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updated 1/21/2010 10:46:09 AM ET 2010-01-21T15:46:09

Guests: Brian Shactman, Kevin McCarthy, Todd Harris, Steve McMahon, David Axelrod, Howard Dean

CHRIS MATTHEWS, HOST:  What the truck happened in Massachusetts?

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews back in Washington.  Leading off tonight: health hazard.  It was Lexington and Concord up in Massachusetts yesterday with the political shot heard ‘round the world.  A commonwealth that has been electing liberal Democrats for half a century has elected a conservative Republican as its new U.S. senator.

What was behind it, an attractive Republican candidate driving a truck, a Democratic candidate so politically off base, she didn‘t know the Red Sox and thought Catholics shouldn‘t work in emergency rooms, anger over President Obama, over health care, all of that?  As Senator Evan Bayh of Indiana put it, if this isn‘t a wake-up call for Democrats, these guys are to politically comatose to know what planet they‘re living on—or something like that.

So what happens now?  David Axelrod joins us at the top of the show.

So what about health care?  Was the cradle of liberty the deathbed of “Obamacare”?  Speaker Pelosi says health care will pass one way or the other, but some worried Democrats in both the House and the Senate, liberals and moderates both, are saying the bill just can‘t move the way it is.  But can President Obama really give up on health care after investing so much heart and soul into it?  Let‘s bring in Howard Dean tonight.  He‘ll tell us.

So ask yourself this, how scared are the Democrats now?  Last night‘s stunner is sure to convince marginal Democrats that it‘s time to retire, quit politics, and it‘s certainly promising Republicans that it‘s time to run for office if you‘ve been thinking about it.  We‘ll look at the growing endangered species list for Democrats.

Plus the blame game.  That got going before even one vote was counted last night.  It‘s now in full swing, and a lot of fingers are pointing at the people who ran Martha Coakley‘s Senate campaign up in Massachusetts.

Finally, a lot has been made about how independents voted for Brown, those Massachusetts independents—think about it—have always voted Democratic.  In other words, yesterday people who had voted Democratic their whole lives went Republican and for a Republican conservative.  What‘s with this ideological shift up there?

We begin with the stunning victory by Republican Scott Brown up in Massachusetts.

We‘re joined right now by White House senior aide David Axelrod.  David, why don‘t you—it‘s a big day in American politics.  Let‘s take a look at what the Republicans are saying right now about what happened in Massachusetts in that Senate race yesterday.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN ®, ARIZONA:  Last night, a shot was fired around this nation, a shot was fired saying, No more business as usual in Washington, D.C.!

REP. JOHN BOEHNER (R-OH), MINORITY LEADER:  You‘ve heard what the Speaker said yesterday and what the majority leader said—We‘re going to find some way to push this over the line.  It‘s that kind of arrogance that has the American people about ready to pull their hair out and about ready to throw every Democrat out of here.

REP. ERIC CANTOR (R-VA), MINORITY WHIP:  The election last night in Massachusetts for Senator-elect Brown was much about an election that rejected arrogance.  Much like David in his fight against Goliath...

(END VIDEO CLIP)

MATTHEWS:  Wow.  They seem to have their plan down.  It‘s arrogance.  Arrogance was defeated in Massachusetts yesterday.  Your take on what you learned yesterday, David Axelrod.

DAVID AXELROD, WHITE HOUSE SENIOR ADVISER:  Well, what I learned, Chris, is what I learned to some degree November of 2008 and the two years that I traveled with Barack Obama, and that is that middle class people, hard-working people are being squeezed in many different ways.  And they‘ve seen their jobs disappear.  They‘ve seen their wages stagnant.  Expenses are growing.  Health care, by the way, you know, has been growing exponentially.

And this is enormously aggravating when they look to Washington, they look to Wall Street, they see special interest hegemony here in this town.  And the want people to fight for them.  And that‘s why we‘re here.

MATTHEWS:  Yes.

AXELROD:  But—and we‘re going to continue that fight.  But we are the person in charge now, and obviously, we‘re going to become the fulcrum of some of that aggravation.

MATTHEWS:  But you had a Democratic candidate for the Senate up there, Martha Coakley, the attorney general, much respected.  She was, you could argue, to the left of President Obama on health care.  She was for that public option, no matter what.  She was going to go all the way with it, along with the netroots and some of the people on the progressive side of things, very assertively saying the things I would think the president would generally support.  She was a classic Democratic candidate.

Why did she get walloped in a state that‘s been voting for Democrats as long as I can remember for Senate and House races?

AXELROD:  Well, look, I‘m not going to disparage General Coakley, who‘s a god person.  But let‘s give some credit to Scott Brown.  He ran a terrific campaign.  He tapped into that zeitgeist that I talked about, that sense on the part of everyday people that they‘re not getting a fair shake.  And he spoke to it.  So I think that has a lot to do with it.  He ran a very good campaign.  I think that Democrats were a little late to get to—to send up the flares in responding to that challenge.

But there is no doubt that we have a lot of agitation out there and a lot of aggravation, and how could we not?  I told the president, Chris, a year ago, when we sat down and heard the economic forecast from our economic advisers, I said, You know, you got some great numbers, admire them now because a year from now, they‘re not going be nearly this good.  You can‘t govern in an economy like this when so many people are struggling and not, as the person in charge, bears some of that with you.

And we had to do some very difficult things to get this economy moving again—the recovery package, stabilizing the banks, stabilizing the auto industry.  None of that was popular.  We knew it wasn‘t popular, but the president did it because the consequences of not doing would have been a much larger catastrophe for the country.  But you pay a political price for that.

It is very important that—for middle class people that they have some leverage against insurance companies, and we pursued health reform, health insurance reform.  But the long process—the long, tedious process here in Washington—underscored in people‘s minds some of their worse sensibilities about the town, and that, I think, was felt, as well.

So there are a lot of factors in here.  We‘re obviously very cognizant of them.  But the most important thing we can do is move forward, fighting for people, fighting to create jobs, fighting to raise salaries, fighting to get people a fair shake in this economy.

MATTHEWS:  How do you shake this—it may be local.  I mean, I know Massachusetts politics, and I know you know it.  A lot of this was local.  They didn‘t like the party establishment.  They thought they‘d been around too long and took it for granted.  A lot of that had nothing to do with the White House.

But this arrogance tag—when Democrats get accused of cultural or economic arrogance, of being the insiders, of being in with Wall Street, it seems to me the Democrats are dead.  They have to own that issue of populism, of economic—We‘re for the little guy, the middle guy...

