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updated 12/31/2009 11:56:30 AM ET 2009-12-31T16:56:30

Guests: Matt Nesto, Chuck Todd, Pat Buchanan, Eugene Robinson, Bob Baer, Chris Cillizza, Richard Wolffe, Del. Eleanor Holmes Norton, Rep. Dan Lungren, Bob Baer, Tyler Drumheller

CHRIS MATTHEWS, HOST:  Close call.

Let‘s play HARDBALL.

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

Whose fault?  How did a 23-year-old Nigerian man whose own father reported suspicions about him to the U.S. embassy manage to purchase a transcontinental airline ticket bound for the U.S. with cash, checking no bags, and get past security with a syringe sewn into his underwear and explosive taped to his legs?

Some Republicans are already pinning the blame on the Obama administration.  Janet Napolitano didn‘t help saying the system worked.  What‘s it like when it doesn‘t work?  Who created the watch lists, however, the system that we‘re using right now?  Weren‘t they put into effect during the Bush administration?

Two members of the House Homeland Security Committee, one Republican and one Democrat, will debate that point, and it‘s a hot one, at the top of the show.

And is Yemen the new sanctuary for al Qaeda?  The terror suspect we‘re talking about set off alarm bells with his father when he dropped his studies and disappeared into Yemen.  Add to that the U.S.-backed air strikes against al Qaeda in Yemen earlier this month, is this the latest danger area?  I‘m going to talk to two former CIA operatives about how the terror threat is heading.

Anyway, plus: Who you going to call?  Myth busters.  We‘re going to talk to the biggest—about two of the biggest myths of a president‘s first year and maybe detonate a couple of those myths tonight here in HARDBALL.

Also, the president‘s didn‘t speak publicly about the foiled terrorist attempt until today.  Could the optics—that‘s our new word these days—of his Hawaii vacation hurt him, too much good time in the sun with the people left back here in the other 48 states with the cold?  That‘s in the “Politics Fix.”

And finally, who were the big winners and losers of 2009?  The Gallup poll has the answers and we‘re going to have them for you in tonight‘s “Sideshow.”

Let‘s start with the foiled terrorist plot to blow up a Northwest airliner.  We‘re going to bring in two members of the Homeland Security Committee, Democrat Eleanor Holmes Norton of Washington, D.C. and Republican congressman Dan Lungren of California.

Let‘s go through the data here.  You both know it.  Number one, the guy paid in cash.  He didn‘t check any bags.  His father reported that he was troubled to the United States embassy—a lot of questions about that thing.  He had explosives taped to his leg.  He had a syringe in his underwear.  And he walked right onto that plane and did his business until a fellow passenger stopped him.  No official stopped him anywhere.  No official would have stopped him.  He would have blown up the plane except for a fellow passenger.

This is scary stuff, Congressman.  Tell me what do you make of the data we have already on this case?

REP. DAN LUNGREN (R-CA), HOMELAND SECURITY CMTE:  Well, it‘s easy to be a Monday morning quarterback, and I don‘t want to do that.  But the fact of the matter is, a lot of what we do when we‘re successful is connecting the dots.  When you talk about a watch list, that‘s very different than the no-fly list.  It‘s a much larger list.  And you start to compile it and then try and bring bits of information together against the names that are already there.

Now we know there was sufficient reason to deny this person the opportunity to come to America, to have a visa to be on that airplane.  The questions that we‘re going to ask as members of the committee are, Where are the failures in this system?  How can we make sure that you connect these dots much earlier than happened in this particular case?  And how do we have better inspections?

I‘ve been a strong advocate of the full body scan, something that we have not put into place around the country and around the world.  Hopefully, we‘ll take another look at that particular device, which would have given us an opportunity to see what this person had strapped to his body.

MATTHEWS:  What did you do about getting us the full body scan, Congressman?  How did you go about pushing for it before this happened?

LUNGREN:  Well, what I‘ve tried to do is to say, Look, if some people have objections to the idea, that it‘s an invasion of privacy, we ought to have something as simple as what I call a “do not care” line.  That is, most people, I don‘t think, would care about the invasion of privacy.  They wouldn‘t see one being subjected to this sort of a system.  And in fact, where we‘ve done pilots, over 95 percent of the people have voluntarily gone through.

For those who would not want to go through, they would go through the conventional means, but they would also be more likely to be subject to full-body pat-downs.  It seems to me when we have the suggestion that the balance is not appropriate in terms of the right of privacy, we ought to realize what this kind of a detection system would give us.  It would give us an opportunity to see things that cannot be found by a magnetometer.

MATTHEWS:  OK...

LUNGREN:  ... and also...

MATTHEWS:  Did you introduce this...

LUNGREN:  ... without a full body pat.

MATTHEWS:  ... legislation—Mr. Lungren, did you introduce this as legislation, the requirement that we go through that greater screening?

LUNGREN:  Oh, I have worked with TSA on this, and I fought against an amendment that was on the floor that prohibited us from doing this.

MATTHEWS:  I see.  OK.

LUNGREN:  It is not something that the TSA can‘t do.  They have it within their authority to do it, if we will give them the proper funding to buy these machines.

MATTHEWS:  Congresswoman Norton, your thoughts about these facts here?  I just want to know what more could somebody have done?  The father blew the whistle.  The guy had no—the guy paid in cash.  He had no luggage.  What else?  He had this syringe that would have been shown on one of these detectors, had he gone through one.  He had the explosive material in his underwear.  I don‘t know, what do we have to do to raise a red flag?  And nothing was done.

