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'Hardball with Chris Matthews' for Monday, August 16th, 2010

Read the transcript to the Monday show

Guest Host: Michael Smerconish

Guests: Howard Fineman, Eugene Robinson, Rev. Michael Faulkner, Scott Stringer, Joan Walsh, Mark Mazzetti, Bob Baer, John Feehery

MICHAEL SMERCONISH, GUEST HOST:  All eyes on the contemplated mosque near Ground Zero.

Let‘s play HARDBALL.

Good evening.  I‘m Michael Smerconish in New York, in for Chris Matthews.  Leading off tonight: Mosque hysteria.  President Obama‘s speech concerning a contemplated mosque near Ground Zero has raised the ire of many on the right.  On Friday, the president said Muslims have the same right to practice their religion as anyone else and that it‘s his obligation to make sure everyone is treated equally under the Constitution.  Then Saturday, he seemed to walk it back, saying he wouldn‘t comment on the, quote, “wisdom” of building the mosque.  Republicans pounced, calling the president out of the mainstream.  We‘ll get into the mosque debate and how it‘s playing politically at the top of the show.

And some on the far right are taking it further.  Newt Gingrich said the mosque is like putting a Nazi sign next to the Holocaust Museum.  Comments like that, plus calls from leading Republicans to ditch the constitutional right to birthright citizenship has moderates in the party worried.  Could this kind of talk hurt the party long-term?

Plus, Afghanistan and Iraq get the headlines, but under President Obama, the stealth war against al Qaeda has expanded to roughly a dozen countries worldwide.  We‘ll go inside on how this administration is changing the war on terrorists.

And guess who‘s back on top in the Florida Senate race?  Marco Rubio now leads Charlie Crist in the newest Mason Dixon poll.  We‘ll take a look at what‘s happening in Florida and some other hot races across the country.

And they‘re calling it a cost-cutting measure.  The teachers union in Milwaukee wants Viagra covered under its health insurance plan.  That‘s in the “Sideshow” tonight.

But we begin with President Obama and the mosque controversy.  Scott Stringer is the borough president of Manhattan.  The Reverend Michael Faulkner is a Republican running for Congress here in New York.

Gentlemen, here‘s the president on Friday night speaking of the contemplated mosque in lower Manhattan.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  Let me be clear.  As a citizen, and as president, I believe that Muslims have the right to practice their religion as everyone else in this country.


OBAMA:  That includes the right to build a place of worship in a community center on private property in lower Manhattan in accordance with local laws and ordinances.  This is America, and our commitment to religious freedom must be unshakable.


SMERCONISH:  So that‘s the president on Friday night.  Then on Saturday, he offered this.


OBAMA:  I was not commenting and I will not comment on the wisdom of making a decision to put a mosque there.  I was commenting very specifically on the right that people have that dates back to our founding.


SMERCONISH:  Reverend Faulkner, allow me to focus your attention on Friday night.  What, if anything, did the president say Friday night at the White House that in your view was mistaken?

REV. MICHAEL FAULKNER ®, NEW YORK CONGRESSIONAL CANDIDATE:  Well, I think he weighed on it way too soon, as he has in other issues, and you know, misspoke or went over the line.  I think it‘s an issue for local people to decide and for local people to weigh in on.  I hadn‘t seen this as a national issue that required the president‘s attention.  However, he made it so, and so he weighed in on it.

SMERCONISH:  But specifically—in reading the transcript, in watching the remarks, I‘m hard pressed to find a single sentence in this speech that a rational person would find objectionable.  Am I mistaken?  Is there something, anything in this speech that you can point to?

FAULKNER:  No, absolutely not, except that he did not say what he said on Saturday.  You see, the problem was talking about wisdom.  I agree with the president on the Constitutional rights.  I agree with the president as it relates to religious freedom.  But this is not an issue of religious freedom.  This is an issue of sensitivity.

If Islam is truly a religion of peace, then they should want to promote peace and build a bridge of harmony and fellowship between the entire New York community.  This proposed mosque does not do that.  In fact, it‘s the antithesis of that.

SMERCONISH:  Scott Stringer, the implication, at least to my ear, from what the president said Saturday morning in making it clear that he hadn‘t commented on the wisdom—the implication of that was, at least to me, to say, If I had told you about the wisdom of it, I would have said that this was not something that should move forward.  How did you read the Saturday morning comments?

SCOTT STRINGER, MANHATTAN BOROUGH PRESIDENT:  Well, I thought, first of all, his first comments were certainly appropriate.  He reminded us that this is America.  This is also New York City.  And religious freedom is about being able to worship where you choose.

The second comment on Saturday was definitely more nuanced, but the point he was making was, basically, Look, this is a local New York City issue.  This is about land use and zoning and municipal laws.  And quite frankly, the president of the borough of Manhattan should be helping to navigate this with the community and rebuff efforts by national Republicans to create a wedge issue here.

So I thought the president was right on target.  I got to tell you, some of these national Republicans are starting to sound like Joe McCarthy back in the 1950s.  This is becoming something that‘s way out of control.

SMERCONISH:  But it‘s not just—it‘s not just national Republicans.  I mean, perhaps you‘re in the loop on the fact that today Harry Reid, Senator Harry Reid‘s spokesman, also took issue with the location of this mosque so close to Ground Zero.  So it‘s not just a Republican thing.


