, that there's request for the next $250 billion, there's going to be change there.
MATTHEWS: OK...
MEEKS: And the key to me with reference to the auto, this is a loan -
it is not a grant or anything of that nature-that has to be paid back.
But we want to make sure that there are companies that are able to compete and that will be in existence...
MATTHEWS: Yes.
MEEKS: ... to pay the money back to the taxpayers.
MATTHEWS: What do you make, Congressman Lungren, of the argument that this is basically politics of-class politics, that we're more willing to give money to the white collar workers of New York than we are to the blue collar workers of Detroit?
LUNGREN: Well, I don't accept that...
MATTHEWS: There's much more resistance to this deal than there was to the huge bail-out in New York.
LUNGREN: Well, I don't accept that for these reasons, Chris. Number one, the argument was made and accepted by a majority of us in the Congress that the financial institutions were going to collapse, which would cause the credit market to collapse, which would therefore impact each and every one of us in our own individual lives. It was supposed to be a singular moment that we were dealing with.
What we have seen since that time is, frankly, the Treasury Department not acting the way they suggested they were going to. And I think you're going to see a reaction from the Congress in a negative fashion if they don't change, number one.
Number two, we had to swallow hard to accept that rescue plan, and the argument was made that this was a one-time-only thing and it would not be a precedent for the future. If we do that here in the auto industry, there are those who want to do it in the credit card industry, there are those who want to do it in just about...
MATTHEWS: Right.
LUNGREN: ... every other industry out there.
MATTHEWS: How about newspapers?
LUNGREN: Newspapers!
MATTHEWS: How about newspapers?
MATTHEWS: I love newspapers, and they're dying because people aren't buying them, that's why. The same thing with American cars. We aren't buying them. We wouldn't have a-let me go to Congressman Meeks...
(CROSSTALK)
LUNGREN: We are buying American cars. They happen to have the name on them of Toyota, Honda and the rest of them.
MATTHEWS: OK...
LUNGREN: They're being made in the United States. They are being made in the United States.
MATTHEWS: I know. I know. I know. I accept that. But cars with names on them we recognize as American, by American-owned companies. Let me ask you this, Congressman Meeks, because you're on the other side of this argument now. You support the bail-out. Sixty-one percent of the American people, according to a new CNN poll just out the other day, are opposed to this bail-out.
When you think about the auto industry, it seems like people not only are not-are increasingly buying foreign cars, like you are, and not buying American brand cars, but they don't want to help the auto industry. Why is that?
MEEKS: Well, I think that it's a result of people not seeing the relationship between helping the auto makers, and now even, I think, if you take a similar poll to the financial services industry, the connections to Main Street and back street. And I believe there is a connection between Main Street and back street, and I think that the dialogue...
MATTHEWS: Yes.
MEEKS: ... has not shown what that relationship is adequately. And if we lose five million jobs, which-and then you look at a number of others that would be connected thereto, it would be further devastation on our economy. And I would think that we should do at least what our competitors do. You know, when you look at some of the foreign cars, when they are in trouble, their governments do give them some subsidies to help them out.
MATTHEWS: I know. But I...
MEEKS: And so if we want to be competitive, we do have to think about doing the same thing so that we can remain competitive.
MATTHEWS: If we want to be competitive, sir, I think you have a challenge here because three out of four, you and Mr. Lungren's buying decisions, car buying decisions, have been to buy foreign cars. You bought one for one. He bought two for three. Three out of four foreign cars-that is a survey we just took here on the show on live television. I think it explains why the U.S. auto industry is in trouble.
When given the choice in a free choice society, people are increasingly not buying our products in this country with our names on them. I know it's a problem. It's not fair to the guy and the woman working in the industry. It may be fair to the people who design these cars. Thank you very much U.S. Congressman Gregory...
LUNGREN: But-but...
MATTHEWS: Go ahead, Congressman.
LUNGREN: Chris, I just want to say...
(CROSSTALK)
LUNGREN: ... don't give up on the American worker. American workers are producing American cars, and it's their ingenuity that's being used all across this country. Let's not forget them. We can do it with the proper leadership.
MATTHEWS: Right.
LUNGREN: And frankly, if you go Chapter 11, that's not death and destruction, that's reorganization and rebirth. And then maybe these companies can compete.
MATTHEWS: But Congressman, you're rooting here for the non-union worker working for the foreign auto company. Isn't that right?
LUNGREN: Not necessarily. You have a joint venture...
MATTHEWS: It sounds like it.
LUNGREN: You have a joint venture in California between GM and one of the foreign manufacturers...
MATTHEWS: OK...
LUNGREN: ... and they happen to have an agreement there that is working.
MATTHEWS: OK.
MEEKS: American companies have a challenge. They've got to live up to it.
MATTHEWS: OK...
MEEKS: Congress says now, You've got to show a new way of doing business, otherwise you are going to be in trouble. And I believe that they will step up to the plate and you'll see more Americans like myself...
MATTHEWS: OK, we got a Honda...
MEEKS: ... buying American cars if that happens.
MATTHEWS: We got one Honda and two Toyotas in this room. Anyway, thank you U.S. Congressman...
LUNGREN: And one Ford!
MATTHEWS: ... Gregory Meeks, U.S. Congressman-and one...
(LAUGHTER)
MATTHEWS: Thank you, Congressman Dan Lungren.
