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updated 8/12/2009 9:56:11 AM ET 2009-08-12T13:56:11

HARDBALL

August 11, 2009

THIS IS A RUSH TRANSCRIPT.

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

Guests: Mike Barnicle, Sharon Epperson, William Kostric, Gov. Ed Rendell, Stephen Moore, Melinda Henneberger, Chris Cillizza, Doris Kearns Goodwin

CHRIS MATTHEWS, HOST: It's getting weird now, weird.

Let's play HARDBALL.

Good evening. I'm Chris Matthews in Boston. Leading off tonight: In your face. Welcome to town hall America. Take a look at what happened when Senator Arlen Specter held a town meeting today in Lebanon, Pennsylvania.

(BEGIN VIDEO CLIP)

SEN. ARLEN SPECTER ®, PENNSYLVANIA: You want to be let out of here, you're welcome to go. Now, wait a minute! Now, wait a minute! Now, wait a minute! Now, wait a minute!

(SHOUTING)

SPECTER: Wait a minute!

UNIDENTIFIED MALE: (INAUDIBLE)

SPECTER: Wait a minute.

UNIDENTIFIED MALE: And I am leaving! I have every right to leave!

SPECTER: Wait a minute! Wait a minute! He has a right to leave.

(END VIDEO CLIP)

MATTHEWS: Wow. A similar scene played out later this afternoon when Senator Claire McCaskill held a town meeting in Hillsboro, Minnesota-actually, Missouri. Add in the protester with the gun strapped to his lower leg who showed up at a church near the town hall event that President Obama held in Portsmouth, New Hampshire today. It's legal to carry a gun in that state, but this is what happens when the demagogues turn up the heat and the angry people come out in force. They start to tune in. That protester will be on the show to explain what he was doing with a gun near the president's meeting this afternoon.

Also, Eunice Kennedy Shriver, the sister of John F. Kennedy and Senator Ted Kennedy, died early today. Doris Kearns Goodwin and Mike Barnicle will be here to talk about the Kennedys and the Shrivers.

Plus, we told you last night about what Hillary Clinton said when she was asked a question about what her husband thought about something. Well, tonight we have that video, and it's interesting. That's in the "Politics Fix" tonight.

And speaking of Bill Clinton, the hero of Pyongyang, he's in Vegas.

Well, he was there last night. That's in the HARDBALL "Sideshow" tonight.

We start with these town hall meetings, including the one the president had today in Portsmouth, New Hampshire. William Kostric is a protester who came to the town hall meeting today with a gun.

Mr. Kostric, why did you come to the president's town meeting today?

WILLIAM KOSTRIC, ATTENDED PRESIDENT OBAMA'S N.H. TOWN HALL: Well, Chris, first I'd like to correct...

MATTHEWS: No, why did you come to the meeting?

KOSTRIC: I came to the meeting to be heard.

MATTHEWS: And what did you want to say?

KOSTRIC: Well, I wanted people to remember the rights that we have and how quickly we're losing them in this country.

MATTHEWS: And what rights are we losing that you wanted to talk about at the meeting today, at the town meeting on health care?

KOSTRIC: Well, there are a litany of them. It doesn't take a genius to see we're traveling down a road at breakneck speed that's towards tyranny, away from liberty, and that has much to do with excessive taxation. One party wants to take our money and bail out corporations. The other one wants to take our money and bail out welfare cases. Neither party wants to listen to the people who believe that they own their property and what we earn is ours.

MATTHEWS: Who did you vote for last November, sir? Do you mind telling me? You don't have to, if you don't want to.

MATTHEWS: Ron Paul.

MATTHEWS: OK, you voted for Ron Paul. What do you think of President Obama?

KOSTRIC: I think he's a great speaker. I'm surprised that he calls himself a constitutional scholar.

MATTHEWS: Do you have any problems with his legitimacy as president?

KOSTRIC: I don't.

MATTHEWS: You don't-you're not part of the "birther" movement or anything like that? You don't have a question about whether he was born in America?

KOSTRIC: I've read the material. I don't really know anything about that.

MATTHEWS: Wait a minute. Where are you on that issue? Where are you on the issue of whether he's a legitimate president of the United States? Do you believe he is or do you believe he isn't?

KOSTRIC: Well, as I say, I haven't done any of the research into it to be able to make any claims on that. I mean, that's for lawyers and other people...

MATTHEWS: So you're not making any claim that he's not a citizen.

KOSTRIC: I am not making that claim.

MATTHEWS: OK, let's ask about the presidency and what he's trying to do with health care. You brought a loaded gun. Was your gun loaded today?

KOSTRIC: Wow. Who would be silly enough to carry an unloaded firearm?

MATTHEWS: I'm only asking. You're answering the questions. Who's yelling? OK, that's from the tape. Why did you bring a loaded gun to a public meeting?

KOSTRIC: Well, here in New Hampshire...

MATTHEWS: I know the law. You can chew gun at church. You can do anything-you can ride in on a pogo stick.

KOSTRIC: Right.

MATTHEWS: There's lots that you're legally allowed to do. Why did you bring a gun to a meeting with the president of the United States, given the violent history of this country with regard to presidents and assassinations? Why did you bring a gun to a public event with the president?

KOSTRIC: Well...

MATTHEWS: You know the history of this country. If you love this country, you know its history.

KOSTRIC: Well, I...

MATTHEWS: You know we've have had a problem with people with guns at presidential events. Why did you bring a gun to an event with the president?

KOSTRIC: Right. I do know history, and the history is that our forefathers fought for the right to keep and bear arms, and they believed...

MATTHEWS: I know all that. Everybody knows that.

KOSTRIC: ... that every person should be armed.

MATTHEWS: Everybody knows that.

KOSTRIC: OK, well, then...

