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updated 8/20/2010 11:51:59 AM ET 2010-08-20T15:51:59

Guest Host: Lawrence O‘Donnell

Guests: Charles Cook, Jane Wells, Pat Buchanan, Eugene Robinson, Michael Smerconish, Chris Cillizza, Rev. Al Sharpton, Carol Marin, Josh Gerstein

LAWRENCE O‘DONNELL, GUEST HOST:  President Obama says he has no regrets.

Let‘s play HARDBALL.

Good evening from New York.  I‘m Lawrence O‘Donnell, in for Chris Matthews.  Leading off tonight: The prospects for Democrats in November just got dimmer.  Charlie Cook of “The Cook Political Report” has adjusted his House forecast for the mid-terms, and it‘s not good news for Democrats.  Charlie‘s predicting a Republican net gain between 35 and 45 seats, with exactly 39 pick-ups needed for Republicans to take control.  We‘ll hear from Charlie Cook at top of the show.

Plus, Glenn Beck and Sarah Palin are planning a big rally on the steps of the Lincoln Memorial later this month, 47 years to the day after the Reverend Martin Luther King delivered his “I have a dream” speech in the same spot.  Many Civil Rights leaders are not happy about it.  The Reverend Al Sharpton will tell us why.

Then, one day after Rod Blagojevich was convicted on only one of 24 charges against him, we‘re learning more about what the jury was thinking, and it nearly turned out very differently for Blago.

And damage control.  White House chief of staff Rahm Emanuel has spent three days on the phone trying to quell the anger from Democrats who say they were blind-sided when President Obama weighed in on the mosque near Ground Zero.  We‘ll get the latest palace intrigue from inside the West Wing of the White House.

And finally, what does Nevada Senate candidate Sharron Angle have in common with George Washington, Thomas Jefferson and Ben Franklin?  You‘ll find that out in the “Sideshow.”

Let‘s begin with Charlie Cook of “The Cook Political Report” and Chris Cillizza of “The Washington Post.”

Here‘s the situation in the House, Charlie.  With 76 days to go, there‘s the Democratic majority is currently at 255, with 178 and a vacant seat on each side.  The Republicans need a pick-up of 39 seats to be in control.  The newest projection from Charlie Cook and his team, the Republicans will gain 35 to 45 seats.

Charlie, I‘m just baffled at how you do it.  With hundreds of congressional districts out there—first of all, how many do you have to analyze to get to this?  Because a certain amount of them are just—just off the map, and there‘s nothing to think about.  We already know the outcome.  How many do you have to analyze to get down to the zone that‘s in play?

CHARLES COOK, “COOK POLITICAL REPORT,” NBC POLITICAL ANALYST:  Well, you‘re (ph) exactly the point, and that‘s why we look at—you know, you start off with a pool of 150 or so districts that could potentially become competitive, and you know, you winnow and sift them down.  You‘re looking at the candidates.  We meet with the candidates.  We talk to their campaigns.  We‘re looking at the polling data in individual races.

Chris used to work with us.  We‘ve got David Wasserman (ph), our House

editor now.  And what we do is, we‘re looking—you know, we can let the

macro, the national dynamics kind of flag what kind of year it‘s going to

be.  Then you bear down—you bore down on the individual districts

And what we‘ve found is there are just more and more districts that looked safe for Democrats, say six or eight months ago, that started looking shaky, and now we‘re seeing hard data where the Democrats are running—you know, Democratic incumbents are running even or even 5 or 10 points behind.  We generally don‘t move them into the toss-up column until we see hard data, and we‘ve had 10 races in the last week that we‘ve moved from safer categories into either lean Democrat or into toss-up on the basis of hard data.

So this isn‘t just licking your finger and sticking it up in the air.  This is—we‘ve been—perfected this over 26 years and have gotten pretty good at it.

O‘DONNELL:  Chris, just give us an objective outsider‘s look now at how “The Cook Report” is greeted in Washington.  When it comes out with this kind of news, do both parties take it seriously?  Do they just look at their own data, or is Charlie‘s report studied so closely because it‘s the only one in town?

CHRIS CILLIZZA, WASHINGTONPOST.COM:  Well, first of all, let me say I‘m biased because, as Charlie mentioned, everything I know about politics, literally, I learned from Charlie and Amy Walter and Jennifer Duffy (ph), who were over there when I was there.

Look, I think there‘s—Charlie and Stu Rothenberg are the two bit political handicappers in this town.  I will tell you for a fact, 20-plus people e-mailed me, immediately forwarded me the e-mail that “Cook Political Report” sends out with the 35 to 45 prediction.  It absolutely, absolutely sets sort of the line, in a way, Lawrence, you know, sort of where people are seeing it.

When Charlie and/or Stu say this is—the majority is shaky, 35 to 45, clearly, you know, a lot of that margin is up there in the Republicans taking over.  They need 39 seats.  It moves people.  It makes Democrats worried.  If you‘re a Democratic member of Congress and Charlie moves you from lean Democrat to toss-up, I will tell you that the next few days for you are not good ones.  So yes, absolutely influential.