Coming up, Chrysler chairman and CEO Robert Nardelli joins us coming up. We've got one of the big three guys coming here, one of the big ones coming here in a minute. Plus: So why was Congress able to cough up $700 billion to save Wall Street but they're fighting over the nickels and dimes of the auto industry, $30-some billion for Detroit? They only want one twentieth. They want a nickel out of the dollar going to the other guys in New York. Why is the Big Apple beating Motown? We're going to look at the debate between Wall Street and Main Street in a minute, when Congress comes back.
We're coming back in a minute with more HARDBALL.
And on this Sunday, "Meet the Press" has got a hell of an interview. He's got the president-elect, Barack Obama, meeting Tom Brokaw on "Meet the Press" this Sunday.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES: No matter how important the autos are to our economy, we don't want to put good money after bad. In other words, we want to make sure that the plan they develop is one that ensures their long-term viability for the sake of the taxpayer.
(END VIDEO CLIP)
MATTHEWS: We don't want to spend good money after bad. That's President Bush in an interview with NBC's John Yang.
Robert Nardelli is chairman and CEO of Chrysler. Mr. Nardelli, that's a hell of a statement by the outgoing president, that we don't want to spend good money after bad, and he's talking about not spending money to help the auto industry. What do you make of that?
ROBERT NARDELLI, CHRYSLER CHAIRMAN & CEO: Well, Chris, I appreciate the opportunity. We spent six hours today in the hearing, and you know, I come away feeling pretty good about it. We were here two weeks ago, and they sent us back and asked for more detail. We submitted a 120-page document, Chris, laying out each of the elements that they asked for in total detail, tremendous granularity. I felt good that they read that document. Their questions reflected that. They asked very probing questions. They gave us ample time to respond.
So again, our focus in coming here today again was to try and convince both the House and the Senate how critical the situation is, the importance of the auto industry, and to consider giving us, in Chrysler's case, $7 billion that would get us through this financial crisis, this economic trough, and allow us to continue our restructuring efforts that we started in August when we became independent and then be able to fuel a product renaissance going forward in 2009, '10, '11 and '12, Chris.
MATTHEWS: Well, let me ask you about the Chrysler car right now. Lee Iacocca got a billion-dollar loan guarantee from the federal government and was able to meet the requirements of that loan. Do you have the same confidence that in this environment, this economic situation we're facing right now, a deepening, prolonged recession, apparently-not a good outlook for selling cars-that you could pay back the money you borrow from the federal government?
NARDELLI: Well, Chris, I hope I'm as successful as Lee. You know, we've had a lot of discussions about this. You know, the good news is, Chris, that the government at that time did make an informed decision and did allow Chrysler to continue to exist. The fact is, we paid the money back with about $300 million of interest.
Had that not happened, think about the job loss, think about the impact on the economy. And I think that's the important point here, Chris, is that we-and I appreciate the opportunity. We've got to make sure that the people across America understand the importance of the auto industry. And should it go away, Chris, we're looking at 2.5 to 3 million jobs that will be impacted. We're looking at somewhere around $300 billion of systemic impact on the financial institutions that have their money invested just in the three manufacturers. There are studies out there today that there's over a trillion dollars of investments that would have a catastrophic impact on the financial institutions that are already struggling, Chris.
So we must save the auto industry. It's critically important that we don't go from a deep recession to a depression, creating this unprecedented level of unemployment in our country.
MATTHEWS: Can we defeat the competition as American auto makers when the competition has benefits like health care paid for and governments which have much stronger social systems than we do, Canada included, Japan, where the workers do get health care benefits as citizens' rights? We don't give them as citizens' rights. We don't recognize them as rights in this country. The union contract has to get them. The UAW has to demand them in collective bargaining.
Is that the reason we can't compete dollar for dollar with quality imports and quality-produced cars in this country made by other manufacturers? Why are we at a disadvantage, sir? Is it the health care costs? What is it?
NARDELLI: You know, Chris, I think that would-again, I think that would misrepresent. Our labor cost is about 10 percent of our overall cost. I think that Ron Gettelfinger, you know, again, demonstrated the professionalism and understand the criticalness of where we are with his statements yesterday about willing to open up some of the contract relative to some of the things that are in work rules, looking at the VEBA payments, and so forth.
MATTHEWS: Right.
NARDELLI: So I think he's demonstrated, as he's done in the past, a willingness to come to it. You know, Chris, since I took over, we've spent about a half a billion dollars in improvements in our products. We reduced our warranty costs 29 percent. Seventy-nine percent of our products in 2009 will have fuel efficiency better than 2008. We've gone through massive restructuring that was...
MATTHEWS: Right.
NARDELLI: ... desperately needed, Chris, in our industry, in our company. We have taken out 1.2 million units of it capacity. We have furloughed, unfortunately, 32,000 employees. We have taken $2.4 billion of fixed costs out just this year alone.
So, we were well on our way, Chris, through the first half, of-of returning to profitability. And then this unprecedented level of drop in the auto industry, going from a high of 17 million units, to-to basically 10.5. That's 6.5 million units in our business alone.
MATTHEWS: Yes.
NARDELLI: In-in Chrysler's case, that's 650,000 units, based on a 10 percent share...
MATTHEWS: OK.