MATTHEWS: But why did you bring a gun to a presidential event today?

KOSTRIC: That's not even a relevant question. The question is, Why don't people bear arms these days?

MATTHEWS: OK. Let's ask you-OK, you brought a sign that said, The tree of liberty has to be watered with the blood of tyrants, and you're carrying a goddamn gun at a presidential event. I think those things make people wonder what you're about.

KOSTRIC: Right. The sign didn't say anything about blood.

MATTHEWS: What did it say?

KOSTRIC: "It's time to water the tree of liberty."

MATTHEWS: And where did that come from, that line?

KOSTRIC: It's a quote from Thomas Jefferson.

MATTHEWS: And what's the rest of the line?

KOSTRIC: The rest of the line is for people to look up. It's not a sound bite. They need to understand the context in which it was spoken.

MATTHEWS: What's the rest of the line from Jefferson?

KOSTRIC: "The tree of liberty must be refreshed from time to time with the blood of tyrants and patriots."

MATTHEWS: OK, well, you're carrying a gun and you're carrying that sign...

KOSTRIC: Right.

MATTHEWS: ... and you don't think people should worry about you?

KOSTRIC: No, I don't think people should worry about me.

MATTHEWS: Well, let me ask you about the history of people that carry guns to presidential events. Tell me that history, sir.

KOSTRIC: Are you speaking of a particular event?

MATTHEWS: I'm talking about people who bring guns to presidential events in history.

KOSTRIC: Well, I can tell you...

MATTHEWS: Tell me the history.

KOSTRIC: I'll tell you this, Chris, we just started new history. I was there today...

MATTHEWS: Oh, you started new history?

KOSTRIC: There was a peaceful-a peaceful...

MATTHEWS: OK.

KOSTRIC: ... rally. No one was injured.

MATTHEWS: OK.

KOSTRIC: No one on our side was alarmed. People in New Hampshire are used to seeing firearms.

MATTHEWS: Right.

KOSTRIC: No one from New Hampshire was alarmed. Maybe some of the people they bused in from Massachusetts were alarmed, but we're not really concerned about them.

MATTHEWS: What is wrong with the people from Massachusetts?

KOSTRIC: You know, they already have their health care scheme and their socialism going in their state. They should probably keep it over there.

MATTHEWS: Now, let me get back to your belief. Do you believe our fundamental rights as a republic-limited government, the notions that people are-individuals are supreme-you believe all that's at stake here?

KOSTRIC: Yes.

MATTHEWS: How so?

KOSTRIC: Well, it's not like this is, you know, out of the blue and all of a sudden, it's at stake. This has been an ongoing process.

MATTHEWS: OK.

KOSTRIC: This has an ongoing process since it was said, What type of government have you given us, the republic if you can keep it.

MATTHEWS: I agree with...

KOSTRIC: People have not been vigilant. We're going down...

MATTHEWS: I'm with you. I'm with you.

KOSTRIC: ... the tubes.

MATTHEWS: I'm with you (INAUDIBLE) Let me ask you, do you think Roosevelt was wrong to start Social Security?

KOSTRIC: Yes.

MATTHEWS: Was Johnson wrong to start Medicare?

KOSTRIC: Yes.

MATTHEWS: Where did we go wrong? Was Teddy Roosevelt wrong to...

KOSTRIC: Where did we go wrong? I'd start with the Federal Reserve Bank.

MATTHEWS: Well, how about, was Wilson wrong with what he did in terms of reform, the income tax? Was the income tax wrong?

KOSTRIC: The income tax originally, my understanding is, was instituted as a voluntary victory (ph) tax and...

MATTHEWS: No, it was instituted as an amendment to the Constitution, direct taxation.

KOSTRIC: Right.

MATTHEWS: But you're against that, too.

KOSTRIC: Yes, that was-that was later on. That came later on.

MATTHEWS: Well, it came under Wilson. Do you think that was wrong, that was part of the loss of our republic?

KOSTRIC: It would be-there are better ways to do things.

MATTHEWS: OK. So we've been on a slippery slope to the loss of our republic, and therefore, you bought a gun to the meeting the president held today on health care.

KOSTRIC: Therefore? I don't know about that. I live in New Hampshire. I open carry many places. As I said, people come up, they talk to you. People here are pretty used to it.

MATTHEWS: OK. OK. I want to be-I want to be polite to you.

(CROSSTALK)

MATTHEWS: I want to be polite to you.

KOSTRIC: We're not in New York. We're not in Los Angeles.

MATTHEWS: My brother...

KOSTRIC: It's not like people hit the deck when you walk past.

MATTHEWS: Look, I have members of my family who are members of the NRA, that carry-they don't carry guns, but they believe in the right to bear arms, as many Americans do. I'm not against that.

KOSTRIC: Right.

MATTHEWS: I'm asking you, what do you bring to this discussion about health care by bringing a gun and that sign that you quote Jefferson from? What does that bring to a debate that this country is engaged in? And we're looking at your gun right now and your sidearm there. What did-and it's loaded. You pointed that out. What are you doing to help this debate?

KOSTRIC: OK. Well, sometimes, when people are mired in their position, you can try to pull them out of it a little bit. But sometimes, if you show the other end of it, you can pull them a little bit in your direction.

MATTHEWS: Right.

KOSTRIC: Clearly, I'm not advocating violence. Clearly, no violence took place today.

MATTHEWS: Well, what are you advocating?

KOSTRIC: Well, I'm advocating an informed society, an armed society, a polite society. That's all there is to it.

MATTHEWS: So you...

KOSTRIC: John Lott has a great study, University of Chicago, more guns less crime. People should read t.

MATTHEWS: OK, well, thank you very much for coming on the show. I think you speak in a different way than most people. I think what the trouble is, you alarm many people to believe that when you bring a gun, violence might be afoot because they associate a gun with violence and they associate a gun with force. But you say you're not interested in using force to get your way politically. You say that.