I‘ll tell you, just from my own reporting—look, I have a political blog.  I pay very, very close attention to that stuff because I know these guys and I know how much time they spend with it.  I know their independence, and I know that they‘re—been right.  You know, go back and look at their track records.  That‘s what I always say, go back and look at the track records.  They‘ve been right about this stuff a lot more than they‘ve been wrong.

O‘DONNELL:  What do you find is moving the numbers here?  Is it all local issues, or are there some larger national issues?  Is the noise about the mosque a factor in any of this?  What‘s behind the movement?

COOK:  Oh, none of the—the mosque doesn‘t have anything to do with any of this because it‘s happened too recently.  We don‘t have any sort of post-mosque district-level data.

But you know, what we‘re looking at, I mean, on a national level, if you were going to build a profile for where are Democrats likely to lose the most seats, you‘d say the South, the border South, the Midwest.  It‘s districts that are more small-town, rural, exurban, not so much urban or suburban.  It‘s older voters, maybe a little less likely to be college educated, working class.

And what we‘re seeing is independents who voted for Democrats by an 8-point margin in 2008, by an 18-point margin in 2006 -- you know, they‘ve been citing the Gallup poll by—going Republican by a 10-point margin.  It‘s intensity, with Democratic voters lethargic, Republican voters energized.

And then, frankly, now that the campaigns are starting to engage, what you‘re probably going to start seeing is when you‘ve got a hundred-mile-an-hour tailwind at your back, everything seems to work.  And when you have that wind in your face, nothing seems to work right.  And that‘s probably what—I think that‘s probably what you‘re going to start seeing over the next months ahead.

But we‘re going with hard data, what‘s actually in, what we‘ve seen so far, and it‘s not a pretty sight and it‘s a lot like what Republicans were facing in ‘06.

O‘DONNELL:  All right, let‘s...

CILLIZZA:  And...

O‘DONNELL:  Go ahead, Chris.  Go ahead.

CILLIZZA:  Look, I was just going to say—Charlie talked about environmental factors.  I would—for everybody watching out there, I would point to two things.  One, President Obama‘s job approval rating broadly, lowest approval rating 41, highest disapproval in Gallup since his presidency started.

The other is the generic ballot number.  That‘s essentially the

question, Would you support a generic Democrat or a generic Republican for

Congress?  At this point in 1994 -- we know what happened in 1994 to

Democrats.  They had a larger generic ballot lead than they do today.  It

doesn‘t—they are sort of mild predictors, but you look at those numbers

and as Charlie points out—you match those numbers up with raw polling data we‘re seeing from districts, what we‘re hearing from the committees, and it suggests that something is building out there.

O‘DONNELL:  All right.  The question now is, what can Barack Obama do about these mid-terms?  Let‘s take a look at the Obama political travel map this week.  He started in Wisconsin this week, and then he went to California, Washington state, then to Ohio, now he‘s in Florida.

Charlie, what does this tell us?  Is this about trying to hold onto what they already have, or when he‘s going out to places like California, isn‘t he going into places that look pretty safe for the Democrats?

COOK:  Well, I think what the president‘s doing is he‘s raising money, and it‘s where does the party need money?  Where do the party‘s candidates need money?  And you‘ve got Washington state, for example, Patty Murray‘s in a dead-even race, and that was a—that was a contest that we weren‘t even looking at so much eight or nine months ago.  Barbara Boxer in California, a dead-even race.  Certainly, in Florida, it‘s a challenging situation with a big governor‘s race and a Senate race.  I should have mentioned governor‘s race in California, as well.  Wisconsin, big governor‘s and Senate race there.

I mean, he‘s going—this is about money, it‘s not about politics.  It‘s about, you know, getting as much money to help your candidates and the party insulate itself in what‘s almost certainly going to be a pretty tough year.

O‘DONNELL:  But the president is out there.  He‘s making speeches.  He‘s trying to help in the mid-terms.  Let‘s listen to what President Obama had to say in Ohio today.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  The Republicans are up there looking at us, sipping on their slurpees.

(LAUGHTER)

OBAMA:  You‘re not pushing hard enough!  And then finally, we get this car up on level ground and it‘s ready to finally move forward, and we feel this tap on our shoulders.  And we turn around, and it‘s those Republicans.  They‘re saying, We want the keys back.

When you want your car to go forward, what do you do?  You put it into

“D.”

(LAUGHTER)

OBAMA:  When you want it going backwards, what do you do?  You put it into “R.”

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

O‘DONNELL:  Chris Cillizza, he‘s got the Republicans sipping on their slurpees, just watching the Democrats do all the hard work the country needs.

CILLIZZA:  Yes.

O‘DONNELL:  What‘s happening to Obama rhetoric here?  What about those famous speech writers he has in the White House who write that—those elegant speeches for him?

CILLIZZA:  Well, would I say, first of all, let me agree with Charlie on the fund-raising point, Lawrence.  But I would say one thing I do think that the Obama White House is hoping to get out of this.  They are churning out some new lines.  I think he‘s really trying to make—his rhetoric is clearly more pointed than it‘s been.  Democrats, congressional Democrats, will breathe a sigh of relief.  They had always said Obama is not engaging enough.  He needs to cast this more as a choice than a referendum.

