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updated 8/6/2009 11:22:21 AM ET 2009-08-06T15:22:21

HARDBALL

August 5, 2009

THIS IS A RUSH TRANSCRIPT.

THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

Guests: Mike Huckman, Kathleen Parker, Joan Walsh, Jeff Sharlet, Pat Buchanan, Dee Dee

Myers, Michael Feldman, Bob Herbert

CHRIS MATTHEWS, HOST: Big Bill!

Let's play HARDBALL.

Good evening. I'm Bill-I'm Chris Matthews in Washington. We're talking about Bill Clinton! Leading off tonight: The return-that's the story tonight-the return of those two women journalists from North Korea. Certainly that, but here it is, and here's what's coming, the return of Bill Clinton. That's the story that's going to emerge in the days and weeks and months ahead, perhaps years ahead.

It's really, when you think about it, the story of a man and a moment. Four-and-a-half months after they were arrested in North Korea, two American journalists are back on American soil and have got a former president to thank for it. Laura Ling and Euna Lee had an emotional and teary homecoming with their families this morning at Bob Hope Airport in Burbank, California. And right behind them was the former U.S. president who allowed it to happen. The North Koreans made it clear the journalists' release would not have happened without that man.

So here we are. What a difference a day made. Now Bill Clinton, torn apart in the last presidential campaign, is now right there on the political map again. But where on the map? Are we looking at a new era in American diplomacy, Barack Obama, Hillary Clinton and Bill Clinton? The entire world isn't happy, of course, about what just happened. Neo-conservatives, the boys who helped march us blindfolded into Iraq, they don't like it. Then again, they don't like any deal that smacks of peace. We'll debate that just ahead.

And the group that's been called the most influential religious organization in Washington, it's known as "the family." The author Jeff Sharlet says they are dedicated to the religion of power and the powerful. John Ensign and Mark Sanford are among the names associated with that group. We're going to talk to the author.

Plus, the people disrupting those congressional town hall meetings. We know these are organized by the right, and the White House and the Democratic National Committee are now determined to make them the face of Republican opposition to health care. Is this going to work? That's in the "Politics Fix" tonight.

And perhaps no one was happier to see Bill Clinton back in the news with those two young women than the late night comedians. Highlights are coming in the HARDBALL "Sideshow." These guys are brutal.

We begin with Bill Clinton's very successful mission to North Korea. Dee Dee Myers was President Clinton's first and probably most famous press secretary. And Michael Feldman was the senior top aide, in fact, to former vice president Al Gore.

Well,this is one of those strange moments. It's not what Bill Clinton did. He just did this ministerial role. He went over there. But all his prestige from an accumulation of 40 years in public life was what those North Koreans wanted. They wanted class. They got it.

DEE DEE MYERS, FORMER CLINTON WHITE HOUSE PRESS SECRETARY: Right. I mean, Bill Clinton remains a global rock star. He's one of the most visible people in the world, one of the most popular people in the world. He's beloved in countries around the globe, and the North Koreans wanted to take advantage of that.

MATTHEWS: They wanted to sniff around him, be around this guy, didn't they.

MYERS: Well, they wanted...

MATTHEWS: They wanted him (INAUDIBLE)

MYERS: They wanted his imprimatur. They wanted something that somebody of that stature accrues to a rogue nation like North Korea. And you know, I think the president-President Clinton was very careful not to do anything. You didn't even see him smiling in those official pictures.

MATTHEWS: Oh, I want to talk about his conduct in a minute because there was more than just going.

MYERS: So he was...

MATTHEWS: I don't want to sell him short.

MYERS: He was fearful of not being used and yet getting what he wanted, which was to bring the journalists home.

MATTHEWS: Oh, no, I thought he was like a POW with his fingers crossed. Let's-we're going to get Mike in here. But here's what that freed journalist, Laura, Ling said this morning about Bill Clinton. It got to me, I'll tell you that. Here she is. Let's listen.

(BEGIN VIDEO CLIP)

LAURA LING, FREED U.S. JOURNALIST: We were taken to a location, and when we walked through the doors, we saw standing before us President Bill Clinton. We were shocked, but we knew instantly in our hearts that the nightmare of our lives was finally coming to an end. And now we stand here home and free.

(END VIDEO CLIP)

MATTHEWS: Wow. Mike...

MYERS: Wow.

MATTHEWS: I just had a "wow." I was caught up in that emotionally. I mean, I walk in a room and there he is. Now, I guess, you know, Regis Philbin could have been there and she might have been just as happy, but I don't think so. There's-I mean this seriously. There's something iconic about big Bill Clinton. In a way, he's his own Thanksgiving Day float. I mean, the guy is bigger than life, and here he is as the statement, You're free.

MICHAEL FELDMAN, FORMER SENIOR ADVISER TO VP GORE: Well, sure. And as Dee Dee said, this-there are very few people who could have pulled this off. Maybe there was nobody else that could have pulled this off.

MATTHEWS: Because-not because of what he did. What did-what was it-what do you mean by that?

FELDMAN: Well...

MATTHEWS: Existentially who he is?

FELDMAN: Well, first of all, I think-I think he handled this very deftly, and I think there was a team of people from the day that they were taken into custody who worked behind the scenes to try to ensure their release.

MATTHEWS: What do you know about that?

FELDMAN: This was the culmination of that.

MATTHEWS: What do you know about that?

FELDMAN: Well, I know...

MATTHEWS: John Podesta's...

FELDMAN: ... what the administration has said.

MATTHEWS: ... a smart guy.

FELDMAN: He is a smart guy, and there were a lot of smart people involved in this. And I think the administration was very smart to de-link this from their negotiations with North Korea over the nuclear program, to put this in the hands of a private citizen, someone who, as Dee Dee indicated, showed respect to the North Korean government but was able to bring them home without getting tangled in the ongoing discussion about their nuclear program. It was actually a very smart play, very well executed. And the most important thing is those two journalists are home with their families tonight.