KOSTRIC: For me, a firearm...

MATTHEWS: You're not using force.

KOSTRIC: No. A firearm is a defensive tool.

MATTHEWS: So bringing a show of force to a political debate was not meant as a violent act.

KOSTRIC: Not at all.

MATTHEWS: It was meant as a what? What kind of a demonstration was it? Just to get it clear. And I want to let you leave now.

KOSTRIC: It's just another point, if you don't exercise your rights, you will lose them.

MATTHEWS: Do you think if there were a thousand people today there all armed, that would have been a safer crowd?

KOSTRIC: Absolutely.

MATTHEWS: If everybody had a gun?

KOSTRIC: Absolutely.

MATTHEWS: OK. Thank you very much. William Kostric, thank you for coming on HARDBALL.

Coming up, we'll get other sides of this health care debate there. There will be other sides. And the town meeting protests today, they were pretty wild today, meetings involving, well, McCaskill, Senator McCaskill, Senator Specter. We got Eddie Rendell, the governor of Pennsylvania, "The Wall Street Journal's" editorial board member, a conservative, Stephen Moore. We got a lot of points of view, including the one we just saw.

You're watching HARDBALL, obviously, only on MSNBC.

(BEGIN VIDEO CLIP)

SEN. CLAIRE MCCASKILL (D), MISSOURI: I don't understand this rudeness. What is this? I don't get it. I honestly don't get it. Do you all think that you're persuading people when you shout out like that?

(SHOUTING)

MCCASKILL: You don't trust me?

UNIDENTIFIED MALE: No!

UNIDENTIFIED FEMALE: No!

UNIDENTIFIED MALE: No!

MCCASKILL: OK. You know, I don't know what else I can do. I don't know what else I can do. If you-if you want me to go home...

(END VIDEO CLIP)

(COMMERCIAL BREAK)

MATTHEWS: We're back with senator-Governor Edward Rendell of Pennsylvania and we've got Stephen Moore of "The Wall Street Journal" joining us right now. Gentlemen, let's take a look at something that happened at Senator Arlen Specter's town meeting today in Lebanon, Pennsylvania. It's pretty dramatic. It's almost as dramatic as that guy we had on with the gun a minute ago.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'm sick and tired of the Rendells of Harrisburg!

(CHEERS AND APPLAUSE)

UNIDENTIFIED MALE: I'm sick and tired of our young men and women being used as pawns around the world. Would you go back to Washington and represent us first as an American and tell Mr. Obama he's an American, and if not, there's other countries?

(CHEERS AND APPLAUSE)

SPECTER: Well, I think-I think-I think President Obama knows he's an American.

(END VIDEO CLIP)

MATTHEWS: Well, Senator Specter is very clear in saying that the president is, of course, an American. I think we can all agree on that. Governor Rendell, I am staggered. I thought we had agreed on a certain consensus in America. You know, we're going to try to make it a better country. We're going to make a few changes in Welfare, in medical care, and we're going to argue about different provisions. Now we get a guy a minute ago talking about sort of like the republic's at stake. He's acting like Thomas Jefferson-you got to sprinkle the tree of liberty with the blood of tyrants, people talking about-this guy's questioning the president's birth in America.

Are we back on square one in what kind of a country we want, Governor Rendell?

GOV. ED RENDELL (D), PENNSYLVANIA: Well, I think it's incumbent, Chris, on the vast majority of Americans who are still good, honest, decent people who believe in American democracy, who believe in real discourse, to step up and say no to these crazies. They've got to make it clear that we, the American majority, don't want any part of people who are destructive and want to destroy this country for their own reasons.

I think if the majority speaks up loud and clear-and I think they are beginning to. They're getting fed up with this. You saw what happened to Claire McCaskill. You saw what happened to Arlen Specter. You saw the breakdown of any rational political discourse in this country. And I think the majority of Americans are going to get turned off by it, and I think they're going to step up and they're going to be heard.

MATTHEWS: Stephen Moore, your thoughts.

STEPHEN MOORE, WALL STREET JOURNAL EDITORIAL BOARD: Well, I don't really-certainly, I agree that when people go to these kind of town hall meetings and tea parties, they should be very respectful and polite. As you know, Chris, I've been on college campuses where I've been shouted down and not able to speak as a conservative, and I think it's just ill behavior. But I do think it's important for people like Ed Rendell to understand there is an amazing amount of rage out there in this country. It's-it's it's-now, again, I think people should...

MATTHEWS: Rage at what?

MOORE: Rage because of the $800 billion obscene fiscal stimulus bill we had...

MATTHEWS: Are you telling me that these guys were created by this new president, that the people who are watching on television with their guns and their attitudes about the republic weren't around before January 20th?

MOORE: Chris, here's the problem with-look, I don't agree with that gentleman that you had on before. I think it is absurd to bring a gun to these kind of meetings. So I agree with you entirely on that.

But I think that you all are kind of missing the point of what's going on here. There are hundreds of millions-I mean, hundreds of thousands of Americans who are so enraged about what's going on.

MATTHEWS: OK. OK.

MOORE: This is still a pretty conservative country, and people are upset about the policies in Washington!

MATTHEWS: OK, I...

MOORE: They don't think the politicians are listening!

MATTHEWS: I think some of the people are upset because we have a black president. Let's look at Senator Specter's town meeting. Some of these statements people are making...

MOORE: Chris, come on!

MATTHEWS: Listen to what they're saying.

MOORE: It has nothing to do with race!

MATTHEWS: Oh, no.

MOORE: That's an absurd comment!

