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updated 8/24/2009 10:42:12 AM ET 2009-08-24T14:42:12

Guests: Pat Buchanan, Amanda Drury, Willie Brown, Jeanne Cummings, Phil Bronstein, Gov. Ed Rendell, Joan Walsh, Ron Reagan, Rep. Joe Sestak

CHRIS MATTHEWS, HOST:  Tom Ridge blows the whistle.

Let‘s play HARDBALL.

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

Say it ain‘t so!  Like a battery of anti-aircraft gunners, people speaking for the last Bush administration are trying to shoot down the accusation that some of them tried jacking up the country‘s security alert in order to ensure Bush‘s reelection in 2004.

When the news broke yesterday that homeland security secretary Tom Ridge has charged Bush people with doing just that, trying to politicize the terror threat level, the weekend right before the ‘04 elections, a lot of people said, A-ha!  But meanwhile, spokesmen for Donald Rumsfeld and John Ashcroft, whom Ridge publicly suspects in his upcoming book are playing politics in the terrorism watch, are trying to dismiss the accusation, or at least people speaking for them are.

But a lot of people aren‘t, of course, buying the denials.  Ridge‘s account of what happened only confirms what Bush critics on Iraq and related issues always believed, that the White House politicized the terror threat to scare people into voting Republican.

Plus: What‘s going on with health care reform?  Opponents are saying President Obama is pushing big government, that he‘s moving the country towards socialism, while liberals argue that he‘s not moving left enough and that he‘s lost his Democratic voice.  We‘ll go looking for what went wrong.

And has the high-profile fight over health care overshadowed some good news for the economy and for President Obama?  Housing sales are up.  The market on—the stock market is rallying.  And today, Federal Reserve chairman Ben Bernanke said we‘re on the cusp of economic growth.  Does the president deserve credit that he‘s not getting right now?  That‘s in the “Politics Fix” tonight.

And finally, I was in the zinger‘s seat on “The Colbert Report.” 

Let‘s watch.

(BEGIN VIDEO CLIP)

STEPHEN COLBERT, “THE COLBERT REPORT”:  Why not a documentary about the Bushes?  They have two presidents, man!

MATTHEWS:  Because I want some ratings.

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS:  That‘s why I‘m having a Kennedy documentary next Thursday night and not a Bush documentary.  We‘ll have more—just kidding.  We‘ll have more of that on the Steve Colbert report coming up on HARDBALL.  We‘ll give you a good look at what happened late last night.

But we begin tonight with the pushback by former Bush administration officials, who are sending out word denying that they tried playing politics with those terrorism alerts in order to win reelection for George W. Bush in 2004.  Well, the two men whom Tom Ridge said pressed for an elevated threat level—that was John Ashcroft and Donald Rumsfeld—they refused to comment themselves but instead left it to their flacks, if you will, to dispute Ridge‘s version of events.

Ashcroft‘s spokesman said this, “Didn‘t happen.  Now would be a good time for Mr. Ridge to use his emergency duct tape.”  Well, that‘s pretty snarky.  Rumsfeld‘s spokesman implied that this was about the selling of books.  Quote, “The storyline advanced by his publisher seemingly to sell copies of the book is nonsense.  It would seem reasonable for senior administration officials to discuss the threat level.”

Well, of course, we‘re not here going over what the so-called storyline put out by publishers, we‘re quoting directly from Ridge‘s book and we‘ll continue to do so.  We have an advance copy, sir.

Former Bush chief of staff Andy Card also denied the politicization of the national security decisions.  Quote—this is from Andy Card—“We went over backwards—we bent over backwards repeatedly and with great discipline to make sure that politics did not influence any national security or homeland security decision.”  That was what Card said.  And he‘s fairly credible, that fellow.  Well, anyway, “The clear instructions were to make sure politics never influenced anything.”  That‘s Andy Card‘s view.

Well, Bush‘s former homeland security adviser in the White House, Fran Townsend, was on the air saying, “I‘m a little mystified.  Never in my experience did I see any political influence exerted on the cabinet secretary.”  That means on Tom Ridge himself.

Well, let‘s bring in Pennsylvania governor Ed Rendell, who knows Tom

Ridge quite well.  What do you make of this, Governor?  It seems to me that

your predecessor in office has come out almost like the whistleblower in

the insider case with the tobacco companies and said, Look, here—these -

these quotes are pretty dramatic, governor.  They‘re right from the book. 

They‘re not from some flack or from some publisher.

He said, “I wondered when I sat in those meetings on the weekend before the election in 2004 whether this was about security or about politics.  It seemed possible to me and to others around the table”—this is when they‘re talking about what to do about the security threat—“that something could be afoot other than simple concern about the country‘s safety.  Governor?

GOV. ED RENDELL (D), PENNSYLVANIA:  Well, first of all, Tom—I‘ve been in politics 33 years, as you know, Chris, and Tom Ridge is as decent and as honorable a person as I‘ve met in politics, notwithstanding his being a part of a Republican Party, which amazes me.  But he is one of the most decent and honorable people I‘ve ever met.

He‘s telling the truth here, and it‘s clear, it is absolutely clear, from the time bin Laden made his statement—I said back in ‘04 and I got in trouble for it, Chris, that bin Laden was trying to help Bush win the election by raising the specter of terrorism with three days to go.  So did the Bush people.  They wanted to take advantage of this.  I have no doubt that Attorney General Ashcroft and Secretary of Defense Rumsfeld went to Tom Ridge and said, Raise the threat level.  Tom Ridge doesn‘t lie, never has, never will.