AXELROD:  Well, look...

MATTHEWS:  ... trying to take on the...

AXELROD:  Chris...

MATTHEWS:  How did the Republican guy with a truck grab from you—they grabbed Jack Kennedy from the Democrats!  He‘s riding around in that truck with Jack Kennedy‘s movies, saying he—I‘m like Jack Kennedy.  How the hell did you guys let him steal your bacon?

AXELROD:  Well...

MATTHEWS:  I‘m sorry.  It wasn‘t you It wasn‘t you, the Democratic Party.

AXELROD:  No, no, no, no.  But I—look, I agree with you.  As I said, I think we were a little late to recognize the potency of his threat.  And he was a very good candidate and he tapped into a lot of things here.

But let‘s talk for a second about what‘s going on in this town because it‘s fine for—for some folks in the Republican Party to stand up and say, you know, they‘re going to stand up for the little guy, but it really matters what you do.  If you—we‘re fighting, for example, to put a fee on banks so that we can get all the money back from the TARP program that the Republican administration started to stabilize the bank system.

MATTHEWS:  Right.

AXELROD:  We helped them out in their time of need.  They‘re doing well now.  They ought to give this money back.  The Republican Party is lining up with the banks.

We‘re fighting to rein in the worst excesses of the insurance industry, that throws people off of insurance when they get sick, that deprives people with preexisting conditions of insurance, that raises premiums—they‘ve doubled in the last decade alone.

MATTHEWS:  Yes.

AXELROD:  They‘re standing with the insurance companies.  So they can talk the talk, but when it comes time to walking the walk, they don‘t do it.  And I‘m happy to have that contest next November, and if the president chooses to run in 2012, and we‘ll see who the real deal is when it comes to standing up for working people.

MATTHEWS:  What about health care?  It seems to me that you‘ve got fewer options.  You have 59 senators now.  But it seems like there is a possible route to passing a big bill before you have to retreat and perhaps go incrementally.

One option might be—I‘ve heard about this.  I‘ll run it by you now.  And I talked about it last night, optimistically.  You get the House leadership to get 218 votes for the Senate bill with the clear proviso that this issue will be revisited this spring with a major reconciliation bill that uses the opportunity in the procedure of reconciliation to address the concerns of the progressive Democrats and others in the caucus.  Do it with two steps and walk away with a big win.  Is that still possible?

AXELROD:  Well, Chris, I‘m not going to talk about the various possibilities because they‘re under discussion right now.  And obviously, members of Congress are speaking among themselves and with their leaders about where they think they are.  We‘re talking to them.

Here‘s what I believe, though.  And you‘ve been around politics all your life.  I think the worst possible outcome would be for us to walk away from this now because what exists right now is a caricature of this legislation.

MATTHEWS:  Exactly.

AXELROD:  People really don‘t understand what‘s in the bill.  And so we‘ll get all the downside of having supported this and none of the upside of the reality of what it really is.  If they pass this bill, next November, every—every Democratic candidate who supported it, or any Republicans who come to their senses, would be able to say, I was the one who made sure that people with preexisting conditions get covered.  I was the one who gave seniors more prescription protection.  I was the one who extended the life of Medicare and capped out-of-pocket expenses.

And so, you know, there‘s a range of things that will become law when the president signs this bill, not in four years, but immediately, that we can campaign on.  But if we don‘t pass the bill, then it‘s going to live as a negative caricature in people‘s minds.

MATTHEWS:  OK.

AXELROD:  Terrible mistake.

MATTHEWS:  OK, here‘s my advice.  It‘s worth what I give you.  It‘s free, and maybe it‘s worth that.  But it seems to me that this administration is perceived to be activist when it comes to government, progressive, if you will.  It believes in positive government.  The only question—and that question will be the same in November.  The voters know that about your administration.  You do believe trying to do good things at the federal level and get things done for the country.  The only question is whether, open to the voters between now and November—is not whether you‘re progressive or not, it‘s whether you‘re effective or not, if you succeed or not.

AXELROD:  Right.

MATTHEWS:  So you might as well go for it.  That‘s my thought.  Thank you, David Axelrod.

AXELROD:  All right.  OK.  Good to be with you, Chris.

MATTHEWS:  It‘s great to have you on.  Thank you for coming on

HARDBALL.

AXELROD:  OK.

MATTHEWS:  Coming up: Does Scott Brown‘s victory up in Massachusetts mean that health care reform is dead, or can the Democrats come up with a Plan B to keep it alive?  We‘re talking about that.  We just did with Axelrod.  Let‘s talk about it with former DNC chair, former governor of Vermont, Howard Dean, one of the guys who started this whole health care push years ago.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Does Scott Brown‘s victory up in Massachusetts mean that health care reform is dead?  House Speaker Nancy Pelosi insisted today that it would pass still.  Let‘s listen to the Speaker.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE:  Heeding the particular concerns of the voters of Massachusetts last night—we heard.  We will heed.  We will move forward with their considerations in mind, but we will move forward for health care.

(END VIDEO CLIP)

MATTHEWS:  OK.  But Republicans, emboldened by their Massachusetts win up there, are branding the Democrats as arrogant for trying to push reform through.  And what‘s more, Democrats from Senator Russ Feingold to Jim Webb down in Virginia to Claire McCaskill out in Missouri are now saying it‘s time to slow down a bit, go incrementally.  So is there a way forward for health care reform?

We‘ve got the expert here in Howard Dean, the former chairman, of course, of the Democratic National Committee and former governor of Vermont.  How do you do it?  How do you win now with 59 senators, not 60?

HOWARD DEAN (D-VT), FORMER GOV., FORMER DNC CHAIR:  Oh, I actually think we might do better.

MATTHEWS:  OK...

DEAN:  You know, 60 didn‘t do us very well.

MATTHEWS:  Pull the rabbit out of your hat.  Pull the rabbit out.  How do you do it?  I mean it.

DEAN:  There‘s a couple of ways.  One, you can put an incremental bill through, if the House votes for the Senate bill.  I think that‘s not likely.  I don‘t see a Senate bill passing with 59 votes.  I just don‘t see that unless you get so incremental that you‘re really not doing much.  And the other thing you can do is go through reconciliation, which we should have done in the first place.  Senator Conrad‘s the chairman of the Budget Committee.  He‘s indicated that he might be willing to do that.  You‘re not going to do entire health care reform...

MATTHEWS:  You think you can get 50 Democrats to vote for that?

DEAN:  We‘ve had 51 Democrats since day one to do a lot more than...

