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'Hardball with Chris Matthews' for Thursday, July 16

Read the transcript to the  Thursday show


July 16, 2009



Guests: Chuck Todd, Julia Boorstin, Pat Buchanan, John Payton, David Ignatius, Robert Baer, Jonathan Martin, Joan Walsh, Michael Smerconish

CHRIS MATTHEWS, HOST: At last, Ricci speaks.

Let's play HARDBALL.

Good evening. I'm Chris Matthews in Washington. Leading off tonight:

Witnesses for the prosecution. Late today came the moment many were waiting for, Frank Ricci and other firefighters that Sonia Sotomayor ruled against in the New Haven discrimination case testified at her confirmation hearing. They were great TV and made a compelling case that in skirting the charge that a promotion test result the city itself administered discriminated against minorities, the city of New Haven discriminated against worthy firefighters, like Frank Ricci, who did well in the test.


FRANK RICCI, NEW HAVEN, CONNECTICUT, FIREFIGHTER: The lower court's belief that citizens should be reduced to racial statistics is flawed. It only divides people who don't wish to be divided along racial lines.


MATTHEWS: In just a moment, we're going to join the debate over this case of Affirmative Action and alleged reverse discrimination.

Plus: The White House strikes back. Don't look now, but the campaign season is upon us. We're talking off-year. President Obama is in New Jersey this afternoon, campaigning for troubled governor Jon Corzine. But in reality, he's fighting for his own administration, pushing back against rejectionist Democrats and stubborn Republicans in the U.S. Congress.

Also: How are we supposed to view the CIA's failure, ordered by Vice President Cheney, to inform Congress on its hit squad program, a violation of the public's rights to know or just the latest example of how the agency is being used as a political football? "Washington Post" columnist David Ignatius, former CIA operative Bob Baer-both of them take that one on tonight.

And guess who's the possible 2012 Republican presidential candidate with the highest favorability among all Republicans in the country? Well, according to the latest Gallup poll, here's a hint. She's quitting her job in less than two weeks in a very cold state. That's in the "Politics Fix."

And finally, remember how John McCain used "Joe the plumber" as part of his grand campaign strategy last year?


SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: And we're going to go to Washington and we're going to change Washington, and I'm going to bring Joe the plumber with me, my friends!


MATTHEWS: Well, the senator's daughter, Meghan McCain, now gives us a decidedly different take on her father's one-time campaign tool. Maybe she's ready to offer up her own assessment that she wouldn't give us during the campaign. That's in the HARDBALL "Sideshow" tonight.

We begin with New Haven firefighter Frank Ricci, who testified today at Judge Sonia Sotomayor's confirmation hearing. Pat Buchanan is an MSNBC political analyst and John Payton is president of the NAACP defense fund. John, thanks for joining us. Pat Buchanan, thanks for joining us.

Let's look right now at a bit of Frank Ricci's testimony.


RICCI: I studied harder than I ever had before-reading, making flash cards, highlighting, reading again, all my listening to prepared tapes. I went before numerous panels to prepare for the oral assessment. I was a virtual absentee father and husband for months because of it. In 2004, the city of New Haven felt not enough minorities would be promoted and that the political price for complying with Title VII, the city civil service rules and the charter would be too high. Therefore, they chose not to fill the vacancies.


MATTHEWS: Well, there you have it, Pat. Instead of promoting firefighters, they threw out the test. They threw out these guys who did well in the test and basically buckled to whatever. Let's go with your view on this. What's the impact of Mr. Ricci's testimony and also the testimony of an Hispanic firefighter, Mr. Vargas, who also lost out in this decision by the city of New Haven?

PAT BUCHANAN, MSNBC POLITICAL ANALYST: Well, Frank Ricci is what the American dream is all about, and he succeeded through hard work and tremendous effort to overcome obstacles others didn't have to achieve his dream. And he was denied it in part because Sonia Sotomayor, herself a beneficiary of Affirmative Action at Princeton and Yale, threw his appeal into the trashcan, which even the second appellate court said was wrong when they voted on the thing. And the Supreme Court, of course, overturned it, and all the Justices, I understand, said they should at least have had a rehearing. So it tells us what Sonia Sotomayor is all about and it tells us what Frank Ricci is all about.

MATTHEWS: John Payton, sir, your view from the NAACP? What do you make of his testimony?

JOHN PAYTON, PRES., NAACP LEGAL DEFENSE FUND: Well, it's the same testimony he's been giving before. I think he said something similar to that when he was on this show last time. But I don't think it actually relates to Sonia Sotomayor. She acted appropriately in the decision she reached.

What Pat just said, that all the Justices said that they had acted improperly, is actually wrong. The dissenters made it clear that they would have affirmed what the circuit court panel had done below.

You have to separate two issues. Frank Ricci complains about how he was treated in this case. That's one issue. The second issue is whether or not, in fact, the circuit court acted appropriately. I think if you heard anything from this set of hearings, it's that she acted completely appropriately, abiding by existing precedent, and that the Supreme Court changed the rules of the game and made a decision based upon a new rule, not the old rule. Under the old rule, which she had applied, the circuit court did exactly what it was supposed to do.

BUCHANAN: There's a third issue, and that is whether Frank Ricci and those firefighters who passed that test and won those promotions were dealt with justly when they were denied those promotions. On what grounds were they denied those promotions? No one has demonstrated that anything in that test was bigoted or biased against African-Americans.

PAYTON: That's not exactly the point.