DEL. ELEANOR HOLMES NORTON (D-DC), HOMELAND SECURITY CMTE.:  Chris, Dan is right about the dots.  He and I have been on the committee, the Homeland Security Committee, since its inception, and we spent a lot of time during the Bush years trying to connect the dots.  And it looks like we still got some dots to be connected.

And you‘re right, Chris, about red flags.  That‘s what‘s most troubling to me.  The father, a very credible—a most credible, I must say, source who comes forward and reports his own son to the authorities, and that‘s not a red flag, a prominent banker who says that his son has connection to Yemeni terrorists?  I‘m going to want to know about that.

Now, the president did the right thing.  He ordered the right investigations.  He didn‘t panic and do some of the things we did after 9/11.  But I must say, my good friend and his Homeland Security Secretary spun this into a controversy.  I think people like Dan and I—and we don‘t point fingers, we try not to, when it comes to homeland security—would have been content to say, OK, let‘s see what happened.  When you get somebody getting on television saying, Everything went well...

MATTHEWS:  Well—well, let‘s go watch that.  You brought it up, Congresswoman.  Let‘s watch.  Here‘s the secretary of Homeland Security saying things worked as expected—in fact, the system worked.  Here she is making that dreadful comment.

(BEGIN VIDEO CLIP)

JANET NAPOLITANO, SECRETARY OF HOMELAND SECURITY:  One thing I‘d like to point out is that the system worked.  Everybody played an important role here.  The passengers and crew of the flight took appropriate action.

And our system did not work in this instance.  No one is happy or satisfied with that.  An extensive review is under way.

(END VIDEO CLIP)

MATTHEWS:  Well, as Ross Perot would say, Congresswoman, measure twice, cut once.

NORTON:  Well, you know—you know, Chris...

MATTHEWS:  I think that was...

NORTON:  Chris, you know...

MATTHEWS:  ... cutting twice and measuring once.

NORTON:  The American people will forgive a lot if you say, you know, I think we have a problem here.

MATTHEWS:  Yes.

NORTON:  But when you look like you‘re spinning it, they really turn away from you.  She did the president a disservice when she did that.

MATTHEWS:  You know, Congressman, I want to go over this, and I accept

everything about your efforts to try to deal with this by having people

screened properly.  And I keep thinking of the fact of all the times I fly

and you fly all the time to California back and forth to do your job—all the time, we see old women or old men being taken out of their wheelchairs and having to do this Lord‘s walk for about 20 yards to prove that they can walk.  It‘s insane.  And then you hear about this guy who raises all the red flags and walks right through.

Why do we put through this—you got to take your shoes off, you got to do all this crap.  And yet if a guy—well, is this really going to get down to profiling?  Is that what it‘s going to come down to, like they do in Israel where they have a 45-minute interview with the person and you try to figure out their politics, you try to figure out where they‘re coming from and where their head‘s at and hope they‘ll sweat enough so you‘ll know there‘s trouble?  I mean, do we have to go further than robotic effort, to go to human common sense in screening people?  Is that where we‘re going to have to head here?

LUNGREN:  Well, we have adopted some...

MATTHEWS:  I mean, do systems work, or do you need common sense?

NORTON:  We do need common sense.  And have adopted some of the processes that the Israelis have used.  We use it in a more subtle fashion than they do.  But the fact of the matter is, I‘m concerned about what people call PC.  We‘re afraid of being criticized for what we do.  The fact of the matter is, we don‘t have the sense of urgency in this country about the threat that remains.  This is a consistent, constant, intensified threat, and what we have to do is be agile enough to respond to the new manifestations of this threat.

We know that it‘s not just poverty.  We know that it‘s not just people who are ill-educated.  The most recent ones are educated people, sometimes acting in a single act but with connections to others.  We have to constantly refine what we‘re doing...

MATTHEWS:  I know.

LUNGREN:  ... and we have to try and stay ahead of these people every single step of the way.

NORTON:  Look, Dan, I agree, but you know what?  This is the same old problem with the watch lists and the no-fly lists.  And we‘ve never gotten that act together.  This guy was on one list, but he didn‘t kind of make it to the next list.  He wasn‘t even an American citizen.  What does it take to get off a list?

MATTHEWS:  Well, I want to know whether we even go by these robotic things like, if you‘re paying in cash, if—that used to be an old way to catch drug dealers because they dealt in cash.  I mean, that was the old way...

NORTON:  And he paid in cash.

MATTHEWS:  ... twenty years ago of catching people.

NORTON:  And this guy paid in cash.

MATTHEWS:  Can you catch a person how pays in cash and has no luggage? 

Is that enough to say to the guy, You can‘t get on the plane?

NORTON:  Well...

LUNGREN:  That‘s not the only thing we do—that‘s not the only thing we do, Chris.  We add a number of different pieces of intelligence that we get on a regular basis, and we refine things on a very, very regular basis.  That‘s why intelligence is so important in this matter.

MATTHEWS:  Yes.

LUNGREN:  We utilize the intelligence.

NORTON:  We say we have a layered approach, and we do.  But at each level of the layer, we failed here.

MATTHEWS:  You know, the problem is, I wonder whether it‘s even

possible—because Congresswoman, let me ask you this.  If this fellow had

given a little attitude at the airport and said, Look, I know I don‘t have

I‘m paying in cash, that‘s how we do business in Lagos these days.  I don‘t have any luggage because I‘m smart enough to pack light on long trips.  I don‘t want to have to go through luggage and getting the luggage back.  And by the way, my father‘s a big banker over in Lagos.  Get off my case.  You‘d have to let him on the plane.