NARDELLI: ... or $16 billion of revenue gone, Chris.
MATTHEWS: I mean, you have a problem, though.
We had a couple congresspeople on from different parties and different views about the bailouts. And I counted their auto preferences, and they got two Toyotas and a Honda, and I believe one Ford. So, that's three out of four foreign cars. You're not selling too well on Capitol Hill.
But, congratulations. Maybe you can sell them on the bailout. You haven't been able to sell your cars to these guys.
But thank you, the CEO and chairman of Chrysler, a great corporation, Robert Nardelli.
NARDELLI: Thank you.
MATTHEWS: So, is there a double standard in Congress about bailouts? Why is Congress willing to give Wall Street, the bankers there in New York, $700 billion in bailout money and are being a little bit tight when it comes to the automakers, who only want about one-twentieth of that?
Dan McGinn is an auto industry consultant. And James Gattuso is a fellow at the Heritage Foundation.
I want to-hi, James. Thank you, as well.
Let me-John, what is it-what do you think of that guy? He has a tough job here. But part of the problem of the American automakers is to compete with the cars coming into this country and the cars that are made here by foreign automakers.
DAN MCGINN, AUTO INDUSTRY CONSULTANT: You know, Chris...
(CROSSTALK)
MATTHEWS: People are choosing other products.
Look, we are having a tough fight. We're competing.
The auto industry, American industry has about 47 percent of the market. But, Chris, in Alabama, in Texas, in Mississippi, across the South, we spent over $3.5 billion of taxpayer money in those states to build the plants for our competitors.
MATTHEWS: We build-you mean, they're built-those plants are built by whom?
MCGINN: Our taxpayers paid to build the Toyota plants and Honda plants. Look, these are good companies.
MATTHEWS: You mean they got tax breaks in those states.
MCGINN: Tax breaks in those states. We supported them.
(CROSSTALK)
MATTHEWS: They got tax breaks in local states.
MCGINN: No, no, I'm saying, so, we helped support them.
But the issue is this. This is about jobs. It's not just-this is not about an academic policy or an economic debate in Washington. It's about three million jobs. It's a million people who are on pensions. It's a million people who are on health benefits.
MATTHEWS: So, you are against-you are for the bailout and against the bankruptcy?
MCGINN: I'm for a loan for the industry, absolutely.
MATTHEWS: And how long would you give them?
MCGINN: Oh, if they do what they talked today, a serious oversight board, you give them the money, and they said they...
(CROSSTALK)
MATTHEWS: What happens if they can't pay it back?
MCGINN: They said that they believe...
(CROSSTALK)
MATTHEWS: Would you give them money, knowing they probably can't pay it back?
MCGINN: Knowing they probably-look, if they tell me they are serious, Chris, this is 5 percent of the $700 billion we gave Wall Street to try to save three million jobs in this country. You have got to make that bailout.
(CROSSTALK)
MATTHEWS: OK.
Mr. Gattuso, you don't agree?
JAMES GATTUSO, SENIOR RESEARCH FELLOW IN REGULATORY POLICY, THE
HERITAGE FOUNDATION: Well, it's funny. We have a new floor now for what is considered in budgets. It used to be the Marine Corps Band. Any time someone proposed spending that cost less than the Marine Corps band, you could get it through automatically in Congress, because, you know, of course, it's more important than that.
Now, the floor has gone up to $700 billion. Anything that costs less than $700 billion should go through because, after all, that's less than we spent on the financial bailout.
The point is, the financial bailout and the auto bailout are two different things, are considered differently. What one was, was the lifeblood of money flowing through the economy in a macro sense, macro intervention.
This is interference in the competitive-to help out individual companies who have failed over decades in the competitive process. And, also, you have to be remember that we have learned a few lessons from the financial bailout, too. And, frankly, they are not happy ones. If anything, the lessons have been that we should be more careful, not less careful, but more careful, about bailing out industries.
We know the problems. We know the problems of transparency, of oversight.
MATTHEWS: OK.
(CROSSTALK)
MATTHEWS: He's saying the difference is, in a big economy, financial institutions are more important than carmaking.
MCGINN: Oh, come on. Are we going to protect 401(k)s for people, but we're not going to protect the jobs for people?
This is about giving money to Wall Street where we don't even know-where we don't even know what happened, where it went. There were no plans. There were no hearings. I'm not going to second-guess Congress, the administration.
Chris, this is about jobs. This is about little leagues. This is about churches in America. I worked in West Virginia. My dad worked in a factory for 43 years to get...
(CROSSTALK)
MCGINN: ... pension.
MATTHEWS: In this industry, TV, they are firing people everywhere right and left. There's layoffs for everybody, buyouts.
We know-in newspapers, you wouldn't believe the number of people I know who have been offered buyouts, which are puny, puny offers to begin with. Everybody seems to be losing their job in this business. How many businesses should be bailed out, sir?
MCGINN: Well...
(CROSSTALK)
MATTHEWS: What businesses are eligible, under your standard?
MCGINN: Chris, that...
MATTHEWS: Just autos?
MCGINN: That's part of the tough job of government.
No, I think it is just autos. But I do think it is autos, because it is 10 percent of all the jobs in the country. It will cost us between six and eight times more, A, if we don't bail them out than if we spend the money now. Plus, only 15 percent of the world drives a car today, Chris. We can't afford to trade foreign-our dependence on foreign oil for dependence on foreign manufacturing. We can't give up this fight right now.