MATTHEWS: Let's listen to what they're saying. Here's the Specter town meeting, right there. And then, Governor, react to this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I don't believe this is just about health care. It's not about TARP. It's not about left and right. This is about the systematic dismantling of this country. I'm only 35 years old. I have never been interested in politics. You have awakened sleeping giants. We are tired of this. This is why everybody in this room is so ticked off! I don't want this country turning into Russia, turning into a socialized country. My question for you is...

(APPLAUSE AND CHEERS)

UNIDENTIFIED FEMALE: What are you going to do to restore this country back to what our founders created, according to the Constitution?

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

MATTHEWS: Governor Rendell, this is primitive talk.

RENDELL: No question.

MATTHEWS: What do you make of it? Is this about the health care bill, or is this about some basic sort of almost secessionist movement going on out there against any kind of federal role in anything to do with social welfare?

RENDELL: Well, I grant Stephen one point. I think there are people who are legitimately concerned about the amount of debt the country is running up, and I think that is a legitimate concern. However, to say that these people who come to the rally, that that's foremost on their mind-

Stephen, let's begin with the fact that many of these people are "birthers." The birthers are absolutely nuts. They won't believe the clear and credible evidence that President Obama was born in Hawaii. Hawaii is part of the United States of America. I think the birthers...

MOORE: Ed-Governor, let me say this. I hope that you all on the left keep calling these people who go to these tea parties and these town hall meetings nuts because you're talking about the...

RENDELL: I didn't say they're all nuts.

MOORE: But look, but you are!

RENDELL: I didn't say they were all nuts.

(CROSSTALK)

RENDELL: No.

MOORE: You look at a couple people like this nut who brings a gun to this rally and say, these people are just crazy. Why don't they just shut up and go home? And, you know, we-and, Chris...

MATTHEWS: OK.

MOORE: ... I have to say, it is so outrageous for him to say that these people...

RENDELL: The birthers are a substantial...

MOORE: ... are angry because we have a black president.

MATTHEWS: OK.

MOORE: I mean, it makes me think that you're totally out of touch with what...

(CROSSTALK)

MATTHEWS: No, the reason-the reason...

MOORE: A lot of people voted for Barack Obama.

MATTHEWS: The reason I say it is because I look at the map of the United States and I see where people question his birth, and I see the pattern-the pattern of race here. And its historic in our nature, and I see it, and I don't like it.

And you're telling me these people just have-just have idle thoughts: Well, he may not be born here.

Could it not be his ethnicity? And you deny that, Stephen? you deny that's the issue here?

MOORE: Could it be-I'm sorry. Could it be what?

MATTHEWS: His ethnicity. That's not the issue here?

MOORE: I don't believe it is. I believe-I believe that...

MATTHEWS: You really don't believe that?

MOORE: I really don't.

MATTHEWS: And you look at the people that-the kind of people that have been jumping...

MOORE: Chris...

MATTHEWS: ... up and down on this issue.

MOORE: Chris, I think most conservatives that I know-and I-I go to a lot of these meetings-they're proud of the fact that we have a black president today. They genuinely are proud of our country for electing a black-a black president.

They don't agree with his policies, but the fact that-that we have grown beyond racism, I think, is a great thing for this country. I think most conservatives agree.

MATTHEWS: You think these people voted for Obama?

MOORE: Some of them did.

(LAUGHTER)

MATTHEWS: Oh, come on.

MOORE: I did-I know some of them do.

I went to these tea parties. A lot of them are independents. A lot of the people were angry-as angry at George Bush as they are with Barack Obama. They just think our country is out of control. You don't-you can't borrow $10 trillion over the next decade.

MATTHEWS: OK. That's-that's...

MOORE: We're losing control of our country.

MATTHEWS: Let me go back to Governor Rendell.

You have got a budget problem in Pennsylvania. You know the difference between people worried about budget problems and people with a fundamental anger at the way things are. Some people are just mad at society right now.

RENDELL: Yes, there's no questions about that.

And-and the birthers are a perfect slice of these people who have lost their rationality. And they have become obsessed with certain things, and-and that obsession is hurting the democratic process. You know, if Stephen is right-and let's grant for the moment, hypothetically, that's he right, that there's this huge wave of outrage out there in the country-the way to manifest that-that is at the voting -at the polling booth...

MOORE: Yes.

RENDELL: ... at the 2010 elections. And we will see what happens at the 2010 elections.

The way to manifest it is not going to public meetings and ending discourse because you shout so loud that nobody can be heard.

MOORE: I agree with that. Governor-Governor, I agree with that. And I think that-that that's the ugly side of these meetings. I don't think people should shout down an Arlen Specter or a Claire McCaskill.

RENDELL: And, Stephen, I have never seen...

MOORE: You're exactly right about that.

RENDELL: I have never seen-I have never seen ugliness and rage like this in the 32 years that I have been in politics. I have never seen never anything close to it.

MOORE: Oh, but-but, Governor-Governor, there was a lot of rage against George W. Bush. I mean, you can't deny that.

MATTHEWS: Well, let me ask you about...

RENDELL: Not rage at this level of intensity.

MATTHEWS: Stephen, I respect what you write. Anybody that writes and thinks hard, like you do, deserves respect, clearly, left, right, or center.

But there's been a memo that has been passed around to these groups that tells them how to behave at these meetings. They're told to yell out. They're told to interrupt. They're told to stop the tenor of the meeting, to get the person holding the meeting off their game.

It's clearly a disruptive tactic. Would you agree with that?

MOORE: I haven't seen the memo. So, I wouldn't...

MATTHEWS: It's put out by Right Principles. It's a group that has been circulating its memo throughout these groups.

MOORE: Well, I...

(CROSSTALK)

MATTHEWS: And they're all using the same tactic.

(CROSSTALK)

MOORE: I don't agree with that, no.

RENDELL: Stephen, you're a fair...

MOORE: I don't agree with it. I think it's outrageous.