This is not—whether the rhetoric changes a little bit, though, the message is still the same.  The Republican rhetoric and message is, This is a referendum on Barack Obama and a Democratic-led Congress.  The Democratic message is, This is a choice.  Do you want what we‘ve done, which may not be popular but it was necessary, or what in 2006 and 2008 you rejected from Republicans?

Traditional mid-terms suggest that it‘s almost always, particularly a first term mid-term, which this is for Barack Obama—suggest that the referendum is more likely than choice.  But in truth, the White House and the president only have so many ways to go here.  You know, I think they need to try to make it about Republicans.  That doesn‘t mean it‘s going to be successful.

O‘DONNELL:  All right, let‘s listen to how the president continues to try to make this about Republicans.  This is the president on Monday in Wisconsin.  Let‘s listen.

(BEGIN VIDEO CLIP)

OBAMA:  You remember when I was running, we had a little slogan, “Yes, we can.”  These guys‘ slogan is, “No, we can‘t.”  No on closing loopholes for companies that ship jobs overseas, no on the tax cuts for small businesses, no on the clean energy jobs, no on the railroad and highway projects.  Just this weekend, the Republican leader in the Senate said—this is a quote from the Republican leader in the Senate—“I wish we had been able to obstruct more.”  Obstruct more?  Is that even possible?

(LAUGHTER)

(END VIDEO CLIP)

O‘DONNELL:  Charlie Cook, can the president win swing voters with that rhetoric?

COOK:  I don‘t think so.  Swing voters, they don‘t—they‘re kind of like if you went on a cruise and you get on the ship and the gangway pulls away and you realize it‘s not going where you thought it was going.  It‘s not the cruise you signed up for.  And independent voters are not happy right now.  They are among the most disapproving of Congress.  The president‘s approval rating among independents is down to about 38, 39 percent.

Independents are not happy campers, and while they don‘t vote quite as much in mid-term elections as presidential years, they still represent a pretty good chunk of the electorate.  But what I tell my Republican friends is this is a bad news/good news situation.  The bad news is voters don‘t like you, and they haven‘t forgiven you.  The good news is this election isn‘t about you.

O‘DONNELL:  Thank you, Charlie Cook and Chris Cillizza.

CILLIZZA:  Thank you.

O‘DONNELL:  Coming up: A rally planned by conservative talk show host Glenn Beck has raised the ire of Civil Rights leaders.  Beck‘s holding his “restoring honor” rally on the anniversary of Martin Luther King‘s “I have a dream speech” on the steps of the Lincoln Memorial, the same place Dr.  King gave his speech.  We‘ll talk about it with the Reverend Al Sharpton and our own Michael Smerconish next.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

O‘DONNELL:  Results now from last night‘s primary in Washington state.  And keep in mind it‘s a unique top two state, meaning the top two finishers advance to the general, regardless of party affiliation.  Democratic incumbent senator Patty Murray finished first with 46 percent.  Republican Dino Rossi came in second with 35 percent.  And a tea party candidate backed by Sarah Palin finished a distant third.  That means it‘ll be a match-up between Murray and Rossi in November.  Rossi, who lost two tight races for governor, could be a tough opponent for Senator Murray in a state that Democrats need to hold.

We‘ll be right back.

(COMMERCIAL BREAK)

O‘DONNELL:  Welcome back to HARDBALL.  Ten days from now marks the 47th anniversary of the Reverend Martin Luther King‘s “I have a dream” speech at the Lincoln Memorial.  There‘s going to be a rally that day on the steps of the Lincoln Memorial, and it will be led by Glenn Beck.  Here‘s Beck talking about it on his radio show back in June.

(BEGIN VIDEO CLIP)

GLENN BECK, HOST, “GLENN BECK”:  I‘m standing at the Lincoln Memorial on 8/28.  The government is trying to now close the Lincoln Memorial for any kind of large gatherings.  This may be the last large gathering ever to assemble at the Lincoln Memorial.  Historic!  Historic.

(END VIDEO CLIP)

O‘DONNELL:  The Reverend Al Sharpton is the president of the National Action Network.  And syndicated radio host Michael Smerconish is an MSNBC contributor.

Reverend Sharpton, historic—Glenn Beck is right about that, isn‘t he?

REV. AL SHARPTON, NATIONAL ACTION NETWORK:  I don‘t know.  I don‘t know if it‘s the last gathering or not.  I think that, clearly, that day, a day that we in the Civil Rights community—many of us who were too young, some not even born when the ‘63 march happened—we always recognize it.  Two years ago, it was a big breakfast that I and two of Dr. King‘s kids spoke at, at the DNC convention.  In Denver last year, in churches.  This year, we‘ll be marching from a school in Washington to where the King monument will be built.

It‘s a historic date for us because it was the day he, Dr. King, talked about his dream, a dream that a lot has been achieved and then a dream that a lot has not been achieved.  And we‘ll be dealing with it that day in Washington.  I have no idea why Mr. Beck chose that day or that site.

O‘DONNELL:  Reverend Sharpton, I have to ask you, how did this happen?  And by that, I mean why didn‘t some other group with a real connection to Dr. King have that time and that day reserved for something to commemorate Dr. King‘s speech?