MATTHEWS: You're a nationalist, right? You sound like one. Nothing wrong with it, but you sound like an economic nationalist, like a Pat Buchanan.
MCGINN: I'm a competitor. I believe we should compete. But we have got to give these people a fair hand to compete.
(CROSSTALK)
MATTHEWS: Mr. Gattuso, is it important the United States retain its manufacturing base, that we are a company (sic) that still makes things?
World War II was won largely because we had the productive ability to turn our auto industry into a tank industry, into a ship-building industry. We could build everything. We were the arsenal for democracy, because we had a manufacturing base.
(CROSSTALK)
MATTHEWS: If we lose that base, can we still survive in terms of our security, sir?
(CROSSTALK)
MATTHEWS: Can we? If we don't have a manufacturing base, are we able to do what we have to do in times of stress?
GATTUSO: I don't think-if there's war with Japan again, I don't think Toyota is going to take its factories in Kentucky and Alabama and move them back to Tokyo. The factories are here.
We are talking about who operates them, whether it's the most competitive companies and whether we force the U.S. companies to be as competitive as companies based elsewhere.
MATTHEWS: Yes.
GATTUSO: And, look, also, I think it is pointless to talk about who is a U.S. company and who is a foreign company.
You know that there are more cars manufactured by the Detroit automakers in Ontario, Canada, than there are in Michigan?
MATTHEWS: Yes.
GATTUSO: This is an international industry. And economic nationalism just doesn't make sense to talk about here.
MATTHEWS: So, it doesn't matter to you whether we have an American brand auto industry or not?
GATTUSO: What does matter to me is...
MATTHEWS: It doesn't matter to you?
(CROSSTALK)
MATTHEWS: No, does that matter to you, that we have American cars, that we have cars with American names on them?
GATTUSO: You know, I don't think the name matters. I don't think the name matters at all.
MATTHEWS: It doesn't?
GATTUSO: I would like jobs for Americans. And, so far, with present practice, Detroit has been destroying jobs for Americans.
(CROSSTALK)
GATTUSO: Without that restructuring, without that competition, that will continue.
(CROSSTALK)
MATTHEWS: You disagree? You think America ought to have an auto industry?
MCGINN: We desperately need an auto industry. If we are going to reinvent and make green cars, we need to be able to compete in this country and we need to honor the agreements we have made for pensions and jobs. We have got to be able to compete.
(CROSSTALK)
MATTHEWS: Well, we're at the heart of the American debate.
Gentlemen, it's great having you on.
This is the American debate right now. And it is here on HARDBALL, too.
Thank you, Dan McGinn. Thank you, James Gattuso.
(CROSSTALK)
MATTHEWS: Both worthy arguments. Take your sides.
Up next: Why did a Florida congresswoman hang up on a call from the president, then hang up on a call from the president's chief of staff? This woman is hard to get through to. We will get to the bottom of that one next in the "Sideshow."
(LAUGHTER)
You're watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: We have got to get McCain off that merry-go-round.
Anyway, back to HARDBALL. Time for the "Sideshow."
It turns out that Barack Obama doesn't have the most recognizable voice in the world. Yesterday, he got hung up on twice. The president-elect called U.S. Congresswoman Ileana Ros-Lehtinen of Florida to congratulate her on her reelection. She assumed the call was from a prank from some radio station, and ended the call.
Obama top aide Rahm Emanuel then called the congresswoman and tried to convince her that it wasn't a joke. She hung up on Rahm Emanuel.
Well, it turns out Obama was forgiving when the congresswoman realized her mistake.
(BEGIN VIDEO CLIP)
REP. ILEANA ROS-LEHTINEN ®, FLORIDA: He said, "Look, when my ego gets too big, Michelle is going to remind me often that the congresswoman from South Florida hung up on me, not once, but twice."
(END VIDEO CLIP)
MATTHEWS: Wow. I don't know how to blame anybody here, because guess what?
Remember this prank, an infamous prank? It was a prank call to Governor Palin just last month, when a Canadian radio duo masqueraded as the president of France and got away with it.
(BEGIN AUDIO CLIP)
UNIDENTIFIED MALE: Yes, hello, Mrs. Governor?
GOV. SARAH PALIN ®, ALASKA: Hello. This is Sarah. How are you?
UNIDENTIFIED MALE: Fine. And you? This is Nicolas Sarkozy speaking.
How are you?
PALIN: Oh, so good. It's so good to hear you. Thank you for calling us.
UNIDENTIFIED MALE: You know, I see you as a president one day, you, too.
(LAUGHTER)
PALIN: Maybe in eight years.
(LAUGHTER)
(END AUDIO CLIP)
MATTHEWS: From far from-off France-actually, from Canada.
That, of course, was during the '08 campaign, when Sarah Palin was number two on the ticket. I guess it's four years from now for the governor to seek that highest office.
Anyway, time for our daily feature, "Final Daze," a look at what President Bush is up to as his term winds down.
Well, with Wall Street wallowing and Main Street wondering how it is going to pay the bills on this holiday season, President Bush had one event on his public schedule today, the lightning of the White House Christmas Tree. That happens, by the way, in just a half-hour. We will try to show it to you.
Coming on, tonight's "Big Number."