NORTON:  No, you go to the list next.

MATTHEWS:  Well, the only reason...

NORTON:  You go to the list next.

MATTHEWS:  ... he was on the list, though, is his father complained. 

Suppose his father hadn‘t complained.

NORTON:  Well, but he was on the list.

MATTHEWS:  Because his father complained.

NORTON:  I don‘t know.  He may have been on the list all along...

MATTHEWS:  I see.

NORTON:  ... because he had Yemeni connections.

MATTHEWS:  Oh, I see.

LUNGREN:  Chris...

(CROSSTALK)

MATTHEWS:  Go ahead, Congressman.

LUNGREN:  Chris, this is why we have—this is why we have to have the layered approach.  We use intelligence.  We use the robotic approach.  We use personal observation.  We use police dogs.  We use all of these different things because we know nothing is a fail-safe.

MATTHEWS:  Right.

LUNGREN:  That‘s why we have to have a comprehensive approach.  That‘s why we have to have American people alert to the kind of suspicious activity that might take place.  You might make a mistake when you say, This person looks suspicious.  But we ought not to have people cowed—that is, afraid to say it.  Let the authorities make those decisions.

NORTON:  Chris, this man did not go through the whole body or entire body mechanisms that they have in Amsterdam.  And there are reports that people coming into the United States don‘t have to go through that technology.  That doesn‘t make much sense.

MATTHEWS:  Yes.  OK.

NORTON:  This is a sovereign country...

(CROSSTALK)

MATTHEWS:  Well, I feel a little better after talking to you two.  Thank you very much for joining us, Delegate Eleanor Holmes Norton of D.C.  and U.S. Congressman Dan Lungren of California.

Coming up: Where does the United States need to fight these terrorists?  We‘ll ask two former CIA officers about where the real danger is.  And they‘ve been out in the field.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Al Qaeda‘s now claimed responsibility for the attempted terrorist attack on Christmas Day.  So where does the United States need to go right now to fight terrorism in this world?  And where does al Qaeda live?  Bob Baer is a former CIA field officer and is now Time.com‘s intelligence columnist.  Tyler Drumheller‘s been on before.  He serves as the CIA—he served as the CIA station chief in Europe until he retired in 2005.

Let me go to Bob Baer.  Is this threat that we faced this weekend with the Christmas attempt over Detroit—is this an emerging threat?  I mean, is it fair to say that the threat of this kind of terrorism in the air, for example, is growing?

BOB BAER, FORMER CIA FIELD OFFICER:  Chris, it‘s not an emergence.  It‘s an old threat that we never took care of.  This is Yemen.  Yemen is the sort of the center of al Qaeda, always has been.  We‘ve never cleared it up.  And you‘ve elements of Qaeda all in those mountains, and they‘re almost impossible to get to.  It‘s a divided country...

MATTHEWS:  OK, hold on...

BAER:  ... an ungovernable country.

MATTHEWS:  Bob, hold there for a second.  Welcome back.  We want to bring in President Obama right now.  He apparently has abruptly ended a round of golf and sped towards his family vacation home for what‘s described as a personal matter.

Let‘s go to Chuck Todd for a report on the president.  He‘s in Hawaii

Chuck.

CHUCK TODD, NBC WHITE HOUSE CORRESPONDENT/POLITICAL DIR.:  Hey, Chris.  Well, just very quickly, we know there had been some reports about what happened and the president cutting things short.  A friend of the family was injured today on the ocean.  It‘s nothing having to do with the first family, but it was an injury to somebody very close to the president, a friend of the president.  We‘re not quite clear how serious these injuries are, but there is a lot of law enforcement and ambulance folks around the presidential compound.  And of course, any time that happens, it gets a lot of people nervous and concerned.

And so that‘s the facts as we know them now.  The first family is fine.  The president is fine.  But it is a family friend that apparently has been injured.  And again, we don‘t know yet the seriousness of those injuries, Chris.

MATTHEWS:  OK, thank you, Chuck Todd, who‘s with the president.  We‘ll get more on that as it develops later this evening.

TODD:  You bet.

MATTHEWS:  Let‘s go back to Tyler Drumheller with the question before the country this weekend, and that‘s who‘s our biggest threat?  Is it Yemen now?  And I wonder how this fits into our decision to send 20,000 more troops to Afghanistan.  Can we pin down the enemy, or are they everywhere, Tyler?

Oh, we‘re having sound problems right now.  Let‘s go back to Bob Baer. 

Bob, can you hear me?

BAER:  I hear you fine.

MATTHEWS:  Bob, I don‘t think Tyler—I can‘t hear Tyler.  Let me ask you that question.  You were saying Yemen‘s been a problem.  But is there a point of a particular concern, or is it Yemen, is it Somalia, is it Afghanistan, the Pakistan border, Europe, Hamburg, even cells within the United States?  I mean, where is the enemy, if you had to put it in your head right now?  Give me a picture of the enemy.

BAER:  Chris, this is the classical guerrilla force that gets up and moves.  You send in our military.  It‘s untenable for them.  They get up and move to more remote areas.  So they‘ve moved to Yemen.  They‘ve moved out of Afghanistan.  They‘ve moved into Yemen.  They‘ve moved into Somalia.  They‘ve got bases all across Europe.  It‘s whack-a-mole.  It is virtually impossible to crush this thing, with it being everywhere in the world.

MATTHEWS:  Well, does it make sense, Tyler, to go after them in Afghanistan, given what‘s happening right now coming out of Yemen?