STRINGER:  I think it‘s unfortunate that the Republican strategy for the November elections is to put Democrats that have difficult races in a position of having to decide on what street corner in New York City a mosque is located.  And I got to tell you, I don‘t think these Republicans have any idea where Park Place is or where West 4th Street is.  It is...

SMERCONISH:  Mr. Stringer, let me...


SMERCONISH:  Gentlemen, hang on.  Hang on.  Let me just—let me just stick with this for one moment.  Mr. Stringer, if, indeed, the intent of the mosque is to be a bridge builder, then wouldn‘t the hue and cry reaction—I mean, there‘s a CNN poll that says nearly 7 in 10 Americans object to this.  Wouldn‘t the reaction to that data and this outcry be for the organizers to back off and say, You know, maybe we‘re mistaken in this regard.  Maybe it‘s going to be counterproductive.

STRINGER:  Listen, politically, for me and many elected officials, it would be easy to play to the crowd.  But this is about religious freedom.  This is about a community in lower Manhattan that took the hit for the rest of the country saying that it is OK for this to proceed.  That‘s what the local community board (INAUDIBLE)  That‘s what Mayor Bloomberg has said.  The president of the United States had to weigh in because it has become a national issue.  I think these Republicans have...


SMERCONISH:  Hang on, men!  Hang on!  Reverend Faulkner, I want you to listen to former speaker Newt Gingrich, and then we can have a dialogue about, quote, “these Republicans.”  Let‘s listen.


NEWT GINGRICH (R-GA), FORMER SPEAKER OF THE HOUSE:  Nazis don‘t have the right to put up a sign next to the Holocaust Museum in Washington.  We would never accept the Japanese putting up a site next to in Pearl Harbor.


GINGRICH:  There‘s no reason for us to accept a mosque next to the World Trade Center.


SMERCONISH:  Reverend Faulkner, is that a fair analogy?

FAULKNER:  I think it‘s Newt Gingrich‘s analogy.  Let me give you another analogy.  It would not be fair for the Ku Klux Klan to erect a statue or a monument near the bombs (ph) in the South that were burned during the Civil Rights movement.

What we have to understand is this is not about Republicans versus Democrats.  This is Americans, and these are people who are expressing their views.  Now, I support Islam being able to worship anywhere they choose.  There are over 100 mosques in Manhattan.  And we have religious tolerance and religious freedom.  I support that.  I promote that.  That is a core American value.

STRINGER:  OK, Reverend, can I just—can I just...

FAULKNER:  However, the wisdom—the wisdom of this, and to politicize it the way it has been is wrong.  It sways the mind of people.  We need to understand 3,000 Americans...


FAULKNER:  ... lost their lives...

STRINGER:  Reverend...

FAULKNER:  Republicans and Democrats lost their lives on 9/11.


SMERCONISH:  Go ahead, Scott Stringer.

STRINGER:  And by the way, Jews and Muslims also lost their lives.

FAULKNER:  Absolutely.

STRINGER:  And quite frankly, as an American Jew, I‘m offended that Newt Gingrich would relate this to what happened in Nazi Germany.  This is where people are creating a situation that divides this country for no good reason.  I wish everybody could come to New York City.  Sure, people have feelings about this, and we‘re debating it in a collegial manner.  But when you get these people like Newt Gingrich, who thinks that he can come in and create national hysteria to going back to when he was in power in 1994, when he divided this country, I think we should reject that.

And I think Reverend Faulkner, who I respect a lot—Republicans and Democrats should take a time out, blow the whistle and say, Shouldn‘t we now focus our attention on getting...


SMERCONISH:  Scott, Mr. Stringer—hang on.  Scott Stringer, I want you to see...


SMERCONISH:  Scott Stringer, I want you to see what Sarah Palin wrote on her FaceBook page.  I think she asks a reasonable question in asking the president to take a definitive stance.  “Mr. President, should they or should they not build a mosque steps away from where radical Islamists killed 3,000 people?  Please tell us your position.  We all know that they have the right to do so, but should they?  And no,” she adds, “this is not above your pay grade.”

What‘s the answer to that question, Scott Stringer?

STRINGER:  The answer for Sarah Palin and Newt Gingrich and the radical right in the Republican Party is, What‘s your plan to bring more security dollars to New York City?  Can I have a plan so that we can actually protect the city from Islamic fundamentalist terrorists?  They‘re after the wrong group of people.  There is a security threat.  There‘s an Islamic radical security threat.  But it‘s not about a mosque or a peace center in lower Manhattan.  They are totally missing the point here.

SMERCONISH:  Reverend Faulkner...


SMERCONISH:  Does the president need to answer that question?

FAULKNER:  I think the president tried to answer that question.  But this is really a local issue.  If this is truly a peace center, if the imams and all of those involved in this mosque truly want to promote peace, then why are doing it in a place where it is clearly controversial?

STRINGER:  Because that‘s where they‘re located!

FAULKNER:  I am a pastor.  I am a minister.  If I was building a church, I clearly would not build a church in a heavily Jewish area...

STRINGER:  Well, you should.

FAULKNER:  ... or an area where my church...

STRINGER:  Reverend...

FAULKNER:  ... where my church would be an offense to others...

STRINGER:  Reverend—Reverend...

FAULKNER:  ... simply because in the name of religion, I am coming in peace.  If that is truly my aim, it is to draw people in and not to push people away.

STRINGER:  But we want you to build a church in Jewish communities because that‘s how we all get along here.  And even though we may serve different religions or different Gods, I‘ve been to your church, and I respect the work, the great work that you do.