MATTHEWS: They got those things honorably. That is the fundamental point because...

PAYTON: No, the point is whether or not the test was the right test.

BUCHANAN: ... Ms. Sotomayor has, her whole life-she-her whole life, Sonia Sotomayor has argued for ethnic and racial preferences in hiring and promotions, in going to colleges and in getting jobs, and that has been the theme of her life. And the question is, Can she sit on the Supreme Court and forget everything she brings to the Court from her life?

PAYTON: She's been on the court for 17 years. There's not another case that anyone pointed to that raised any issue along these lines at all. The question is...

BUCHANAN: Let me raise one.

PAYTON: ... whether or not that test was fair to all of the people who were taking it, and New Haven concluded that it was not. And I think I said the last time I was on the show, if we had a fairer test, no one would be complaining because everyone is better off when everyone is treated fairly. New Haven thought that the test...

BUCHANAN: Why was it an unfair-why was it an unfair test? Because black Americans, none of them were in the top 19? Did that make it unfair per se? As for a case, let me give you the New York case where Sonia Sotomayor said New York had to extend voting rights to felons at Attica and the other prisons because there were so many African-Americans there and so many Hispanics in there that not to give them the vote was-represented a disparate impact of the law, even though the 14th Amendment says the states decide on who gets to vote!

PAYTON: Actually, that's not what that case was about, either. It was about whether or not under the Voting Rights Act, section two, you could deny the vote to people who were felons. And she read the law word by word and concluded that there was no exception and that she dissented that they should have been allowed to vote. That's not about disparate impact. That's simply about whether or not you are denying people the right to vote.

Now, come back to the case at hand, which is what happened in New Haven and whether or not that was a fair test. The real issue is whether that test was measuring what was supposed to be measured. And I think that the evidence was pretty clear that if you wanted to know who was going to be a good leader, who would be a good commander, that was not the way you would go about doing it. You would...

MATTHEWS: All right, let me ask you, Mr. Payton...


PAYTON: ... interview than on the written test.

MATTHEWS: A lot of people believe that SAT scores are unfair because they're tests because they don't like the whole notion of a culturally based test. Are you one of those who believe written tests per se are discriminatory?

PAYTON: No, of course not. And the question...

MATTHEWS: Does Judge Sotomayor believe that?

PAYTON: Well, I don't know what she believes about that, but I don't think-she obviously took all these tests. And no one would say, Let's use the SAT to decide who ought to be a captain and a lieutenant on the New Haven Fire Department.

BUCHANAN: All right, sir-sir, but you know as well as I do, if of the eight top applicants for lieutenant and captain, four of them were African-American, nobody would be looking at that test at all.

PAYTON: That's because...

BUCHANAN: That would have been just fine, but the very fact that African-Americans didn't come in the top 19, that is why the test suddenly becomes suspect. Maybe the reason is the African-American firefighters didn't study as hard. Maybe they didn't work as hard. Maybe they're not as bright. Maybe they're not doing as well on these exams. But to automatically assume that some kind of discrimination must occur simply because the test results bring in 18 white folks and one Hispanic it seems to me is a rush to judgment.

MATTHEWS: Let me ask...

PAYTON: No one was assuming that. New Haven actually had experience with African-American and Hispanic firefighters being promoted, and in fact, 15 percent of their captains and lieutenants were African-American and Hispanic. So New Haven knew from its own experience that they certainly had qualified firefighters who were black and African-American and Hispanic.

This test was used for the first time, and when this test was used for the first time, those results were inconsistent with New Haven's own experience. And when they actually talked to some experts in testing, they had reason to believe the test was not measuring what they wanted measured. They need a fair test for everybody.

BUCHANAN: Do you think-all right. Do you think, given that test and given how it came out, those firefighters should have been denied the promotion?

PAYTON: I think if everyone got to take a fair test, then we would have had results everyone would have felt very comfortable with. The flaw in this is the test.

BUCHANAN: Well, why are you uncomfortable with the results?

PAYTON: I just told you. New Haven has experience with African-American and Hispanic firefighters doing just fine as captains and lieutenants, passing other tests and being promoted. They used this test for the first time. You have to examine tests and see if they're, in fact, measuring what you want measured.

BUCHANAN: Sir, your assumption is the test is unfair because the white firefighters came out on top!


BUCHANAN: I don't know where you come to that conclusion!

PAYTON: No. Actually, there are guidelines in the EEOC about how you look at this. And when they looked at this and then when they asked some experts about how the test was working, the experts made this following point, that you certainly wouldn't use a multiple-choice test as 60 percent of your decision, which New Haven does and very few, if any, other jurisdictions do. The jurisdictions closest by weight the multiple choice part as only 25 percent.

MATTHEWS: OK, here's a point...


MATTHEWS: Here's something everybody can understand. Are you arguing, Mr. Payton, and are you arguing the opposite-you're arguing, Mr. Payton, that the very notion of a multiple-choice objective test, where you have to answer particular questions about specific questions of perhaps chemical fires, electrical fires, complicated things you have to answer-are you saying by its nature, a written test which involves multiple-choice answers is, in fact, inherently unfair? It sounds like you're saying you shouldn't give too much weight to that. Well, why not? Why not?

PAYTON: If you were designing this test, I think you would change both the questions and its weighting. And I'm not saying you can't have a test. I'm saying that the test ought to be weighted appropriately and that the most important thing...

MATTHEWS: Well, why...