SHARPTON:  Well, it‘s a good question.  But like I said, two years ago, we went to Denver.  Last year, it was in churches.  This year, when we decided we wanted to go to Dunbar High School and then march to the monument, the thinking was we wanted to focus on the structural inequality that‘s still left to achieve Dr. King‘s dream—the area of education, health care, jobs.  There‘s a real problem of jobs.

And we wanted to march to the monument grounds that is being built and will one day have the monument there for Dr. King, to show marching into the future.  That was our thinking in National Action Network and the groups that are working with us.

But I think you raise a good point.  And I think, again, we‘re not reacting to Beck.  We had announced this in April.  We‘ve been organizing around that.  When I found out about Beck, I thought it was a very ironic choice for him to go there on that date, and particularly when you look at the fact that there‘s some reports that one of his co-convenors is the National Rifle Association.  That‘s interesting, because both Lincoln and Dr. King were killed by gunfire.

So, it‘s a very interesting choice for them.  And I just hope they read Dr. King‘s speech before they go, if they are going to at all refer to the significance of that day. 

O‘DONNELL:  Michael Smerconish, before I get your reaction to what Glenn Beck is doing here, I just want you to listen to a little bit more of what he had to say about this, explaining himself in June.  Let‘s listen to what he said his intention is. 

(BEGIN VIDEO CLIP) 

GLENN BECK, HOST, “GLENN BECK”:  I believe in divine providence.  It was not my intention to select 8/28 because of the Martin Luther King tie.  It is the day that he made that speech.  I had no idea until I announced it and I walked off stage, and my researcher said, “New York Times” has already just published that this is Martin Luther—and I said, oh, geez. 

(END VIDEO CLIP)

O‘DONNELL:  Michael, I for one, whenever I hear Glenn Beck profess ignorance of something, I believe him.  I believe he had no idea what that date meant.  I‘m willing to take that at face value.

But what do you think Beck should have done when he discovered that was the date? 

MICHAEL SMERCONISH, RADIO TALK SHOW HOST:  He should have changed it. 

I find myself, Lawrence, for the second time in a week looking at an event, time and a place, time and a place, time and a place.  Just because there‘s a right to move forward and do something doesn‘t mean that it‘s the right thing to do, a similar sound bite that I offered in this conversation about the mosque and the location in Lower Manhattan. 

I mean, I think what‘s unstated so far is that what sets the stage for this to become a divisive day, when it shouldn‘t be, is the fact that Glenn Beck on one of his broadcasts—actually, on a FOX News morning program—regarded the president as a racist.

And so it sets the stage for a very uncomfortable circumstance.  He‘s got 364 other days in the year that he could have selected.  And, frankly, I‘m surprised that he didn‘t pick an alternative date when he learned that news. 

O‘DONNELL:  Reverend Sharpton, Glenn Beck says he believes in divine providence, that divine providence guided him to that place on that date. 

SHARPTON:  Well, again, I would hope—and I‘m a minister—I believe in divine providence—I would hope that, if that is true, that he reads the speech, where Martin Luther King talked about people trying to nullify the federal government‘s protecting people‘s civil rights, certainly a position that runs contrary to he and Governor Palin on laws like immigration, people that interpose.

You know, he needs to read the speech.  And I think that, if he read the speech, then that, in itself, might be some kind of divine intervention. 

But I think that I would agree with Michael here that he, rather than make this day something that he claims that it‘s not, should have chosen another day. 

We will not confront him.  We will not be near him.  We will do what we do in the civil rights community today, blacks, whites, Latinos.  We will be marching together, trying to deal with some of the issues today that they dealt with in 1963.  He will have to deal with his own contradictions on that day. 

O‘DONNELL:  Reverend Sharpton, if Glenn Beck invited you to speak at that event on that day, would you accept? 

SHARPTON:  Well, no, because we will be at Dunbar High School and we will marching to the King monument.  But if I were to speak, I would read Dr. King‘s speech.

And I‘m sure that, if Mr. Beck, at least from what he has stated publicly in the times I have appeared with him, would disagree with most of it.  If you read that speech to many of those that believe as Mr. Beck professes and didn‘t tell them it was Martin Luther King‘s speech, they would be totally opposed to someone talking about a strong federal government protection of civil rights, a strong emphasis on protecting the poor, a strong emphasis on nonviolence, if you‘re part of the NRA.

So I think that it is interesting that, on that day, they may expose themselves to a lot of contradictions, since they chose not to move the date if they didn‘t know what the date meant in the first place. 

O‘DONNELL:  Michael, what should Beck do going forward? 

Should—should he move the date?  Should he invite someone else, invite Jesse Jackson, invite someone who actually does have a link to Martin Luther King and Martin Luther King‘s work? 

SMERCONISH:  He showed some sensitivity as to what day of the week it would be, because, initially, his indication was that he wanted it for 9/12, and then recognized that that was going to be a Sunday and didn‘t want to ask folks to work—quote—“on the—the Sabbath.”

I‘m just surprise that had he didn‘t exercise the same level of judgment and say, this is inappropriate now that it‘s been brought to my attention. 

It‘s—it‘s now coming quickly.  Apparently, months have ticked off the clock, and he hasn‘t moved it.  I still think he should move it.