Number two, this is not a Mark (SIC) McClellan, this is not someone who wrote a book that attacks the Bush administration.  If you look at the rest of the book, it‘s fairly benign when it comes to the Bush administration.  Thirdly, this isn‘t Mark McClellan, who after saying all of these bad things, continued to remain as an employee of the Bush administration.  Tom Ridge left 30 days after this incident supposedly took place.  So we have every reason to believe him.  I‘m sure he‘s telling the truth.

The only reason that they didn‘t force him to raise the threat level -

and by the way, as Tom said, not only was he against raising the threat level, but there was no one in the Department of Homeland Security, not one person, who agreed that the threat level should be raised because of this.  The only reason they didn‘t raise it was because they thought it might backfire.

MATTHEWS:  Did you ever get this sense, as chief executive of Pennsylvania when you were getting the word on these alerts, these code yellows, code oranges—they proceeded up the line there—did you ever get the sense there was politics behind them?

RENDELL:  Not so much politics, Chris, but we were mystified because the underlying facts, as much as they would divulge to us, didn‘t seem to justify the ups and downs of the threat levels.  In fact, we used to on occasion joke about it.  But I wasn‘t sure that politics were involved, but I know that bin Laden delivered that message because he wanted to influence the election and he wanted to help Bush because George Bush was the greatest recruiter around the world that al Qaeda ever had.

MATTHEWS:  Yes, you think—do you think Osama bin Laden was in league with the Republicans in the oddest way, in a sense?  Let me ask you to repeat there what you just said there.  I agree with you, by the way.  I think they loved having Bush as president.  Explain why you think so.

RENDELL:  Well, I said this in ‘04 and I got all sorts of grief for it.  Osama bin Laden is a smart guy.  We‘ve got to grant him that.  He knew by saying this three days before the election, it would raise the specter of terrorism, and he knew that that was Bush‘s strong suit.  It was, in fact, the only arrow Bush had left in his quiver at that time.  And he knew exactly what he was doing.  He was trying to help Bush because George Bush and his policies were the greatest recruiter that al Qaeda had, not just in Iraq, but all over the—all over the globe.

MATTHEWS:  Congratulations, by the way, Governor.  I think I‘m missing the other half of you, sir.  You have lost so much weight.

(LAUGHTER)

MATTHEWS:  You look so good.  You‘re going to live to be 100, sir, and I hope so.

RENDELL:  Mike Huckabee.  Mike Huckabee.

MATTHEWS:  I hope you make it to 100.  Thank you very much, Governor Ed Rendell of Pennsylvania, who‘s on one of the meanest damn diets I‘ve ever seen in my life.  Congressional.  Anyway, you‘re going to look good in Ocean City this weekend.

Anyway, let‘s go to Joan Walsh of Salon and Ron Reagan of Air America radio—a little light note there with our friend.  Let me go to you, Joan, and your thoughts on this because it seems to me that you must be somewhat sanguine about realizing that the other side of the ideological argument has been caught, with an insider blowing the whistle as loud as I can imagine.  The secretary of homeland security himself is saying that in the interests of politics—the people around the table the weekend before the 2004 election were playing politics to get their guy reelected so they could keep their jobs.

JOAN WALSH, SALON.COM:  It‘s completely believable.  And liberals were saying it that summer and they were laughed at.  They were mocked.  You know, he also admits that they raised the threat level, and you know, talked about the great presidency of George Bush right after John Kerry accepted the nomination in Boston that year.  So they really did orchestrate—they used terror to scare people.  They used terror to diminish Kerry.

I remember John Kerry had to come out and smack Howard Dean, who was telling the truth about this, that they were politicizing the terror warnings, because he didn‘t want to be seen as some kind of left-wing lunatic.  And this is what they did all along, going back to October 2002.  They had to have the authorization to use military force right before those midterm elections.  They had to do that.  They used politics all along.

Tom Ridge is an honorable man.  I‘m glad he‘s finally telling the truth.

MATTHEWS:  Again, Ron Reagan, thanks for coming back, Ron, again.

RON REAGAN, AIR AMERICA RADIO:  Sure.

MATTHEWS:  It seems to me that—this line is the one that jumped out at me.  You know how careful people are when they work in administrations.  They know—they hear the footsteps.  They know Dick Cheney‘s coming.  They know Rumsfeld‘s coming.  They know Ashcroft‘s coming.  When they get their name mentioned in these books, they know who‘s coming after them.

Here he is saying this.  “There was something afoot other than simple concern about the country‘s safety at that table.”  We‘re talking about a videoconference on the nation‘s security—something afoot besides security.

REAGAN:  Yes, indeed, something afoot.  And you know, Tom Ridge has actually implied as much going way back to May 10th of 2005.  In a “USA Today” article, he was quoted as implying many of the things that he‘s stating more baldly...

WALSH:  Right.

REAGAN:  ... now in his book.  Now, the media didn‘t pick up on it so much then because, of course, it was just left-wing lunacy, I guess.  But isn‘t it funny how left-wing lunacy turns into reality after a few years?

MATTHEWS:  Sometimes.

(LAUGHTER)

REAGAN:  Sometimes.  In this instance, I think so.  So yes.  Yes.  And as everybody has said, Tom Ridge is an honorable man.  If some of these people like Frances Townsend want to come out and call him a liar, they‘re welcome to do that.  But if you parse their words very carefully, they‘re also hedging a little bit.  Townsend said today that, Well, it was never mentioned in that context in her presence...

WALSH:  Right.

REAGAN:  ... talking about politics and the terror alert.  Well, that‘s not...