TYLER DRUMHELLER, FORMER CIA OFFICIAL:  I think you have to go after them wherever they are, if Afghanistan, Yemen.  But it‘s not really a military problem.  The real place you have to look for these people, the real danger is in Europe, in Canada, and people that are already here in the United States.  And working with the Europeans more effectively—we still haven‘t gotten that right, even from my days there.  There was plenty of intelligence available here.

And the other problem at this end lies in the structure that was put in place after 2004 here, where everything was sort of done by committee, everybody‘s talking about connecting the dots and throwing around buzzwords.  And really, there‘s no individuals who are really responsible for this.  It‘s all committees.  So it‘s more of a structural problem here and then figuring out how to work with the Europeans, allay their fears about what we‘re going to do with the information and our fears about what they‘re going to do.  And that‘s really where the process can be tightened up.

MATTHEWS:  Well, there is a kind of who‘s on first base situation. 

We know that the State Department, the U.S. Embassy in Lagos was informed of this young man‘s danger to us.  We were told—we were told, obviously, that the FBI‘s in charge of taking care of these watch lists and keeping an eye on who we should keep an eye on, as a country. 

And now we realize that the homeland security is out there as the flak-catcher over the weekend. 

Who is responsible, Tyler?  You‘ve got Janet Napolitano taking the flak.  You have got the FBI in charge of keeping track of these watch lists.  And it was a U.S. Embassy official or consular officer who got the call from the kid‘s father. 

DRUMHELLER:  Well, it‘s—technically, if you look at the lists, it is the National Counterterrorism Center. 

But all these organizations have their own counterterrorism centers, CIA, Homeland Security, all these people.  And it‘s not—and if you look at the way the watch list is compiled, they are committees that meet each morning and say who should be on it, who shouldn‘t be on it.

MATTHEWS:  Right. 

DRUMHELLER:  And that‘s fine.  You have to have groups of analysts.

But, at the end, there has to be one or two people who really do—

are experts on this who make the final decisions.  And it can—and it has

we used to do it during the Cold War.  We certainly can do it on this. 

(CROSSTALK)

MATTHEWS:  Well, I think it comes down to somebody with a really good intelligence hunch, brain, like you guys. 

Let‘s take a look at Senator Lieberman, who has jumped on this thing. 

Here he is talking about Yemen.  Let‘s listen.

(BEGIN VIDEO CLIP, “FOX NEWS SUNDAY”)

SEN. JOSEPH LIEBERMAN (I), CONNECTICUT:  I will leave you with this thought that somebody in our government said to me in Sanaa, the capital of Yemen.  Iraq was yesterday‘s war.  Afghanistan is today‘s war.  If we don‘t act preemptively, Yemen will be tomorrow‘s war. 

That‘s the danger we face. 

(END VIDEO CLIP)

MATTHEWS:  Well, that‘s a very aggressive statement.  And you might expect it from Senator Lieberman.  And it may be appropriate in some situation.  But the question is, what does act preemptively mean, Bob?  Go into Afghanistan?  We‘re already in there with, you know, over 100,000 troops now.  We‘re fighting.  We fought in Iraq.  We‘re fighting—it‘s not like we‘re holding back in the war on terror here. 

ROBERT BAER, FORMER CIA FIELD OFFICER:  COM:  Well, you can‘t go into Yemen.  It‘s too mountainous, too many remote valleys up there, too many tribes.  You will never get to the bottom of the problems in Yemen. 

I don‘t know what he means, acting preemptively.  The government in Sanaa is barely holding on.  There is a civil war going on.  Saudi Arabia is worried about its security from Yemen.  So, it is another, you know, blank spot on the map, Yemen.  I don‘t know what you would do about it.  It would take two million soldiers to subdue that country. 

MATTHEWS:  Well, maybe that‘s what he means.  Is there any argument to

I mean, I‘m obviously setting up perhaps a straw man here—is there any argument for a large, you know, a punitive raid, United States Army marching into a country like Yemen, where we do have diplomatic relations, Tyler? 

I just wonder how many wars—it seems like every one of these situations develop, whether it‘s 9/11.  You get people like Michael Ledeen, the far-out people:  Let‘s attack Syria.  Let‘s attack Iran.  Let‘s attack on all fronts and go to war with every Islamic country. 

Now, there are some people who might like the whole pinball machine to light up like that.  I mean, I think they‘re crazy.  But—because that just makes more enemies, more casualties on both sides.  And then you have got what the East-West—well, the people who really want this East-West war have always wanted, which is an East-West total war. 

You‘re shaking your head, Bob.

BAER:  Well, we need fewer troops in the Middle East.

Look, there‘s no help for it.  We have to kill Muslims when we have an army in Afghanistan, Pakistan, in Iraq.  But the more Muslims we kill, the more enemies we have.  And this just becomes a never-ending cycle.  That‘s what worries me. 

MATTHEWS:  Well, is that something that people want?  Who wants that? 

BAER:  No, they don‘t want it.  It‘s—no, what do you do about it?  The question is, we have to find a way to get out of these wars as far fast as we can...

MATTHEWS:  Yes. 

BAER:  ... and then see what happens. 

In the meantime, you know, that man should have been stopped in Amsterdam because he was on a list.  But the FBI and the CIA don‘t share databases. 

MATTHEWS:  OK. 

BAER:  They still don‘t after eight years. 

MATTHEWS:  Tyler, here‘s—Tyler, then back to Bob. 

Here‘s my worry.  Everybody with a brain is worried.  And that‘s everybody out there right now.  What happens if our enemy out there gets really ambitious, they send 10 or 20 of these guys out every day, and we catch most of them, but we don‘t catch them all?  And that‘s hell, where we don‘t catch them, real hell, Tyler.