MATTHEWS:  (INAUDIBLE) people like Blanche Lincoln and the other—and...

DEAN:  No, I think you‘d lose Ben Nelson...

MATTHEWS:  ... Pryor, Landrieu...

(CROSSTALK)

DEAN:  You‘d lose her.  You‘d lose...

MATTHEWS:  Both Nelsons?

DEAN:  I think Bill Nelson...

MATTHEWS:  Would you have 51 after what happened yesterday?

DEAN:  Yesterday, the problem was that people wanted more.  We did a poll—Democracy for America did a poll.  Eighteen percent of the people who voted for Scott Brown voted for Barack Obama.  Of those 18 percent, three out of five wanted a public option.  They thought they didn‘t go far enough.  Of the Obama voters that we polled that stayed home, 80 percent wanted a public option.  So this is—the problem here...

MATTHEWS:  Just a minute.  Just a minute, Governor.  There‘s two facts on the table right now.

DEAN:  Right.

MATTHEWS:  The Democratic candidate was for the public option.  She was very aggressive, very progressive.

DEAN:  Right.

MATTHEWS:  Martha Coakley was much more progressive than the president.  She stuck to the line, I want an individual mandate and I want a public option, period.  She said it right through the end, never—never broke from that.  So she took the position you‘re advocating now...

DEAN:  Right.

MATTHEWS:  ... and a lot of people (INAUDIBLE) The other guy said, I‘m going to kill it in its bed.  The voters voted for the guy who said, I‘m going to kill it...

DEAN:  These guys...

MATTHEWS:  So they had an choice between the public option candidate and kill it, and they voted kill it.  So how do you explain this?

DEAN:  These voters were sending a message to Washington.  They asked for change, but they haven‘t...

MATTHEWS:  But she said...

DEAN:  ... gotten change.

MATTHEWS:  ... I want to give you the public option...

DEAN:  We‘ve had a year of...

MATTHEWS:  ... and they said no to her!

DEAN:  ... dealing with every...

MATTHEWS:  Governor, this is...

DEAN:  ... interest group, the banks...

MATTHEWS:  You‘re whistling past the graveyard here!

DEAN:  ... the insurance companies—I don‘t think so.

MATTHEWS:  She ran for the public option.

DEAN:  Our polling shows what it shows.

MATTHEWS:  But she‘s for the public option and she got blown away!

DEAN:  People who were for the—voted for the public—who are for the public option...

MATTHEWS:  Why didn‘t they vote for the candidate of the public option, then?

DEAN:  Because they wanted to send Washington a message.  They want real change.

MATTHEWS:  How about voting for a candidate who supports a position more progressive than the president?

DEAN:  They want real change.

MATTHEWS:  Wouldn‘t that have done it.

DEAN:  Chris, they want real change.

MATTHEWS:  Wouldn‘t that have done it?

DEAN:  You know voters as well as I do, and you know...

DEAN:  No, I‘m just saying, if I go out there and say...

DEAN:  The voters wanted to send...

MATTHEWS:  ... I‘m further—I‘m more progressive than the president, vote for me—and that was Martha Coakley‘s position and they said no.  And the other guy comes along and says, Forget it.  I‘m voting to kill it.  OK.  He‘s calling himself Mr. 41.  This guy—this guy, this candidate, Scott Brown, is walking around, signing his name Scott Brown 41.  I‘ll be the 41 guy who votes for the filibuster.

DEAN:  There are a lot of people outside Washington that don‘t think that bill ought to pass because it‘s too watered down, because it‘s basically...

MATTHEWS:  But not Martha Coakley!  She was all the way for a progressive...

DEAN:  You‘re being silly!

MATTHEWS:  ... public option.  What?

DEAN:  Chris, because you know very well what voters do.  Voters were sending a message to Washington, We don‘t want business as usual.  That‘s what they were sending the message about.

MATTHEWS:  How do you know that?

DEAN:  Because we polled.

MATTHEWS:  But the poll that was...

DEAN:  American Research Group.

(CROSSTALK)

MATTHEWS:  ... official poll, where people had to go into the booth and voted, they had a choice between a public option candidate and a no candidate.  How do you explain that decision?

DEAN:  I just did.  You can‘t know what people do in the booth unless you ask them.  We asked them overnight, and we found out that of the Obama supporters who either stayed home or voted for Scott Brown, they overwhelmingly wanted to do more on health care, not less.

MATTHEWS:  So they were more progressive than the president.

DEAN:  This is not a surprise in Massachusetts.

MATTHEWS:  No, were they more progressive than the president?

DEAN:  That‘s correct.

MATTHEWS:  So on all the issues raised in the campaign—debt, taxes, the arrogance of power, the Democratic Party in Massachusetts, all those issues—where were the voters?

DEAN:  The voters were upset...

MATTHEWS:  Where were they on all those issues?

DEAN:  They were upset by Washington as usual, dealing with special interests, writing a bill that was great for the insurance industry, not doing much about the bankers...

MATTHEWS:  Well, that is your position. 

DEAN:  That is not my position.  That is the voters of Massachusetts. 

MATTHEWS:  You‘ve just defined—you‘ve just said the voters of Massachusetts agree with you, but they voted Republican.  That makes no sense.

DEAN:  Oh, it does make...

MATTHEWS:  If you had been in the voting booth, would you have voted for Scott Brown?  Would you have done this? 

(CROSSTALK)

DEAN:  Of course not. 

MATTHEWS:  Well, well—oh.  But you rationally would not have voted for the conservative Republican, because he‘s against health care. 

But you say the voters are irrational.  They somehow sent smoke signals in their voting.  They vote for a conservative Republican who is totally against health care to tell the country they want a progressive health care program. 

That is crazy. 

DEAN:  We know what they did. 

MATTHEWS:  Are voters crazy?  Are voters crazy? 

(CROSSTALK)

DEAN:  Chris, there‘s only one crazy person around here.  And I may hold up a mirror and you may see him in a minute.  But don‘t be silly.

MATTHEWS:  But you mean that voters—voters vote right-wing Republican to express progressive values? 

I don‘t understand...

(CROSSTALK)

DEAN:  First of all, Scott Brown did not campaign as a right-wing Republican. 

MATTHEWS:  He said, I will kill health care. 

He ran against taxes. 

DEAN:  Yes. 

MATTHEWS:  He subscribed to a more older version of Democratic liberalism.  He was with Jack Kennedy and tax-cutting back in the ‘60s.

DEAN:  Yes. 

MATTHEWS:  He pulled back the clock and said, OK, I‘m back there.  He rode around in the truck and established himself as a populist against the big shots, against the arrogant Democratic establishment of Massachusetts.