And, Lawrence, the political ramification of this is something that—that I‘m keenly interested in.  Who knows what those signs will say.  Glenn Beck can‘t control who show up for his rally, but you can rest assured they will get great attention in the media.

And there‘s a potential for blowback here, because I‘m sure he will have a large crowd.  It will be a devoted crowd.  They will be individuals who represent, in many respects, the core of the new face of the Republican Party.  But there will be a lot of moderates and a lot of independents who will be watching the film footage for signs of—of what exactly that represents.

And there‘s the potential, I think, for individuals to get turned off

by what they see. 

O‘DONNELL:  Reverend Sharpton, you have made many tactical decisions over the years in terms of leading protests and where to have protests, what to protest, what not to protest. 

What is—take us inside your thinking on this.  I‘m—I‘m sure

people have considered, in—in your movement, whether or not they should

have a physical protest on the site where Glenn Beck is.  It seems—

sounds like you have specifically decided not to do that and to—and to -

to be elsewhere, in Washington, D.C., but be elsewhere. 

What do you think is the—is the right way to treat this for people who are concerned about him doing it on that date and Martin Luther King‘s memory? 

SHARPTON:  There‘s been a lot of debate with the coalitions that are around this date and some people who did want to confront him or protest, and we collectively decided, this day is not about Glenn Beck.  This day is not about Sarah Palin.  It‘s about Dr. King.  It‘s about winning the right to vote in ‘65, after the ‘63 march, the ‘64 Civil Rights Act, celebrating how far this country has come, and then challenging us to prepare ourselves to bring it to where we can close the achievement gap in education and go forward.

To go and confront him is to make it about him.  That would, in my opinion and the opinion of many that are participating with us that day, would mock the memory of Dr. King.  They are not in history for trying to confront those that were adversarial.  They are in history because they moved forward despite those that were opposed to their moving forward.

And I think that—again, I agree with Michael, and he and I don‘t agree on a lot, I‘m sure—let Mr. Beck do what he does and stand alone.  He doesn‘t need any help from us for the country to see what he‘s doing, and they will see what we‘re doing.  And we will be talking about how we bring the country together and close the gap in education and health care and the civil rights of all Americans.

And what he will be representing and the people in his audience, let them judge that for themselves.  We don‘t need to confuse the visuals by our trying to confront something.  We need to be upholding what Dr. King‘s dream was really about on that day.  It was an important day in American history. 

O‘DONNELL:  A Sharpton-Smerconish agreement is a beautiful thing to see. 

(LAUGHTER)

O‘DONNELL:  Let‘s just hope—I think we can all agree we would like to see a much more appropriate commemoration next August 28 -- 

(CROSSTALK)

SHARPTON:  Well, Smerconish can come at our rally and speak, as long as I can write his speech. 

(LAUGHTER)

O‘DONNELL:  OK.

SMERCONISH:  I don‘t think—I don‘t think I would—I don‘t think I would draw much of a crowd, Reverend. 

(LAUGHTER)

SMERCONISH:  You would better have Beck than have me. 

SHARPTON:  Well—

O‘DONNELL:  All right.  You guys negotiate off-camera. 

SHARPTON:  Yes, sir.

O‘DONNELL:  That‘s going to be it.

Thank you very much. 

SHARPTON:  All right, thank you. 

(CROSSTALK)

O‘DONNELL:  Reverend Sharpton and Michael Smerconish, thank you very much for joining us today. 

SMERCONISH:  Thank you. 

O‘DONNELL:  Up next:  Nevada‘s Republican candidate for Senate, Sharron Angle, has put herself in the same company as George Washington, Thomas Jefferson, and Ben Franklin. 

That‘s obviously in our “Sideshow,” which is next on HARDBALL, only on

MSNBC.

(COMMERCIAL BREAK)

O‘DONNELL:   Back to HARDBALL, and now the “Sideshow.” 

Former House Leader and current Tea Party organizer Dick Armey went on “The Daily Show” last night.  Things went about as well as you would expect. 

(BEGIN VIDEO CLIP, “THE DAILY SHOW WITH JON STEWART”)

DICK ARMEY, FORMER REPUBLICAN HOUSE MAJORITY LEADER:  Armey‘s axiom is division of labor works people when—best when people mind their own damn business.  The problem with government, it‘s just not very disciplined at minding its own business. 

(LAUGHTER)

JON STEWART, HOST, “THE DAILY SHOW WITH JON STEWART”:  Wait a minute.  How are you the messenger for this?  You were a congressman for how many years?  You were the House majority leader and then you became a lobbyist.  How are you the messenger? 

(CHEERING AND APPLAUSE) 

ARMEY:  Isn‘t that a remarkable thing? 

(CROSSTALK)

STEWART:  How did you—how did you end up as the messenger of Tea Party, no government freedom?  This seems very opportunistic. 

(LAUGHTER)

ARMEY:  Could you imagine—now, I want to tell you, this is your—

(CROSSTALK)

STEWART:  I think—I think you might have filled my hat with something. 

(LAUGHTER)

STEWART:  How is this possible? 

ARMEY:  Now, this is a remarkable thing.  I‘m a walking, talking miracle. 