DRUMHELLER:  And I—Chris, I think you‘re right.  That‘s one thing you really have to prepare on—for this.  This is what the Europeans had to deal with in the ‘60s and ‘70s. 

Occasionally, you‘re going to have to—some of this won‘t work.  Someone will get through.  And you have to be prepared what to do after that.  But it‘s—in the meantime—what you were saying before, very quickly, is, it is not a military solution.  It is an intelligence solution. 

And if you think they—how many number two and number three and number four of al Qaeda have been killed by Predator attacks and all these other things?  The real dangerous people are the guys like this little guy that would never even come up on the radar. 

MATTHEWS:  Yes. 

Well, how would you possibly pick up intel on a few guys get together with a kid like this?  They recruit him or he joins them.  They give him what he needs in terms much weaponry.  He is already indoctrinated, or self-indoctrinated.  He already has a point of view. 

How could a big intelligence worldwide network pick up on such a small situation like that, Tyler and then Bob? 

DRUMHELLER:  Well, because you have to have—the only way to do it -

these cells are very hard to penetrate, obviously, but you have to have sources on the ground, human sources, in places all over the world reporting.  And you can do it with allies.  You can do it with on you—where you—you did it where—how you must where you are.

And you collect information on—on the whole situation.  And what you have to get is someone will come to you at some point and say, there is a fellow here.  He‘s a Nigerian, and he looks like he may be one of the people that‘s—that are going to do this. 

The one thing that saves us on this is that you have—it is hard to find people to kill—to kill themselves, to do suicide bombings...

MATTHEWS:  It is?

DRUMHELLER:  ... unless you‘re in someplace like Israel and Palestine. 

MATTHEWS:  Well...

DRUMHELLER:  To recruit suicide bombers is not easy for these guys.  So, that‘s the one area.  And you just—you have to be constant—you have to go to—you have to go to work every day on it, basically. 

MATTHEWS:  Yes. 

I wish you were right, but I have been in the West Bank in places like Nablus.  And I have to tell you, I have seen the martyrs on the walls over there.  They‘re celebrated.  And their parents sit next to you and have sweet tea with you and talk about their kids. 

It‘s not hard enough. 

DRUMHELLER:  Right.       

MATTHEWS:  Anyway, thank you, Bob Baer.

Thank you, Tyler Drumheller. 

Up next: Gallup poll‘s winners and losers, a little lighthearted coming up on 2009.  Who were the winners and losers of 2009?  We will have them in the “Sideshow” for you—some surprises.

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

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

First up: the political winners and losers of 2009. 

Well, the results just came in from a new Gallup poll of Americans.  On the winners list, according to those polled, first lady Michelle Obama, Secretary of State Hillary Clinton, and Sonia Sotomayor, the newest Supreme Court justice, all women, by the way.  Joining them on the winner‘s list, President Obama. 

Topping the losers list, those White House grifters, the Salahis, next.  South Carolina Governor Mark Sanford, remember him?  He went off to Argentina looking for the Allegheny Trail or whatever he was looking for.  Anyway, who could forget the U.S. Congressman Joe “You Lie” Wilson? 

Joining them, the speaker of the House, Nancy Pelosi. 

Now for those who made both the lists for losers and for winners.  Senate Majority Leader Harry Reid, a winner and a loser, Federal Reserve Chairman Ben Bernanke, both sides.  And the most talked-about pol this year, Sarah Palin, also a winner and a loser.  It depends on which direction, I guess, you‘re coming from. 

Anyway, there you have it, straight from the people. 

Next—you will love this one—sex, lies and videotapes.  Over at India, Governor Narain Dutt Tiwari has resigned following the release of a sex tape showing him in bed with three women.  The shocker?  Well, he was 86-year-old, the governor was, 86.  The tape was first broadcast by a local station over there in India on Friday.  Though the governor said the tape was faked—I don‘t know how you faked it—anyway, he submitted his resignation a day later, citing health reasons. 

Well, I guess—well, that explains a lot. 

Anyway, time for the “Big Number.” 

Earlier in the show, we brought you Homeland Security‘s Janet Napolitano‘s initial reaction to the thwarted terrorist attack of Christmas Day.  She said—quote—“The system worked.”  Well, that‘s like, “You‘re doing a hell of a job, Brownie.”

Anyway, well, how many Americans disagree with that assessment?  According to an online unscientific poll by Politico.com, 96 percent.  Just 3 percent agree with the homeland security secretary, who said, everything is working great.  I wonder who those 3 percent are.

Anyway, 96 say the attempt shows that security in place didn‘t work.  Can‘t argue with that one.  Anyway, that‘s tonight‘s “Big Number.”  Ninety-six percent say things aren‘t working well. 

Up next:  It‘s been nearly a year since President Obama took office as president.  And “The Washington Post”‘s and our own Chris Cillizza outlines the biggest myths of a president‘s first year.  He‘s going to crack through them.  And he‘s going to do it right here in a minute.

You‘re watching HARDBALL, only on MSNBC—the myths.  

(COMMERCIAL BREAK)

MATT NESTO, CNBC CORRESPONDENT:  I‘m Matt Nesto with your CNBC “Market Wrap.”

Stocks wobbling to a higher finish today in light holiday trading.  The Dow industrials are up 27 points, there S&P 500 up about a tenth-of-a-percent, and the Nasdaq about a quarter-of-a-percent, 5 ½ points higher on the session.