DEAN:  Right. 

MATTHEWS:  And it worked.  I‘m just looking at the results.  I‘m not cheering them.  I‘m looking at them.  And you are not looking at them.  You are saying, no matter who won. 

Suppose Coakley had won.  You would have said that was a victory for progressive Democrats, wouldn‘t it?

(CROSSTALK)

DEAN:  No, I would have said, thank God the right person won.

MATTHEWS:  OK.  In other words, if she wins, that‘s a victory for your side.  If she loses, that‘s a victory for your side. 

DEAN:  No, I don‘t think it‘s a victory for our side.

(CROSSTALK)

MATTHEWS:  You said that your side won, because the polling showed the people...

(CROSSTALK)

DEAN:  Chris, I haven‘t hardly said anything.  You have used up all the airtime in this interview. 

(CROSSTALK)

MATTHEWS:  I will let you say it again.  Why do you believe that Martha Coakley‘s defeat meant people wanted a progressive health care bill?

DEAN:  I think people are sending a strong message to Washington.  They want strong leadership.  They want real change.  And they don‘t want to accommodate the special interests. 

And they think, for the last year, that the Democrats have accommodated special interests, not just in health care, but in the banking industry and in Wall Street and these other areas as well. 

MATTHEWS:  So, if you are Scott Brown, and he is listening to this program, he is learning from you that what he really ought to do is back a public option, because people, when they voted for him, were really, secretly for the progressive position, not for him, his position?

Are you saying that is what he should read the voters as saying?

DEAN:  I am saying you are being silly.  And you know very well they are not saying that. 

MATTHEWS:  No.  Well, should he vote for a public option now that he‘s in the Senate?

DEAN:  You know he is not going to do that. 

(CROSSTALK)

MATTHEWS:  But the voters told him—you said the polling showed they‘re for that.

(CROSSTALK)

DEAN:  Let‘s be real about this for a minute.  The public option is dead this year, no matter what happens.  It‘s not coming back.

MATTHEWS:  It would be in his political self-interests to vote for the public option, you‘re saying, wouldn‘t it be?

DEAN:  What I think we ought to do is look forward from this election, Chris. 

MATTHEWS:  No, but you said the polling showed people are for the public option.

DEAN:  Chris, I said what I said.  This is silly.  We‘re not getting anywhere.

MATTHEWS:  No, you are being silly. 

DEAN:  Do you want to look forward or do you want to look backwards?

MATTHEWS:  You are saying that, no matter who wins an election, your argument wins. 

DEAN:  What I‘m saying is, we need a health care bill, a real health care bill, and we ought to continue...

(CROSSTALK)

MATTHEWS:  OK.  Let‘s talk about tactics.  Let‘s get back to where we might agree here. 

What is wrong with trying—I tried this with Axelrod.  I‘m going to try it with you.  Get the House Democrats to tuck it in, take it, pass the Senate bill, as a tactic, move on to a real reconciliation bill this spring, which addresses the concerns of the progressive and others in the Democratic Caucus.  Get that passed.  Use that—use reconciliation for that, not to create a health care plan.  You do that in this bill to fix the problems with it, which you can do with reconciliation.

What is wrong with that approach? 

DEAN:  I don‘t think there is anything wrong with that approach, depending of course what the fix is.  I think they‘re going to have a hard time getting the votes in the House, because I think the progressives are going to be concerned whether...

MATTHEWS:  Well, would they rather walk away with nothing? 

DEAN:  Well, I don‘t know.  You have got to ask them. 

MATTHEWS:  How do you sell—you‘ve been in politics.  How do you run for reelection and say, I really tried to do what I believe in, but I blew it?

Isn‘t it better to say, I got most of what I wanted; I will try for more later?  I got most of what I wanted; I am going to try for more later, isn‘t that a better reelection campaign? 

DEAN:  Most of what the verdict in Massachusetts was—is that we would rather have no bill than what we have got.  That is what the verdict in Massachusetts...

(CROSSTALK)

MATTHEWS:  Well, they did decide they wanted no bill. 

DEAN:  Right. 

MATTHEWS:  They voted for a guy who is going to vote no. 

DEAN:  That is right. 

MATTHEWS:  But it is a strange interpretation you‘re lending to this. 

(CROSSTALK)

DEAN:  The polls don‘t—the polls are what they are. 

MATTHEWS:  OK. 

DEAN:  And you are what you are. 

(CROSSTALK)

DEAN:  So, it‘s all—it‘s the 2,000 people that we polled against—against you. 

(CROSSTALK)

MATTHEWS:  This guy with the barn coat that said I‘m going to vote to  kill the bill won.  I would say that the people who are against the bill won. 

DEAN:  I think that is true. 

MATTHEWS:  Yes. 

DEAN:  But don‘t forget there are a lot of people against the bill who are Obama‘s core base voted against Martha Coakley. 

MATTHEWS:  You know what one of them was?  Martha Coakley was with you, and she lost. 

DEAN:  Yes, well, you know, you‘re welcome...

MATTHEWS:  She was totally with Howard Dean, and she lost. 

(CROSSTALK)

DEAN:  Well, maybe she was or wasn‘t.  I didn‘t follow all the campaign all that closely. 

MATTHEWS:  She votes exactly like you on this issue, with the progressive position, the public option. 

DEAN:  Yes. 

MATTHEWS:  She said she was for that position, and the voters said, no, thank you. 

MATTHEWS:  Now, you have more charm and charisma.  Perhaps you offering yourself in Massachusetts could have done it. 

DEAN:  I would have been a carpetbagger. 

But, listen...

MATTHEWS:  Thank you, Governor. 

DEAN:  ... when I was running, we won our special elections. 

MATTHEWS:  Run for office.

(CROSSTALK)

MATTHEWS:  Would you run for office?  Would you run for office?

(CROSSTALK)

DEAN:  When I was the DNC chair, we were winning those elections.

MATTHEWS:  Would you get Pay Leahy to take a break and let you in there?

Governor Howard Dean, a candidate for the United States Senate one of these days. 

DEAN:  I don‘t think so.  That, I don‘t think so.

MATTHEWS:  Up next:  Does Scott Brown‘s victory mean we‘re going to start hearing more Republicans take on Democratic incumbents in the midterms.  Are going to—some of these business type guys come out of the woodwork with trucks going and run against people?  We‘re going to see.  We‘re going to talk to people when we come back. 

Are some of these guys in trouble?  We‘re going to talk to the head of recruitment for the National Republican Congressional Campaign Committee coming up.