During President Bush's eight years in office, how many U.S. states did he visit? Good question. A good question. Forty-nine states. He went to 49 states during his eight years as president. That's our "Big Number" tonight.
So, what's the one state Mr. Bush hasn't stepped foot in? Well, here's some hints. The last time this state voted for the Republican presidential ticket was 1988. This year, Obama beat McCain there by 37 points, his second biggest margin anywhere. So, which state is it? Vermont, Ben and Jerry's country. President Bush still has until January 20 to get to the Green Mountain State.
Up next: Senator Norm Coleman still leads Al Franken in that Minnesota Senate recount, but the counting continues.
And up next, we have got some of those contested ballot. I love this. We're going to do this. You can do it, too. You can decide. Our strategists are going to come on, one a Democrat, one a Republican, and try to judge fairly, I hope, which of the ballots should go to which of the candidates.
I'm telling, it's pretty clear most of the time, but some of these people really like to make it complicated.
You're watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MELISSA LEE, CNBC CORRESPONDENT: I'm Melissa Lee with your CNBC "Market Wrap."
Stocks tumbling in the final hour of trading, as investors await what could be a very weak November jobs report tomorrow, the Dow Jones industrials down 215 points, the S&P 500 down 25, and the Nasdaq lost 46.
Ahead of the monthly unemployment report due out first thing tomorrow, more job cuts announced today. AT&T says it will eliminate 12,000 jobs. That's about 4 percent of its work force-DuPont and Viacom also announcing cuts.
Meantime, the number of people receiving unemployment benefits climbed last week to a 26-year high.
The nation's retailers reported November was their weakest month since at least 1969 -- the one bright spot, though, Wal-Mart, which said sales were up more than 3 percent from a year ago.
And oil prices tumbling again, crude falling $3.12, closing at $43.67 a barrel. That's the lowest level in four years.
That's it from CNBC. We're first in business worldwide-now back to
HARDBALL.
MATTHEWS: Welcome back to HARDBALL.
The latest on that Minnesota Senate recount has Norm Coleman with a paper-thin lead over Al Franken-it's all paper ballots, it seems-just 316 votes separating the two candidates. And the ballot drama all this week has been building, with uncounted ballots turning up in one precinct, and another precinct coming up short of Election Day totals. They don't have as many ballots as they had the night they counted.
But the real problem starts with what are called the contested ballots. Both Coleman and Franken are challenging the validity of another catch this -- 6,000 votes in dispute.
And that's where we bring you the strategists, Steve McMahon, unparalleled in his judgment, a Democratic strategist. The same must go for Todd Harris. They will give you squeaky-clean, completely objective statements here.
By the way, the last time we looked at these contested ballots from Minnesota, Todd scored it one for Franken, one for Coleman, and four thrown out. And Steve counted it five for Franken and one for Coleman.
(LAUGHTER)
MATTHEWS: Let's see how they look at these same...
(CROSSTALK)
TODD HARRIS, REPUBLICAN STRATEGIST: That's real-real unbiased.
(LAUGHTER)
MATTHEWS: They both look-let's take a look at the first one.
This is my-this is what you have to look-please, guys, look at these-this ballot up on the screen. Here it is.
Minnesota Public Radio's Web site has the contested ballots online. This one, they call the apology, the Franken campaign. Now, that one has, I think it is pretty clear to say, they have-they have crossed out the one person. I think that is-can somebody show me this damn thing? I think that is-that is pretty clear.
What do you say? Todd...
HARRIS: The problem with this...
MATTHEWS: Who won that one?
HARRIS: ... I would throw this out, because it has...
MATTHEWS: Oh. Oh.
HARRIS: No, no, no, look. You have to look on the side here.
(CROSSTALK)
HARRIS: There's a note from the voter, and they have redacted-the voter signed their name on here.
MATTHEWS: OK.
HARRIS: And so...
MATTHEWS: Yes. Well, they redacted, and they said, none of this counts, and they gave it to Franken.
HARRIS: No, no. Well, they shouldn't give it to anyone.
(CROSSTALK)
MATTHEWS: No, they gave it to Franken, because it's filled in. The bubble is filled in for Franken, after crossing out Coleman.
HARRIS: But the ballot has the voter's signature on it. It has an identifying mark. And, by Minnesota state law, any identifying mark needs to be thrown out.
STEVE MCMAHON, DEMOCRATIC STRATEGIST: Here's Todd's position. Here's Todd's position.
MATTHEWS: Everybody, watch this closely. You will see one where a
person cross out with great endeavor X, X, X, five X's crossing out the
Coleman ballot, and then writing in Al Franken, and then writing out on the
side note: "By mistake, I filled in wrong oval. Hope I can be corrected.'
(CROSSTALK)
HARRIS: And then they signed their name to it.
MCMAHON: OK, but hold on. So, Todd's position, Chris, just so we're clear, because I want Todd...
(CROSSTALK)
MATTHEWS: Oh, the signing of the name is what kills this?
HARRIS: Yes. Their name is redacted. You can't see where they signed their name. They took it off.
MATTHEWS: OK. So, that's your problem?
(CROSSTALK)
HARRIS: My problem is that they have signed their name.
MATTHEWS: OK. Let's move on to the next one.
(CROSSTALK)
MATTHEWS: This ballot-no, we have to move on.