A report from MasterCard on holiday spending bringing some cheer to retailers today, shows that spending was up more than 3.5 percent this year, consumers buying more, despite retailers‘ reluctance to offer deep discounts—the Gap, Wal-Mart and Amazon all up on that report. 

Apple rising today, again another new high.  Investors are excited about the prospects of their new tablet computer. 

But airlines taking it on the chin, after last week‘s failed terror plot.  Delta and American Airlines parent AMR both down about 4 percent in trading today. 

And, finally, oil prices hitting their highest levels in more than a month, amid geopolitical tensions in Iraq. 

That‘s it from CNBC.  We‘re first in business worldwide—now back to

HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

As his first year as president comes to a close, “The Washington Post”‘s Chris Cillizza lists the myths about a president‘s first year. 

We are going to go through them with Chris and Richard Wolfe, MSNBC‘s political analyst, senior strategist at Public Strategies, and author of “Renegade: The Making of a President,” quickly and already at work on another book.

Richard Wolffe, thank you for joining us. 

RICHARD WOLFFE, SENIOR STRATEGIST, PUBLIC STRATEGIES:  Thanks, Chris. 

MATTHEWS:  And, thank you, Chris Cillizza. 

Young fellow, you‘re up. 

(LAUGHTER)

MATTHEWS:  And this is it.  You‘re going to take on the myths that have guided us through centuries.  You‘re going to be the iconoclast.

Here he goes.  Myth number one: that Congress—congressional control by a president means power.  So, Barack Obama came into office with a sweep of the House and the Senate.  That should have meant, according to the myth that you acknowledge here, success in getting what he wanted. 

What happened? 

CHRIS CILLIZZA, “THE WASHINGTON POST”:  You know, Chris, I think you see a Democrat elected with 365 electoral votes, 258 seats in the House, 60 seats, eventually, after Al Franken won in the Senate, and you think, well, this is going to be a rubber stamp, not in the negative connotation of that word, but these—that Congress is basically going to say, this is a popular Democratic president.  He‘s the president of our party.  His main priority is health care.  Let‘s get this thing done. 

Well, as we saw, December 24, they did get it done, but that was, you know, nine months, 10 months after the president started on that trail.  It was well after his initial deadline, before the August recess. 

And what you always have to remember, Chris, is, members of Congress have been there a long time.  They value the institution.  They think that they have as much to do with the bill as the president does,.  And, of course, always important to remember their political calculation.  This is ultimately about them surviving in the next election.  And they are going to do everything they can. 

I think you saw that with Ben Nelson in a very red state, up in 2012, the senator from Nebraska, trying to do everything he could to be able to go to the people of his state when he was up for reelection and say, look, this is what I got for you and this is why I ultimately voted for the bill. 

So, there is a lot of reasons.  But, if you look back, George W. Bush is another example.  Social Security, after he was reelected in 2006, that went absolutely nowhere, despite Republican majorities in the House and the Senate. 

MATTHEWS:  Richard Wolffe, was it in fact a myth?  Was it in fact seen as a truism, if you will, that a Congress loyal to the president would do his bidding, as—well, we had a Democratic Congress under Clinton.  We had one under Carter.  We have one under—under Obama. 

Has there been a myth that you can get things done if you have got the Congress in your party? 

WOLFFE:  Well, you really need congressional authority to get anything meaningful done. 

You know, executive orders and foreign policy only take you so far.  I think what was unusual, what was really unusual here, is that the Republicans decided that they weren‘t going to give him any kind of honeymoon, they were going to make him really unacceptable in polite Republican society. 

And this is a kind of impeachment strategy.  This has been to make him seem so radical and so out of the mainstream in terms of American opinion, that no Republican could be seen to vote with him from day one, from the stimulus and through health care. 

And that strategy has been successful in keeping that group together.  It has peeled off a few of these Democrats from conservative states like Ben Nelson.  But, in the end, the Democrats just about have enough power.  The president still needs them on his side to get anything meaningful done. 

MATTHEWS:  Give me the key name who said that should be the candidate

the way that Republicans should behave.  I just want to know that while we get—who did that? 

WOLFFE:  This is across the board on the leadership. 

Look, he didn‘t get one vote in the House for the stimulus package.

MATTHEWS:  I know.  I would like to know where these—I would like to know where the loop begins on this stuff, this total negativity. 

WOLFFE:  This started in the campaign.  Let‘s face it.  The idea that he was Muslim and palling around with terrorists, it has just continued on here.  Look at what they are saying about him, as a radical, as a socialist, as a statist.  None of this bears any resemblance to what he‘s actually done or tried to do. 

MATTHEWS:  Let‘s swing over to the other side politically.  An angry base will abandon you.  You believe that has been the belief, that if he doesn‘t do what he said he would do in the most ideological sense, that his troops would get even. 

CILLIZZA:  Well, Chris, go back and look at the—several weeks before health care went through, the president made a speech in which he said I‘m going to send 30,000 more troops to Afghanistan, something that the base of the party roundly previously objected to and made very clear they weren‘t happy about.  But those liberal Democratic senators, the Sherrod Browns of the world in Ohio, they stayed in line.  They ultimately went and voted for the president on health care. 

I think if you go back, Chris—let‘s go back to 1980.  The Democratic base so disliked Jimmy Carter that Ted Kennedy feels as though this is his time he‘s going to primary a sitting president.  Jimmy Carter wins.  Bill Clinton comes in to office running as a third way, sort of trying to basically use the liberal base of the party to position himself in the center.  Liberals are the ones who came to his biggest defense when he was impeached in 1998. 