You are watching HARDBALL with Kevin McCarthy.  That‘s how they say it in Massachusetts.  Back with HARDBALL. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

Yesterday‘s victory up in Massachusetts was a big shot in the arm for Republicans, certainly.  What does this mean for the November midterms?

U.S. Congressman Kevin McCarthy is head of recruitment for the National Republican Congressional Committee.  He joins us now from Capitol Hill.

So, how many Scott Browns you got, Congressman? 

(LAUGHTER)

REP. KEVIN MCCARTHY ®, CALIFORNIA:  Well, we have quite a few already filed. 

MATTHEWS:  How many trucks do you have? 

(LAUGHTER)

MCCARTHY:  We are buying a whole new fleet.  No.  We have quite...

(CROSSTALK)

MATTHEWS:  Well, tell me what about it means to you, the whole thing. 

MCCARTHY:  Well, what it means to me, I mean, there‘s three big messages. 

To me, it means this system works.  This political system does work.  You can be an underdog.  You could come from a state that all 10 congressional districts have elected Democrats.  And Scott came across, even won Barney Frank‘s district.  And that means, if you ever thought about chance to be a part of this system and change it for what they think would be better, and I believe them, this is the time to run.  This is the time to engage. 

MATTHEWS:  Do you have a sense that the Democratic senators are worried right now?  You can smell which way which way winds—or tell which way winds are blowing.  Do you think people like Specter and certainly Blanche Lincoln and others on the Senate side are—are, well, scared?

MCCARTHY:  Not only just the Senate side—the congressional side.

I heard it on the floor last night between members.  I watched it today, this morning, talking to different Democratic members.  They‘re nervous.  Some of them saw it coming.  Some of them were walking up to others and said, you were right.  And others were saying, where do we go from here now?

MATTHEWS:  What do you make of the word arrogance?  I mean, I don‘t know whether it is a talking point put out by your party.  But it seems to be true, from my end.  I know Massachusetts politics a bit.  And I do think the Democrats up there have had a problem over the years of being a little too elite, culture elite, being taken too much with the best sort of academic credentials, and thinking that those somehow entitle you to the biggest jobs.  Lower-level jobs entitle you to promotions.

This—apparently, it‘s the first time a Democrat hasn‘t moved up when moving for a higher office in years.  They automatically kick them upstairs, from A.G. to senator, that kind of thing.  Is it arrogance?  Is it cultural, political?  What kind of arrogance is it?  Your party has been using that word. 

MCCARTHY:  Well, I think it is a combination. 

I think, one, it‘s the policy that is happening in Washington right now.  But it is the arrogance and Chicago-style politics and way it is going forward.  If you track the movement of the senator-elect Brown, he started moving in the polls right when the Nebraska deal got cut.  Then, you found, in the—Florida, the Medicare Advantage deal.  That is what the style started coming up.  Then you had this whole idea that it‘s supposed to be transparent, but you wouldn‘t even let the cameras into the room. 

You know, one thing Americans like, they...

(CROSSTALK)

MCCARTHY:  ... an undergo, but they like fairness.  They like fairness in the process. 

MATTHEWS:  OK.  Let me tell you what I know from Massachusetts.  He began to move up when he started going on the air with those really well-done ads showing John Kennedy, back in the ‘60s, the president, who was much more of a centrist, I think it‘s fair to say, than certainly his brother Ted become, much more of a sort of a typical middle-of the-road Democrat, you might say.

And he coming out for tax cuts, which was a revolutionary idea when we still had deficits, to say that this was a way to get rid of the deficits.  For him to run on John Kennedy, doesn‘t that seem a little irony—I mean, ironic for your party, to be running on the most popular—perhaps the most popular president, along with Reagan, in the last 50, 100 years, to be using Jack Kennedy to get elected as a Republican? 

MCCARTHY:  Well, Jack Kennedy talked about tax cuts.  I would argue that maybe this party isn‘t where Jack Kennedy was back then.  That‘s not the same Democratic Party today.

And I think he ran as an outsider.  She ran as part of the establishment.  He was willing to campaign, go out to Fenway, even if it‘s cold, and ask somebody for their vote, shake their hand and talk to them. 

He became a real person.  I mean, the one thing about this election we have to remember, this is an anti-incumbent year.  This is anti-Washington.  And you don‘t want to be a part of Washington.  You want to show you want to be a part of the solution of America to fix the problems. 

MATTHEWS:  Who is your favorite Red Sox pitcher? 

MCCARTHY:  Well, it would be Curt Schilling. 

MATTHEWS:  OK. 

(LAUGHTER)

MATTHEWS:  Thank you very much.  He ought to be at this point.  Thank you. 

He is not there anymore, but he‘s certainly doing the job for your party. 

Thank you, Kevin McCarthy.  Congratulations.

Up next:  Scott Brown‘s victory may be the sign of things to come in the midterms this November.  If Republicans can win in Massachusetts, to paraphrase Frank Sinatra, perhaps they can make it anywhere.  Our strategists on what this means for both parties—or, as they say in Massachusetts, parties.  Which Democrats are on the endangered list?  Let‘s go to who is in trouble right now, after what happened yesterday?

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

BRIAN SHACTMAN, CNBC CORRESPONDENT:  I‘m Brian Shactman with your CNBC “Market Wrap.”

A broad sell-off on Wall Street, as the dollar hits a four-month high against the euro, troubles in Greece of course the cause of that, the Dow Jones industrials tumbling more than 122 points, the S&P 500 down 12, and the Nasdaq shedding 29 points. 

A number of factors boosting the dollar today, at the expense of stock prices, as we just touched on—China taking aggressive steps to curb bank lending, looking really to tamp down its fast growth and poke a few holes in that possible real estate and commodity bubble over there.

Investors dealing with a surprise drop in new housing starts here in the U.S. blaming it on the recent cold snap, economists, though, saying the U.S. still recovery moving at a better pace than in Europe. 

Two companies posting better-than-expected results after the closing bell.  Starbucks beating estimates on both its top and bottom lines and raising its full-year outlook—eBay also topping expectations, both companies‘ shares moving sharply higher in after-hours trading. 

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

HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

So, how many Senate Democrats running for reelection should be worried right now by Scott Brown‘s victory? 

Let‘s bring We bring in the strategists on both sides, Democrat Steve McMahon, Republican Todd Harris. 

Republican Todd Harris, I will just call you Republican Todd Harris all night. 

TODD HARRIS, REPUBLICAN STRATEGIST:  Happy with that. 