(LAUGHTER)

(END VIDEO CLIP)

O‘DONNELL:  So, Dick Armey, opportunist Washington hack or a walking, talking miracle?  Hmm.  Geez, I don‘t know.  You decide. 

Now, moving on to Armey‘s fellow traveler Sharron Angle, the would-be senator was asked about charges that she is too conservative to represent Nevada.  Her answer?  Quote—“I‘m sure that they probably said that about Thomas Jefferson and George Washington and Benjamin Franklin.”

That‘s why Sharron Angle is the walking, talking miracle who has single-handedly revived Harry Reid‘s prospects for reelection every day that she has campaigned against him.  Her opposition to the federal government founded by the likes of Jefferson, Washington and Franklin and amended to include such popular programs as Social Security and Medicare explains why Senator Reid‘s chances of reelection on Intrade.com have nearly doubled since Angle was nominated as his challenger. 

Time now for tonight‘s HARDBALL “Big Number.”

We have got a modern-day hunger strike in America.  Two challengers, Democrat Ray Lutz and Libertarian Mike Benoit, have pledged to starve themselves until the Republican Congressman Duncan Hunter commits to a series of debates. 

As of tonight, how long have these two been on their strike?  Six days.  Now, don‘t mistake Lutz and Benoit for truly committed hunger strikers.  They have pledged to go no longer than eight days, but, for now, with the hunger strike still under way, six days and counting, that‘s tonight‘s “Big Number.”

Up next:  Rod Blagojevich dodged 23 bullets and got hit by one, but, today, we learned just how close the jury came to convicting him on some of the more serious charges. 

That‘s ahead.  You‘re watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

JANE WELLS, CNBC CORRESPONDENT:  I‘m Jane Wells with your CNBC “Market Wrap.”

Stocks losing steam toward the close, but still ending higher, the Dow adding nine points, the S&P 500 tacking on a point-and-a-half, and the Nasdaq up six. 

Now, the big story, GM filed paperwork for its landmark initial public offering aimed at repaying taxpayers for that controversial bailout.  Now, GM filed to raise up to $100 million selling stock, but the final figure could be much higher.  Analysts say GM could raise up to $20 billion in its IPO. 

Meanwhile, are Americans shopping?  Retailers moving the market up today—Target shares higher after delivering quarterly earnings which met expectations, boosted by gains in both apparel and its credit card businesses.  Women‘s apparel retailer Chico‘s also a winner today on better-than-expected profit.

But it wasn‘t all good.  BJ‘s skidded after lowering its full-year outlook.  And underwear specialist American Apparel plunged 21 percent after saying it may slip into bankruptcy.

Finally, speaking of underwear, late this afternoon, Limited Brands reported fantastic results, much better than expected.  The company also owns Victoria‘s Secret. 

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

HARDBALL. 

(BEGIN VIDEO CLIP)

ROD BLAGOJEVICH (D), FORMER ILLINOIS GOVERNOR:  The government threw everything but the kitchen sink at me, that on every count except for one, and every charge except for one, they could not prove that I did anything wrong.

This is a persecution.  We have police officers who are being gunned down on the streets.  We have children who can‘t play in front of their homes in the summertime because they might get gunned down, and we have a prosecutor who has wasted and wants to spend tens of millions of dollars of taxpayer money to keep persecuting me, persecuting my family, take me away from my little girls, as well as take my home away from us. 

(END VIDEO CLIP)

O‘DONNELL:  Retired Illinois Governor Rod Blagojevich after jurors found him guilty of just one count out of 24.  The jury could not reach a verdict on 23 counts, resulting in a mistrial.  The prosecution vows a retrial. 

So, what‘s next for Blagojevich?

Carol Marin is a political columnist for “The Chicago Sun-Times” and political editor at NBC station WMAQ.

Josh Gerstein writes for “Politico.”

Carol, what‘s next?  The prosecution seems eager to go?  We have Blagojevich saying, “How can you waste the money chasing me for these silly little nickel/dime offenses?”

CAROL MARIN, WMAQ POLITICAL EDITOR:  There‘s going to be a retrial, Lawrence, and there‘s going to be one very fast.  The government is determined.  Its reputation is on the line with regard to this.

And the government has gone after far lesser targets over the years for much fewer counts.  Rod Blagojevich is a premium target, and they are getting ready.

O‘DONNELL:  Josh Gerstein, the trial did not seem to go national in terms of political implications.  There were no White House staff members dragged into it.  Some of the people from Chicago easily could have been, Rahm Emanuel and others.

So, is this playing as a localized political circus in Chicago, or are there national political implications for Democrats and the continuation of the Blagojevich story?

JOSH GERSTEIN, POLITICO:  Well, I think on the second round there could be.  I mean, there‘s no telling.  You said that some of the White House witnesses got off the hook this time—didn‘t have to go and testify, even though they were on standby.

And if either the prosecution or the defense changes their strategy for the second go-round in this trial, it certainly could be escalated.  But, you know, it‘s federal court.  A big factor here is there‘s no television cameras in the courtroom—which makes it even harder to project it up into some kind of a national story.

I also think Rod Blagojevich being such a flamboyant character sort of tends to make this a very personal story about him that‘s hard to generalize out to a political party or even politicians in general.