PAYTON: ... you would want to know about who can be a leader is in an interview or some other assessment that would be much more focused on what you want in your captains and lieutenants.

BUCHANAN: Well, you know, sir, you seem to be saying this test came in with the wrong result, and we got to get ourselves a test that will come in with the result we want!

PAYTON: You just keep saying that over and over again, but I never said that.

BUCHANAN: Well, that's what it sounds like!

PAYTON: I said if you want to measure...

BUCHANAN: I hear you just fine!

PAYTON: ... for leadership, measure for leadership.

BUCHANAN: Do you think the Supreme Court decided...

MATTHEWS: OK, let's go to what...

BUCHANAN: ... this correctly?

MATTHEWS: ... the Justice candidate believes. Pat, do you believe that she believes tests are inherently unfair, written tests? Does she believe this?


MATTHEWS: She's up for Supreme Court, not John.

BUCHANAN: Well, I showed you that statement...


MATTHEWS: I showed you that statement in "The New York Times."


BUCHANAN: I mean, culturally, she believes some of these tests are culturally biased, and therefore, there should be Affirmative Action for Hispanics and other minorities. But what I don't understand, Chris-I understand the argument for African-Americans, but I don't understand the argument for Hispanics in this sense. They were never enslaved. They never had Jim Crow. Puerto Ricans came to the United States in the 1950s into a liberal city! Why are they being preferred ahead of Portuguese Americans and Polish Americans?

PAYTON: Well, let me just say this. We have many more minorities than African-Americans who have been victims of very nasty discrimination, including Puerto Ricans and other Hispanics in this country. I don't think there's any question about how racism and discrimination, ethnic hostility, have affected more than African-Americans in this country.

BUCHANAN: All right, let me mention, Irish Americans have certainly been discriminated against for almost 100 years. We all remember "No Irish need apply." Should Irish Americans be preferred in the Ivy League and get Affirmative Action and ethnic preferences?

PAYTON: You are making a slightly different point. This is not an Affirmative Action case. It's whether or not we can have a fair test. And you know, we want a fair test for everybody.


PAYTON: If you have a fair test and people actually get their promotions on the basis of a fair test, no complaints from anybody.

MATTHEWS: Let me ask you both, do you expect-this is a political question. Do you expect this is going to cost the nominee any votes? For example, I've been sort of hunching here that Lindsey Graham, Orrin Hatch, Chuck Grassley are three Republicans that might vote for her confirmation. Do you think this is going to stop that, the performance by these two witnesses today, Mr. Vargas and Mr. Ricci?

BUCHANAN: I don't know if...

MATTHEWS: Is it so compelling, it will kill her chances with those three Republicans?

PAYTON: I think it will have no effect.

BUCHANAN: I don't know the answer to that, Chris, to be very honest.

I would think right now...

MATTHEWS: No effect, you said?

BUCHANAN: ... the majority Republicans on the floor, a slim majority right now, I would guess would vote against Sotomayor...

MATTHEWS: I think-I'm wondering whether she's going to get at least three. I'm of the opinion-well, I'm not sure. I'm not sure it wasn't so compelling. I want to watch and see how this plays in the press the next 24 hours. I have a hunch that Mr. Ricci and Mr. Vargas were very compelling on the stand in what have been very boring hearings, and they may be the only people with personality we've heard from, including the nominee, who has been coached so much that she doesn't display any personality. And I think it's hurt her, but we'll see.

Pat Buchanan, thank you. Thank you, John Payton. Too much coaching. Too much coaching, too much cover-up of the real identity of a person who may be a hell of a lot more interesting a candidate than we've seen. Anyway, thank you.

Is the flap over Dick Cheney's secret CIA plan to assassinate al Qaeda leaders hurting the agency? Well, he tried to keep it secret. We know that. And can President Obama make good on his promise to look forward, not backward, when his attorney general is considering an investigation of criminality among those who violate the law. "The Washington Post's" David Ignatius joins us to talk about the potential damage to the CIA in these latest disclosures and potentially what the president's up to.

You're watching HARDBALL, only on MSNBC.


MATTHEWS: Welcome back to HARDBALL. Is the latest story about the CIA concealing a secret hit squad from Congress turning the agency into a political football? That's what "Washington Post" columnist David Ignatius, who's sitting right here, thinks. And here along with us is former CIA operative Bob Baer, who's also an intelligence columnist for "Time" magazine.

Gentlemen, I as a citizen would like to see the law honored. The CIA is supposed to tell the Congress what it's up to and what it anticipates doing. The word's gotten out they were planning to have a hit team go around the world killing al Qaeda operatives. Congress is supposed to know about such stuff. You're saying...


MATTHEWS: ... they didn't have to tell them?

IGNATIUS: If they had an idea-if I have an idea, do I have to tell you about it in advance?

MATTHEWS: The law says so.

IGNATIUS: No, the law doesn't say...

MATTHEWS: If you have plans?

IGNATIUS: Anticipated, yes.

IGNATIUS: If you have a program that's a real program, obviously, you do need to inform Congress. Leon Panetta, who's the new CIA director, decided that he should inform Congress. If I'd been director of the CIA, I probably would have done it, too. Whether that's-whether it was illegal not to have done it is a separate question.

MATTHEWS: Why wouldn't Cheney do so? Why would Cheney tell the CIA, Don't tell Congress? His daughter, who's the only one speaking on this, says because Democrats can't handle hot stuff, as she put it. In other words, Democrats as a party are not trustworthy with national secrets. Therefore, that's her father's reason for not telling them.