MATTHEWS:  Who are you gunning for?  Let‘s go, without using ballistic references here, Harry Reid in Nevada, Blanche Lincoln in Arkansas, Arlen Specter, the new Democrat in Pennsylvania, Evan Bayh in Indiana, Mark—

Feingold in Wisconsin, Patty Murray out in Washington State.

Who is in trouble?  Who is the biggest—who‘s your easiest ones to knock off? 

HARRIS:  I think Reid is in real trouble.  Specter is in real trouble.  Lincoln is in real trouble.  When Democrats start losing in places like Massachusetts, Democrats start retiring in places like Arkansas, Nevada, other swing states, Colorado.

MATTHEWS:  You expect—oh, do you expect people of this caliber to start quitting now, rather than face a hellish nine months?

HARRIS:  I would be surprised if Reid would, because he‘s going to be able to bring so many resources to bear.  This is going to be such—probably the most expensive campaign ever in Nevada history.  I would be very surprised if he did.  But he is very vulnerable—three Republican challengers with very, very little name I.D. in Nevada, all three of them beating him right now in head to heads. 

MATTHEWS:  Steve, what does a Democrat do?  What is the big message on the inside playing defense after last night, watching what happened up there?  They used the word arrogance a lot, a lot of the Republicans.  They want that to be the spin—not ideology, arrogance. 

STEVE MCMAHON, DEMOCRATIC STRATEGIST:  Right.  Right. 

One of the big challenges for an incumbent, particularly one who has been around for a while, is convincing voters that they haven‘t gone Washington, and they still understand the problems of average families. 

I don‘t think...

MATTHEWS:  They know the baseball players on the local teams?

MCMAHON:  Exactly. 

(LAUGHTER)

MCMAHON:  Exactly. 

And they understand that people who are paying for their groceries are having a hard time and people who are getting squeezed in other ways are having a hard time. 

(CROSSTALK)

MATTHEWS:  Should they buy a truck and drive around in a barn coat, like this attractive Republican candidate? 

MCMAHON:  Well, actually, I think Todd...

MATTHEWS:  It worked.

MCMAHON:  I think it is wishful thinking on Todd‘s part.  You have three Republicans in Nevada. 

MATTHEWS:  Nevada.  First of all, pronounce it right. 

(CROSSTALK)

MCMAHON:  Nevada.  Nevada.  Nevada. 

(CROSSTALK)

MATTHEWS:  You say Nevada. 

(CROSSTALK)

MCMAHON:  By the time the Republican primary is over, they going to cut each other to ribbons, and Harry Reid is going to look a lot different, because he‘s going to have an open field to explain to folks what it is he has been doing, how it is he has been helping them. 

And, frankly, a lot of that has gotten lost lately because health care reform has dominated all of the conversation.  The campaign season is about to start.  These guys get it. 

MATTHEWS:  OK

MCMAHON:  They saw the message last night, and they‘re ready for it.

MATTHEWS:  What is easier for you guys on the Republican side?  Maybe you won‘t give this away, but maybe you will. 

Is it better for you if the Democrats keep fighting for a real health care bill, even if they do it through the Senate accepting—or the House accepting the Senate bill, and then doing later some kind of reconciliation, or if they chop it to pieces and do the easier stuff that sells with both parties?

What is the smarter move for the other side, the harder target for you to hit?

HARRIS:  I hope—with all due respect to Governor Dean, I hope they do exactly what Howard Sean said on the show tonight. 

STEVE MCMAHON, DEMOCRATIC STRATEGIST:  Hey, hey, hey.  That‘s my guy. 

Let‘s stop. 

HARRIS:  What happens in November will be largely determined by what lesson the Democrats learn.  And if you listen to Governor Dean, you listen to Nancy Pelosi, the lesson that they are taking from this is that we didn‘t go to the left enough, as if their problem in Massachusetts was that they couldn‘t motivate the Democratic base. 

MCMAHON:  That wasn‘t the problem. 

HARRIS:  The problem was that Independents basically, not basically, Independents completely turned their bags on the Democratic Party. 

MCMAHON:  That was another problem. 

HARRIS:  And in a state like Massachusetts, maybe if you turn out your entire Democratic base you can negate the fact that the Independents have abandoned you.  But in real swing states if Independents do in the Rocky Mountain states what they did last night in Massachusetts, it‘s going to be a very, very ugly November. 

MCMAHON:  There‘s no question after watching New Jersey and Virginia, where Independents went for Republicans by 30 points and now watching Massachusetts, where the latest polling had Martha Coakley losing Independents by 40 points.  There‘s a real a wakeup call for Democrats right now.  And they understand that. 

MATTHEWS:  How do you play defense? 

MACMAHON:  Well, you have to play a little bit of defense, but you got to play a little bit of offense.  And Howard Dean is right about this.  There was not very much enthusiasm for Martha Coakley, among the Democratic regulars in Massachusetts.  The liberal left—

MATTHEWS:  But she very progressive. 

(CROSSTALK)

MCMAHON:  She was progressive but—

MATTHEWS:  She‘s what Howard Dean and you guys want.  All the way. 

MCMAHON:  She was very progressive but for some reason she didn‘t connect with folks.  And by the time President Obama got there—and Obama went in with a 60 percent approval rating in Massachusetts and came out with a 60 percent approval rating.  But the time he got there he couldn‘t motivate the base.  You cannot be a Democrat and win elections if you are disconnected from your base.  You also cannot be a Democrat and win elections if you get beat among Independents by 40 points. 

MATTHEWS:  Here‘s my question.  If the Democrats saw the tsunami coming over the weekend, and everybody knew it was coming, that this guy was an attractive candidate, he was doing well in the polls, why didn‘t they come out and vote and save their Democratic candidate?  When the President asked them to do it, Bill Clinton asked them to do it.  Everybody came up there and said this is important.  They didn‘t vote. 

Why not? 

MCMAHON:  We‘ve talked about this before.

MATTHEWS:  But why didn‘t they vote?

MCMAHON:  Well, because there‘s two ways to run.  And you and I have talked

about this.  There‘s the left/right, and you can run on that axis.  Am I

more liberal or more conservative.  Or, inside/outside.  This year,

inside/outside is more powerful.  He ran as an outside against an insider -

-

MATTHEWS:  But why didn‘t the Democrats vote to save their candidate?

MCMAHON:  Because the outsider message was appealing to Democrats.   He got 24 percent of the Democrats to vote for him.

HARRIS:  Because the Democratic base is dispirited and Independents are mad as hell because they don‘t see any change in Washington. 