O‘DONNELL:  Carol, in a new trial, who would be more likely to call someone from the White House?  Would the—the prosecutors don‘t seem to be interested in those witnesses?  Would Blagojevich suddenly want to put on a defense somehow through those witnesses?

MARIN:  They might, and Robert Blagojevich, the former governor‘s

brother, his lawyer has said he really regrets that Congressman Jesse

Jackson Jr. was not called.  So, I think the defense actually would look,

if they are going to put on a formal defense—they didn‘t this last time

if they are, I think that Valerie Jarrett and Rahm Emanuel suddenly become much more interesting to them this time around.

           

O‘DONNELL:  Let‘s listen to what Blagojevich‘s attorney, Sam Adam Jr., had to say about the retrial.

(BEGIN VIDEO CLIP)

SAM ADAM, JR., BLAGOJEVICH ATTORNEY:  We don‘t know what.  Why would a prosecutor who after 10 seconds—seriously -- 10 seconds of hearing what the verdict is jump up and say, no matter what, we‘re trying this case again.  You want to think about it, wouldn‘t you?  You would want to say, look, let us sit down and reorganize our thoughts here.  Is this worth it?  And that‘s what I ask the people out there—is this worth it?

(END VIDEO CLIP)

O‘DONNELL:  Carol, what‘s the prosecutor‘s answer to that?

MARIN:  The answer is: yes, it is worth it.  This is a prosecutor Patrick Fitzgerald who perhaps greatly overstated what he was prepared to show in court, but he said this was a crime spree and that Lincoln was rolling over in his grave when they indicted Blagojevich.  They‘ve got to make good on that declaration, and that‘s why they have so much invested in this.

O‘DONNELL:  Josh Gerstein, they always—defense lawyers will always talk about, you know, how can you waste all this money on this prosecution?  The fact of the matter is that all those prosecutors are going to draw their regular salary whether they are prosecuting this case or any other case.

But, is there—is there more of a necessity to push these things all the way through because politicians are involved?  I mean, if that were some other white collar criminal, might the prosecutors say, OK, that‘s it, we took our best shot, go ahead?  When it‘s a high-profile politician accused of violating the public trust, is that the kind of thing that guarantees you a retrial in mistrials like this?

GERSTEIN:  Well, I think that‘s definitely a factor and I wouldn‘t say that we should say right now that it‘s a guarantee that there‘ll be a retrial.  I mean, I know that the prosecutors came out and said they would retry.  But can you imagine if they had said, maybe what they were going to do, we would be weeks of speculation that maybe they‘re going to drop the case.  It almost became a self-fulfilling prophecy.

So, I think it‘s very natural that the prosecutors would step in and say, you know, of course, we‘ll retry this case—and I wouldn‘t be surprised if they pare it down.  I would be surprise if they dropped it.

But, you know, it‘s 24 counts.  Basically, every time Blagojevich or one of his cohorts picked up a telephone, they got charged with a count of wire fraud punishable by up to 20 years in prison.  Some of that might be excessive and therefore the prosecutors may decide just to simplify it—even some of the jurors who are voting for conviction said the case was presented in a somewhat confusing fashion.

O‘DONNELL:  We have not heard the end—

MARIN:  And it was.  I mean—

O‘DONNELL:  Go ahead, Carol.

MARIN:  And it was confusing, and it was in the view, I think, of some jurors piling on.  So, it was a dense, complicated case with 24 counts that were redundant in many cases.

And remember this: the feds have a north of 90 percent conviction rate.  They take that very seriously, and are pretty indignant about the notion that they might lose a case.  So, I disagree with Josh in terms of they might not retry it.  I think it is certain they will retry it—whether they go after Robert, perhaps not.  But Rod Blagojevich—I would put money on it.

O‘DONNELL:  And now, the feds have had a dress rehearsal trial and they can figure out how to clean it up and do it in a smoother way next time.

Thank you, Carol Marin and Josh Gerstein.

GERSTEIN:  Thank you.

MARIN:  You‘re welcome.

O‘DONNELL:  Up next: President Obama says he has no regrets about weighing in on the Ground Zero mosque, but Democrats around the country do, and the White House has had to do some damage control with Democrats who say they were blindsided by the president‘s comments.  That‘s next.

This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

O‘DONNELL:  New York Governor David Paterson says the developers of that mosque near Ground Zero have rejected his offer to help them find a different site.  The governor intervenes to try to find a location that was less emotionally charged than the one they are planning to build on just two blocks from the site of the World Trade Center.  But the Muslim group told Paterson that they want to stay where they are—a decision Paterson says he respects.

HARDBALL will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  The answer is no regrets.

(END VIDEO CLIP)

O‘DONNELL:  Welcome back to HARDBALL.

That‘s President Obama today in Ohio answering whether he had any regrets about his mosque comments.

But how is this playing out for Democrats and Republicans facing elections?

Pat Buchanan is an MSNBC political analyst; Eugene Robinson is a Pulitzer Prize-winning columnist for “The Washington Post” and an MSNBC political analyst.

Guys, I want you to consider this report from “The New York Daily News” today, “The New York Daily News” reported that “White House Chief of Staff Rahm Emanuel has spent three days on the phone doing damage control with angry Democrats and urging them not to go public against the president, Democratic sources said.  Obama went ahead with the Ramadan dinner remarks even though his top political advisers had not reached a consensus on what he should do.  Emmanuel was one of the skeptics.”