IGNATIUS: That's the kind of...

MATTHEWS: Isn't that an incredible statement?

IGNATIUS: ... divisive, divisive Cheney rhetoric that the country basically has had-had enough of. You know, Cheney and company lost big-time in our presidential election.

I do think that we went through a period of real hysteria, where all -

everything was held in tight, everybody was panicked.


IGNATIUS: We're coming out of that period.

And, so, I like the idea of Panetta looking at this, deciding that, for now, he doesn't want to do it, but thinking he ought to brief Congress about it. I think that's-that's good.

What I don't like, Chris, is Congress treating this as a gotcha. I mean, the-the advocates of Speaker Pelosi have been looking for evidence that the CIA has been lying to the country.

MATTHEWS: Who is doing this?

IGNATIUS: Well, I-I'm told that, when Panetta went up to brief Congress on this program that he had just found out about and decided he didn't want to do, and he was briefing them immediately, I am told by people close to Panetta the reaction of some House Democrats was, aha, we have vindication for what the speaker said. Now we can go out and show...

MATTHEWS: Because Nancy Pelosi, the speaker, several weeks back, said that she had been lied to by the CIA.

IGNATIUS: She said that had been lied to-lied to by the CIA.

And I think that's really the problem here, is that, somehow, we have got to stop treating the CIA as a political football.



MATTHEWS: You're saying the Democrats basically-your column today in "The Washington Post" said, the Democrats are using this situation, the failure of this CIA to notify them because the vice president told them not to about a secret hit plan, is being used by the Democrats and friends of the speaker to prove that they're not an honest organization.

IGNATIUS: That is certainly the...


MATTHEWS: OK. Let me go to Bob Baer.

How do you read this? My concern is that the vice president is operating in an executive capacity, when, under the Constitution, he has no executive authority, and he himself has denied, as incredible as it seems, has denied his participation in the executive branch of government. He says, for purposes of the disclosure of his income, et cetera, et cetera, he doesn't have to tell anybody that he's a member of the executive branch, which I find part of his sort of M.O.

Anyway, your thoughts on this, Bob.

ROBERT BAER, FORMER CIA OFFICER: Oh, I mean, the vice president is out of bounds, clearly. He's hidden a lot from-from the-you know, from Congress.

And there were assassination squads, you know, run out of the vice president's office, or directed out of the vice president's office. I have heard enough of this to make it true. But, on the CIA's part, it's on firm ground.

Look, no-no weapons were deployed. No people were deployed. It was simply tasking. It was contingency planning. And the CIA does this all the time. And if every time the CIA came up with an idea, as fanciful as they are sometimes, went to the Hill, it would be tied up forever.

The CIA is on firm ground. And I completely agree with David that this is just-this is Pelosi getting back at the CIA for embarrassing her. And it's very unfortunate.

MATTHEWS: How do you know she's doing this? How do you know she's doing this, Bob?

BAER: I don't know that...


MATTHEWS: You just said she's getting back to this-you just made a statement. Nancy Pelosi is getting back at the CIA. How do you know that?

BAER: That-that whole tiff we went through before about what whether-what she knew about torture and what she didn't, and the CIA called her untruthful on this, I think they're mad about it. The Democrats are mad about it. They raised the word assassination. Look at the evil CIA, is out there, secret teams, and the rest of it, when they know full well that the CIA had full authority after 9/11 to go out and kill people, targeted killings. They...


MATTHEWS: Well, I don't like-look, I think it's a misuse of the term assassination. Killing terrorists is not assassination. Killing political leaders is assassination, by the definition-definition in any dictionary.

But it was "The Wall Street Journal," hardly a Democratic tool, that broke this story on Monday. It's "The New York Times" that broke the story on Sunday. The word assassination was first used by "The Wall Street Journal," not the Democrats, sir.

BAER: It's...


MATTHEWS: So, you're accusing the Democrats of something "The Wall Street Journal" did, and you're saying the Democrats have put together a political hit operation to get the CIA, to make Nancy Pelosi look better. Give me examples of who has done that. Give me a member of Congress, his or her name, that has done that.

BAER: The fact that they wrote a letter saying that they were lied to, there was affirmative disinformation passed from the CIA. They provided no evidence for this. The CIA...


MATTHEWS: ... the chairman of the Intelligence Committee, you're talking about.

BAER: Exactly.


BAER: And this letter has been on the Internet. It's been made public. These accusations are just this-it's just unseemly, the way Congress is going after the CIA, when it was really a problem in the White House.

But, again, this is Washington. You know, it's-this stuff floats down.


BAER: And the CIA gets blamed. And it's demoralizing. It is not worth it.

MATTHEWS: Well, maybe we're reaching a confluence of opinion here, which is that it's not the CIA's fault that the vice president goes over there any number of times in the buildup to war and tries to sharpen their case for a war with Iraq.

BAER: Right.

MATTHEWS: And now we find out the vice president told them at some point, don't release any information to Congress, because, as Cheney's daughter now talks for him, says, because they can't trust the Democrats with hot stuff.

We have a Constitution where somebody without executive authority or constitutional authority called Dick Cheney is out there telling our intelligence agencies what to do and what not to tell Congress they're doing.

Your thoughts, David.


MATTHEWS: You're an expert on this.

IGNATIUS: Oh, Bob Baer...

MATTHEWS: You know that agency as well as any journalist.