I‘ll tell you one state to look for over the next several weeks to see how this all plays out is Delaware.  If there was one lesson from Massachusetts, this whole idea this was Ted Kennedy‘s seat.  In Delaware, this is the Biden seat.  You know, Mike Castle very, very strong candidate.  And for Beau Biden, if his rational is this is the Biden seat.

MATTHEWS:  Who said he would ever do that? 

HARRIS:  Well, that‘s how Democrats in Delaware are talking. 

(CROSSTALK)

MATTHEWS:  First of all, he just came back from serving his country over there in Iraq. 

HARRIS:  I‘m not saying he‘s not an honorable man.

MATTHEWS:  First of all, one thing the Bidens aren‘t is arrogant. 

HARRIS:  Well, he‘s going to be a rubber—

MATTHEWS:  We‘ll be right back. 

HARRIS:  -- a rubber stamp.

MATTHEWS:  Thank you, Steve McMahon.  Thank you Todd Harris.

He‘s not going to be a rubber stamped.

Up next, who‘s to blame for the Democrats‘ big defeat in Massachusetts?  Martha Coakley?  Health care?  President Obama?  The national Democrats?  We‘ll get to the blame game which is always sort of weirdly fun in this business. 

This is HARDBALL only on MSNBC. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP) 

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY:  I think there are a lot of people that bear responsibility for some aspect of what happened last night. 

(END VIDEO CLIP)

MATTHEWS:  Well, as John Kennedy once said victory has 100 fathers; defeat is an orphan.  Which I think is so true.  White House Press Secretary Bob Gibbs right there—Robert Gibbs says there‘s lots of blame to go around.  Yes, we know that.  The finger pointing is fierce.

Terry O‘Neill is the president of NOW—National Organization for Women. 

And Sam Bennett is President of Women‘s Campaign Forum. 

Well, thank you both for joining us.

Terry, you—this is a tough one because a lot of people thought that I think there are going to be a lot more women in the United States Senate over time.  I think it‘s really coming.  And I thought this was going to be one of them. 

TERRY O‘NEILL, PRESIDENT OF NOW:  Me, too. 

MATTHEWS:  OK.  So what happened?

O‘NEILL:  Well, I‘m glad she won and I‘m sorry she lost.  I think what happened this election was a referendum on politics as usual, on business as usual inside the beltway.  I think it is a referendum on change that has not happened.  I think—

MATTHEWS:  So it is about Washington, not Massachusetts? 

O‘NEILL:  Absolutely. 

MATTHEWS:  OK.  What‘s your thinking, Sam? 

SIOBHAN “SAM” BENNETT, WOMEN‘S CAMPAIGN FORUMATTHEWS:  Hey, you know first I‘ve got say, we need a hell of a lot more women in elected offices in this country.    You know—

MATTHEWS:  Well, the Senate‘s the classic opportunity. 

BENNETT:  Classic opportunity for that.  But the bottom line is two things in my mind happened here.  Number one, double standard.  Her opponent nude, male centerfold gets a total pass. 

MATTHEWS:  That‘s a tought.

BENNETT:  And here‘s Martha Coakley called ice queen.  If she was a guy, Chris, she would have been called dignified.  And the other thing -- 

MATTHEWS:  And if she had done the centerfold. 

BENNETT:  She wouldn‘t have even been in the race.  Wouldn‘t have even happened.

MATTHEWS:  That would have been emabarsing. 

BENNETT:  That would have been more than—it would have been a deal killer for her. 

MATTHEWS:  It‘s so interesting.  So what is that about? 

BENNETT:  It‘s about a double standard.  It happens all the time. 

MATTHEWS:  This is sort of a man bites dog aspect—a male centerfold.  Let‘s face it.

(LAUGHTER)

MATTHEWS:  Do you have numbers on the women response?  Because I thought—

I said before we went on.  Hillary won Massachusetts in the primary. 

BENNETT:  Right.

MATTHEWS:  But most voters are women. 

BENNETT:  Right.

MATTHEWS:  Right?  So why didn‘t a woman candidate win? 

BENNETT:  Well, the thing is, it doesn‘t mean a woman is going to vote for a woman just because she‘s a woman.  That is not what happens here. 

MATTHEWS:  Even when the there is a backlog of not having enough women in the Senate? 

BENNETT:  Yes.  The women in this country have not made that connective tissue.

And the other thing that happened in this race, Chris, was independent expenditure.  I do not care how well your race is run.  I don‘t care how good of a candidate to you.  If a million bucks—millions and millions— comes down on your head in the final couple of weeks of your race when you don‘t have the bandwidth to respond, or the financial means to respond, you‘re in trouble. 

MATTHEWS:  Would you two years from now run Martha Coakley for the Senate in Massachusetts? 

BENNETT:  Without any hesitation. 

MATTHEWS:  In two years. 

Would you?  Let me go back to you. 

O‘NEILL:  Absolutely.  In a heartbeat.  She‘s eminently qualified.  She‘s a great candidate.

MATTHEWS:  So you‘d have a rematch? 

O‘NEILL:  Absolutely. 

BENNETT:  Love it. 

MATTHEWS:  And how would you run the campaign differently? 

(LAUGHTER)

MATTHEWS:  I‘m trying to get you to say something here. 

O‘NEILL:  Raise more money.  Make sure you‘ve got something into it. 

Any Democrat that‘s going after her right now, look in the mirror first.  Where were you when she was 30 points ahead in the end of December?  A couple of weeks ago she was 30 points ahead in the poll. 

MATTHEWS:  OK.  Let‘s get to the technical charges.  She took vacation during Christmas, took a  couple of weeks off, right before this general election.  Was that smart before the special?

I mean, I‘m going after what‘s his name—that guy—up in—now he‘s going to be mad at me because I forgot his name.  The guy up in Connecticut who beat Joe Lieberman?

(LAUGHTER)

MATTHEWS:  He took off -- (INAUDIBLE)

Why do these Democrats take vacations after they win primaries?  I don‘t get it.

BENNETT:  And you know, I think Debbie Wasserman Schultz said it best last night.  The primary is not the general.  You can‘t confuse the two.  But the bottom line is  she wasn‘t a perfect candidate.  But guess what?  She was a terrific candidate, eminently qualified.   Double standard, independent expenditure.

MATTHEWS:  Here‘s another (INAUDIBLE).  You shouldn‘t need a perfect candidate in Massachusetts if you‘re a Democrat. 

BENNETT:  Right. 

MATTHEWS:  You come in there with an edge, right? 