MATTHEWS:  Yes, well, that was...

(CROSSTALK)

REAGAN:  ... non-denial denial.

MATTHEWS:  I agree with you.  That was a non-denial.  You don‘t ever say what your motive is anyway.  Nobody‘s going to say, Hey, let‘s fix this, gig this up—Joan, let‘s gig this up...

WALSH:  Right.

MATTHEWS:  ... so we can get our boss reelected on Tuesday.  I mean, what kind of brain would have—would say that at a meeting?

But what struck me this weekend, as we‘re getting into this weekend, is the way in which these people are not really denying what Ridge said.  Ridge says there was politics around that table and it was pushed back effectively by him.  And people—Dan Bartlett and the others went along with it.  They didn‘t try to push this thing.

But you notice it‘s the flacks who are coming out and denying it, not the principals?  You don‘t hear—you don‘t hear Ashcroft—his name has been taken in vain here.

WALSH:  Right.

MATTHEWS:  Rumsfeld‘s name has been brought up.  He‘s been accused by his colleague of playing politics, and yet he doesn‘t come forward.  Ashcroft doesn‘t come forward.  They put out these spokes—by the way, when do you leave office and stop having spokespeople?

(LAUGHTER)

WALSH:  Never!

MATTHEWS:  Do you, like, continue to have them, like an aura?  Does it just stay around you?  There‘s, like, an array of spokespeople floating around?

WALSH:  Butlers.

MATTHEWS:  Do you have a spokesperson, Joan, that could speak for you, or do you want to speak for yourself?  I‘m just kidding.

WALSH:  I‘m going to send in my spokesperson next week, Chris.

MATTHEWS:  OK.

WALSH:  This is the last time I‘ll be here.

MATTHEWS:  Well, these guys still have—they have people that are out there playing their anti-aircraft guns, rather than speaking for themselves when their honor‘s at stake.  Your thoughts, why they do it that way?

WALSH:  Well, I think...

MATTHEWS:  Why do we hear from spokesmen?

WALSH:  A couple things.  I think they‘re trying not to even dignify Tom Ridge with the decency of refuting him themselves.  He was perceived as not entirely a team player.  He was always perceived as a little bit too liberal for that administration.  So I think they‘re kind of, in a way, snubbing him by sending their spokespeople, their butlers, their manservants out to smack him.

(LAUGHTER)

WALSH:  And you know, it‘s not working.  He is a person, as Governor Rendell said, that has a lot of integrity.  I don‘t know—I wish he‘d said something a little bit earlier.  But you know, he expresses such regret in the book, as well, that your heart kind of goes out to him.  He knew he was doing the wrong thing, and he left.

MATTHEWS:  Walsh, I love it when you don‘t like somebody!  You accuse them of being British!

(LAUGHTER)

MATTHEWS:  You accuse them of having a butler.  That‘s your ultimate putdown, you know, you (INAUDIBLE) you guy with a butler!

(LAUGHTER)

WALSH:  Oh, lots of people have butlers.

MATTHEWS:  Ron Reagan—I know how you think.  Ron Reagan, your thoughts on this, having experience some with this.  It seems to me that you have a fight going on here, but it does remind me of that Russell Crowe part in that tobacco industry case, where somebody very much on the inside knows what happened on the inside, and the other guys on the inside are not really willing to be as outspoken as he.

REAGAN:  Well, that‘s right.  And we‘ve had a string of people who‘ve been on the inside of the Bush administration coming forth for years now and telling us some pretty unattractive things.  And let‘s not pretend that this is just a sort of funny one-day wonder, you know, Tom Ridge has a book out, kind of story.  This is serious business.

WALSH:  Right.

REAGAN:  We‘re talking about the national security of the United States and the fact that it was being politicized.  People were being terrorized—no pun intended—by these terror alerts...

WALSH:  Right.

REAGAN:  ... for no good reason other than to put George Bush back in the White House.  And that—I don‘t know if it‘s strictly speaking illegal or not, but it sure is wrong.

WALSH:  I would call it—I would, in fact, call it terrorism.  They were trying to terrorize people into supporting the president, literally.  It‘s so wrong.  It‘s so wrong and it should not be lost in this kind of “He said, she said” debate.

MATTHEWS:  OK.  Well, in that incidence—in that incident the weekend before the election in 2004, in the question of whether they go from yellow to orange, Tom Ridge stopped them from doing it.

WALSH:  Right.

MATTHEWS:  Anyway, thank you very much, Joan Walsh.  Again, Ron Reagan.

REAGAN:  Thanks, Chris.

MATTHEWS:  Have a nice weekend, both of you.

WALSH:  You, too.

MATTHEWS:  When we return: What was it like inside the Defense Department while all this was going on?  We‘re going to bring in U.S.  Congressman Joe Sestak, a Democrat who‘s running for the Senate, obviously, in Pennsylvania and talk about what it was like to have all these codes flashing in their face with some politics behind them and getting people all gigged up to vote Republican.  We‘ll be right back.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  We‘re continuing to discuss the charge made by former homeland security secretary Tom Ridge, just out in a new book that‘s coming out in two weeks, that top Bush administration officials, including Secretary Rumsfeld and John Ashcroft, the attorney general, tried to politicize the national threat alerts on the weekend before the 2004 Bush reelection.

U.S. Congressman Joe Sestak joins us from Philadelphia.  You were an admiral in the Navy working at the Pentagon at the time.  What do you make of this?  This is in the book, by the way.  It‘s not put out by some publicist.  It‘s in the text of the book.  We‘ve been studying the book‘s text—Tom Ridge, former U.S. congressman, former combat veteran of Vietnam, all kinds of awards as a warrior.  He‘s real.  What do you make of this?