IGNATIUS: Well, my feeling is that the CIA had no greater enemy, the CIA professionalism had no greater enemy during the Bush years than Vice President Cheney.

He was-he was leaning on them. He was beating up on them. He was, you know, doing-I think, way over the line. What we ought to want, what you ought to want, what-what-what Bob Baer wants, because he worked there, is for us to have a professional intelligence service, the way we have a professional military, and for the country to respect that, and for politicians not to take turns taking shots at them.

You know, Cheney took his shots when he was in.


IGNATIUS: And now we have-I do think we have House Democrats taking their shots.

And I think, at some point, the American people have to say, enough.


IGNATIUS: We wouldn't tolerate it with the military. We're not going to tolerate it with our intelligence service. Back off, everybody.

And I think this is a useful incident. You know, you asked me for names and numbers and all that.

MATTHEWS: I agree with you completely, by the way. I hope I haven't spoken ill to the way-I completely agree. I think it's Cheney's fault. I think the CIA gets a lot of hit.

Do you agree with that, Bob, that the Democrats are abusing the CIA the way Cheney was?

BAER: Oh, I think absolutely. It's their turn. They're-it's-you know, they control the committees. They-they leak information. They're mad at the CIA, sometimes justifiably.

But the point is, they're-rather than taking thing out on this White House or the last, they're taking it out on the CIA. It's an easy target. And it-it's a target that cannot defend itself.

MATTHEWS: And I believe that men and women who go behind the enemy lines and risk their lives every second of their lives for this country, and get no credit, because they can't be identified, deserve better treatment than this.

The vice president, we will continue to talk about, until he comes on this program and explains himself.

David Ignatius, thank you.

IGNATIUS: Thank you.

MATTHEWS: Bob Baer, thank you.

Up next: Remember how John McCain spent his presidential campaign talking up this fellow, whose name isn't actually Joe, and his job isn't actually the plumber? But they call him Joe the plumber. Well, McCain's daughter has some choice words for Joe. And that's coming in the "Sideshow."

You're watching it, HARDBALL, on MSNBC.


MATTHEWS: Welcome back to HARDBALL. Time for the "Sideshow."

First up: plumbing the depths.

Remember Joe the plumber, the McCain campaign's prime-time working stiff? There, you can see him up on the stage at a McCain campaign rally last October with the presidential candidate's daughter Meghan.

Well, nine months later, Meghan is out there with a somewhat adversarial attitude toward the McCain campaign prop.

Here is what she told "Out" magazine, a publication geared to gay and lesbian readers-quote-"Joe the plumber-you can quote me-is a dumb-ass. He should stick to plumbing."

Well, if that's your term for Joe, I wonder what sobriquet she has got ready for Sarah? That's Sarah Palin, a topic Meghan says she won't even address, at least until deadline day arrives on the book she's planning to write.

Now for tonight's "Big Number"-Sarah Palin has touted as the biggest fund-raising asset of the Republican Party. In fact, as we will get to in the "Politics Fix" tonight, she's got the highest favorability of the leading Republican candidates for 2012.

And here is an additional fact. sent out a fund-raising e-mail this week asking for money to counter what they say are the false claims that Sarah Palin has been making on climate change.

How much did they raise just 24 hours after putting that e-mail out? According to, $100,000. So, see how the left is laughing all the way to the bank on Sarah Palin? One hundred thousand dollars in just 24 hours. Villainizing the lady from Alaska seems to be paying off-tonight's "Big Number."

Up next: President Obama hits the campaign trail for New Jersey Governor Jon Corzine. But how much is he campaigning for Corzine, and how much is he really campaigning for Barack Obama?

You're watching HARDBALL, only on MSNBC.


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

A late rally pushed stocks higher today, as investors bet on big earnings for technology companies. The Dow Jones industrials gained 95 points. The S&P 500 added eight, and the Nasdaq finished 22 points higher.

IBM shares gained more than 3 percent today, ahead of an earnings report that came out just after the closing bell. IBM posted a second-quarter profit of $3.1 billion. That's up 12 percent over last year and well ahead of analyst prediction. The tech giant is also increasing its full-year profit forecast by a whopping 50 cents a share.

Google shares finished slightly higher, ahead of their second-quarter report. Profit and revenue both rose, beating Wall Street expectations.

Helping trigger today's late rally, positive comments from the economist known affectionately as Dr. Doom. Nouriel Roubini said today that the worst of the financial crisis may be over and predicted that the economy will emerge from the recession towards the end of the year.

That's it from CNBC, first in business worldwide-now back to


MATTHEWS: Well, the president is hot back on the campaign trail-rather, he's back on the hot campaign trail up in New Jersey today.

Let's take a look at him. He's campaigning for Jon Corzine, who is in big trouble up there. He's the incumbent Democratic governor. He's also going to be helping out-the vice president is out there helping out-

Biden is out in there in Virginia, the other guy.

See, every year, after a presidential campaign, there's two big governor's races. One is in Virginia, and one is in New Jersey. Here is the president campaigning today.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We inherited an economy where Washington didn't pay for anything, made a lot of promises. So, we ended up inheriting a $1.3 trillion deficit. Financial regulation, nobody even thought of.

And, as a consequence, people could take enormous risks, and have Main Street end up paying the cost.

But you know what? That was the America of yesterday.


OBAMA: We're now looking at the America of tomorrow. We're going forward. That's not the America our children is going-are going to inherit.



MATTHEWS: Chuck Todd is NBC News chief White House correspondent. He's sitting right across from me tonight. He's also our political director. And Jonathan Martin is Politico's senior political reporter.