RENDELL: Well, you're a fair guy.

MOORE: I think-you know, look...

RENDELL: Doesn't it bother you...

MOORE: Sorry. Go ahead.

MATTHEWS: Governor.

RENDELL: I said you're a fair guy. Doesn't it bother you that they're-K Street lobbyists are spawning a lot of these protesters?

(CROSSTALK)

RENDELL: That doesn't bother you?

MOORE: I have to say, this is one of the most outrageous charges, Governor.As you know, if this is about the health care bill-a lot of it is -all the union, all the industry groups are in favor of what Barack Obama wants to do.

I mean, PhRMA and the American Medical Association, they're running ads in favor of the Obama...

(CROSSTALK)

MOORE: This is actually one of the reasons there's so much rage.

It's K Street and it's the insiders in Washington against America here.

And America is standing up and saying, we don't want these-these lobbyists running Washington.

RENDELL: It's K Street lobbyists that are renting these buses to take these people...

MOORE: They're not. They aren't.

RENDELL: ... to go and disrupt-oh, I saw a guy admit it, a guy by the name of Phillips (ph). He admitted. He was proud of it, proud of it.

MOORE: Well, I-look...

RENDELL: And he's on K Street.

MOORE: Then, why-why are all the lobbyists...

RENDELL: Stephen, I will lend you the tape.

MOORE: Governor, then why are all the lobbyists spending all this money running ads in states like yours...

MATTHEWS: Well...

MOORE: ... you know, endorsing the-the Obama health plan?

RENDELL: Because the insurance companies...

MATTHEWS: Well, it's the guy from Columbia Healthcare that spends $20 million in this campaign, $5 million of his own money.

RENDELL: Yes.

(CROSSTALK)

MATTHEWS: I mean, this-he is the guy that got hit for fraud a couple years ago. He's -- $1.7 billion in a fraud case. He's the guy spending $5 million of his own money, after taxes-he's not getting a write-off for this, I don't think-it's not a 501©(3). And he's raising another $15 million from the industry.

So, clearly, the industry is not unified in its support for Barack Obama, Stephen.

MOORE: Well, it's-but, Chris, it's also true that, on the other side...

RENDELL: And the insurance companies are against this.

(CROSSTALK)

MOORE: Chris, it's also true on the other side, where you have the rallies in favor of the Obama program, that's all organized by the unions.

So, how is that different than industries organizing events against these policies, which I don't think it's doing? I don't think it's being done by industry.

(CROSSTALK)

MATTHEWS: OK. Let me-let me ask a question.

(CROSSTALK)

RENDELL: Well, let me answer that.

MATTHEWS: OK. Last word from the governor, and then Stephen.

RENDELL: Look, there's a big difference. The rallies that are organized on the pro-Obama side, we don't shout down other speakers. We don't yell. There's no rage. We let the discourse go on.

(CROSSTALK)

RENDELL: That's a big difference, Stephen.

(CROSSTALK)

MOORE: Governor, you have never...

(CROSSTALK)

RENDELL: That's a big difference.

MOORE: You have never been a conservative trying to speak at an American campus and being shouted down not by the students, by the faculty. It happens all the time on the left.

RENDELL: And...

(CROSSTALK)

MOORE: And I think it's-it's terrible behavior on the left and the right.

(CROSSTALK)

MATTHEWS: OK.

(CROSSTALK)

MOORE: That's something we can all agree on.

MATTHEWS: Let's agree that it's great having you on.

Thank you, Stephen Moore.

MOORE: Thank you.

MATTHEWS: Please come back.

Governor Rendell, thank you, sir, for coming on.

Up next: What happens in Vegas stays in Vegas. Let's get the details of the latest birthday party for the former President Bill Clinton. It's coming up in the "Sideshow," where it belongs.

You're watching HARDBALL, only on MSNBC.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: As a 74-year-old man, if you develop cancer, we're pretty much going to write you off, because you're no longer a working citizen who will be paying taxes.

What are you going to do about it?

SEN. ARLEN SPECTER (D), PENNSYLVANIA: You're just not right. Nobody 74 is going to be written off because they have cancer. That's a vicious, malicious, untrue rumor.

(APPLAUSE)

(END VIDEO CLIP)

(COMMERCIAL BREAK)

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

First up: Viva Bill Clinton. Big Bill rang in his 63rd birthday last night in Vegas. Dinner was at a joint charging $250 a steak. The gang included the former staffers Terry McAuliffe, John Podesta, Paul Begala, Jay Carson, and Hollywood's Steve Bing. Let's just leave it at that.

Next up: ordinary people. Supreme Court Justice Clarence Thomas likes to trek across the country with his wife, Ginni, in a 40-foot R.V. and park at Wal-Marts. I told you, ordinary people. You know it when you see it.

Next: Please release me. Remember Jim Traficant? Who could forget him? The Ohio congressman was convicted in 2002 on charges of corruption and tax evasion. He will be released from jail next month, September 2. In honor of that date, Ohio's Mahoning Valley Scrappers, a minor league baseball team, is hosting-you will love it-Traficant release night.

The team's home team game that night-hometown game will include an official announcement and slides from Traficant's career on the team's video screen up on the board there at the game. As Traficant used to say at hearing such news, beam me up, Scotty.

Now for tonight's "Big Number."

Yesterday, the Alaska state legislature reversed one of Sarah Palin's marquee policies. The legislature voted to override Palin's veto and accept $28 million in federal stimulus funds for the state of Alaska.

Palin said the federal money would come with ropes attached. Well, the Alaska legislature doesn't seem to mind those ropes, opening the door for $28 million in federal dollars in stimulus-tonight's "Big Number."

We will be right back.

Here-We will be right back.

The death of Eunice Shriver, we're going to talk about that when we come back with Mike Barnicle and Doris Kearns Goodwin.