REP. JOE SESTAK (D), PENNSYLVANIA:  He is real.  And this is a disappointment.  That the security of the United States can become a political football is unacceptable.  On the bigger picture, when you see that we have had an administration that politicized everything from attorney general‘s selection over to intelligence and the selection of it to go into a war, you begin to understand rapidly why, one, people really do believe, even if they don‘t know Tom Ridge, why this is probably true, and second, why so many have lost faith in Washington, D.C., and their politicians, where principle is after politics.

MATTHEWS:  Do you have a sense, as a military guy and as a political guy now, how politics does play in wartime?  I mean, this is a general question.  I mean, presidents have to win reelection.  They have to win wars at the same time.  How do they keep them separate?

SESTAK:  It‘s pretty tough, to be honest with you.  In the military, we just like to take orders.  But I will say this, that during the Rumsfeld regime—and I have respect for a lot of—a couple of the things that Donald Rumsfeld said—that there was such a difference in how he actually went about his business that I actually stated that he really stole the wardroom.

That is, you, as a military officer, understood that there was a belief—and I‘m not saying on politics of winning president Bush‘s next election, but there was a line of thought to where Mr. Rumsfeld wanted to go.  And if you differed in your opinion and you were trying to get to the next step up there, he not only—which was very unusual—interviewed two stars and three stars as they wanted to go to the third star rank—and which is not uncommon to the fourth star, but not that junior two and three star level—that you knew that there had begun to be a bit more personal politicization of the military.

That is very unhealthy.  And so leadership of our civilians never to put politics into a security issue actually was there to a bit when I was in the military.

MATTHEWS:  Well, is this your accusation, that the Bush administration played politics down the line?

SESTAK:  I think...

MATTHEWS:  That they were really interfering with the war effort to play their political games, achieve their own personal agendas?

SESTAK:  Yes, my take is that the Bush administration and its leaders, its civilian leaders, wanted to do things. 

For example, there was a belief in their mind that we had to have this war with Iraq.  And, in a sense, those that might have brokered a difference, at least at the very—near the top, I believe that, to some degree, the ability to provide that judgment, the environment to provide that judgment was absent. 

It was a pretty tough crowd that came in, in the—in the administration of President Bush and took over in the Defense Department.  And, while I might have respect for them, I did not agree with the tone of unwillingness to broker differences of opinion that often happened and was known to us more junior officers in that climate.

This situation with Tom Ridge, this is really politics about winning a

political campaign and who—often in Washington, since I have been in

politics—and I‘m not saying it‘s only Republicans, Chris—it—they -

people believe winning is more important than public service at times. 

I really think that Washington forgets this, to a large extent.  Where principles should be triumphing over political calculations, it just doesn‘t enough. 

MATTHEWS:  Congressman, you have probably been in rooms where you have had other people at the table or maybe in the Congress where you have looked around the table and had a sense there‘s some people at the table who had a hidden agenda that began to show itself. 

I think the phrase is, you‘re tanked, you‘re bought out by an industry or something.  And I just saw this movie “In the Loop” about the war in Iraq and how the word seemed to get around we‘re going to war with Iraq.  And it wasn‘t clear where it started from, but it became the line. 

And, if you broke from it, you were in trouble, but you could never find out where it became the line. 

I once asked Secretary Rumsfeld along the lines we‘re talking.  Did the president ever ask you if we should go to war with Iraq?  And he said, well, he never asked me, which leads to me believe it‘s not a funny question.  It means that they always knew they were in league. 

In other words, there was an unspoken decision somewhere in the brain, the combined brain of the Bush administration, on all these levels, that everything was about politics, everything was about going to war with Iraq, and it was all about justifying, this administration, that we just got rid of, basically, to go to war and do its thing.

And it seems to be here in the words of Tom Ridge, who wasn‘t in the loop, saying, there seemed to be something afoot in the meetings about whether to establish a higher alert level that didn‘t have to do with the country‘s safety. 

In other words, he senses around the table there‘s some political stuff going on.  And I just wonder how it works inside the top.  You have been pretty close up there. 

SESTAK:  Well, in—in the Pentagon, General Shelton, who was chairman of the Joint Chiefs of Staff, he used to hand out a book called “Dereliction of Duty.”  It was about Vietnam. 

And he wanted every officer who reported to the Joint Staff to understand, never again should you not speak your mind, because you can have—serve this nation ill, as happened during Vietnam. 

Somehow, that was lost, I think, to some degree among our more senior leaders when the Rumsfeld crowd came in.  It was harsh when they came in.  They let it be known there was a way.  And, as I said, they actually appointed a former retired officer to interview before Mr. Rumsfeld did, which had never been done before, two stars about to go to three stars.

MATTHEWS:  Yes. 

SESTAK:  And my belief is, in the military—and it was why I was registered independent—if there‘s anything that should be nonpartisan, it‘s that.

And, in this case with Tom Ridge, to actually fool around with the highest constitutional duty of the president, security of America, and whether you can truly believe it because how you know they have done other types of politicization, means that Washington really does need to change.  And I have—I have grave concerns over that. 

MATTHEWS:  OK.  Thank you, U.S. Congressman Joe Sestak. 

SESTAK:  Thank you. 

MATTHEWS:  Thank you for joining us.

He‘s running for the United States Senate.

Up next: some oddball moments from my appearance last night on “The Colbert Report.”  That‘s next in the “Sideshow.”