MATTHEWS: And Bill Clinton never cracked a smile. That takes tremendous discipline, to never once give them what they wanted...

MYERS: Right.

MATTHEWS: ... which was some cheerful picture of equality with a former president.

MYERS: Right. And he, having been president, having been on the world stage now for nearly two decades, understands the symbolism of little things like a smile in an event like that, where he-you know, obviously, the "dear leader" is smiling. But Bill Clinton wasn't going to do that.

And interestingly-I mean, one of the reasons Mike said that Bill Clinton had shown respect to the North Korean regime-when Kim Jong Il's father died, he sent him a letter of condolence and...

MATTHEWS: Bill did.

MYERS: Yes, he did. He was president at the time. It was 1994. And you know, Kim Jong Il or somebody there said today that that had shown-they wanted to repay that humanitarian gesture by releasing the journalists. So these little things that President Clinton did over many years to build relationships with people around the world pay unusual dividends.

MATTHEWS: Here's what the president said about Bill Clinton. Let's listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I want to thank President Bill Clinton-I had a chance to talk to him-for the extraordinarily humanitarian effort that resulted in the release of the two journalists. I think that not only is this White House obviously extraordinarily happy, but all Americans should be grateful to both former president Clinton and vice president Gore for their extraordinary work.

(END VIDEO CLIP)

MATTHEWS: Mike, it was your old boss that sort of had to deal with this because those two journalists, those two women journalists who were caught in this terrible situation, worked for Al Gore and his company called Current. How did this work? How did he get Bill Clinton aboard? How did that happen?

FELDMAN: Well, I can only tell you what I've heard through the background briefings that the administration has done. The fact is, the vice president was very concerned about them from day one. He did feel a real strong sense of responsibility for their safety.

MATTHEWS: Well, they were working for him.

FELDMAN: Sure.

MYERS: Yes.

FELDMAN: And I think the day-I alluded to the group of people that were working behind the scenes. Vice President Gore was one of them. There were people at the State Department, obviously, advising them, and then, ultimately, President Clinton, who was willing to go over there and actually perform this very deft diplomatic mission to get them out.

But you know, look, these are two people, Bill Clinton and Al Gore, who understand the complex issues involved here. They didn't need to be-they may need to be briefed up on the current state of affairs, but they understand foreign policy. They understand the delicate issues at stake, and they knew what had to be done. They got together and they worked on this together, and thankfully, they're home safe tonight.

MATTHEWS: What I liked about it was the first time we've seen the Democratic leadership of the last couple decades working together. I mean, really, this is the first time, Bill, Hillary, Al, this president all working on the same team, even if it was just one instant purpose here, which was to get those two women out. It was pretty powerful to see them all working together.

MYERS: Right.

MATTHEWS: You know, they looked so much better...

MYERS: Right. And they were working together.

MATTHEWS: ... than George W. Bush and Dick Cheney.

MYERS: Right.

MATTHEWS: I mean, so much better for this country to see those people together than what came in between those people.

MYERS: Well, you're not going to get any argument from me or Mike on that!

MATTHEWS: Well, what I like about it...

(CROSSTALK)

MATTHEWS: I mean, John Bolton, this character out there, this guy, this former neo-con-well, he's always going to be a neo-con-who's one of these guys who talked us into the war in Iraq, got us into hell over there, and then has the nerve to come out and make fun of this because all the president did, the former president, was go over there, you know...

MYERS: Right.

MATTHEWS: ... pick up these two women and come home. And that was bad politics?

MYERS: Right.

MATTHEWS: What are we supposed to do, let them stew?

MYERS: Right. I mean...

MATTHEWS: What's his point?

MYERS: ... we tried it their way for eight years, and all we saw as a result of that was North Korea became a nuclear nation. And now I think it's time to try a different approach. And certainly, President Obama has signaled that from the beginning (INAUDIBLE) during the campaign. Certainly, President Clinton approached the North Koreans differently, and you know, reached-no agreement with them is perfect, but they were not a nuclear nation when Bill Clinton left office.

MATTHEWS: Yes. Well, I think it's a question now what the president's role-you know Bill Clinton very well. You once told me very charitably that Bill Clinton is who you think he is. I mean, there's no big-it's full of transparency.

MYERS: Yes. Right.

MATTHEWS: The guy's the whole story.

MYERS: Right. Right. And it's not always simple. But one of the things I think we-I was reminded of and-today is he's a much more emotional figure. You know, people connect to him emotionally. And seeing Laura Ling there talking about what it felt like to walk into that room-it wasn't just because she was-you know, she thought in her heart that she was going to be free. It was-it's something else about him that people connect to him and that he cares and that-you know, that he's come halfway around the world to help these two women come home. That's something you expect from Bill Clinton, and it's something I think the world missed during the Bush years.

MATTHEWS: Human compassion.

MYERS: Yes. The human-there's-he's human.

MATTHEWS: Yes, Mike, you know, everybody has their strengths and weaknesses. We know a lot about the Clintons. We know a lot about Bill Clinton. Al Gore, this isn't exactly his line of country, emotion and passion, right?

FELDMAN: Well, look...

MATTHEWS: Now, this guy's really good. Let's move on now to the role they're going to play without getting too gooey here. The question is, does this open a door to more of a role for the former president, given the fact that his wife is secretary of state, which complicates but also offers an opportunity maybe?

FELDMAN: I think, look, this is a president and this is an administration that is very comfortable using all the tools in the toolchest, OK? The day he picked Senator Clinton to be secretary of state of the United States, I think you saw that. The campaign is behind them. They're working together now. What do we need to do to get the job done? And he's going to go to the best and brightest and the most capable people to get it done, and I think this is an example. And there'll be others.