SMERCONISH:  But Mr. Stringer, isn‘t a better analogy—I mean, I know you took issue with what Newt Gingrich had to say vis-a-vis the Holocaust, but we all remember when Pope John Paul II asked the Carmelite nuns to retreat from close proximity to Auschwitz.  I mean, was that the right thing for him to do?  And if so, then isn‘t it equally correct for there to be a request that this mosque not move forward?

STRINGER:  There‘s no question that people have strong feelings on this issue, and everyone can make a request and have the discussion about that.  And I‘m not suggesting that people who make that request, like Reverend Faulkner, are doing anything terrible.

But when we start to demand that property that is already occupied by a religious institution, that we should remove them or force them out, I then think it goes against everything we believe in this country in terms of religious freedom.

FAULKNER:  But there‘s...

STRINGER:  And that is the issue here.

FAULKNER:  There‘s a...

STRINGER:  And by the way, the notion that we will not recognize and be tolerant gives the terrorists the win that this country does not stand...


SMERCONISH:  I think we have common ground among the three of us that if people will take the time to read what the president actually said on Friday night, instead of relying on sound bites and spin, they‘ll find agreement with it...

FAULKNER:  Absolutely.  Absolutely.

SMERCONISH:  ... because the Friday night remarks were spot on.  It was a defense of the Constitution and a big vote for religious independence and freedom in this country.


SMERCONISH:  Saturday morning, things changed.  Thank you...

FAULKNER:  There was a Greek orthodox church that was also destroyed at 9/11, St. Nicholas (ph) church.  They have been trying for years, since 9/11, to get zoning and to get approval to rebuild.  They have not gotten that yet and...

SMERCONISH:  Gentleman, I‘ve got to...

FAULKNER:  ... they were there before...


SMERCONISH:  I‘ve got to call it there.  But I thank Scott Stringer and I thank the Reverend Michael Faulkner for joining us.

Coming up: So what are the politics of the proposed mosque near Ground Zero?  Is there a conscientious effort on the part of the GOP to use the mosque and the prospect of ending birthright citizenship to drive the party base to the polls in November?  And if so, which party benefits in the long run?

You‘re watching HARDBALL, only on MSNBC.


SMERCONISH:  It‘s a week on the campaign trail for President Obama.  He stopped in Milwaukee to campaign for Tom Barrett (ph), who‘s running for governor of Wisconsin.  Then it‘s on to LA for a Democratic Congressional Campaign Committee fund-raiser tonight.  Tomorrow, the president goes to Washington state to raise money for Senator Patty Murray, who‘s facing a tough reelection campaign.  Wednesday, he‘s in Ohio to stump for Governor Ted Strickland, and then on to Miami for another fund-raiser.  Now, note that all five of those stops are in states that the president won.  Then on Thursday, the first family goes on vacation to Martha‘s Vineyard.

HARDBALL returns after this.


SMERCONISH:  Welcome back to HARDBALL.  With his comments this weekend, President Obama ensured the debate about the mosque at Ground Zero will become a national issue.  But could Republicans turn it into a mid-term election issue?  And between this and the debate over reviewing the 14th Amendment, are these really issues the GOP wants to leverage?

John Feehery is a Republican strategist.  Joan Walsh is the editor of

I‘d like to show you both, and I‘ll start with Joan, what Senator Reid‘s spokesman said about the mosque just today.  Quote, “The 1st Amendment protects freedom of religion.  Senator Reid respects that but thinks that the mosque should be built in some other place.  If the Republicans are being sincere, they would help us pass this long overdue bill to help the first responders whose health and livelihoods have been devastated because of their bravery on 9/11, rather than continuing to block this much-needed legislation.”

Joan, does it sound like Harry Reid did the president any favors with those comments?

JOAN WALSH, SALON.COM:  No, he didn‘t.  I mean, look, I—John is a Republican strategist.  I‘m a Democrat, but not a Democratic strategist, Michael.  You know that.  I‘m going to sit here and I‘m going to be critical of some Democrats today, too, because the demagoguery on this issue is really frightening and really tragic.

That said, Harry Reid—he‘s a tower of Jell-o here.  It‘s clear that the Republicans are trying to demagogue this.  It‘s clear that they‘re trying to make both this and the 14th Amendment issue big voting issues.  It remains to be seen whether they will succeed.  But it‘s really sad and tragic to me.

SMERCONISH:  I want to pursue something with you.

WALSH:  Sure.

SMERCONISH:  I can‘t conceive that on its face, that by definition, it‘s demagoguery to think that this is in poor taste.

WALSH:  You know, my religious freedom and your religious freedom is not subject to anybody‘s idea of taste.  It is a value we have.  It is a right we have.  You know, I am the grandchild of Irish immigrants.  I was raised—my earliest political memories, Michael, are about John F.  Kennedy‘s win and the thrill that my parents and grandparents had that our people had finally been fully accepted, that Catholicism was embraced—no, not necessarily embraced, but Catholicism was not going to bar us from any opportunities and that our rights were not going to be subject to people‘s prejudice and bigotry against Catholics.

SMERCONISH:  The president...

WALSH:  This is the same issue, Michael.  It‘s no different.

SMERCONISH:  The president on Saturday morning, when he uses the word “wisdom,” when he says—and I‘m paraphrasing—Note that I‘ve not weighed in on the wisdom of building the mosque in close proximity to Ground Zero, I think by implication, he‘s questioning the wisdom.  You wouldn‘t say that he‘s practicing demagoguery.