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Back to HARDBALL.  Time for the “Sideshow.” 

I went up to New York last night to appear on “The Colbert Report” and to talk about next Thursday‘s HARDBALL documentary, which is going to be at 7:00 Eastern next Thursday on this channel, “The Kennedy Brothers.” 

I tried pointing out the many accomplishments of this remarkable family. 

(BEGIN VIDEO CLIP, “THE COLBERT REPORT”) 

MATTHEWS:  Let me just start a couple things people forget, little things that Ted Kennedy did.  If you‘re between 18 and 21, you get to vote because of Ted Kennedy.  He‘s the one who changed that, got the Constitution...

STEPHEN COLBERT, HOST, “THE COLBERT REPORT”:  He did that. 

MATTHEWS:  He got it.

COLBERT:  He did that. 

MATTHEWS:  And if you‘re a woman...

(CHEERING AND APPLAUSE) 

MATTHEWS:  Well, if you are a woman athlete—my wife played tennis at Stanford—you—if you were a woman athlete in the old days—and she was on the varsity tennis team, the national champions.  She had to pay for all the road trips.  In those days, women athletes were treated like dirt. 

Today, because of Title IX, because of Ted Kennedy, women athletes have equal treatment in many schools.

(CHEERING AND APPLAUSE) 

MATTHEWS:  That‘s Ted Kennedy.

(CHEERING AND APPLAUSE) 

MATTHEWS:  These are little things. 

COLBERT:  So—so, much...

MATTHEWS:  He‘s done a lot.  And, also, he spent the last...

COLBERT:  So, we can thank him for much fitter women. 

(LAUGHTER)

COLBERT:  Thank you.  Thank you.  Thank you.

(CROSSTALK)

MATTHEWS:  If you look at it that way. 

COLBERT:  I always look at it that way. 

(CROSSTALK)

COLBERT:  Why not a documentary about the Bushes?  They have two presidents, man. 

MATTHEWS:  Because I—I want some ratings. 

(LAUGHTER)

MATTHEWS:  That‘s why.

(LAUGHTER)

COLBERT:  That is bold.  That is refreshing. 

(APPLAUSE)

(END VIDEO CLIP)

MATTHEWS:  Believe me, it‘s not just about ratings.  Like many people, not just of my generation, I‘m deeply interested in Jack, Bobby, and Ted Kennedy and their impact on this country and its politics.

Next up: more out-of-right-field talk about health care, the latest courtesy of South Carolina Senator Jim DeMint, a Republican.  Yesterday, in a radio interview, Senator DeMint told us what he‘s been hearing from his people. 

(BEGIN AUDIO CLIP)

SEN. JIM DEMINT ®, SOUTH CAROLINA:  Probably, the most heart-wrenching experiences I have had over the last several days is when naturalized American citizens who have immigrated here from Germany, Iran, and other countries, they come up to me and they say, why are we doing what so many have fled from?  Why don‘t Americans see what we‘re doing?

And I have—and I have realized that these people who have lived and

under socialist type economies and totalitarianism, they know where we‘re headed if we don‘t turn things around. 

(END AUDIO CLIP)

MATTHEWS:  The way this guy talks.  Recent immigrants from Germany and Iran.  So, what does Angela Merkel‘s conservative government in Germany and the way she leads that country have to do with Ahmadinejad and the way he leads Iran?  Is this just a general attack on other countries? 

Time now for tonight‘s “Big Number.” 

Cash for clinkers—or clunkers is that rare government program that‘s almost too successful.  In fact, the program will have to end this Monday because it‘s running out of money.  But there‘s no doubt that it had a good run.

How many Americans so far have filed claims for that 4,500 bucks, perhaps, in rebates, after trading in their old car for a more fuel-efficient car?  Well, 457,000, almost half-a-million cars, half-a-million Americans.  Within a weekend to go, the government gets almost half-a-million cars off the lot.  Cars are moving off that lot.  That‘s tonight‘s “Big Number.” 

Up next:  After a nearly flawless presidential campaign, what went

wrong with President Obama‘s sales job—and you have got to call it that

of his health care reform plan.  What‘s gone wrong?  We have got Pat Buchanan joining us and the brilliant Willie Brown of California to dissect that one.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

AMANDA DRURY, CNBC CORRESPONDENT:  I‘m Amanda Drury with your CNBC “Market Wrap.”

Well, stocks surged to new highs for the year today on positive comments from the Fed and a surprising jump in home sales.  The Dow Jones industrials are up about 156 points, the S&P 500 gaining 31, to finish the week back above the 2000 mark, and the Nasdaq adding 18. 

Well, existing home sales surged more than 7 percent in July, the fastest sales pace in more than two years and the largest monthly gain on record. 

And at the Fed‘s annual conference in Wyoming, Chairman Ben Bernanke said, economic activity appears to be leveling out.  He said prospects are good for a return to growth in the near future. 

And “The Wall Street Journal” says Dow Jones is putting its index business up for sale—no word yet on the asking price.  News Corp.  purchased Dow Jones in 2007 for more than $5.5 billion. 

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

HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

Charles Cook, who studies elections and makes predictions sometimes based on history, said that the situation for this president has gotten completely out of control.  The president and the congressional Democrats are in big trouble right now. 

We have got all kinds of new ABC poll numbers coming in we can share with you right now, tonight.  Right now, just 46 percent of the country approves of the president‘s job, the job he‘s doing on health care.  Fifty percent now disapprove.  In other words, he‘s in the trouble area right now.  That‘s a flip from a month ago, when 49 percent approved and 44 percent didn‘t. 