We have got the two best guys around.

Start with this question. Does the president miss the trail? Is that why he's out there? Or does he just got to get the engine hot for health care? What's he up to?


Earlier this week-and we went off on this clip the other day-you can see, he-he likes the campaign trail. He's comfortable out there. In Michigan, he got fired up. He pushed back at Republicans for the first time on this economy than-he hadn't for a while.

And I can tell you this. White House aides know he's better on the stump than when he's at the Rose Garden. You can't-you can't be pointing your finger, you can't dropping your G's in the Rose Garden.


MATTHEWS: He gets into that sort of preacher cadence and the dropping of the G's and the sleeves.


TODD: This New Jersey thing, though, by the way, this is a-one of those boxes he has to check as the leader of the Democratic Party.


TODD: You don't do a rally with 17,000 people in July, unless you don't want to be doing that rally with 17,000 people in October, because you're worried that guy is not going to win.


TODD: They're getting it out of the way.


MATTHEWS: Let me ask you...


TODD: ... get it out of the way.


MATTHEWS: Jonathan Martin, is this guy's biggest-the president's biggest worry that the big litmus test on how he's doing, the temperature on him will be, if he loses Jersey and Virginia, if both go down...

MARTIN: Right.

MATTHEWS: ... and the Republicans win there, he will be seen as a lame duck almost?

MARTIN: Don't want to lose both. You have got to win one of them. If you win one of them, then it's a non-story. If you lose both of them, and especially Jersey, a blue state...

TODD: No, no, no.


MARTIN: ... that's tough for them.


TODD: ... Jersey. This is about Corzine. There's a-it's a one-state thing. It's Virginia.

MARTIN: Well, that's what I said, right.

TODD: Yes.


MATTHEWS: So, he's got to win Virginia?

TODD: I don't think Jersey matters either way.

MARTIN: Well, look, I think, if you lose both...


TODD: It's a referendum on Corzine.

MARTIN: If you lose both, politically, it's problematic, though.

Don't forget, though, speaking of going on the campaign trail, when he was having small problems with the stimulus, what did he do? He left D.C.

TODD: Right.

MARTIN: He went to places like Florida, Fort Myers, Chuck, and he tried to campaign for the thing. And that...


MARTIN: ... help them.


Is peripatetic his nature? Does he-is he almost, in a sense, by-he's got to have a lot of noise and action? I have a sense-I was away for two weeks. I got back, I-I thought I had missed out on what's going on.

Does he feel that he went too-he away too long for the G8 meeting, going to Ghana, going to Russia, going to the papacy, all that stuff? He comes back, it seemed he was not-if not off his game, out of it a little.

TODD: Well, obviously, it's...

MATTHEWS: Does he feel that at the White House?

TODD: It's the timing of the trip.

They-look, he loves being overseas. He likes-he likes being the world's-America's-the world-the leader of the free world. He enjoys the role. He's-this is why, remember, when he got in that fight with Hillary Clinton during the primary, he always felt very comfortable.

You know, everybody thought he was inexperienced. On foreign affairs, he's very comfortable-but the timing of this trip. Look, health care is a pain for them to get through Congress, holding Max Baucus' on this, dealing with all the politics of this...

MATTHEWS: The chairman of the-of the Finance Committee.


TODD: ... back and forth. And you need to be holding his hand every single day.

Any day that you don't, you know, he's wondering, how come you're not holding my hand? What happened?

MARTIN: Well, and plus...


TODD: And-and it's that hand-to-hand...


MATTHEWS: OK. Baucus says in the paper today...


MATTHEWS: OK. Baucus says he's not helping; the president is not being helpful, because he's not pointing him to a direction on how to pay for this hugely expensive health care bill. He's not talking about taxing the benefits of those with good health care plans as a way of helping to finance this.

Is that true? Is that what they think? The White House thinks the president-I mean-I'm sorry-the people on the Hill, who have to pass this bill, feel the president is not carrying the heavy load here?

MARTIN: Well, I think they-they are wanting some more direction from the White House, especially as far as how to pay for it.

And there is hesitation among Democrats to do-tax employers, to go

because, you know, organized labor is adamantly against it. So, I think that is a nonstarter.

But, at the same time, where does the money come from? Do you do the surcharge on the rich? And then you-you open the door to a tax-increase charge by the Republicans. So there is concern on the Hill.

The most striking thing I saw today was Senator Harry Reid, the leader in the Senate, saying that the president's campaign organization airing these campaign ads against Democratic senators was, quote, a waste of money.

TODD: Well, you know why that is? Because they're complaining to Harry Reid. That's right, Evan Bayh and Mark Pryor are going to Harry Reid, hey, get the DNC to stop running these ads.

MATTHEWS: Are they running ads that are pressuring the conservative Democrats?

TODD: They're running-


MATTHEWS: Here is what I would think; I remember back in '93 a woman named Marjorie Margolies Mezvinsky, a Democrat from the suburbs of Philly, was asked by President Clinton to vote for his tax bill. She voted for it. The Republicans mocked her on the floor and said bye, by, Marjorie. Bye, bye Marjorie. And she did get beaten on the tax issue by a guy who wasn't the coolest politician in the world, John Fox.

I'm asking, could it be that a lot of Democrats are scared, not just the conservatives, if they vote for this big health care bill, with an increase in taxes for the rich of four or five percent, that they're going to get nailed?