This is dubbed the circle, where the person circled the ballot. Let's take a look at what they did. They circled the bubble, instead of filling it in, again, I think, demonstrating a clear intent, in this case for Franken.
What do you think?
MCMAHON: Franken.
MATTHEWS: What do you think?
HARRIS: My problem with this-and you can't see-no, the viewers can't see this, but if you're looking at the whole ballot, they clearly knew how to vote, they filled in the entire bubble on all of these other names. And for some reason on this one, they didn't. You can see on this.
MATTHEWS: What do you think the intent was there?
HARRIS: I don't know. Maybe they were mulling it over and decided not to.
(CROSSTALK)
HARRIS: But the person knows how to vote.
MATTHEWS: The Coleman campaign takes the same position you do, Todd, they said-they challenged it because they said it was not filled out completely. In other words, the bubble wasn't filled. Let's take a look at the third one here. What do you think? Steve, what do you think? Do you think you count that one?
MCMAHON: That one, I think you have got to count that one.
(CROSSTALK)
MATTHEWS: You've got to count that one, OK. So we disagree here.
MCMAHON: To go to Todd's analysis. If you look around the rest of the ballot, that's what they did everywhere on the ballot, that is an Al Franken vote.
HARRIS: Yes, I agree with that.
MATTHEWS: OK. The Coleman campaign challenged this ballot, saying it was not filled out completely.
OK. Let's move on to the next one. Both campaigns challenged this ballot. Now this is where the person left a black mark to the right of-no. This is the one, it's in between. It's between Coleman and Franken, almost equally distant. This person must be driving people like you two crazy right now. There is absolutely no indication whether they like Franken-it's like when you go bet on roulette and put the chip between the two numbers.
MCMAHON: See now, you think I'm going to say Franken on this one, but I'm going to say no count.
MATTHEWS: OK.
HARRIS: Yes, you've got to.
(CROSSTALK)
MATTHEWS: I like the way you try to get good credit for the obvious.
(LAUGHTER)
(CROSSTALK)
MATTHEWS: Anyway, the Franken campaign challenged this ballot, saying the voter's intend could not be determined. That's fair enough.
Let's take a look at the next one. The Minnesota Public Radio dubs this one-let's keep going. Dubs this ballot "The Batman." The Franken campaign contested it. Let's take a look at this one. That is where the independent candidate, Barkley, was crossed out, but "Norman Coleman's" name was filled in. "Norman Coleman's" was filled in. What to you make of that one?
HARRIS: Well, the voter wrote in Norm Coleman, and by Minnesota law -
you can't see it on the screen.
MATTHEWS: Can we go back to the one where "Norman Coleman" was written in? Now that's the different. Now we go back to one where "Norman Coleman" was filled in, where he actually wrote the name "Norman Coleman" at the bottom. That's the one. Go back there. See where the name "Norman Coleman" is filled in, isn't that legitimately for Norm Coleman?
HARRIS: Yes.
MCMAHON: Yes. That's a Coleman ballot.
MATTHEWS: OK. You accept that, OK. OK, let's go back to that "Batman." I'm going to try to figure out that one, the one we were just looking at. What do you make of that "Batman"? What was that about? Go forward to the next one. Here it is. What do you make of that so-called "Batman"?
HARRIS: They voted for Coleman. It's a-this is clearly a Republican. They voted for McCain, they voted for Coleman, and for whatever reason on all of their votes, and you can see off on the right side of the screen, for whatever reason, they drew wings. I don't know why. But it is a Coleman vote.
MATTHEWS: Do you accept the wings?
MCMAHON: I'm going with the wings. And I think the wings belong to Norm Coleman.
MATTHEWS: OK. Let's talk about this race. What do you make of it? This is insane, because there are 6,000 ballots apparently like this that are going to have to be decided. And we found that-we found some disputes between these two gentlemen which tells me it's going to be arbitrary. Is there any way to know through the canvassing board and its elements who wins?
HARRIS: Well, most people that I have talked to think that really very few total numbers of votes are going to change one way or the other. Coleman is up by about 300 and some right now.
The issue right now is whether the Franken campaign, if they're unhappy.
MATTHEWS: OK. Here is a person that I think may be demonstrably insane. They filled out every single one of the bubbles on the ballot. They went through every one-see this? This person is like the Lone Ranger. What is this person-or Zorro, what are they doing here?
MCMAHON: You know who wins here? Private schools.
(LAUGHTER)
(CROSSTALK)
HARRIS: For the record, people at home can't see this, but...
MATTHEWS: What do you think was the intent?
MCMAHON: That was a joke. That was a joke.
HARRIS: If you look at the whole ballot, this is an Obama supporter, because they voted for Obama. So they only picked one president but they picked everyone for the Senate.
MATTHEWS: Maybe they don't like politicians, saying goodbye to all the rest of you guys.
HARRIS: But the biggest joke of this is that the Franken campaign is actually challenging this ballot, saying it is a Franken ballot, and the other marks were just...
MATTHEWS: The producers have now tallied up, you guys, the way you look at these things. So far in the updated scorecard between Todd Harris, Republican strategist; and Steve McMahon, Democratic strategist, Todd Harris has thrown out eight ballots. He has kept two for Franken and three for his favored Coleman. Steve McMahon has thrown out just two ballots, kept eight for Franken and three for Coleman.