These are marginal shifts, but they‘re definitely going in one direction, down.  Half the country now opposes what President Obama and the Democrats want to do with health care, by the way, as they understand it.  That‘s—that‘s the caveat.  And the country is now almost evenly split in support for a public health option, in other words, having a public plan to compete with the private insurance companies.  It was once 2-1 in favor of such a plan. 

So, what‘s going on?  What happened to the president, who was so politically brilliant during the campaign last year, didn‘t make a mistake?

Pat Buchanan is from the right, obviously.  He‘s MSNBC‘s political analyst.  And Mayor Willie Brown of San Francisco, the former speaker of the—of the California Assembly, he‘s joining us right now. 

I want Mayor Brown to come in here. 

I haven‘t heard from you lately.  Is the president too wonky?  Does he lack heart in saying what he really believes in?  Or what he really believes in, meaning health care for everybody, I assume, won‘t that sell with the middle class who already have health insurance? 

WILLIE BROWN (D), FORMER MAYOR OF SAN FRANCISCO:  Well...

MATTHEWS:  What‘s going on here?  What‘s—what‘s not working? 

BROWN:  ... unfortunately—unfortunately, this is a different kind of president.  This is a—a new politician on the block. 

He really says what he means.  He really believes that health care should be done in a manner inconsistent with what obviously the nation is ready to succeed and ready to receive.  I would guess that Barack Obama will sell his concept of health care. 

It‘s just that he‘s permitted five different congressional proposals to be out there.  They have created confusion all over the lot.  And, believe me, if you don‘t start out by saying, I am not going to touch your health care, certainly not at the expense of insuring the 43 million to 46 million people who do not have insurance, I‘m going to expand your health care, I‘m going to make it less expensive for you, and then I‘m going to address the issue of other people‘s needs—when he does that, Barack Obama will be back on track. 

MATTHEWS:  Are you suggesting that what he has to do is fix the current system now and say, next year or at some time in the near future, we will get to expanding health care to those who don‘t have it? 

BROWN:  That is exactly...

MATTHEWS:  Are you suggesting a two-part plan? 

BROWN:  That is exactly what he is going to have to do.

And, as a matter of fact, it‘s even going to be hazardous under the circumstances to achieve that goal.  But it can be achieved. 

MATTHEWS:  Pat, do you think that‘s a fallback position for him to take, in other words, fix the situation most people who are middle class right now face?  They have got some kind of insurance, but it doesn‘t cover preexisting conditions, and they do have health problems they worry about.  It doesn‘t cover them if they lose their job, which is a big problem in America, when people lose their job so quickly.

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  Right, portability. 

MATTHEWS:  Portability.  It deals with those things, but it doesn‘t try to expand coverage to all the millions of people, whether it‘s 15 million, if you count it one way, or 46 million, if you count it another way, who don‘t have it now. 

(CROSSTALK)

MATTHEWS:  Can he do a two-step? 

BUCHANAN:  I think he‘s—well, that‘s the only option he‘s got, because he‘s not going to get that big program right now, Chris. 

I think take the elements of it that both parties support, or general

majorities of both parties support, or enough do to get it through, and go ahead and do it.

The problem with this is, he starts off, would you like to have a—a public option?  Sure, everybody.  Would you like to have universal coverage?  I would love that.  Everybody—all these positive aspects.  When you put this big, huge, complex, contradictory thing out there, controversial thing out there, Republicans hit it, the Blue Dogs hit, everybody hits it, and, all of a sudden, people become aware of the specifics they don‘t like. 

It‘s been going down ever since.  And now he‘s at a point, Chris, where I think he has got to do just what you‘re saying, because he‘s not getting that big thing through.  One of his problems, what is Obama‘s specific health care program that the president says, this is the bottom line, this is where we‘re going, and this is what we want?

You have got Steny Hoyer and you have got—the Pelosi out there, and we‘re not going to let—we‘re not giving you anything but the public option.  All the Blue Dogs saying, you put that in there, it‘s dead. 

MATTHEWS:  OK. 

Mr. Brown, can the president do what you say he has to do with his Democratic Party left?  Will they allow him to move slowly now, rather than quickly, in other words, in pieces? 

BROWN:  I—I—I do think they will. 

As a matter of fact, I think Howard Dean‘s being out there absolutely doing what he‘s doing helps the president, because, all of a sudden, I think the people who rejected Howard Dean‘s leadership before will now understand, these are the people that are recommending certain things, and the president is in a different space. 

He‘s more conservative.  He‘s more considerate.  He‘s more measured.

And keep Howard Dean doing what he‘s doing, Barack Obama‘s chances go up at being successful. 

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  I think that‘s right.  He makes Barack look moderate, makes Barack look like a reasonable fellow who said, look, I want the public option, but I‘m not going to go over the cliff because there‘s some fine things we want. 

CHRIS MATTHEWS, MSNBC HOST:  Do you think it‘s ironic, perhaps more ironic that the performance, the somewhat dizzy performance of people at these town hall meetings—I don‘t know mean people arguing politics and worrying about their pocketbooks.  That‘s what you‘re supposed to do at town meetings.

I don‘t think people arguing about policy are ever out of line, people bringing guns, people yelling.  Has that created a climate—now, I was watching another network the other night when Chuck Grassley was on, and he said ironically the people on the far right, who are really, really angry, give this president some moving room, because he can go back to his left and say, look at this country.  I can never move the middle in this environment. 

BUCHANAN:  I think with the president, look, he can play off the right politically as a foil.  But I think a terrible mistake has been made. 