Be right back.

(COMMERCIAL BREAK)

SHARON EPPERSON, CNBC CORRESPONDENT: I'm Sharon Epperson with your CNBC "Market Wrap."

A modest sell-off on Wall Street today, with bank stocks dragging on the broader market. The Dow lost 96 points. The S&P 500 is down 12. The Nasdaq finished 22 points lower.

Bank stocks skidded after analyst Dick Bove said they're running on fumes, despite a recent rally. He recommended taking short-term profits. Citigroup, Bank of America, and J.P. Morgan all finished lower on the day.

Shares of CIT Group tumbled after the commercial lender said it would file for bankruptcy if it couldn't secure some reliable debt financing.

But retail stocks moved higher today, ahead of earnings reports due out later this week. Target, Wal-Mart, Macy's, and The Gap are all posting gains for the day.

In Manhattan, Bernie Madoff's former CFO pleaded guilty to charges including securities fraud and money-laundering. Frank DiPascali apologized to investors and said he knew what he was doing was wrong, but did it anyway.

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

HARDBALL.

MATTHEWS: Welcome back to HARDBALL.

Eunice Kennedy Shriver, the founder of the Special Olympics, died earlier today in Hyannis, Massachusetts. Mrs. Shriver was of course the sister of President Kennedy, of Robert Kennedy, of Ted Kennedy. She died surrounded by her family.

Doris Kearns Goodwin is an author, of course, and presidential historian, and Mike Barnicle, our friend, is a friend of the Kennedy family.

I want to start with Doris because Sarge Shriver once told me, before he got Alzheimer's-we were having a great lunch. And, of course, everybody loved Sarge. He started the Peace Corps. He was a great guy.

He said: If you really look at my wife, Eunice, you see Jack Kennedy. They're almost genetically the same person. If she weren't a woman, she would have been president-something like that. Tell us about the importance of Eunice Shriver, who had to live in the in the-in the shadow of her brothers?

DORIS KEARNS GOODWIN, PRESIDENTIAL HISTORIAN: You know, in a certain sense, what you could say about Eunice Shriver is that she created a movement.

And that puts her in line with people like civil rights leaders, union leaders, gay and lesbian leaders. A movement transforms the attitudes of people in societies, in countries, and the people themselves, which sometimes has an even greater effect than politicians do.

And it seems it all came from the relationship she had with Rosemary when she was a little girl. They said she was the most sensitive to Rosemary, almost as if she were born mature, as if she were the mother of Rosemary, rather than the sister...

MATTHEWS: Yes.

GOODWIN: And all that, being able to teach her how to play tennis, how to put on lipstick, how to go shopping, giving her compliments...

MATTHEWS: Yes.

GOODWIN: ... she saw how far she could come, and she wanted to do that for disabled people in the country.

MATTHEWS: OK.

Well, I think we got ahead there. Rosemary Kennedy was the quiet Kennedy sister that, of course, was-well, retarded was the old term. She was slow.

And I'm not sure, Doris, how slow she was. I know she was a little out of control there, and Joe Kennedy had her lobotomized. But I think that was an extreme treatment, wasn't it, Doris?

GOODWIN: Oh, there's no question. I mean, they thought it was a miracle cure at that point.

MATTHEWS: Yes.

GOODWIN: It's crazy. If you could take away the prefrontal lobotomy...

MATTHEWS: Yes.

GOODWIN: ... if you take away the part of the brain that agitated you, so she would emerge as a serene person. She lost her ability, really, to be a person after that. And I...

MATTHEWS: She lost her person.

(CROSSTALK)

GOODWIN: And I think-but I think what happened is that also made Joe Kennedy Sr. and Eunice want to do something for people who were suffering from disability.

And, boy, they came through with spades with the Special Olympics. Think about China, a-a place where severe attitudes towards disability, and, yet, the-the Special Olympics that took place there were hugely triumphant. So, that's a pretty great accomplishment.

Michael, you have been privy to that family in very-ways none of us will.

Can you tell us what it was like in that inner connection between Eunice Shriver and-and Rosemary? Because I have been pictures of Eunice walking Rosemary when she was still around across the lawn there. She took an interest in her like nobody, apparently.

MIKE BARNICLE, MSNBC POLITICAL ANALYST: Well, you know, Chris, nearly every summer, up until-until Rosemary died, Rosemary would come to Hyannis Port, for a couple weeks each and every summer.

And she would go out sailing with Senator Kennedy. And Eunice would, as Doris indicated, take care of Rosemary, not as if she were her older sister, but as if she was her mother.

Your initial question to Doris, though, reminded me of a story that Senator Ted Kennedy used to love to tell. Eunice Shriver was very, very competitive. And, had Jack Kennedy lived, he would have been Eunice Shriver at 88.

(LAUGHTER)

BARNICLE: But Ted Kennedy used to love to tell the story that, when he was leaving for prep school, leaving the house in Hyannis Port, going away to prep school, his parents, Ambassador Joe Kennedy and his mother, Rose Kennedy, got him a set of luggage embossed with his initials, EMK, on the luggage.

And when he-when he went upstairs to pack the night before he was to leave for prep school, the luggage was gone, and he found out that Eunice had taken the luggage, because her initials are EMK as well.

MATTHEWS: Wow.

(LAUGHTER)

MATTHEWS: Well, let me ask you about this role that-you know, I was lucky to be in the Peace Corps. And you all know what that's done to people's live. And Sarge Shriver, who has got Alzheimer's, was an amazing guy. What role-let's talk about the Kennedys' role in public service, because let's skip politics for a couple of minutes. We never do it here, but let's do itYou first, Doris. Why did they make this big commitment to the Special Olympics? Nobody in this country on a national or world stage ever paid attention to people who were-who were learning-disabled, or whatever, retarded, whatever the term is, special education people. They did.