WALSH:  He‘s not practicing demagoguery.  There‘s a difference between demagoguery going out to divide and cowardice, falling for it.  And I‘m not -- I‘m not praising the president here.  I praised him Friday night.  I don‘t know why he said what he said Saturday.  I know, theoretically, there‘s a difference.  It‘s a local issue, blah, blah, blah.

But the fact is, this is a right.  These people have a right.  There‘s a mosque—there‘s already a mosque a few blocks away.  Should we close that mosque, too, Michael?  This is why these freedoms are so important because when you compromise on one thing—OK, not two blocks, how about four?  There are porn shops in the neighborhood!  Why don‘t we go out and shut those, too.  I think those are a disservice to the memory...

SMERCONISH:  Let me...

WALSH:  ... of people who died on 9/11.

SMERCONISH:  Let me...

WALSH:  This is preposterous, and we know it in our heart.  This is...


SMERCONISH:  John Feehery, is it preposterous, and do you know it in your heart? 

JOHN FEEHERY, REPUBLICAN STRATEGIST:  I think it‘s a big mistake for those folks to build that mosque so close to the 9/11 site.  I think it‘s needlessly offensive.  They‘re going out of their way really to stir the pot on this. 

I think the best-case scenario—if the president wanted to weight in, what he should have done is say, listen, we‘re going to get everyone together in a room and we‘re going to find out where we can build this thing in a way that won‘t be offensive to the 9/11 families.  That would have showed some real leadership.

To the earlier question, are the Republicans trying to stir the pot on this thing, I think the Republicans are responding to the president‘s statements, his various statements, on this thing, and actually responding correctly, saying, you know what, where is the leadership from the president?  What is he trying to say?  Is he trying to have it both ways?

And I think that—this election is going to turn on the president‘s leadership.  And I think that that‘s going to be the narrative from this... 


SMERCONISH:  Well, let me ask you this. 


SMERCONISH:  And Mark Halperin, among others, put this thought in my head with what he‘s written at “TIME.” 

He said—quote—“Two things are profoundly clear.  Republicans have a strong chance to win the midterm elections without picking a fight over President Obama‘s measured words and a national political fight conducted on the terms we have seen in the past few days will lead to a chain reaction at home and abroad that will have one winner, the very extreme and violent jihadists we can all claim as our true enemy.”

Respond to that, John.  Are we aiding the jihadists by having this debate in public, perhaps with the net effect of that mosque not moving forward? 

FEEHERY:  I truly doubt that.  I think that we—or actually this discussion is very healthy for our democracy and a healthy debate.  And I think that we have to work out where this should go. 

The idea of putting a mosque on the 9/11 site is offensive to many.  We‘re having an open, democratic debate about it.  I think the president‘s implication on Friday night that he thought that they should put the mosque there was—now he backed away from that. 

I think the fact of the matter is that show some leadership, Mr.  President.  Tell us where—you know, if you can bring people together on this.  His statement on Friday I thought was very divisive and polarizing and offensive to the 9/11 families. 

SMERCONISH:  Well, wait a minute.  Wait a minute.

WALSH:  Wait.

SMERCONISH:  Hold it.  Wait.  I need to challenge you on that, because I‘m holding the statement in my hands. 


SMERCONISH:  I have read it multiple times, watched it on television. 

Tell me specifically what the president...


SMERCONISH:  Wait a minute. 


SMERCONISH:  Tell me specifically what the president said on Friday night that was objectionable, because my interpretation is that this was an embracing of religious freedom and the Constitution, something that he‘s often criticized as tearing down. 

FEEHERY:  Sure.  Let me respond to that, Michael.  I think the implication from the statement taken away, if you look at the words and parse the words, yes.  The words themselves were fine.

But the implication coming from that statement was he thought that they should build the mosque on that site.  Then he backed away from that on Saturday, leading to this mass confusion. 

Yes, of course, I agree with religious pluralism, religious freedom. 

Joan, I‘m as Irish-Catholic as you are. 

WALSH:  I know, John. 

FEEHERY:  I believe fiercely in the idea that we should have the idea of religious freedom in this country. 

But the idea of also putting a mosque on the 9/11 site offends me. 

And I think it offends a lot of people.


SMERCONISH:  Let me ask a political question, if I may, of Joan Walsh. 

WALSH:  Sure.

SMERCONISH:  Joan, couple this with what you‘re about to say with the fact that in certain quarters there‘s now a questioning of whether birthright citizenship, vis-a-vis the 14th Amendment, should go away. 

WALSH:  Right. 

SMERCONISH:  Who wins—who wins if these become the focal points of the fall campaign and no the economy?

WALSH:  You know, I think that Republicans are going to take advantage of this.  And it‘s possible that they will win.  I don‘t know, Michael. 

But the larger issue here is, first of all, honesty.  It is not at Ground Zero.  It is blocks away.  It is not a mosque.  It‘s a community center.  Both those things matter. 

And I would say to John, I don‘t want to personalize this, John, and I think you‘re a decent, decent person, but would you be OK with our grandparents or great grandparents be told, you can‘t build a church here; it‘s offensive to the Protestants in the neighborhood? 

We are not at war with Islam.  We‘re at war with al Qaeda.  If al Qaeda wants to build a memorial or a recruiting center in that neighborhood, I will join you, John—so will all Democrats—and we will protest that together. 