MATTHEWS: But let's-let's-I'm getting back my usual hat on, HARDBALL hat. The first thing of concern was that he would be involved in so many complicated messes with Ron Burkle and people like that he hangs around with, these Hollywood people, they didn't want any embarrassments. And to the former president's credit, Bill Clinton has caused no embarrassment for this administration whatever. So that's been dealt with.

Having proven himself that he's not going to screw it up, now he's proving he can help.

MYERS: Right.

MATTHEWS: And now we're moving on to maybe bigger territory here. Do you think-or does Hillary Clinton still have to keep the planet to herself?

MYERS: I think it remains to be seen exactly what role there will be for President Clinton going forward. I think that there's been a little too much suspicion maybe-I don't know what the right word is-among some of the senior command of the Obama team. Much of it, you know, was a hangover from the campaign. There were some not too happy moments.

MATTHEWS: Too much suspicion or appropriate suspicion?

MYERS: No, I think a little bit too much. I think that, you know, there was always that chatter, Would Hillary Clinton be a loyal team player? I think she's more than showed that her best-you know, her real interests lie...

MATTHEWS: I agree with that.

MYERS: ... with helping her country. And I think the same is true of President Clinton, and I think this is one good example. He said he would not undertake this mission unless the White House approved.

That's not how President Carter treated President Clinton back in 1994, by the way. President Carter announced to the White House he was going to North Korea, and it was up to Bill Clinton to sort of figure out how to deal with that. He was a relatively new president. This was a very complex international issue, and the former president didn't help the president. This president...

(CROSSTALK)

MATTHEWS: ... talk turkey. It seems to me that the toughest things for this president to face are a very difficult economic situation, where this recovery could be as bad as the recession, it could go on for years-we could have 8 percent unemployment two or three years from now. Very tough reelection campaign, tough congressional race next year. He's going to need Bill Clinton for that.

FELDMAN: Sure. He's going to need everybody for that.

MATTHEWS: Somebody's got to go to Scranton for him. Somebody's got to go to Pittsburgh for him, Cleveland for him, L.A. for him, and say, Look, the guy's doing the best we can. Let's stick together.

FELDMAN: Sure, and this president is going to live or die politically by the decisions he makes in office about these big issues. He's put it all on the table. He's not held back. He's saying, We've got to stick...

MATTHEWS: Is this coalition working?

FELDMAN: Sure, it's absolutely working.

MATTHEWS: Is it working, this coalition between the Clintons and Obama?

MYERS: Oh, so far, so good. I can't think of a single example where it's not working.

MATTHEWS: Is it going to get bigger?

MYERS: Hope so. I mean, I think there's...

MATTHEWS: Is it going to become political, as well as diplomatic?

FELDMAN: These guys are going to work together...

MATTHEWS: Yes.

FELDMAN: ... on issues and they're going to work together politically.

MATTHEWS: I think...

(CROSSTALK)

FELDMAN: ... big issues.

MATTHEWS: He's going to have to help in the Middle East, where the Clintons are strong with Israel especially, and its friends here. And he has got to help, Bill Clinton, with keeping the white working class aboard because they're beginning to show tattering out there along tribal lines in this country. I feel it. I see it with the "birthing" thing-I see it with the "birthers," or whatever they're called. I see it with this thing over Sotomayor. I see it over a lot of areas where there's a lot of that racial stuff starting to creep out again, thanks to some extent to the Republicans, but not only to them.

Thank you very much, Dee Dee Myers.

MYERS: Thank you.

MATTHEWS: I think Bill Clinton has a major role to play to keep this country together. Thank you, Michael Feldman.

Coming up: So Bill is back after his success in North Korea. Will we continue to see Bill Clinton in a high-profile role in the Obama presidency? Much more on this new, well, growing coalition, it seems, among Bill, Hillary and Barack Obama.

You're watching HARDBALL. We've got more coming in a minute about what's going to happen. We got Pat Buchanan coming here, Bob Herbert, to talk about the political implications of where this is going. Bill is back.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. What does Bill Clinton's success in North Korea tell us about the state of the Obama/Clinton coalition? That's what it really is between President Obama and Hillary Clinton. Who's getting the most out of this? Well, I think that doesn't necessarily mean that they both aren't getting a lot out of it. Let's find out.

Pat Buchanan's an MSNBC political analyst and Bob Herbert is the strong-minded columnist with "The New York Times."

(LAUGHTER)

MATTHEWS: Mr. Herbert, you almost lost me there the other day, but let's not get into that.

(LAUGHTER)

MATTHEWS: Let's go into where we can find common ground here!

BOB HERBERT, "NEW YORK TIMES": All right!

MATTHEWS: Let's talk about this thing. Bill Clinton-there was something very emotional that happened that grabbed me, and I'm not the softest touch, although I do feel thrills up my leg once in a while. Let's listen to this. This is what the freed journalist Laura Ling said today about this epiphany with Bill Clinton.

(BEGIN VIDEO CLIP)

LING: We were taken to a location, and when we walked through the doors, we saw standing before us President Bill Clinton. We were shocked, but we knew instantly in our hearts that the nightmare of our lives was finally coming to an end. And now we stand here home and free.

(END VIDEO CLIP)

MATTHEWS: Wow. Bob Herbert, your thoughts about what that moment means.

BOB HERBERT, "NEW YORK TIMES": We should enjoy this moment, Chris. It's not just Bill and Hillary Clinton and Al Gore and President Obama, although it is true they all worked together successfully on this. But you get the feel, looking at this, of the country, at least for a moment, pulling together here. People have to be happy that these young women have been returned safely home. It's an international incident that has a positive gloss to it. You know, it's terrific.

MATTHEWS: Pat Buchanan.