But Chris, when you get one Florida congressman, you get 1,000 people come out three times in one day...

MATTHEWS:  I agree.  There are two different groups. 

BUCHANAN:  These people are upset, they‘re concerned.  And it‘s too complex for them. 

MATTHEWS:  I just don‘t think people should bring guns to...

BUCHANAN:  I don‘t think anybody should bring an armed rifle to a public meeting, and that‘s very offensive.  There is no doubt about it. 

But I tell you, I think the attacks on the town hall folks have been a horrible mistake, because those are blue dog voters, as Charlie Cook said. 

MATTHEWS:  Your thoughts Mayor Brown?  Just reemphasize what you think he ought to do right now, the president. 

BROWN:  I think the president has to make it clear that neither of the five plans floating around in Congress in any fashion is Barack Obama‘s. 

He said at the outset, I‘m not going to do what Hillary Clinton did.  I‘m not going to present you with the whole series wrapped in paper, and you‘re to say yes or no to my proposal.  I‘m going to let the Congress produce, and I‘ll react to that. 

Now it‘s clear in everybody‘s mind, if Barack Obama does what he‘s capable of doing, holds a speech in which we all pause, all channels, and watch him, and he lays out the four or five things that are possible right down the middle in America, and indicates that this is the first step, Barack Obama will win that fight. 

BUCHANAN:  He‘s got to do more than—you got to do more than that. 

He‘s laid out these things in speeches. 

His problem, Chris, is he‘s going to have to bring them in and tell them, this is what we want, and this is—you got to stop knocking these guys and you got to stop knocking those guys.  This is what we want and I want it, and get engaged. 

He‘s too much up there just, you know, as a teacher, something like that, an instructor. 

MATTHEWS:  Pat Buchanan, have a nice weekend.  Mayor Brown, we have got to go.  Mayor Brown, I think everybody heard your thoughts, which is two-step.  Thank you very much.

Next Thursday, by the way, on this network we are going to have our premiere of our documentary on the Kennedy brothers, all the Kennedy brothers.  That‘s Joseph, Jr., Jack Kennedy, Bobby Kennedy, Ted Kennedy.  What an extraordinary group of brothers.  We will show all of that in our documentary next Thursday. 

Let‘s take a look, a peek at it, and this is at John F. Kennedy‘s first run for congress. 

(BEGIN VIDEOTAPE)

MATTHEWS:  In 1946, 29-year-old Jack ran for Congress for Massachusetts 11th district, cutting in front of local politicians who had been waiting patiently for the seat to open. 

The year before he died, while beginning to dictate his memoirs, Jack confessed having been something of a carpetbagger. 

JOHN KENNEDY, FORMER U.S. PRESIDENT:  I was an outsider really.  I had never lived very much in the district.  My family roots were there, but I had lived in New York for ten years.  And on top of that, I had gone to Harvard, not a particularly popular institution at that time in the 11th congressional district. 

MATTHEWS:  The Kennedy tactics from 1946 would be used in succeeding campaigns.  One was an astute use of public relations, image building.  Joe, Sr., had been a Hollywood mogul and knew how to promote. 

RICHARD REEVES, JFK BIOGRAPHER:  He basically was the one who took Hollywood publicity techniques and applied them to politics. 

MATTHEWS:  Fortunately, Joe, Sr., also had a good product to sell.  Lieutenant Kennedy had rescued his crew when his PT Stress Disorder boat was rammed by a Japanese destroyer, a story Joe, Sr., got reprinted in “Reader‘s Digest” and then handed out 100,000 free copies to local voters. 

To the amazement of many old hands, the thin, young upstart won. 

(END VIDEO CLIP)

MATTHEWS:  If you love politics and love this country, you are going to love this hour on the Kennedy brothers.  It airs next Thursday at 7:00 eastern right here on the place for politics, MSNBC. 

Up next, has the hot fight over health care overshadowed some good economic news that just came out in the last couple of hours actually?  When will President Obama start getting some credit for this news?  We‘ll have that back at you if you want to feel a little better about the weekend. 

It‘s coming up on the next minute of “The Fix,” coming back on “Hardball” on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to “Hardball,” time for the “politics fix.”

Despite heaps of criticism lately on how he‘s handling health care reform, it appears president Obama has done a few things right.  Today we got a report of a huge jump on home sales.  July sale went up more than 7 percent, the largest monthly increase in ten years. 

Analysts say the president‘s tax breaks for first-time home buyers have a lot to do with that rebound. 

Today the Federal Reserve on another front, Ben Bernanke, the head of the Fed, said the U.S. economy is on the verge of a recovery. 

And the stock market, of course, rose by 150 points today.  We‘ve got the cash for clunkers program, which has been extremely popular with the consumers.  Nearly 500,000 cars sold in just a couple of weeks. 

Joining me right now to look it over is Jean Cummings of “The Politico,” the immensely successful “Politico,” I should say, and “The San Francisco Chronicle‘s” Phil Bronstein.  I will say nothing about the economics of newspapers these days.

But let me go Phil with his thoughts out there.  There is some good economic news.  The car front, nobody thought you could push cars this fast off the lots with this little break that‘s going to end. 

Home sales in the 250,000 to 325,000 level, which has nothing to do with the San Francisco market, I assume, Phil, is doing very well.  The market is up almost to 10,000 now.

What‘s going on?  Is this all just quick silver?  Is this not real or what? 

PHIL BRONSTEIN, “SAN FRANCISCO CHRONICLE”:  Well, it‘s all real, Chris.  I think the issue is how is it affecting me, you know, the average citizen, because also today it was announced in California, unemployment rates at 11.9 percent. 