GOODWIN: Absolutely.

I mean, I think, when Eunice went to Stanford, she went in sociology. She then worked in social work in Harlem. So, she already had that instinct of wanting to do something, which, as we have said, I think, grew out of that special relationship with Rosemary.

Then, she got President Kennedy to set up a committee on mental retardation. She set up the National Institutes of Child Health. And, suddenly, research was going into what's possible for disabled people. But then she made it real. She realized that, when Rosemary took compliments, when she was able to swim, as she said, once like a deer, she she-she lit up. She was a different person. So, finally, she figured, if we can give these kids and these older people a chance to compete, to feel good about themselves, it's going to change their attitudes toward themselves, their parents' attitudes toward them, and the community's attitudes towards them.

So, it's a huge thing that was done. You know, it was said that the American Revolution was won in the hearts and minds of the American people before the first shot was even fired. When you transform attitudes, you have done something larger, in some ways, than pure politics.

MATTHEWS: Michael, the Kennedy family is now living through what most families live to, old age, the ones that have survived old age. Of course, Pat and Rosemary and now-and Jean are still-Jean is still alive, and Teddy is still alive. And-and now Eunice is gone. They're going through the sort of passage all families go through, old age now. And what's it like?

BARNICLE: Well, Senator Kennedy battling his illness, he has an odd luxury that none of his brothers ever had, or were ever given. He has the luxury of time to plan his departure from this Earth.

The other thing that Doris is talking about-you know, Chris, I don't think we can overestimate what Eunice Shriver did. She literally, nearly all by herself, at the beginning, managed to take the word that everyone used in the '40s and '50s, and '60s when we were growing up, retarded, out of the language. We would had say, oh, he's retarded or she's retarded.

But these are people with special needs. She, nearly all by herself in the beginning, managed to make life easier for people who didn't have it very easy because of misunderstandings about who they were and the difficulties they endured. She managed to put a light on for millions of people around the globe, as Doris alluded to, who had been forced to live life in the shadows.

And anybody who has ever seen the Special Olympics-I mean it is food for the soul just to see the Special Olympics and the pride that these people have in participating in them.

MATTHEWS: Doris?

GOODWIN: Well, you know, just your comment about the fact that she lived at least to a good old age makes you realize how fulfilling that life was. When Joe Kennedy had to bury his children, he once said it's a terribly unnatural thing when a parent has to bury a child. And think about that family with Kathleen dying at 28. Joe Jr. at 29, Jack and Bobby at 46 and 43. Rosemary having that lobotomy at 21.

And he said at that time, when you bury a child, the sorrow is forever. At least when a child buries a parent, time will heal. And I think that's the way it will be with this. Everybody knows what an extraordinary life she had. And 88 years she had to live it.

MATTHEWS: Doris, you're great. Thanks for that. Everybody knows what that means. Parents should die later, should die first. Thank you very much, Doris and Mike, as always. By the way, the funeral-the wake is Thursday. The funeral is Friday for Eunice Kennedy Shriver.

Up next, Secretary of State Hillary Clinton made it clear she's the boss. She's certainly secretary of state. Everybody gets tired. I think she's had a hell of a trip. And, well, television is television, and we're going to show the pictures. This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: We're back. Time for the politics fix, tonight with Chris Cillizza of the "Washington Post," and Melinda Henneberger of PoliticsDaily.com. Thank you both for joining us.

I want Melinda and Chris to take a look at Secretary of State Hillary Clinton and what she had to say when someone asked her what her husband thought about a matter involving Congolese and Chinese trade relations. Let's listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: What does Mr. Clinton think, through the mouth of Mrs. Clinton, and what does Mr. Mutombo think on this situation? Thank you very much.

HILLARY CLINTON, SECRETARY OF STATE: Wait? You want me to tell what you my husband thinks? My husband is not the secretary of state. I am. So you ask my opinion. I will tell you my opinion. I'm not going to be channeling my husband.

(END VIDEO CLIP)

MATTHEWS: Melinda, your thoughts on that performance? I thought it was very American myself, but let's hear your thoughts.

MELINDA HENNEBERGER, POLITICSDAILY.COM: It was refreshingly honest. It was obviously from the gut, but also shockingly insecure. I mean, her husband has been reduced to photo-ops with dictators and errands usually run by Jesse Jackson or Jimmy Carter. So I was a little surprised that she came of as so threatened by the question about her husband.

MATTHEWS: Maybe because she's busting her butt to do something really worthwhile for a hugely under-covered event, like re-establishing American relation was Africa, while her husband gets a cheap opportunity and exploits the hell out of it, and comes out a hero. I don't want to get into complete psycho babble.

Chris Cillizza, you're always so-look, she did a hell of a job in Africa. And I'm totally with her. Chris Cillizza, you're always so wary of saying anything, but here's your thought. What do you make of what we just saw.

CHRIS CILLIZZA, "THE WASHINGTON POST": I actually thought it was relatively compelling TV, actually, Chris. The problem with politics nowadays, from my perspective, is you don't see enough real emotion. Almost everything is manufactured and focus-grouped.

She was clearly annoyed, and she expressed it.

MATTHEWS: Do you know what I think I saw, Melinda? And you and I have been in politics, been on the bus together. I have to tell you, we saw what politicians behave like when there's not a camera on them, human beings. When somebody, you know, underestimates your status like that guy did with the question, apparently, you react. Who are you talking to?

HENNEBERGER: And I would have loved to have seen that Hillary a little more during the campaign, obviously. We all would have. But right.

MATTHEWS: They would have loved her in Scranton, I can tell you that.

They would have said, there's a regular person, you know.

HENNEBERGER: Right.