PAT BUCHANAN, MSNBC POLITICAL ANALYST: Look, it's a very emotional moment, a very positive moment and a wonderful moment. It's wonderful that those journalists are home and Bill Clinton brought them home. But we're paying a price for it, Chris, in the sense that this dictator of North Korea, who's a barbarian, has whistled up a president of the United States, said, Come to my country, apologize for these two women, who accidentally walked across the boarder and were sentenced to 12 years hard labor.

And he's someone who's been defying the president of the United States, insulting our secretary of state, exploding nuclear devices, testing missiles toward Hawaii, and he was able to bring a former president of the United States over there and to have him apologize to that dictator.

MATTHEWS: Who said he apologized?

BUCHANAN: It's what North Korea is saying to...

MATTHEWS: Do you believe he apologized?

BUCHANAN: Yes, I do.

MATTHEWS: How do you get that-where did you get that from?

BUCHANAN: Well, Hillary Clinton said, we made a mistake, or they did something wrong. And I have read it in a number of places that they say...

MATTHEWS: Because I read "The New York Times" that he denied that-they denied that he apologized, the White House.

BUCHANAN: Well, they said they asked-I mean, he asked-asked for a pardon.

(LAUGHTER)

BUCHANAN: And did he admit they went across? But what I'm saying is...

(CROSSTALK)

MATTHEWS: But, Pat, you said he apologized. Do you know that?

BUCHANAN: Well, that's what I say the North Koreans are saying.

MATTHEWS: Well, do you trust them?

BUCHANAN: Well, they have whistled up...

MATTHEWS: Since when do you trust what they say?

BUCHANAN: Well, they also...

MATTHEWS: Today?

BUCHANAN: Yes, there was a-they said they had exhaustive discussions. I'm not sure they had those. But that's what they're saying.

Here's what I'm saying, Chris. In Asia, this is an enormous victory for Kim Jong Il. And he...

(CROSSTALK)

MATTHEWS: You think...

(CROSSTALK)

MATTHEWS: You think people think more of him worldwide than they did two days ago?

BUCHANAN: I think that-I...

MATTHEWS: Or do they think he just did what you did?

If he did what you did, and held up our country to make a goodwill gesture that was-you would argue would be somewhat humiliating to get back two innocent people, who you say are innocent...

BUCHANAN: Right.

MATTHEWS: ... then how does he look good?

BUCHANAN: Well, he's gotten-he's traded hostages for prestige. The Japanese and the South Koreans-the Japanese have hostages over there. Kim Jong Il's country has kidnapped people.

MATTHEWS: So, you believe he gained?

BUCHANAN: I believe he gained.

MATTHEWS: OK.

BUCHANAN: And I think all over the world, someone like...

(CROSSTALK)

BUCHANAN: ... Ahmadinejad, suppose he says, OK, we will give you back those backpackers that wandered in here, but send the former president of the United States over, and say they made a mistake.

MATTHEWS: Yes, but I-look, I also think-let's take a look at Senator Clinton and what she said about the nature of that mission and what happened in North Korea. Let's listen.

(BEGIN VIDEO CLIP)

HILLARY RODHAM CLINTON, U.S. SECRETARY OF STATE: I want to be sure people don't the confuse what Bill did, which was a private humanitarian mission to bring these young women home, with our policy, which continues to be one that gives choices to North Korea.

They can continue on the path they are on, or perhaps they will now be willing to start talking to us within the context of the six-party talks about the international desire to see them denuclearized.

(END VIDEO CLIP)

MATTHEWS: I guess, Bob, the question-the other part of the-Pat has his point of view about this thing, that it was humiliating for us to take this step. But I wonder, if you were Bill Clinton, private citizen Bill Clinton, husband of the secretary of state, Democrat, if you will, American, if you well, certainly that-did he have any choice but to do this?

HERBERT: Sure, he-sure, he had a choice. And he made the-he made the correct choice.

One, I don't think I don't think it was humiliating at all for the United States. I think the world sees this for-for what it is. And, you know, the-the idea that Kim Jong Il got a few minutes of propaganda, which I don't think is very effective propaganda, if you trade that for perhaps 12 years of these young women's lives, that's a trade that I would make in a heartbeat.

(CROSSTALK)

MATTHEWS: Why do you think Bill Clinton seems bigger on the world stage today than he did a week ago, if he humiliated himself? That's the question.

BUCHANAN: No, no, I don't...

(CROSSTALK)

MATTHEWS: This isn't a zero sum game here.

(CROSSTALK)

BUCHANAN: Look, Bill Clinton didn't humiliate himself. I think he did the right thing.

But he's-what I'm saying is, America, in this sense-you have a former president of the United States, which is an enormously influential figure, going to Beijing and, in effect, asking for...

(CROSSTALK)

MATTHEWS: You mean Pyongyang. Pyongyang.

BUCHANAN: Pyongyang-and asking for, you know, the release of these hostages. He's been called, if you will, by...

(CROSSTALK)

BUCHANAN: ... dictator.

MATTHEWS: Yes, I know.

(CROSSTALK)

BUCHANAN: But Bill Clinton did the right thing. And President-look, here's the thing, Chris. Look what Hillary Clinton was saying there.

What she is saying is, look, don't take this as though this was our government doing this, because we have still got a tough policy.

She knows that, in Asia, people are saying, what is going on?

MATTHEWS: But that's about face. I know. I know.

BUCHANAN: It's more than just face. It's, is the United States going to cave? Is Kim Jong Il going to demand Bill Clinton he negotiates?

MATTHEWS: OK.

What I find interesting, that not every-that diplomacy is about finding not where the zero sum operates, because that's where you get nothing done.

BUCHANAN: Right.

MATTHEWS: One side is going to lose. The other side is going to win

but where one side gets something really big to them that doesn't cost you as much as it thrills them.

You know, Erich Honecker, the head of the-you know, the Eastern...