So the question is, how many of these programs are affecting me personally, each and every individual, or am I sitting there still thinking, a, am I going to have a job tomorrow, and b, when are they going to get those SOBs on Wall Street and Washington who created this disaster? 

So I think those are the two questions that really need to be addressed for a bigger segment of the public than the people who cashed in clunkers. 

MATTHEWS:  I think the answer to that question is manifest.  They‘re never going to get them. 

Let me go to Jeanne Cummings.  Your thought about the disconnect between—you know, I was watching, I watch CNBC all the time.  They get the numbers and they just keep coming up.  They went up 150 points today based upon Fed reporting by the fact that Bernanke seems to be somewhat bullish, on the fact that housing is going up.  People are buying houses at a certain level, the $250,000 level of housing.  You have the clunkers things moving.

Is this green sprouts but we don‘t have a real harvest coming?  What‘s going on here? 

JEANNE CUMMINGS,             “POLITICO”:  I definitely agree with Phil that those numbers are great, but the numbers that are still bad, unemployment, home foreclosures, and consumer confidence, those are all down, and they‘ll probably not move a whole lot more because now the unemployment rate and foreclosures are starting to feed themselves. 

And so for most Americans I think it looks like a statistical recovery to them, but not real in their own lives.  And until they can start to really feel that, I think that‘s when Obama will begin to get some credit and people will begin to have some more confidence. 

Although I will point out, Chris, in “The Post” survey that was released today which had a lot of news that wasn‘t so great for the president, he did hold steady on the impact of the stimulus and the economy. 

And so there is some notice of it out there, but, in a way, I think consumers are not trustful that this is a recovery that‘s reaching them just yet.  And that‘s probably a good thing, because the unemployment rate isn‘t going to recover anytime soon. 

MATTHEWS:  We‘ll come right back and talk more with Phil Bronstein of “The San Francisco Chronicle” and Jeanne Cummings of “Politico.”  You‘re watching “Hardball” only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with Jeanne Cummings of “Politico,” and Phil Bronstein of “The San Francisco Chronicle.” 

Phil, I don‘t know what you make of Tom Ridge, but he‘s got his neck stuck right out there now with this claim in this new book that‘s coming out in a couple of weeks.  We‘ve got a copy of the book.  He basically accuses Rumsfeld and he accuses Ashcroft of playing politics right there on the eve of the 2004 election. 

BRONSTEIN:  We‘re horrified and shocked, Chris, because that‘s never happened before.  I mean, George W. Bush is at the center of this in a sense.  Cheney just called him a wus not too long ago.  Now Tom Ridge is claiming the Bush administration was alarmist at best and fibbing at worst. 

They used to say in the newspaper business back, you know, when it was a business, thank you for that, if you were getting hit from both sides, you were doing something right.

But I tell you one thing that was interesting, going back to your earlier conversation about Obama and message, the Bush team in retirement came out with a stronger and more unified message against the Ridge book today than Obama has come out on health care. 

MATTHEWS:  So what is the difference between the two parties?  Why do the Democrats have a problem with unity? 

BRONSTEIN:  I think that‘s part of the history, right?  That‘s part of the history of Democrats.  It‘s debate, it‘s debate.  And message has always been key for Republicans. 

Although, you know, you talk about your Kennedy special that‘s coming up.  I think the Kennedys really understood message and how to stay on message. 

MATTHEWS:  That‘s right, they sold the Kennedys. 

Let me go with Jeanne Cummings on that, your thoughts on this Ridge thing?  It seems to me Ridge has given a bombshell.  I mean, he‘s given a very good argument to the Democrats that politics were afoot in the whole war on terrorism going right through to the 2004 election, playing the game right up to the voting itself. 

CUMMINGS:  Well, absolutely.  This is something the Democrats suspected at the time, and they‘ll jump on it.  Of course, they won‘t have the Bushes to kick around since it won‘t be anytime soon that we will see another one running for president, at least that‘s what you hear from the family.  Jeb Bush isn‘t ready to get into the game. 

But it is a blow to the legacy of the Bush administration. you know, one more of many as these books come out.  Each one of them reveals something new that is devastating to that White House. 

MATTHEWS:  You know, Phil, just to talk about the documentary we‘re doing for next Thursday—I‘ve got to bring it up since you brought it up again. 

You know, we got Jack Kennedy—I don‘t know if you‘ve ever seen this tape.  We dug up a tape at the Kennedy library where Jack Kennedy is actually talking about the fact that he was a carpetbagger when he ran in the 11th district back in 1946, actually admitting that going to Harvard was a problem in that district, actually admitting he never really lived in that district. 

I find it an interesting message.  But you don‘t get that in the man‘s lifetime.  You get it afterwards.

BRONSTEIN:  Candor is not something that usually goes together with politics.  And I saw that sound bite, and it was pretty fascinating.  And I suspect pretty soon thereafter someone advised him to stop talking like that. 

MATTHEWS:  Well, he was actually talking into a Dictaphone right before he got killed, and he was doing for posterity.  We‘ve got it.  It‘s going to be in the documentary. 

Mr. Bronstein, I don‘t mean to disparage the newspaper business.  It‘s made me what I am, it‘s made you what you are.  We hope it‘s around a thousand years from now. 

Jeanne Cummings, we hope “Politico” adds to the strength of prinT.

Join us again Monday night at 5:00 and 7:00 eastern for more “Hardball.”  Right now it‘s time for “The Ed Show” with Ed Shultz. 

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

END   

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