But we‘re not at war with Islam.  Why would we let peaceful Islamists, peaceful Muslims believe that we want to declare war on them, too?  Who does that serve?

SMERCONISH:  John Feehery, go ahead and respond to that.

FEEHERY:  I think that the 9/11 families are the ones that are most affected by this.  They take great offense to this—this community center...


WALSH:  They don‘t all take great offense.  They don‘t. 

FEEHERY:  Well, most of them do.  And they have a right to be heard on this.  And I think their views have a right to be respected. 

SMERCONISH:  Is the president...

WALSH:  They‘re divided.

SMERCONISH:  I want to—do I have time to very quickly share Rush Limbaugh‘s comments from today?  Can we go to Rush?  Because I want you both to respond to that before we have to shut this down. 

Here he is today.


RUSH LIMBAUGH, RADIO TALK SHOW HOST:  This is the first time in a long time, Snerdley, I can recall the Democrats, the liberals ever even caring about property rights. 

There‘s no—there‘s so much here. 


LIMBAUGH:  There is so much to learn here.  You know, we—we thought Obama was our first post-American president.  We might have underestimated him—our first anti-American president. 


SMERCONISH:  John Feehery, does the Republican Party benefit by having Rush Limbaugh, who is really the titular head of the organization as far as I‘m concerned, say that he‘s an anti-American?  He‘s the commander in chief.  He‘s all of our president.  I just—I hear moderates and independents turning away when they hear such a thing. 


FEEHERY:  Let me state clearly that I do not believe that President Obama is the first anti-American president.  And I think that comment is ridiculous. 

SMERCONISH:  OK.  I think that‘s enough. 

Thank you both, John Feehery and Joan Walsh.  I appreciate you both being here. 

WALSH:  Thanks.

SMERCONISH:  Up next:  The teachers union in Milwaukee is fighting to get Viagra covered under its health insurance plan.  Why am I smiling?  Their rationale?  It would save money.  That‘s ahead in the “Sideshow.”

You‘re watching HARDBALL, only on MSNBC. 


SMERCONISH:  Welcome back to hard HARDBALL.  Now time for the “Sideshow.” 

Tom DeLay is cleared.  Politico reports that the federal investigation has ended six years after the Department of Justice began its work.  DeLay had been investigated for his ties to lobbyist Jack Abramoff.  But, last week, the Public Integrity Section of the DOJ called DeLay‘s lawyer to tell him there won‘t be any charges. 

The former leader does, however, still face a state case in Texas that will begin later this month.  We‘re guessing, though, that DeLay might just be dancing a Texas two-step to celebrate passing this first hurdle. 

Next, it‘s August, and the time of year when teachers are getting ready to head back to the classroom.  In Wisconsin, the Milwaukee Teachers Education Association has been waging a two-year battle to have Viagra, Cialis and similar drugs reinstated in the teachers‘ health insurance coverage plans, claiming discrimination against male union members. 

The school board has successfully argued so far that this is a cost-cutting measure that would save nearly $800,000 per year.  That‘s a lot of rulers.  Stay tuned as this fight continues. 

And speaking of back to school, fired General Stanley McChrystal, ousted after that “Rolling Stone” article quoting the general and his staff trashing the Obama administration, is headed for the ivory tower.  General McChrystal will teach a graduate course about leadership at Yale this fall. 

And now time for the HARDBALL “Big Number.” 

Former eBay executive Meg Whitman has made no secret she‘s a self-funded candidate for California governor.  And after an infusion to the tune of $13 million this weekend, how much has she spent on her bid to date?  One hundred and four million dollars.  And that‘s tonight‘s “Big Number.” 

Up next: the shadow war against al Qaeda.  “The New York Times” reports on how President Obama has expanded the fight against terrorist networks to roughly a dozen countries worldwide.  We will get into that when we return. 

You‘re watching HARDBALL, only on MSNBC. 


JULIA BOORSTIN, CNBC CORRESPONDENT:  I‘m Julia Boorstin with your CNBC “Market Wrap.”

Stocks ending mostly flat on some mixed economic info and a general lack of interest, the Dow Jones industrials down a point, the S&P 500 up a tenth-of-a-point, and the Nasdaq climbing eight points. 

Shares in education firms skidded today after the Department of Education said most for-profit schools would be ineligible for federal aid because too many students aren‘t repaying their loans. 

Meanwhile, more Americans are keeping up with their credit card payments, and delinquencies and charge-offs were lower in July.  And banks are easing lending standards for small businesses for the first time in four years.  That‘s according to the Federal Reserve. 

Internet media site Hulu is reportedly making plans to go public as early as this fall in a deal valued at around $2 billion. 

And China has officially bumped Japan to number three.  It is now the second largest economy in the world behind the United States. 

That‘s it from CNBC, first in business worldwide—now back to


SMERCONISH:  Welcome back to HARDBALL. 

Sunday‘s “New York Times” had a huge story with this headline: “Secret Assault on Terrorism Widens on Two Continents.”  With U.S. troops starting to leave Iraq and plans for the same in Afghanistan next year, how many other countries are we fighting?  And how long will we do it? 

Mark Mazzetti is one of the “Times” reporters on that story.  We‘re also joined by CIA officer Bob Baer, who writes for  

Hey, Mark, I was thinking this weekend that Saturday morning Dr. Laura was probably elated when she saw how big that mosque story got from Friday night, because it knocked her N-word tirade right out of the news.  But, on Sunday, here you had this tremendous front-page story, revelations about the way we‘re fighting a war against terrorists, and the mosque still dominated. 