MARTIN: Because they are going to be hit as tax increasers. Of course they are. Look, any member of Congress, Democrat or Republican, their chief concern, first and foremost, is always their own behind. The fact is these moderate Democrats, especially those who are in cycle, like Blanche Lincoln, for example, are-

MATTHEWS: The ones up for reelection.

MARTIN: -- tough votes.

TODD: I will say this, this is why-everybody is wondering why is the White House rushing? They're rushing because they know the closer this calendar moves to ten, the harder it is to corral enough votes. They think they can get all the votes they can get now because it's an easier vote to explain away, and have other votes to cover it up over the next-

MATTHEWS: Here is my concern. The biggest argument for health care reform among liberals and progressives for the last 20, 30 years was we're already paying for health care in the emergency room anyway; so you might as well do it officially and give some people some pride, so they can go see a doctor, instead of the emergency room and wait three hours.

If we're already paying for it, why don't we take the savings we're going to get from all those ER services people are getting right now, and apply it to a national health care plan? In other words, if that was true, we're already paying for it, how come we got to have a big tax increase to pay for it?

TODD: That is part of it. They'll claim that part of this money that they're finding is in that savings. The problem is you also go through all of this crazy Congressional mumbo jumbo. Congressional Budget Office doesn't score this, doesn't score that. That gets used as a hammer.

MATTHEWS: I think we need better staff work. I don't think the staff's done a great job of saving this money or finding the savings or controlling costs. I think the president is not getting served by the Hill staff in getting these cost savings, because the only way to sell this to the average American is it's smarter and better in terms of health delivery to have this new system than the old system, because most people already have health insurance. Most taxpayers have health insurance.

TODD: And not only that, most voters.

MATTHEWS: Voters who show up in off-year elections, by the way, have health insurance.

TODD: And the biggest problem with this, the new health care plan won't go into effect for four or five years.

MATTHEWS: But the taxes will.

TODD: Yes.

MATTHEWS: I know. Let me ask you-Let's get to the bottom line here. You're both politically skilled persons. You said something on this program the other night that you think the president will get a health care bill through by the end of the year. Do you believe that still?

TODD: One hundred percent.

MATTHEWS: He'll get a bill?

MARTIN: Get a bill?

MATTHEWS: A bill signed. We'll see a signing ceremony with all the people there.

MARTIN: And he will celebrate regardless.

MATTHEWS: And he will be able to claim the same kind of success that Lyndon Johnson did with Medicare, in other words, a major first year accomplishment.

TODD: Absolutely.

MATTHEWS: Why will it happen?

TODD: If he didn't, they've set themselves up for failure. They have set themselves-it's too big of a hit.

MATTHEWS: How do they get 60 senators?

TODD: Well, they have 58 Democrats. If they have to, they will wheel Bob Byrd in if they have to to get the 59th vote. Ted Kennedy will make it for this vote.


TODD: Part of the reasons why they're going after Republicans still, even though they can do this on a party line, is by just reaching out to moderate Rs, that's going to calm Ben Nelson down.

MATTHEWS: Any way they are going to lose Dianne Feinstein?

TODD: I doubt it.

MATTHEWS: She's worried about the fiscal chaos in California.

MARTIN: That's a tough no vote.


TODD: If she goes against them, she will get Ned Lamonted and she will-she will get primaried the next time she's up.

MATTHEWS: She's enormously popular. Thank you, Chuck Todd.

TODD: Not in the Democratic-

MARTIN: Base of the party.

TODD: I would question that.

MATTHEWS: Well, thank you. In my base. Thank you, Chuck Todd. Thank you, Jonathan Martin. I'm allowed to play favorites. I love Dianne Feinstein. I like Barbara Boxer.

Up next, Sarah Palin's resignation as governor of Alaska may not have hurt her chance of becoming president. But new polls show it hasn't exactly helped either. We've got the numbers. I've got to tell you, these numbers are interesting. We'll be right back with very positive numbers for Sarah Palin. Back in a minute.


MATTHEWS: We're back. Time for the politics fix with syndicated radio host Michael Smerconish, who is an MSNBC contributor and the author of "Morning Drive," and Joan Walsh, editor in chief of

Well, I'm not sure I can hear anybody here right now, unfortunately. But we've got the latest Gallup poll right now. Given a choice of six candidates, Mitt Romney leads with 26 percent. Palin is at 21 percent. Huckabee is at 19 percent. Newt Gingrich is at 14. Pawlenty and Barbour are down there at the bottom.

It's an interesting poll. We're going to get some more participation here, but right now I'm going to go over the polling right now. It's fascinating to see that Sarah Palin-Romney is in the lead. But now let's look at the favorability ratings among Republicans. This is just among Republicans. Palin has the highest favorability at 72 percent. That's quite a lead over Huckabee, who is down there at 59 percent. You see it on the chart there. And Mitt Romney's at 56 percent.

It looks to me like Palin is do incredibly well. We're going to come right back in a moment and we're going to have our guests join us right now.


MATTHEWS: We're back with Michael Smerconish and Joan Walsh. You've both had enough time to look at these charts. Let's look at this thing for 2012 among the preferences. Michael Smerconish, you first. Romney's at 26. Palin's at 21. And then Huckabee 19, and then the rest of them. What do you make of that, overall, what that says?

MICHAEL SMERCONISH, RADIO TALK SHOW HOST: Well, I know is sounds surprising when you look at the strength of Palin's numbers, because you would expect, giving her resignation, that she would have dipped or declined in those polling figures. She hasn't among the base. I'm not surprised.