BUCHANAN: Right.

MATTHEWS: ... Eastern Germany all those-East Germany, all he wanted his whole life was to come to the United States and be received at the White House, all his life. In other words, you-you think communists think they're better than us? They don't.

BUCHANAN: Right.

MATTHEWS: They know we're pretty damn good.

(LAUGHTER)

MATTHEWS: So, in an odd way, we have prestige that we can use, and we don't necessary suffer from it.

BUCHANAN: It is-it is...

MATTHEWS: Every time we give some prestige to somebody, I don't think it necessarily brings us down.

BUCHANAN: Well, you have got-I agree with you to this extent. There's an enormous prestige, not in Bill Clinton's personality, but he's the former president of the United States.

MATTHEWS: OK.

BUCHANAN: And you played that card. And did you play it wisely in terms of what's happening in Asia?

MATTHEWS: OK.

Bob, you're up there in Hillary-ville. New York is Clinton-ville. I have to deal with people all the time who work up there and live up there who seem to be in that sphere of the Clintons up there. Is there now going to be a bigger role for Bill Clinton in our world, positively?

HERBERT: I don't know if it's going to be bigger or not.

I think that the Obama administration always had the idea that they would be able to use Bill Clinton from time to time effectively. Obviously, you know, it's-it's-it's delicate. His wife is secretary of state, you know, and she has to take the-the point-point position on diplomacy.

But, when the time comes, and Bill Clinton can be helpful, either in a high-profile way or behind the scenes, I think the Obama administration had planned all the time to use him. And-and-and Bill had made it clear, after the election campaign-and it was a rough primary-he had made it clear that he would help the administration in any way that he could.

MATTHEWS: Is he going to run for anything in New York? Do you think he could be elected governor up there?

(LAUGHTER)

(CROSSTALK)

HERBERT: Well, he would be elected in a heartbeat, but I don't think he's going to run.

MATTHEWS: I just wanted to hear it from you, Mr. Herbert.

(LAUGHTER)

MATTHEWS: That's what I wanted. You gave me some news tonight.

(LAUGHTER)

MATTHEWS: Bob Herbert.

He would be elected in a heartbeat. I love that stuff.

BUCHANAN: You notice-you notice that North Korea has insulted Hillary, calling her a schoolgirl...

MATTHEWS: Yes.

(CROSSTALK)

BUCHANAN: ... and a pensioner, and then says, but the former vice-former president of the United States, bring him on over.

MATTHEWS: Yes, I know. I saw that.

BUCHANAN: It's...

MATTHEWS: Maybe they lack some of your brilliant mischief, though.

(LAUGHTER)

MATTHEWS: I'm not sure they're that smart. But I did see all those pieces.

(LAUGHTER)

MATTHEWS: I'm not sure Kim Jong Il, as he's putting back the Jack, whatever it is, would know that.

Anyway, thank-whatever he drinks.

(CROSSTALK)

MATTHEWS: Thank you very much, Pat Buchanan.

And, thank you, Bob Herbert.

HERBERT: Thanks, Chris.

MATTHEWS: Up next: The late-night comedians were happy to see Bill Clinton back in the action. Wait until you catch these guys. They won't give him a break. You think I'm tough? Catch these guys. Wait. They got the best laughs, though, on late night.

That's coming up in the "Sideshow."

You're watching it, HARDBALL, on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Back to HARDBALL. Time for the "Sideshow."

By the way, I love it when people tell me their kids like this part of the show.

Anyway, now for the chuckle-worthy side of the Clinton trip to Pyongyang.

First, my friend Craig Ferguson.

(BEGIN VIDEO CLIP, "THE LATE LATE SHOW WITH CRAIG FERGUSON")

CRAIG FERGUSON, HOST, "THE LATE LATE SHOW WITH CRAIG FERGUSON":

Clinton agreed to go. As soon as he found out the mission was about picking up chicks, he is like: "I will go."

(LAUGHTER)

FERGUSON: "I will do it for America."

(APPLAUSE)

(LAUGHTER)

FERGUSON: "I will find these young ladies. And I will..."

(LAUGHTER)

FERGUSON: "I will rescue them."

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS: And now here with the exact same number, Jimmy Fallon.

(BEGIN VIDEO CLIP, "LATE NIGHT WITH JIMMY FALLON")

JIMMY FALLON, HOST, "LATE NIGHT WITH JIMMY FALLON": It was a great way for Obama to use Clinton that way. I think I know how he got him to go over there.

He's probably like: "Bill, look, I need to you go to North Korea for me."

(LAUGHTER)

FALLON: "I can't do it. I'm completely booked. I have numerous obligations."

"I want you to visit a women's prison."

"What time is my flight?"

(LAUGHTER)

(APPLAUSE)

(END VIDEO CLIP)

MATTHEWS: Same theme.

Anyway, as Clinton knows, it's hard to shake this stuff.

Now to tonight's "Big Number."

Quinnipiac polled Americans this past week, asking them who do they trust to do a better job handling health care, the president or Republicans in Congress? Well, who won out? The president with 46 percent. Congressional Republicans are a ways behind, but gaining with 37 percent.

That may be too close for comfort.

It's not exactly a commanding position for the president. Forty-six percent of the public now trusts the president over the other guys to deal with health care, not exactly a majority-tonight's "Big Number."

Up next: an inside look at "The Family," it's called, a high-powered top-secret group of Christian fundamentalists, which is considered the most influential religious group in Washington. They're the organization, by the way, that operates that House on C Street up on Capitol Hill, where Governor Mark Sanford and Governor-well, Senator John Ensign both lived. We will talk to investigative journalist Jeff Sharlet, who lived among the family, next.

You're watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MIKE HUCKMAN, CNBC CORRESPONDENT: I'm Mike Huckman with your CNBC "Market Wrap."