So, why don‘t you give us the CliffsNotes version of what you reported? 


The gist of our story was that the—quietly, the Obama administration has been expanding military and intelligence operations in a number of places, in Africa, the Middle East, Central Asia. 

It‘s not just Afghanistan and Iraq or even Pakistan, which we do write a lot about with the CIA drone campaign.  It‘s in places like Yemen.  It‘s in other parts of the Horn of Africa, like—like Somalia.  Yemen was a particular focus of our story, because it is the country with an al Qaeda presence where there has been an expanded Pentagon campaign of training Yemeni forces, but also airstrikes on suspected al Qaeda compounds. 

SMERCONISH:  In a sound bite, it‘s a scalpel approach, as opposed to a hammer approach.

MAZZETTI:  Yes, that‘s the metaphor used by John Brennan, who is the president‘s top counterterrorism adviser, saying that, unlike the Bush administration, which relied on, as he put it, the hammer of large military invasions in Iraq and Afghanistan, they would try something quieter, something, in his words, kind of more surgical. 

But the question is whether you can really do this surgically and—and whether there is anything surgical that could—that might possibly have a blowback effect, in other words, create more militants than you‘re actually capturing or killing. 

SMERCONISH:  Bob Baer, give me a gut-check on the “Times” reporting of this story.  I note that Jack Devine was an individual quoted by Mark Mazzetti and his colleagues, a former CIA clandestine officer who, among other things, was concerned as to whether there are rules. 

What are we getting ourselves into if we pursue this stealth path? 

ROBERT BAER, INTELLIGENCE ANALYST, TIME.COM:  Well, I think what—it was a good story, but what it sidestepped is what is called wave (ph) special access programs, which, for the military, under Title 10, allows the military to assassinate. 

So, essentially, the military in what is called battlefield preparation can go into a country like Yemen we‘re not at war with, and assassinate leaders in al Qaeda or related groups.  And this is Pandora‘s box.  Once you open it, where else do you go?  I mean, do you it in Thailand?  Do you do it in Morocco? 

It‘s an open-ended war.  And I think you hit is on the end is that it requires good intelligence.  It requires precise intelligence.  Otherwise, you‘re killing innocent people.  And there will be a blowback, you know, later on down the line. 

SMERCONISH:  Mark Mazzetti, one of the reactions I had in reading the story yesterday morning is that I think, if President Bush were still in charge, and if you had this expansion of stealth operations, the so-called scalpel approach, my hunch is that there would be a hue and cry from the Democratic leadership in the House and the Senate. 

But, of course, we know that‘s not the situation right now.  What is the GOP position on this new strategy?  And what can you tell us about the reaction among House and Senate Democratic leaders? 

MAZZETTI:  Well, I think both sides, both parties have generally been fairly supportive of this. 

I mean, look, the Republicans are not going to come out and criticize the White House for being aggressive about—on terrorism.  That‘s not a position that they‘re—they‘re inclined to take. 

The Democrats, at the same time, have been quiet, in part because it‘s not the big, public, costly wars of Iraq and Afghanistan.  They are also fighting for reelection in November.  They‘re not going to  take the White House on for being—again, taking an aggressive tact on terrorism.

So, as we say in the story, it‘s kind of a uniquely beneficial political landscape for the White House to carry out this strategy.  But it also does raise the questions of, you know, if everyone is on board, you know, do they—do they really know everything?  Are they asking all the right questions?

MICHAEL SMERCONISH, GUEST HOST:  Bob Baer, reflecting on your experience in the field—do you think this will work?

BOB BAER, TIME.COM:  No, it‘s not going to work.


BAER:  Our intelligence is too bad.  We can only hit these places with aerial weapons.  You‘re going to kill women and children.  It‘s unavoidable.

You look at the Wikipedia—I mean, the WikiLeaks.  And Task Force 373, and, you know, they went in, they tried to kill this al Qaeda guy in Libya and they killed a bunch of children.  This isn‘t the fault of the military.  It‘s the fault of bad intelligence.

There is such—no such thing as a scalpel assault in Afghanistan. 

It just doesn‘t happen.

SMERCONISH:  But what‘s the—what‘s the alternative?  It would seem to me—but I‘m a neophyte in this regard—it would seem to me that the alternative are ground forces and that you‘d probably get more support from Americans of this kind of methodic approach than invading another country.  I mean, what exactly should we do in Yemen if not use predator drones?

BAER:  You can‘t do anything in Yemen.  We—I mean, there‘s nothing to be done in those mountains.  The government itself in Yemen won‘t go up into those mountains to get the people because it can‘t.  And then what you‘re doing—and once you go in there and go look for what you believe to be al Qaeda people, you‘re taking on whole tribes.

So, what we‘re doing is we‘re putting so much pressure on Yemen, it‘s going to affect Saudi Arabia.  And Saudi Arabia is right in the middle of a war now with the Houthis in Yemen.  It just—it just—you know, the more you get involved in these secret wars, the worse the situation becomes, the more you put pressure on central governments like in Islamabad and Riyadh and it‘s a potential catastrophe.

SMERCONISH:  Mark Mazzetti, quick final question if I may.  Who has the upper hand vis-a-vis the CIA and the Pentagon—if this is the new direction—who‘s in charge?