But this is what I watched in Florida, guys. I watched that woman-very big woman and that guy-a little guy, looked like Dennis Franz, remember the guy from the television show? But, you know, Sipowicz. And they were both looking at the same exact ballot, every time they looked at the same ballot, they winced and they looked up at it and each of them had a different result. One was Bush, one was Gore. I mean, they were looking at the same damn ballot. How can that be?
MCMAHON: Who was it who said, very, very sagely, what you see depends upon where you sit? And I think Todd and I have demonstrated...
(CROSSTALK)
MATTHEWS: No, you more than him.
(LAUGHTER)
(CROSSTALK)
MATTHEWS: Todd is trying to be a sober judge. You have seen every opportunity to seize an opportunity.
MCMAHON: Here is what I did. I presume that people go into the booth intending to cast the vote. So you try to discern their intent.
HARRIS: Real quick, the larger issue here is that I hope the Franken campaign doesn't try to push this into the United States Senate. The people of Minnesota ought to be able to decide who their senator is, not Harry Reid or Chuck Schumer.
(CROSSTALK)
MATTHEWS: Maybe we ought to have, when you vote, you have one of those audio systems where if you can't get it right, you can yell it in too. Franken! It sounds nothing like Coleman, maybe that would work.
Thank you, Steve McMahon. Thank you, Todd Harris. Imagine being a telephone operator trying to deal with these people?
Up next, consider this, Hillary Clinton, Bill Richardson, Joe Biden, all three ran for president against Barack Obama, and all three now work for the guy. While early Obama supporters like John Kerry didn't make it. What's this about here? Is this some Biblical parable with some strange meaning? Is it better to be a rival than a friend of the new president? Who showed up latest in the vineyard? How come they are not getting the same amount of money? Anyway, that's ahead in our "Politics Fix."
This is HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: Coming up, Sarah Palin's wardrobe malfunction. The Republican National Committee discloses it spent even more money on clothes for Governor Palin than originally reported. HARDBALL returns with the "Politics Fix," coming up next.
(COMMERCIAL BREAK)
MATTHEWS: We are back with the "Politics Fix" with the Politico's Roger Simon, and Jill Zuckman of The Chicago Tribune. I don't know whether this is still a story, but maybe it's beating a dead horse. But here we are, Sarah Palin, who is extremely popular, I can tell, from her work down in Georgia on behalf of Saxby Chambliss, now winning a race the other day.
Apparently $30,000 more in the clothing department here than before, it went up to $180,000, that's the latest report by the RNC. What is this about?
ROGER SIMON, POLITICO: Thirty thousand is two pairs of shoes, come on.
(LAUGHTER)
SIMON: It's like something Imelda Marcos.
(CROSSTALK)
MATTHEWS: OK. Is the clothing allowance worth the effort on the part of the Republicans? Let's be honest. She's the one star to come out of this campaign. John McCain is not running again for national office. She is the star of the future, isn't she? Look at the crowd she gets. Look at this-look at this, I mean, this isn't just her play-acting. This is her reacting to huge responses from crowds.
She goes-I would bet almost any state in the union, any state, including New York and the more liberal states like Connecticut, that she can draw a big crowd.
JILL ZUCKMAN, THE CHICAGO TRIBUNE: Well, I think she is a star of a wing of the Republican Party, the very conservative wing. And what I also think is this new news about an extra $30,000 in wardrobe costs doesn't matter, because we already knew about the $150,000 and it did not hurt her.
MATTHEWS: Can they say that if you are a new politician, you can do the windshield wiper wave, that's OK. But you can't do the old pointing. The old pointing is, they always pretend to recognize somebody in the first row. This-gotcha. Can they just say, no more of that phoniness, just please stop that?
SIMON: Bill Clinton was a master of that. She is a star in a party without stars-without viable stars. The only other one was, unfortunately, for the Republican Party, born in Austria, so he couldn't run for president or e would be running now, Arnold Schwarzenegger.
Look at those people on the stage. How many ordinary people recognize Sarah Palin?
MATTHEWS: Any of those people. I would think the Senate and the House of Representatives maybe have nobody as well known as her either way, right? Except for McCain, probably.
SIMON: The counter is, OK, she is a star, she is well-known for being stupid. Well, you know, a lot of people don't think she is stupid. They think the media played a game of gotcha with her. And, you know, she has a couple of years to get smarter. I would not write off Sarah Palin for the future.
MATTHEWS: The only problem she got into with the media was the-I thought the interview by Katie Couric where Katie asked her wide-open questions that seemed to suggest a vacuity there. It wasn't like she didn't know the answer to a particular question. It was the wide open questions, what do you read, blah, blah, blah, those kind of things.
SIMON: She could answer the first question. What she failed at was when Katie Couric asked a follow up. Well, give me an example, you know, tell me the books you've read, tell me newspapers you've read.
MATTHEWS: Name a court decision that matters to you.
SIMON: Right, name a-exactly, that was a big one. But you know what, when George W. Bush ran for governor of Texas the first time, he wasn't considered an intellectual powerhouse. Karl Rove got him through it by saying, here, here are three issues, you are going to talk about these three issues, you're not going to talk about anything else. It got him all the way to the White House.
MATTHEWS: Yes.
SIMON: You can do that. You can train for that.