And a late-day rally was not enough to move the markets into positive territory today-the Dow Jones industrials finishing 39 points lower, the S&P 500 down almost three points, and the Nasdaq losing a little more than 18 points.

A weak report on the service sector was the biggest drag on the Dow today. The sector index fell nine-tenths-of-a-point in July, and economists were expecting it to go up a full point.

Late in the day, investors started moving into riskier financial stocks, Bank of America, J.P. Morgan, and Citigroup all posting solid gains at the closing bell.

And shares in tech bellwether Cisco Systems are moving lower after hours. On an earnings report released just after the close bell, Cisco reported a steep decline in quarterly earnings that still managed to beat analyst expectations, though.

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

HARDBALL.

MATTHEWS: We have got some breaking news.

Former U.S. Congressman, Democratic Congressman, William Jefferson of Louisiana has been found guilty of 11 of 16 counts of bribery. He's the guy who was found with $90,000 in cash in his refrigerator.

Boy, that's a story.

Welcome back to HARDBALL.

One hundred and thirty-three-well, it's 133 C Street in Washington, D.C.-that's up on Capitol Hill, if you visit here, right behind the Capitol-is known for housing lawmakers and hosting prayer and Bible study groups. But, recently, that townhouse we're looking at has become associated with political sex scandals. Senator John Ensign lives there and was confronted by-at the house by colleagues who wanted him to end his affair with a campaign staffer.

The estranged wife of former Congressman Chip Pickering said he carried out his affair at that C Street house. And Governor Mark Sanford referenced C Street after publicly admitting to cheating on his wife by-with that woman down in Argentina.

Let's take a look right now.

(BEGIN VIDEO CLIP)

GOV. MARK SANFORD ®, SOUTH CAROLINA: I was part of a group called C Street when I was in Washington. It was a-believe it or not, a Christian Bible study, with some folks who asked members of Congress hard questions that I think were very, very important. And I have been working with them.

(END VIDEO CLIP)

MATTHEWS: Journalists and author Jeff Sharlet lived in a house owned by the same organization that owns and operates C Street, and wrote a book about it called "The Family: The Secret Fundamentalism at the Heart of American Power."

What is the connection with all these stories of sexual peccadillos? I mean, I sort of like Sanford, because he seems involved in an actual romance. But who knows with these relationships? What do you think?

JEFF SHARLET, AUTHOR, "THE FAMILY: THE SECRET FUNDAMENTALISM AT THE

HEART OF AMERICAN POWER": Yes, I think Sanford is the most innocent.

But, look, the Family teaches that morality-there's two kinds of morality. There's morality for the little people. That's me and you. And there's morality for those selected by God. They believe some politicians are selected by God, not elected by the people.

And you saw that go into play with...

MATTHEWS: Where do they get this selection idea from? Is this some weird distortion of Calvinism and power? What is it?

SHARLET: Exactly. It's dumbed-down Calvinism.

MATTHEWS: Yes.

SHARLET: The idea-they-they came up with this idea. They-they're 70 years old. They're the oldest, most influential Christian right organization in Washington, founded with the idea that Christianity is getting it wrong for 2,000 years, talking about the poor, the weak, the suffering, that what God wants them to is to be missionaries to and for the powerful, that God will work through these powerful people, who he will reveal to us by giving them wealth or status.

MATTHEWS: Well, I know-I'm familiar with a benign version of that, the Jesuits. But let's talk...

(LAUGHTER)

MATTHEWS: I mean, I really mean benign.

Let me ask you about what's wrong here. Or so what? My favorite question.

SHARLET: Well...

MATTHEWS: So what if a bunch of these guys go to prayer breakfast, all live together? I see some guys here, like Irish Catholic Mike Doyle. Bart Stupak ,he is not a fundamentalist. I don't know what Zach Wamp is.

John Ensign, you mentioned him. Tom Coburn is probably fundamentalist.

What-people have their own religion. They go to prayer breakfast.

I don't know that culture very well, but what's so harmful about it?

SHARLET: Absolutely nothing going to a prayer group, you want to pray with some folks, you want to get support. The issue is when you have an organization that is not registered like a lobby that is acting like a lobby.

MATTHEWS: OK. What are they pushing?

SHARLET: They are pushing their idea that-they have two ideas. One is biblical capitalism, the idea that God works through an unregulated market. They have been doing this for 70 years.

Two, their idea is an idea of American power...

MATTHEWS: So, they're selling members of their congregation, basically, on the idea that the federal government and all the state governments should let these people in-on Wall Street do what they feel like?

SHARLET: Exactly. They began 70 years ago with the idea that the New Deal was some kind of satanic conspiracy, that God has chosen who he wants to be healthy and who he wants to be poor, and it's up to us to accept it, and it's up to the Family to help us accept that.

MATTHEWS: Do you have any-have you done any reporting on how this religious belief you discuss, or propose, describe here, how that has affected legislation? Has anybody actually passed a bill that operates on the-the-the religious precepts of this organization?

SHARLET: The Family doesn't tell you how to vote, and they don't initiate legislation.

What they say is, they bring together-these guys together in prayers cells. They said, the groups themselves, they say these groups be invisible to the public. They should not take actions themselves, but, out of them, actions should grow.

Senator Sam Brownback gave me an example of how it works. He says, what happens-a piece of legislation he's been trying to pass, something called the Silk Road Act-no one pays attention to the Central Asian republics. What it will do is prop up dictators over there.

He says, this has-this has lots of benefits. One, it opens up those countries to the kind of corporations that are his major backers, like Coke Industries. Two, he says, where capitalism goes, the Gospel follows. This is his approach to foreign policy. This is what they're trying to do. That's what the Family's been trying to do.

Senator Coburn, who, as we saw, was Senator Ensign's spiritual adviser, has been going on foreign policy trips, paid for by the Family, to try and set up Christian prayer cells of the very kind that helped Ensign.