MAZZETTI:  Well, the Pentagon is in charge in Yemen, and there‘s—but there‘s a debate about whether the CIA should take it over.  And that could be because they could then bring predator drones into a campaign that hasn‘t had them.  But it could also make it a covert action, which means it would be deniable by the U.S.

But ultimately, I mean, Bob is right that it‘s not a question of who‘s got the best weapons or who‘s got, you know, the authority?  Is there intelligence on the ground?  And whether it‘s Pakistan or Yemen, you know, it is only effective if they can build up intelligence networks to figure out where the al Qaeda are.  And actually, most people, probably, are in agreement on that.

SMERCONISH:  It‘s a great story.  I recommend everybody who‘s been consumed with the mosque to go get yesterday‘s “New York Times.”  You can get online and read this exhaustive analysis.

Mark Mazzetti, thank you.  Bob Baer, many, many thanks for being here.

MAZZETTI:  Thank you.

SMERCONISH:  Up next, don‘t look now, but Charlie Crist may be in trouble in that Florida Senate race.  The latest on that campaign and the races in Connecticut, Arizona, and Pennsylvania.

This is HARDBALL, only on MSNBC.


SMERCONISH:  Well, for anybody hoping to see General David Petraeus in the White House one day, don‘t hold your breath.  General Petraeus told David Gregory, he will never run for president, and he did so in a very Shermanesque fashion.


DAVID GREGORY, MODERATOR, “MEET THE PRESS”:  Does that mean you‘re totally clear you‘d never run for president?

GEN. DAVID PETRAEUS, CMDR., U.S. TROOPS IN AFGHANISTAN:  Yes, I really am.  And, you know, I said that I‘ll adopt what Sherman said and go back and look at what has become to be known as a Shermanesque answer on that particular question.

GREGORY:  No way, no how?

PETRAEUS:  No way, no how.


SMERCONISH:  That‘s about as clear as it gets.

HARDBALL will be right back.


SMERCONISH:  We‘re back.

Next Tuesday will settle some tough primary fights for 2010.  Which Democrat will face Charlie Crist and Marco Rubio in Florida, who would they like to win?  And how nasty will it get between John McCain and J.D.  Hayworth in Arizona in the final days?

We‘re joined now by “The Washington Post‘s” Eugene Robinson and “Newsweek‘s” Howard Fineman.  They are both MSNBC political analysts.

Gentlemen, here‘s the new Mason-Dixon poll in Florida in the Democratic primary.  Congressman Kendrick Meek leads businessman Jeff Greene, 40-26.  In the general, with Meek as the Democratic nominee, Republican Marco Rubio leads with 38 percent.  But with Greene in the race, independent Charlie Crist leads Rubio by just one point.

Howard, if I‘m Charlie Crist, who am I rooting for on Tuesday?

HOWARD FINEMAN, MSNBC POLITICAL ANALYST:  Well, obviously, you want Greene to come from behind and win this thing because Greene is not as popular among Democrats.  And that would then give—that would then give Charlie Crist further reason to pursue the strategy he‘s been pursuing all along, which is trying to get close to Obama—who‘s going to be visiting for Meek, by the way, this week—and run as a sort of crypto-Democrat, which is kind of what he‘s doing down there.

SMERCONISH:  Eugene Robinson, on the outcome of this race, I noticed that Charlie Crist was supportive of the president relative to the mosque.  How do you think that cuts in Florida?

EUGENE ROBINSON, MSNBC POLITICAL ANALYST:  Well, in the general election I‘m not sure it cuts that well, but I think it‘s part of Charlie Crist‘s strategy, as Howard said, to appeal to Democrats and independents.  You know, it‘s a—it‘s a tight rope he‘s trying to walk to run as an independent.  And he‘s been doing very well so far.

But if Democrats are really coming home to Kendrick Meek, who is more the establishment candidate and Obama is coming to campaign for him, that‘s a problem for Crist because of a sizable vote for Kendrick Meek might throw the race to Marco Rubio.

SMERCONISH:  Let‘s shift gears and go to Arizona.  It seems like the distance between John McCain and J.D. Hayworth is an increasing gulf.  Howard, what‘s going on in this race to account for it?

FINEMAN:  Well, what happened is that John McCain got to the right of—I don‘t know—pick your—pick your winger with the help of people like Lindsey Graham as his compadre in the Senate.  They went to the right on immigration.  John McCain started talking about fence.  He started talking about security.  He‘s even had nice things to say about looking at the 14th Amendment, which is Lindsey—the idea that Lindsey Graham floated in the Senate.

So, McCain looked at the challenge from the J.D. Hayworth from the right and said, J.D., I‘m getting to the right of you if I possibly can.  You can call me a flip-flopper, you can call me, you know, whatever you want to call me.  I‘m getting over there, and there‘s nothing you can do about it.  And that‘s what McCain has done.

SMERCONISH:  Eugene Robinson, let‘s all listen to J.D. Hayworth at a border rally on Sunday.


J.D. HAYWORTH ®, ARIZONA SENATORIAL CANDIDATE:  My opponent, the same man who told us when he ostensibly was running against Barack Obama that we had nothing to fear from an Obama presidency, is, likewise, his partner not only in this cosmetic $600 billion—pardon me -- $600 million bill, but also in the long-term plans of the open border advocates for amnesty.