MATTHEWS: Anyway, I think we have milked this thing do death. Chris Cillizza, any final thoughts about Hillary Clinton's wonderful statement about who the secretary of state actually is?

CILLIZZA: No, other than I do think that this sort of nature of politics as it is practiced now robs politicians of who they actually are. I mean, I think you saw it with Al Gore during the 2000 campaign. He was so careful not to take a position, very poll-tested, whole alpha male thing.

Afterward, Al Gore's had this successful career as a global warming prophet, leaving a lot of people to say, why didn't he act like that during the campaign? I think it's the nature of the beast, unfortunately. And we've had a hand in creating it.

MATTHEWS: One thing I've been saying-

HENNEBERGER: Although, she's the chief diplomat now. It wasn't a very diplomatic thing, coming off like that.

CILLIZZA: True.

MATTHEWS: Let me ask you, Melinda, old buddy, do you think there's any chance anybody, male, female, of any age, from any country, is going to dare ask her again, in this history of our times, what her husband thinks about anything? I don't think so.

HENNEBERGER: Maybe not.

MATTHEWS: OK, we'll be right back. Let's talk about the gun-toting guy we just had on the show tonight, with Chris Cillizza Melinda, and also some of these incredible statements being made at these town meetings to everybody. You're watching HARDBALL, on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: The rumor that's been circulating a lot lately is this idea that somehow the House of Representatives voted for death panels that will basically pull the plug on grandma, because we've decided that we don't-it's too expensive to let her live anymore.

I am not in favor of that.

(END VIDEO CLIP)

MATTHEWS: Melinda and Chris, you know, back in the '50s before Youtube children were born, I remember the Fluoride debate, Chris especially. The conservatives believed, the Birchers-the Birchers, not the birthers, who were their grandparents-believed that fluoridation of the water was a communist technique to undermine our IQ or something. The only problem with that was they fluorinated the water in Russia too. It was a little bit hard to believe that it was all part of some subterfuge to undermine our will.

That said, this stuff about euthanasia, this stuff that's been talked about, the plug-pulling, the death panels that Sarah Palin, who's become sort of the patron saint of these people-it's really getting wild. Chris first. It's really getting wild.

CILLIZZA: You know, Chris, in campaign politics-and you know this a little misinformation goes a long way. And I think that's what we're seeing. You know, you saw this during the campaign, and frankly after the campaign, with the whole birth-birth certificate debate, that people are looking for reasons. And even when they are provided with evidence that these claims are in fact not factual, they are still sort of convinced by this misinformation.

It's all based on raising enough doubt. That's all that it's about. It's not about offering a different plan. It's about raising enough doubt to beat back this plan.

That's hard. That's why you don't see big policy proposals-Social Security, Medicare, health care-changed all that much.

MATTHEWS: Do you believe, as a high school kid, that there was a piece of John Dillinger's anatomy on display at the FBI building? And when you came down here for your high school trip, didn't you believe it was going to be part of the trip? Everybody in Philadelphia believed that, growing up, and it wasn't true.

Did you know that, Chris? That's one of the rumors that gets started, everybody believes.

CILLIZZA: That's the problem is combating those rumors. Combating every Internet rumor that's out there is almost impossible. I know the White House has set up this website. They did it during the campaign as well. The problem is the people who are believing these rumors, those falsehoods, they're not going to the White House website to see those things rebutted. They're not interested in it being rebutted.

MATTHEWS: Melinda, respond to this. Here's a piece of the president today. You take a look and comment on this, from the meeting today in Portsmouth.

HENNEBERGER: Sure.

(BEGIN VIDEO CLIP)

OBAMA: Every time we come close to passing health insurance reform, the special interests fight back with everything they've got. They use their inference-they use their political allies to scare and mislead the American people. They start running ads. This is what they always do.

We can't let them do it again, not this time, not now.

(END VIDEO CLIP)

MATTHEWS: Melinda, which way is this going to go? Could this be a fortune cookie for the president to have the wing-nuts out there? In the end could they help him sell the middle?

HENNEBERGER: I absolutely think that Sarah Palin and maybe even the guy you interviewed earlier, who was toting the gun, might end up being Obama's greatest allies in this, because they've gone so far, and especially with Palin's talk about these death panels. It's so demonstrably false that I hear what Chris was saying about how you can never underestimate the power of a myth like that.

But I really think that it has gone so far that there's going to be push-back, and that people will realize how crazy those claims are. I think in the town hall today that Obama had-you know, it was too much-my criticism of that was it was too much like a Bush event. It was so orchestrated. It was so friendly. He does very well with push-back and critics. He should have allowed a less hand-picked crowd to be there, and not have that great disconnect between all these screaming critics and the very sort of applauding, smiling crowd.

MATTHEWS: Yes, let's not replace the governor with the peanut gallery. Your thoughts, Chris Cillizza?

CILLIZZA: I was going to whole-heartedly-I think Melinda is exactly right. I was struck. You see these angry crowds yelling at Arlen Specter. You work for us, Claire McCaskill, having to tell people please be quiet. Then you see this event where the president of the United States says, is there anybody out there who's suspicious about this? It's like, what are you-he's asking for someone to sort of come-In truth, the person who stood up was not exactly, you know, someone -these angry mobs we've seen. Melinda's exactly right. The disconnect I was really, really struck by.

HENNEBERGER: Whereas Specter looked pretty good, surprisingly good, just standing there, taking it, you know, trying to put his point across, but standing up to the angry mob looks a lot better.

MATTHEWS: He's a great argument for American health care. I'll tell you that. Look at this guy. He's 80 years old . He's up there head to head with this guy.

Anyway, Chris Cillizza, it's always a charming event. Melinda, you're the best. Melinda Henneberger with-what's the thing called-

HENNEBERGER: PoliticsDaily.com.

MATTHEWS: There it is, PoliticsDaily.com. 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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