MATTHEWS: Here's what I don't get; is this a religious group? If so, why does it include Catholics and Protestants and apparently Eric Cantor's been over there. He's Jewish. How does that all fit together, if they have a religious doctrine? It doesn't seem like they share one belief.

SHARLET: Doug Coe teaches that the person of Jesus transcends all of this. He says Jews, Muslims love Jesus. That's what allowed him to forge alliances with dictators like Suharto and Siad Barre in Somalia.

Catholics; the Family has historically been extremely anti-Catholic.

Doug Coe has said things like he hates --

MATTHEWS: What's Doyle doing there and Stupak? What are they doing there?

SHARLET: I think they're attracted to the same god that Ensign worships, which is the god of American power. These guys like the access. They like the influence.

MATTHEWS: Doyle's some working class Irish Catholic from Pittsburgh.

Where do you put him into the leadership clack.

SHARLET: He's not in the leadership clack. The family-look, Senator Coburn, in fact, told James Dobson's magazine, "Citizen," several years ago, that he went out looking for some Democrats. The Family has always been about 80, 90 percent Republicans.

MATTHEWS: Are you sure this isn't like me staying at the Y? It's cheap?

SHARLET: I don't know what you do at the Y.

MATTHEWS: It used to be six bucks a night in D.C. That's one reason to stay there.

SHARLET: When you're at the Y, do you try and facilitate arms deals with Suharto? Do you try and set up foreign policy.

MATTHEWS: -- a cheap place to stay.

SHARLET: Maybe Mike Doyle is, but why are they being dishonest about it? Congressman Bart Stupak, one of the conservative Democrats involved, been there for seven years, getting subsidized rent. In 2002, told the "L.A. Times," we don't talk to the press about it. Yet now he says he doesn't know what's going on there. Why does Zach Wamp, Congressman from Tennessee, say --

MATTHEWS: What's the reaction of these members of Congress? You've outed them and showed they're all part of this cell.

SHARLET: I've been reporting on this for several years for "Harper's Magazine," for "Rolling Stone." Never had a fact corrected.

MATTHEWS: Well, I'll hear from them. I can tell you that. Thank you for coming on, Jeff, because I can guarantee you I'll hear from each one of these Congressional people I've mentioned here, who want to know why I've outed them as members of some religious cult, when they'll tell me it's just a cheap place to stay, I'm sure.

Thank you. Good luck with the book. It's a good looking book, by the way. I've seen it. "The Family." Thank you very much, Jeff Sharlet.

Up next, those groups of protesters who were disrupting Congressional town hall meetings-we talked about them last night-all across the country, in Long Island, Philadelphia, Texas. There they are. Now the White House and DNC, the Democrats, are fighting back, hoping to make them, the people you're looking at, the face of opposition. In other words, the only people opposing health care are those screamers out there. Is it going to work as a tactic for the Democrats? The politics fix is next. It's coming up.

This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: We're back. Time for the politics fix with syndicated columnist Kathleen Parker and Salon.com's editor-in-chief Joan Walsh. I'm not sure you two are going to argue much. But let me tell you, I've never seen a stronger column in the newspapers than what I read this morning when I got up. The reason I'm so glad Kathleen is joining us, Joan, is that she wrote this column basically back up Senator George Voinovich of Ohio, saying the Republican party, which has been pretty well over the last half century, is basically getting destroyed by the right wring wingers in the south.

We've talked about the obsession with the birther thing down in the south and all the rest of the ethnic potential here. Here's a quote that really grabbed me: "that same rage was on display again in the fall of 2008, but this time the frenzy was stimulated by a pretty gal with a mocking little wink. Sarah Palin may not have realized what she was doing. But southerners, weaned on Harper Lee, heard the dog whistle."

Kathleen, "heard the dog whistle." Is Sarah Palin a poster girl for racism? Yes or no?

KATHLEEN PARKER, SYNDICATED COLUMNIST: Not consciously.

MATTHEWS: Not consciously?

PARKER: I don't think-I certainly don't think she, Sarah Palin, knows anything about Harper Lee or the deep history in the south, where you don't position a white woman and a black male and pretend like there's nothing happening there. There's a deep history. That's why I mentioned Harper Lee in there.

You want to talk about the southern strategy?

MATTHEWS: Just like "To Kill a Mockingbird." I just saw it again, one of the great movies ever, where the white woman claimed that she had been molested by this totally innocent black guy.

PARKER: Right.

MATTHEWS: And she was believed for no reason, except she said so.

PARKER: Right. Look-and please let me be really, really clear. I'm not saying Sarah Palin did that. I'm just saying there's a subliminal level of communication that goes on. The southern strategy has always been well, since they stopped using the N-word and being explicit what they're trying to do with race and creating this us versus them dynamic, it became increasingly vague through the years. You started talking about state's rights at a certain point. Then you starred talking about these wedge issues like gay marriage and on and on. But ultimately, it's always about an us and them dynamic.

JOAN WALSH, SALON.COM: Right.

PARKER: And Sarah Palin's really very good at that. And when she plays her populist role, there's no one better at it.

MATTHEWS: Is she connecting the dots, Joan, among Henry Louis Gates, the birther movement, the Sotomayor testimony and confirmation questioning, so tribalistic? There's no doubt about it; all that stuff has become very tribalistic, something we thought we'd begun to crack in this country. Is Sarah the dog whistle that says, yes, that's what it's about?

WALSH: I think Sarah Palin's overall message is one of us versus them. I think that she took the lead on the campaign trail-and you and I talked about it back in September and October, Chris-in really making Obama the other. She would literally say things like, you know, we don't know enough about him. We're not sure where he's from.