I think ultimately liberals make a political calculation—this happens with conservatives, too.  We‘re just talking about a Democratic president here.  They make the political calculation this person is with me more than they are against me and I‘m not going to abandon them for one or two things.  Now 10 or 15 things that they do against the base of the party, then maybe.  

MATTHEWS:  Richard, all I know is the Republicans abandoned George W. Bush‘s father when he raised taxes. 

WOLFFE:  Right.  But look, given the choice—elections are about choices.  Given the choice between Sarah Palin or Mitt Romney on one side and Barack Obama on the other, I think they‘ll forget—the angry base will forget their unhappiness about the lack of a public option and fall in line.  Chris is right here. 

On the other side, look, an angry country you cannot buck.  If the country stays angry at all politicians, at incumbents, at the president, then he‘s in big trouble.  It is not just about the base.  Anger is a real problem. 

MATTHEWS:  When will we know whether you‘re right or not, Chris? 

Will it be this coming election, this 2010 election? 

CILLIZZA:  Chris, don‘t you assume that I‘m right? 

MATTHEWS:  I just want to know if the scorecard is right.  Give me the scorecard.  If he doesn‘t get hammered this coming November, you‘re right. 

CILLIZZA:  Yeah.  Look back, Chris.  First term, midterms of a president‘s term, almost always significant, 20-Plus-seat loss in the House, upper-digit losses in the Senate.  If it‘s something less than that or even equivalent to that, in truth, then it is consistent with historical norms.  If you start getting up to a 40, 50 seat loss in the House, major losses in the Senate, then I think that‘s to Richard‘s point, which is it‘s not just the anger of the base—it is not just any of these myths we go through—it‘s the anger in the country, anti-incumbent sentiment in the country, and the country wanting to put incumbents back—send them a message. 

MATTHEWS:  You are on base here.  You‘re up at bat, Chris Cillizza.  You say that approval ratings inevitably drop.  That‘s the myth, that presidents started with all the capital and dissipates over time.  You say that‘s not true. 

CILLIZZA:  If look back, it‘s definitely not true.  Both Ronald Reagan and Bill Clinton came into office with far lower approval ratings than they left office.  Bill Clinton happened to go through that thing of impeachment during that time and still left office higher. 

It depends on what you do.  George Bush came in with middling approval ratings—George W. Bush, excuse me.  Those ratings dropped precipitously during his presidency thanks to a number of things, the war in Iraq being one thing, Hurricane Katrina being another.  It‘s what you do in office. 

I think that‘s far too early for us to know with President Obama.  He‘s putting in place a vast reform of the health care system.  That will eventually be what we judge him on. 

MATTHEWS:  Richard, you first.  Isn‘t it amazing how polling works?  We saw in a poll today that some people think Janet Napolitano was right, that the system works when it comes to Homeland Security and that terrorist threat.  I was reminded, Richard, of people that liked Bill Clinton more after they found out about Monica.  There‘s always somebody out there that gets a different message.  Right? 

WOLFFE:  Yes, I‘m not sure Tiger Woods could say the same thing.  But look, if you look at the polling on these fast-moving stories, it is incredibly unreliable.  The question is does this guy‘s numbers—does President Obama‘s numbers look more like Reagan or Carter.  If the track of the economy is like Reagan, than he‘s going to be doing great and his numbers will inevitably rise with the economy and the stock market.  If this is just one foreign policy disaster after another, the economy still feels like it is in a crisis in a couple of years, and he‘s Jimmy Carter, then, as Republicans have wished for, his numbers will stay low and continue to lose support among independents. 

But at this point, who knows which way the economic recovery curve is going to turn? 

MATTHEWS:  I think it is timing.  I think that Carter and Bush Sr.  both had their recessions late in their terms.  It is much better like Eisenhower, Nixon, all of them having their recession—Reagan—having them early, and coming back in the end, is how people remember you.  It‘s what did you do against me lately that matters.

Thank you, Chris Cillizza, for your attempt to bring down all those myths.  I think you had some success there.  Happy New Year to both of you fellows. 

Up next, political analysis on the recent failed terror attack.  We‘re going to look at the politics.  It‘s already begun.  People like Hoekstra, ranking member on the Homeland Security Committee, ranking Republican, blasting away at the president, saying it was his fault, even though, well, the system was set up under Bush.  We‘ll see.  There will be blame.  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA:  A full investigation has been launched into this attempted act of terrorism, and we will not rest until we find all who were involved and hold them accountable. 

(END VIDEO CLIP)

MATTHEWS:  That was President Obama today in Hawaii, making a statement about the attempted terrorist attack.  Time now for our political fix, with Pat Buchanan and Eugene Robinson, both MSNBC political analysts. 

Pat, fire away.  The president‘s in Hawaii.  Is he the Michael Balandic (ph) of this affair, the wrong climate, the wrong optics, the wrong look?  He doesn‘t look like he will not rest. 

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  I think the optics are terrible, Chris.  He‘s out there in the playground, the sun playground, when the country is cold and angry and terribly upset over this, what looks like something that really should never have happened, this character from Nigeria, who basically has been put on a watch list.  His own father says he‘s a radical and an extremist, who have a visa denied him in Europe, who holds on to a year old visa in the United States, pays cash, and gets on a plane across the Atlantic to blow it up. 

So I don‘t care who is responsible here.  I don‘t think you‘ve got any sense of urgency or anger or taking responsibility on the part of the administration until late today, which is the fourth day of this event. 

MATTHEWS:  Gene, do they suffer by their lack of body language here, lack of verve in responding to something that may not have been able to be stopped but it‘s going to be somebody‘s fault politically. 