I hear from these folks as radio callers. They are the hardcore base. And, Chris, the more negatively she's portrayed nationally, the more emboldened they become in their views. The real question is, can she grow that base? And the answer is, no, she cannot.


JOAN WALSH, SALON.COM: I agree completely with Michael. I mean, she went out on a note of blaming the media and blaming the East Coast elites, even though 15 of 16 ethics complaints were filed by Alaskans, her constituents, Chris. But as a Republican, you can't go wrong by bashing the media, and people believe she's a renegade. The things that make you or me or Michael say, she doesn't have the experience; why is she giving up this executive job, which is a great platform, to go away and do god knows what?

Well, they see why she's doing it. They believe she's been hounded off the stage and that she's better off as an outsider, and that she can surge back.

I don't think so. I think her negative numbers with independents have grown, with Democrats have certainly grown. She cannot grow the party beyond this very tiny base. So it's --

MATTHEWS: So to make your point, Joan, here she is. It makes part of your point. Among the favorability among Republicans-look at the second chart now -- 72 percent, just asking if you like her or not, don't like her or not. Seventy two percent of Republicans say they like her. That's the highest of any Republican.

Michael, does it surprise you that she's the most popular among that Republican world, just Republicans?

SMERCONISH: No, it does not surprise me. Don't forget, we're talking about a vastly diminished party. But if you were to see numbers that reflect Republicans, Democrats and independents, it would be a far different picture.

MATTHEWS: Let's take a look to make that polling. Here's everybody included, unfavorability, 45 percent. I will I had the favorable. But I can assume it's the split of that. But 45 percent, Joan, to make your point is her unfavorability, pretty high among voters. But in the end, all voters don't pick nominees. In the end, the party regulars-and in an off-year or an election which may not look too good to Republicans, doesn't the wilder wing of the party, like McGovern did in '72, like Goldwater did in '64 -- don't the wilder people win when it doesn't really look like a winnable year?

WALSH: I think that's very likely. I think what the party really lacks at this point is a set of leaders who are really defining a very different vision, who are defining it coherently, who agree on a direction and who have the wherewithal to stop Sarah Palin.

In the absence of such people, I don't see Mitt Romney as the nominee. I simply don't. In the absence of such people, her charisma, her kind of caniness around politics-we may not know if she's bright, but she's certainly bright about appealing to her base. She really has a strong platform. As you say, they're in the wilderness now. So there's a good chance they'll go for the wilderness candidate.

But I want to hear what Michael has to say.

MATTHEWS: I want to ask you a pointed question. Suppose you're running for governor of Pennsylvania next year and you're Tom Corbett or you're Gerlach or somebody else, and you want somebody to come in and raise some money and make some noise for you; would you bring her in?

SMERCONISH: It's an easy one. What you do is bring her into Washington and have the event there. Would I bring her into the Philadelphia suburbs? Hell no. I would not do that.

MATTHEWS: How about in deer hunter country, where they have guns and they like people who like guns, out west in Pennsylvania.

SMERCONISH: They loved her there. Right, that's part of that 20, 21 percent. There they would lover her. But as you know, Chris, that's not the area that sways elections in my state, nor across the country.

MATTHEWS: OK, let me-let's move on to this question of what we watched today. Joan, you first. I watched Mr. Ricci, Frank Ricci and Mr. Vargas, the fire fighters. I watched them all. They all looked very smart in their uniforms. I thought they looked very plaintive. I thought they looked like victims. They looked very sad, almost upset.

They didn't look like big shots. I think the portrayal of Judge Sonia Sotomayor as a person that gave them a cursory judgment, who didn't give them literally their day in court, is hurting her. What do you think?

WALSH: I really don't think it hurt her, Chris. I think they are

very sympathetic characters. They have always been. But I think it's very

ironic that she's being tarred for not having empathy for these two

individuals, or those 19 individuals, when she's being attacked for having

perhaps having empathy for other groups.

I think she really was not a renegade in that decision. She was in the majority. She ruled with the majority of her court. And the Supreme Court four out of nine, not the majority, but still four solid justices out of nine, voted with Sotomayor.

They followed precedent. John Peyton (ph) said it best. They really did follow settled law. The Roberts court has taken this case law in a very different direction. We'll see how long that persists. But they are the ones that ignored precedent. Perhaps time will show that they were right. Perhaps the law will show that they were right.

But they were the renegades, not Sotomayor. I don't think it's going to matter.

MATTHEWS: How is this going down in South Philly and places like that? How's this going down in the whole part of the east that you cover, especially, Michael? Who's wins this argument?

SMERCONISH: Sotomayor is winning because she did so well in the first two days. And she deed so well because the thing has been a total snooze. Everybody's eyes, I think, have been glazing over.

What Vargas did and what Ricci did is they humanized it, because no longer was this a conversation about obscure legal principles. All of a sudden, it was like, oh, there was that white guy who was denied his job, even though he did so well on the test.

But now, ask me is it going to make a difference? I don't think it will make a difference, because what the GOP needed to do was thread the needle and draw a causal connection between the wise Latina speech and this embodiment of her view of the law. They've not been able to do that.

MATTHEWS: Joan and Michael, I've got to go. Joan and Michael, thank you both. Join us again one hour from now at 7:00 Eastern, as we cover President Obama's speech to the NAACP. Right now, it's time for "THE ED SHOW" with Ed Schultz.



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