MATTHEWS: So who is the biggest winner this year, Jill Zuckman, Tina Fey or the person she plays?
(LAUGHTER)
MATTHEWS: I'm dead serious, I would argue Tina probably professionally. But then I look at here. Tina is never going to be president. Could that person be president we're looking at right now? I'm dead serious. Could she be president some day, yes or no? You want to close the door on that prospect?
ZUCKMAN: I don't know. Here's the problem, I mean, she.
MATTHEWS: You are not willing to close the door, though, are you?
ZUCKMAN: No. I won't close the door on it because she does have a quality, a pizzazz that is very appealing to a lot of people, but she also polarizes.
MATTHEWS: OK. As a student of politics, you guys are too, inevitably the man-in this case the woman, who gives that "someday we'll win this thing back again even though we lost this year," was Goldwater in '60, Reagan in '76, they all go to the convention, they give that cri de guerre, that call for-you know, war cry, and they all do it in the same way. We are going to do it this year, but someday we're going to come back.
Goldwater came back and got the nomination. Reagan came back and got the nomination. Both from the right wing of the Republican Party. She could do it.
SIMON: She could do it.
MATTHEWS: And I mean it.
SIMON: She could do it and...
MATTHEWS: Pawlenty, who is going to beat her? Come on, Romney?
ZUCKMAN: How about Jindal?
MATTHEWS: Jindal.
SIMON: It is easier to stay up get smarter than it is to not have a personality and try to get a personality.
MATTHEWS: I'll tell you, you know, liberals out there cannot stand her, regular populist liberals can't stand her, a lot of middle-of-the-road can't stand her. But as long as you've got an audience, look at that crowd.
Anyway, Roger Simon, Jill Zuckman, coming back. It's so hard, isn't it, Jill? This is really hard to do this, to salute Sarah Palin. Somebody once said, was it Sarah Silverman that gave Florida-no. We'll be back for the lighting of the Christmas tree. I have a thought in there about the two Sarahs, Silverman and Palin, who helped the Democrats more? You are watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: We're back with the Politico's Roger Simon and Chicago Tribune's Jill Zuckman. Jew first-Jill first.
Are we going to have-are we going to have-we were talking about ethnic issues here.
(LAUGHTER)
MATTHEWS: Are you-we are talking about tree lighting and celebrating Christmas if you're from a Jewish family. That is how I got it in my head there.
What about George Bush, do you think his other son, Jeb, is going to run this time for Senate down in Florida?
ZUCKMAN: He certainly seems like he is considering it. He has been fairly public about the fact that he is weighing the possibility and he is very, very popular in Florida.
MATTHEWS: I know. He came off of a-he was very successful during those hurricanes down there. And he seemed to have won back all of his problems early on.
SIMON: Yes, and he's.
MATTHEWS: I mean, beat them all.
SIMON: He's well-liked. He's bright. He does well with the Hispanic vote. He does well with the Jewish vote. He opposed his brother on offshore oil drilling, which is dear to the hearts of...
MATTHEWS: He was for or against it?
SIMON: He was against it. His brother was for it. So he knows how to play the political game. The brother of "Shrub" could do very well.
MATTHEWS: While we're talking about it, we'll have a Christmas tree lighting here in a moment. Let me ask you, is that going to be the continuation of-I noticed when George Bush senior got beaten for re-election by Bill Clinton, within two years his son and namesake-there he is, we're watching him there, re-sprouted the Bush again-the Bush hierarchy, the Bush-what are we calling it?
SIMON: Dynasty.
MATTHEWS: Dynasty? Is it going to continue? What's you bet?
SIMON: Well, I think Jeb is going to have problems if he ever wants to run for president, because then the dynasty thing will come back very hard. But governor, you know, senator-I mean, he can't be governor, he has already been term-limited. But running for senator of Florida is a whole different thing.
If he runs and wins, it will immediately be talked about as a possible presidential candidate. But the dynasty thing is going to come up and hurt him.
MATTHEWS: I think he is.
(CROSSTALK)
ZUCKMAN: I don't think voters in Florida are going to hold George W. Bush against Jeb Bush when he runs for Senate. They know him. They know what he stands for. I don't think they are going to confuse him with the person who took us to Iraq.
MATTHEWS: What do make about the politics of the-this guy's selection of cabinet members. It's stunning, really, that he picked Senator Clinton for secretary of state, he didn't pick John Kerry, who helped him so much. He didn't pick Bill Richardson for state, he helped so much.
Is this man sort of overly just to his rivals-or underly generous to his supporters?
SIMON: Well, there is only one brass ring. You know, there is only one secretary of state.
MATTHEWS: Right.
SIMON: When it comes to the cabinet, that is it. And, you know, if stories are true, he went to Biden and said, look, do you want to be vice president or do you want to be secretary of state? And Biden took vice president.
MATTHEWS: Anyway, join us again tomorrow night at 5:00 and 7:00 Eastern for-oh, here comes the tree right now, here it comes. There it is, so beautiful.
Ah, it's out there at the Ellipse, right behind the White House. It is cold in Washington, and therefore a beautiful night, and a clear night, as you can see. It's great to drive by. In fact, my wife always gets our pictures taken there.
Anyway, it's time for "1600 PENNSYLVANIA AVENUE" right now, with David Gregory.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
END
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