SMERCONISH:  Eugene, in response to that kind of criticism—I mean, I think Howard‘s right, there‘s been a sea change in the position of McCain from that which he advocated during the presidential race.

ROBINSON:  Absolutely, John McCain was the number one advocate of comprehensive immigration reform, which would have included some path to citizenship or at least permanent residency for illegal aliens who are already here.  He now says border first, security first.

As Howard said, he was going to get to the right of J.D. Hayworth, especially on this explosive issue in Arizona come hell or high water.  And he‘s managed to do it, and if Hayworth can‘t open up any sort of daylight between his position and that of McCain, then I think Hayworth is probably toast.

SMERCONISH:  Let‘s go to Connecticut—Linda McMahon is hoping—well, the Republican candidate for U.S. Senate in that race.  And posters trend line for Connecticut shows Attorney General Dick Blumenthal leading the former wrestling executive.

Howard, does the family business help or hurt Linda McMahon?

FINEMAN:  Well, I used to think it hurt her.  But Dick Blumenthal better be careful, because even though he‘s not a federal official, he‘s a long-time officeholder.  And this is a bad year to be a long-time officeholder, especially a Democratic long-time officeholder.  Linda McMahon ran a very shrewd campaign.

I mean, this is a person who knows something about being an impresario and she turned her sales skills from wrestling to politics.  And I guess there‘s a pretty close relationship between the two to begin with.

You know, I don‘t—I don‘t think any number of stories about how crazy the WWE people were, or how many times you want to show Mickey Rourke in the movie.  I don‘t think that‘s going to hurt her if the people are in the mood they seem to be in the country right now.

SMERCONISH:  But, you know—

FINEMAN:  If you were Blumenthal, I‘d watch out.

SMERCONISH:  You know, Eugene Robinson, there‘s an—I hate to report another dead wrestler who wrestled professionally and at one time was part of that organization.  There‘s a legitimate health insurance issue to be debated in the context of the Linda McMahon candidacy.

ROBINSON:  Well, there is.  And, look, her stewardship of the WWE empire is something that‘s going to be there can kind of bubbling, perhaps sometimes below the surface, but it‘s going to be there.  And it‘s going to affect some voters.

I agree with Howard, however.  She is not Sharron Angle.  She‘s not an inept candidate.  She‘s—

SMERCONISH:  But the Republicans have set a really high bar this year for not Sharron Angle.

ROBINSON:  But she is—she has shown herself to be skillful, and I do think Blumenthal needs to—needs to watch his back or else he could and let‘s do the pun line that he could get pinned.

SMERCONISH:  Gentlemen, we‘ll end where I began tonight, and that is on the mosque—because Michael Bloomberg is going in for Joe Sestak into my home state of Pennsylvania tomorrow.  I have just a minute left.

Eugene, you take the first 30 seconds.  If you‘re Joe Sestak tonight, are you second-guessing the decision to bring in Michael Bloomberg, the mayor of New York City, tomorrow, given the mosque and what it represents politically?

ROBINSON:  You might face tomorrow with some trepidation.  I‘m not sure how that‘s going to go over in your home state, especially among the people Sestak is trying to woo.  I think it‘s the right position and maybe Sestak will be persuasive.  But I don‘t think that sits well.

SMERCONISH:  Howard, good move or bad?

FINEMAN:  Well, it depends on what Sestak says now.  What he‘s—what Sestak really has to think about, Mike, is what he‘s going to say.


FINEMAN:  Is he going—is he going to agree with Bloomberg or not.

SMERCONISH:  We‘re going to find out tomorrow.

Men, thank you both for being here.  Thank you, Eugene Robinson and Howard Fineman.

FINEMAN:  Thank you.

SMERCONISH:  When we return, I‘ll have some thoughts about what the president should have said about that mosque at Ground Zero.

You‘re watching HARDBALL, only on MSNBC.


SMERCONISH:  Welcome back to HARDBALL.

Permit me a final word about that mosque.  If you haven‘t already, I recommend you take the time to read the president‘s actually remarks from Friday.  My hunch is that you‘ll be hard-pressed to disagree with anything that he actually said.

Most importantly, the president said this.  He said, quote, “As a citizen and as president, I believe that Muslims have the same right to practice their religion as everyone else in this country and that includes the right to build a place of worship and a community center on private property in Lower Manhattan in accordance with local laws and ordinances.  This is America and our commitment to religious freedom must be unshakeable,” unquote.  He‘s right about that, of course.

The next day, he made it clear that he had not weighed in on the wisdom of building the mosque.  If he had, he might have said this—there are many instances particularly in matters that involve the First Amendment when doing what you have a legal right to do isn‘t the right thing to do.  And I believe the development of a mosque right now so close to Ground Zero is a decision which falls into that category.

In just three weeks, we will mark what is only the 9th anniversary of September 11.  Emotions are still raw.  The site where the Twin Towers once stood is literally an open wound.  Children who lost a parent, parents who lost children, spouses who lost partners—they‘re still with us and they continue to grieve.

So, yes, Muslims have the same right to practice their religion as everyone else in this country, but if this mosque really seeks to build bridges, then its organizers should act in compliance with the sensitivities of those whose loved ones perished in an attack on the most basic of American pillars, including the very religious freedom that forms the legal basis for a mosque in Lower Manhattan.

As my parents often say, time and a place, time and a place, time and a place.

That‘s HARDBALL for now.  Thanks for being with us.

Right now, it‘s time for “THE ED SHOW” with Ed Schultz.



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