O‘NEILL:  Not anymore.  Not anymore.  You‘ve got more Independents in Massachusetts than Democrats or Republicans.  And that‘s what showed in this election.  People are beginning not to trust the Democrats.  They ran on a program of change in 2008.  That‘s what people voted for, that‘s what they‘re getting. 

MATTHEWS:  OK.  Are you for all women candidates, or just Democratic women candidate now?

BENNETT:  We‘re both nonpartisan. 

(CROSSTALK)

MATTHEWS:  So, Kay Bailey in Texas, the attorney general up in New Hampshire?  You‘re for both those candidates who are women?

O‘NEILL:  Kay Bailey Hutchinson in Texas, absolutely not.  She‘s opposed to women rights and we would never support her.  But nonpartisan. 

(CROSSTALK)

MATTHEWS:  I think Kay Bailey Hutchinson is pro choice, isn‘t she? 

O‘NEILL:  She has not sufficiently good on our issues to—

(INAUDIBLE). 

MATTHEWS:  Well, thank you.  You heard it here.  Terry O‘Neill, thank you. 

Sam—pronounce that name.

BENNETT:  Siobhan is my first name.  Good Irish name.

MATTHEWS:  And when we return, President Obama‘s first year ended badly, I guess, with last night as a verdict.  What‘s in store for him this year.  You‘re watching HARDBALL.  We‘ve got a few more minutes on HARDBALL tonight.  It‘s been an interesting morning after.  Only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  President Obama has been in office for exactly one year.  The health care fight continues and the Republicans will soon have 41 Senate votes.  What‘s in store for year number two? 

Chris writes “The Fix” for the WashingtonPost.com and Joan Walsh is Editor in Chief of Salon. 

Chris and Joan, it seems to me there‘s been a comparison between what we had yesterday in Massachusetts, and the one held in Pennsylvania, when Harris Wofford knocked off Richard Thornburgh, in that incredible race in ‘91.  Is this has much of a leader, an indicator, of just where we‘re headed—Joan—for this November? 

JOAN WALSH, SALON:  You know, I‘m not sure it is but I do want to say I‘ve spent the last week, Chris, saying, Martha Coakley ran a bad campaign, but we really do have to look at what this means for Democrats.  And I think that‘s the first and foremost thing that it means is that President Obama has simply not led. 

He let the Republicans run this health care agenda.  People want to blame Harry Reid and Nancy Pelosi?  He turned it over to the Senate‘s Finance Committee, he gave Republicans their marching orders, he gave them rope to hang him and that‘s what they did.  That‘s why we‘re still talking about this a year after his inauguration. 

MATTHEWS:  So he‘s been ineffective? 

(CROSSTALK)

MATTHEWS:  He‘s been an effective progressive? 

WALSH:  Oh, please, don‘t set me off today, Chris.  I know you‘re feisty.  I‘m really feisty.  That‘s the one thing I will be here to say. 

This is garbage that he bowed to his left.  This is a corporate bill with corporate giveaways that the left is pissed about.  That‘s the problem with it.  And I‘ll finish Howard Dean‘s sentence.  One more thing.  Howard Dean was trying to say—I don‘t agree with him on everything.  Martha Coakley lost the progressives because nobody cares that she‘s for the public option.  That is dead and gone because the President didn‘t fight for it. 

So the idea that he went too far to this left is simply, factually wrong.

MATTHEWS:  No, I‘m just asking whether Martha Coakley was the Progressive candidate out there and what she stood for.  It sounds like she was addressing the issue the way you might do, had you been a candidate and I just wonder why the defeat of her didn‘t signal a lack of favor for the position, is all I‘m asking.  I‘m trying to learn here.

WALSH:  I disagree.  If you want to keep going with me, I will answer that.  First of all, I would have been in a truck (ph).  I would not have gone on vacation; I would have worked my but off. I find it problematic that she didn‘t.  But I also think that she was saddled with the fact that this bill, as written, is a done deal.  The other thing that is important in Massachusetts, Chris is that the president did cut a deal with Ben Nelson, which penalized progressive states like Massachusetts..  I heard this from my progressive friends.  We have great health care here - it‘s got problems.  But we‘ve made the extra effort and paid the extra money to do something progressive.  And then you‘re going to sell out to Ben Nelson and Nebraska, one of the least progressive states in the nation?  So there‘s a progressive narrative here. 

Chris, you might hear a different message than that from some of the politicians in Massachusetts that I‘ve been talking to in the last 24 hours.  But I‘m not going to give their message; let them give it.

Chris Cillizza, what‘s the difference between what happened yesterday and what‘s going to happen in November?  Is this an indicator of big trouble for the Democrats if they run candidates like Coakley, if they talk like Coakley, if conditions are like they are now?

CHRIS CILLIZA, THE FIX:  I don‘t know if we knew what Wofford presaged what it wound up doing until we look back.  It‘s kind of like 1993, Ron Lewis in Kentucky wins a special election in a Democratic-held seat, we look back after ‘94 and say, obviously Ron Lewis was a harbinger of things to come.  The one thing that I think is very worrisome if you‘re a Democrat, about November, it‘s not certain that this is going to happen but independents.—independents in Virginia moved away from the Democratic candidate. 

Independents in New Jersey - I‘m talking about the governors races in 2009

moved away from the Democratic candidate. 

We don‘t have exit polling here in Massachusetts, but I talked to lots of strategists, lots of people who were polling privately for the two candidates and the two parties.  Brown won overwhelmingly among independents.  That is a problem that the White House has to address.  They‘ve gotten by by saying, look, the president is still popular with independents.  Maybe, but his policies are not that popular with independents.  It‘s a huge problem if it continues. 

And I think Joan is right.  If it continues, I don‘t think we can say, yes, today, this means that Democrats are going to lose the House or lose nine or ten seats in the Senate.  We‘re not there yet.  But it‘s not a good sign if you‘re a Democratic strategist or an elected member of congress.

MATTHEWS:  Joan, would you run Martha Coakley again in two years against Scott Brown?

WALSH:  Not unless she really changed her whole approach to politics.  I

really think she needed to be much more people-centric, she really need to

hear  -- here‘s the thing, Chris, she - Obama - I was listening to 

David Axelrod and it was really annoying -

MATTHEWS:  I‘m out of time, Joan.  I‘m sorry.  We‘ll have you back again, and again, and again.

Joan Walsh, thank you.  Chris Cillizza

Join us again tomorrow at 5:00 and 7:00 Eastern.

Ed Schultz, coming up now the THE ED SHOW.

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