Now, Pat, since that has come out, the White House has pushed back and said, no, we didn‘t have skeptics.  Rahm Emanuel was not one of the skeptics.

But this is, it seems to me, Pat—with your experience in the White House and those kinds of situations—a typical wobbly White House reaction where they‘re trying to find out exactly where they should be on this and maybe trying to indicate that we‘re skeptics was helpful and maybe it wasn‘t.  Has the White House figured out just how to handle it on their own at this point?

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  This thing—this story doesn‘t really help at all, and really, when I looked at it, and I may be wrong, I said, you know, the last line “Rahm Emanuel was one of the skeptics,” that looked to me like the chief of staff was signaling out there “This was not my idea, folks.”

(LAUGHTER)

BUCHANAN:  He did it.  He did it.

But, look, the president‘s really got himself into this.  He stepped into it full force and he stepped back the next day.  Doing so, the thing metastasized.

Lawrence, it became a national issue and now, an international issue.  Hamas has weighed in behind the mosque.  The mosque folks, they‘re feeding concrete, they‘re going to fight it out.

I think Paterson‘s approach is the right approach for Democrats and, frankly, for the country.  They‘ve got a constitutional legal right to do this—but at the same time, putting a mosque, you know, two blocks from where Americans were killed 3,000 of them by Islamic terrorists, not a good idea.

So, I think they ought to get it resolved, frankly, and I think the president should push to.

O‘DONNELL:  Gene, the story is an out of control story politically.  Has the White House mismanaged their own handling of their part of this as a political story?  Because it is—among other things—a political story.

EUGENE ROBINSON, MSNBC POLITICAL ANALYST:  If you look at it as a political story, I think, clearly, the White House has mismanaged it, I think.  If the president was going to come out on the Friday with what sounded like a full-throated endorsement of the mosque plan, then that was the right thing to do.  But then to kind of seem to take it back on Saturday—clearly, there was—there was mismanagement there.

Now—but, Lawrence, if you look at it as a geopolitical story, I think I come to a different conclusion.  I think, you know, my colleague at “The Post,” Michael Gerson, who used to write speeches in the Bush White House, had an excellent column on Monday in which he pointed out that the president of the United States, who‘s waging two wars in Muslim countries, who‘s—who is fighting against this poisonous narrative that terrorist recruiters use about how the United States and the West are at war against Islam—not just against al Qaeda but against the faith itself—a president who‘s in that position might well have had to jump in and had to say something—in strategic terms, not necessarily in tactical terms, and take the political hit for a greater goal.

O‘DONNELL:  All right, guys.

(CROSSTALK)

O‘DONNELL:  Guys, let‘s hold it there.  We‘re going to take a break. 

We‘ll be back with Pat Buchanan and Eugene Robinson.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

NEWT GINGRICH ®, FORMER HOUSE SPEAKER:  Nazis don‘t have the right to put up a sign next to the Holocaust Museum in Washington.  We would never accept the Japanese putting up a site next to Pearl Harbor.  There‘s no reason for us to accept a mosque next to the World Trade Center.

(END VIDEO CLIP)

O‘DONNELL:  We‘re backing with Pat Buchanan and “The Washington Post‘s” Eugene Robinson.

Pat, is Newt Gingrich really that stupid?

BUCHANAN:  Well, I think, whenever you introduce the Nazis and the Holocaust and the rest of it, I think the argument is over.  It‘s deteriorating.  People are all yelling what you said.

So, I think Newt made a terrible mistake there.  In my view, I think Newt was acting opportunistically, and I think he went excessively in order to be the headline or the lead pony, if you will, in opposition to this mosque.

Now, I oppose the mosque.  I think, quite frankly, Sarah Palin hit it dead right that there‘s a legal and constitutional right to do it, but this is sort of a stab to an awful lot of people, so don‘t do it.  I think she hit it right and I think Newt was over the top.

O‘DONNELL:  Eugene, Newt is doing this at a time when “Esquire” magazine has on newsstands an in-depth article with a lot of ugliness in Newt‘s marital history that won‘t play well with Republican voters in Iowa.

Do you think his bombastic “Hey, look at this” has anything to do with trying to make sure people don‘t look at the “Esquire” article?

ROBINSON:  It might well.  But, look, I think in the end, people are going to look at that article.  And I think Newt Gingrich, there‘s a lot he can do and still can do in American political life.  As a presidential candidate—a serious presidential candidate, I think he‘s got way too much baggage and he just added to it with these—with these untried (ph) remarks.

BUCHANAN:  Lawrence, I will say I had the same thought that you just express this morning when I saw that “Esquire” article.  How do you top that?

O‘DONNELL:  All right.  That scares me, Pat, when—

BUCHANAN:  You top that by saying Nazis are at the Holocaust Museum.

O‘DONNELL:  When you start waking up with the same thoughts I do, I‘m going to get worried.

Hey, guys, thank you very much—Pat Buchanan and Eugene Robinson.

That‘s it for HARDBALL.

Right now, it‘s time for “THE ED SHOW” with Ed Schultz.

           

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