EUGENE ROBINSON, “THE WASHINGTON POST”:  I think they do suffer, actually.  And It think it was certainly a mistake to send the troops out to the Sunday shows yesterday with the message that the system worked.  Obviously the system did not work.  If the system worked, I want a new system.

MATTHEWS:  Where is that guy from the Saudi Arabian horse show, or whatever it was, that Bush had working down in Katrina, Brownie?

ROBINSON:  In my column tomorrow, I say this is almost as bad as “Brownie, you‘re doing a heck of a job.”  The reason I say almost is because she did take it back.  Today, the administration did get its act together and come out with statements that more nearly matched with what I think most of the rest of the country thinks. 

MATTHEWS:  For those who missed it this holiday season, let‘s take a look at the secretary for Homeland Security in her—we did a great job and then we didn‘t do a great job.  Both versions. 

It‘s coming up in one second.  We‘re going to watch it.  We‘re going to watch it in one second.  But it‘s the fascinating clip of the weekend.  Pat, do you want to preempt this a little bit by saying something nice about Janet Napolitano.

BUCHANAN:  I think she made a very, very foolish statement and I don‘t think you her personally accountable for it.  Chris, whoever did not put that individual name on a list where he would be double and triple checked before he ever got on an airliner made a terrible mistake.  And, Chris, if that was the system inherited from Bush, it should have been changed.  I mean, this guy was not even a lot of case.  He didn‘t belong on a plane. 

MATTHEWS:  Before you get so cock-sure here, what did you know about him, except that his father said he‘s trouble.

BUCHANAN:  His father said he‘s an extremist and a Muslim extremist.  That means you don‘t fly on a plane across the Atlantic.  This is our country.  We decide who comes in here, for heaven sake.   

MATTHEWS:  Pat, you‘re not arguing with anybody.

BUCHANAN:  Don‘t give me this ACLU stuff, Chris.

MATTHEWS:  Pat, this isn‘t Gonzaga here.  You‘re not looking for a schoolyard fight.  Let‘s go back—Pat, the cops are coming.  Let‘s take a look now at the Homeland Security secretary on “The Today Show.” 

(BEGIN VIDEO CLIP)

NAPOLITANO:  One thing I‘d like to point out is that the system worked.  Everybody played an important role here.  The passengers and crew of the flight took appropriate action. 

Our system did not work in this instance.  No one is happy or satisfied with that.  An extensive review is under way. 

(END VIDEO CLIP)

MATTHEWS:  Pat, extensive review, quick review there.

BUCHANAN:  There really ought to be, Chris.  This—as I say, this wasn‘t even a close call.  If someone is accused by his father of being the extremist and dealing with terrorists, you put him on a list and he does not get on a plane crossing the Atlantic until he proves he has a right to be on the plane.  The burden of proof should have been on him, not on us denying him the flight. 

MATTHEWS:  Thank god we didn‘t have nay family unity in that family.  We‘ll be right back with Pat Buchanan and Gene Robinson.  The old man told us what he was up to.  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MARY MATALIN, REPUBLICAN STRATEGIST:  We inherited the most tragic attack on our own soil in our nation‘s history. 

(END VIDEO CLIP)

MATTHEWS:  Well, I wonder if the Democrats have as much—what‘s it

cheek to pull that one that Mary Matalin pulled, the Cheney adviser. 

What do you think?  We‘ve got Gene Robinson and Pat Buchanan.  How do you have the cheek to say that it was the other guy‘s fault when it‘s on your watch?  I wonder, are only Republicans allowed to say that, Pat? 

BUCHANAN:  Well, look—

MATTHEWS:  I‘ll let you get in there, Gene.  I mean, is it OK to just say inherited 9/11?  Can you get away with that?

BUCHANAN:  Chris, as you and I said, this is non-partisan.  The guy shouldn‘t have been on the plane.  I don‘t know who set up the rules or dropped the ball or whatever.  He shouldn‘t have been on that plane, period.  They ought to have a system where he won‘t be on the plane. 

MATTHEWS:  OK, Gene, let‘s get to the real question of hearings, because is going to look good in these hearings.  Even Lieberman will look good in hearings, even though he wants to have a preemptive strike god knows where.  What are they going to accomplish?  Are we going to attack Yemen now?  We keep learning of new countries where we have to go to war with them.  That‘s not going to solve the problem. 

How many wars can we fight, period? 

ROBINSON:  Not any more at the moment.  We‘re in two.  You can‘t add Yemen.  And then you‘re going to add Somalia after that.  This is my question about the way—deciding that an invasion of the whole country is the way to fight terrorism, and to deal with this terrorist threat.  I don‘t think it is.  I do think that much better security, a system that actually works, of airline security has to be a part of it. 

(CROSS TALK)

MATTHEWS:  You know what they want to do?  More inspection, more bothering safe people.  And that will make everybody feel better. 

BUCHANAN:  Well, Chris, let me say this.  What it does show is the relative irrelevance of a war in Afghanistan to threat of terror on the American homeland right now.  Al Qaeda is in Arabia.  It‘s in Somalia.  It‘s in North Africa. 

MATTHEWS:  You know what?  We‘re three for three on that one.  Pat -

Gene, are you with Pat on that one? 

ROBINSON:  I am definitely with Pat on that one.  And I‘m with Pat on the fact that this is non-partisan.  This is a matter of your safety and Pat‘s and mine and my family‘s and everybody‘s.  Let‘s fix it.

MATTHEWS:  Pat, so much Happy New Year to you.  Gene Robinson, Happy New Year to you.  Pat, and your family.  Join us again tomorrow 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.

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