She would talk about the regular America, you know, and palling around with terrorists. We've taken that apart. So she was the person, not John McCain-maybe behind the scenes the McCain people were encouraging her. But she had a real zest for it, you know? She did it with a real zing and panache.

She really-you know, she had that visceral appearance of enjoying it when she was really saying some pretty hateful and not-founded things. Barack Obama is one of us. He's very much so. The only thing different about him is he's black. He's our first black president.

And, you know, I think we've made enormous racial progress. I don't want to-and I know Kathleen doesn't want to overstate what's going on right now.

But we're in a moment right now with the birthers, with the reaction to the Gates' affair, with the trashing of Sonia Sotomayor, and, you know, even John McCain saying he's not going to vote for her, where the Republican party seems-seems to believe that its best route is tribalism and scaring people. Whether they're scaring people about Obama is going to take away your health care or they're scaring you about we don't know what he's about; he's a Muslim; he's a socialist, it's fear. The tactic is fear and fear alone.

I loved Kathleen's column. It was awesome.

PARKER: Thank you.

MATTHEWS: I'm struck by the numbers. This new poll that came out and showed that the southerners, a majority of them are not willing to commit -a majority of southerners, including blacks-obviously the blacks aren't part of this, I assume-don't have any reason to believe he's an American. They either don't believe it or they're-

WALSH: It's stunning. They're not sure.

MATTHEWS: Or the majority are not willing to say, yes, he's one of us. And the rest of the country is overwhelming. Nine out of 10 say sure, he's one of us. So why is the south alone in this regard? Not northeast, not Midwest, not West. But the South stands out there uniquely and regionally and racially opposed to this guy.

PARKER: One word, Chris-one word, confederacy. I mean, you know, the south is very-I live there, OK? I want to make that clear, too, because I'm not bashing southerners. I love the south and I am a southerner. But-

MATTHEWS: But 40 percent of those states like yours are black. So it's the 60 percent that are white.

PARKER: It's part of the culture to be secessionist.

MATTHEWS: Like Rick Perry effectively is?

PARKER: To always view the federal government as the enemy. And it's very-yes, I can't-I can't-

MATTHEWS: How about Palin? Let's talk about Palin. She's attacked New York, Washington and Los Angeles. She goes after the government, after the media, after Hollywood.

PARKER: Yes.

MATTHEWS: Anything that's on the coast is evil to her. She's an Alaskan who, I bet you any money, is going to spend most of her time down in the middle parts of the country, the rural white parts. She's going to find those cul de sacs of whitedom, and exploit the hell out of them, right?

WALSH: Wasn't she in New York last night at Michael's.

MATTHEWS: Because she's got a lawyer who is smart enough, Robert Barnett, to take her to the one place where she's going to get a hell of a lot of publicity.

PARKER: Michael's is empty these days.

WALSH: That's true.

PARKER: The media downturn.

MATTHEWS: You're tough. We'll be right back with Kathleen Parker, who is one heck of a columnist these days with the "Washington Post," and Joan Walsh, one of my faves here, of course. We all know that. More of the politics when we come back. We're going to talk about Big Bill. The big dog, he's called. I just call think he's Big Bill. You're watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: We're back with Kathleen and Joan. Joan, I have to ask you about Bill Clinton and his-you know, I'm not going to show it again. Every other show is showing it. I've shown it twice. The very emotional scene with Miss Ling, when she talks about what it was like to walk into the room and see Bill there.

WALSH: Yes, please don't play it for me, because when you played it the first time, my friend and I were watching, and we both teared up. That's always my great fear on television: I'll swear or I'll cry. So, you could have made me do that, Chris.

It was a wonderful scene. First of all, I know Laura. I have worked with her at "Current." She's a wonderful person. This has been an ordeal for her family and her friends at "Current."

And to see the president there, you know, just beaming, this kind of luminous figure. You know, he's had his downside. He's made his mistakes, but I think many, many people in our profession really underestimate the extent to which he connects with people. And you saw the little girl in her just, I'm finally safe, this white knight is here.

And, you know, I sat in this chair-you know this-this chair around the country talking to you and your guests last year, and saying Hillary Clinton will not destroy the Democratic party. Hillary Clinton will not destroy Barack Obama. Bill Clinton will endorse and will work for Barack Obama. Hillary will be a great secretary of state, and very loyal. And Bill Clinton will help.

With frenzied people on the right and the left, equally the left; they'll destroy Obama! They'll take apart his administration. I think they've been proven wrong. And I hope they shut up.

MATTHEWS: Well, you're right. I won't shut up, though.

WALSH: I was trying to leave you out of it.

MATTHEWS: No, you're right. You're right. But I won't shut up.

PARKER: No, that's the beauty of it. We don't have to shut up. We now have Bill back. When are journalists more happy than when Bill Clinton is on the scene?

MATTHEWS: The great thing about it was Big Bill is like the emperor with ice cream in the poem. He's like this big, full of life guy. And to look around the corner and actually see his big face, big head, the whole thing; it must have been unbelievable. And that woman-I think that's one of the great-that's going to be one of the great moments, Youtube moments of our lifetime. I really do think people are going to say that doesn't happen normally in politics.

PARKER: Right. Well, my other-my two other reactions, other than the normal one, which is this is wonderful, and great, and thank God they brought those two women home, was Jesse Jackson must be deeply depressed.

MATTHEWS: You are so-some people have to turn the corner and find somebody to sock when they're in a good mood. Let's think about who can we hurt? It's a great night for the republic, a great night for Bill Clinton. Thank you, Mr. Clinton. Thank you, Mr. President, for what you did. I think you added to your prestige. I don't buy the Pat Buchanan thing. You look better when you help people in this world, and the other guys look like the bad guys.

Thank you, Kathleen Parker. Thank you, Joan Walsh.

Join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL. Right now it's time for "THE ED SHOW" with Ed Schultz.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

END

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