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updated 9/1/2010 1:26:44 PM ET 2010-09-01T17:26:44

Guests: Brian Shactman, Mark Halperin, Eugene Robinson, Bob Shrum; Joan Walsh, Dan Senor, David Corn, John Heilemann, Chrystia Freeland

CHRIS MATTHEWS, HOST:  Anti-Catholic.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews up in New York. 

Leading off tonight: Keeping bad company.  Two years ago, John McCain was attacked for having Pastor John Hagee, who became notorious for his vicious assaults on the Catholic church, endorse him for president. 

Well, this Saturday, Glenn Beck outdid McCain by endorsing John Hagee.  There he was at the foot of the Lincoln Memorial, arm in arm with Beck‘s other proud associates, taking the cheers from the crowd, John Hagee, who called the Catholic church the “great whore” of Revelation.

Is this the love and religious unity to which Beck appeared to personally give witness, or is it more of the old nativist attitude that derides any religious or ethnic difference?  Let‘s talk about who truly stands in the Glenn Beck corral.

Plus: Seven-and-a-half years ago, the war in Iraq began with “shock-awe” and an evolving set of justifications by those who promoted the war.  Tonight, as President Obama prepares to declare from the Oval Office that the U.S. combat mission has ended, we‘ll look back at those reasons for war and see whether any of them turned out to be true.

Also, the new Gallup congressional poll shows the Republicans with their largest lead ever, 10 points.  What can the Democrats do to turn the tide between now and November?

Plus, even as President Obama is being battered on the left for not being tough enough with Wall Street, some of his biggest backers in the banking world are deserting him and throwing money at Republicans.  What‘s going on here?

And “Let Me Finish” tonight with Iraq and why we should have never gone to war in the first place.

Let‘s start with Glenn Beck and Pastor John Hagee.  This Saturday, as I said, Glenn Beck elevated to the national stage a man who achieved notoriety for his attacks on the Roman Catholic church.

Here‘s John Hagee, the man who Glenn Beck shared the stage with Saturday, describing the Roman Catholic church, home to 70 million Americans.

(BEGIN VIDEO CLIP)

PASTOR JOHN HAGEE, CORNERSTONE CHURCH:  This is the great whore of Revelation 17.  This is the anti-Christ system.  This is the apostate church.  In this cup, if you will read it in the Book of Revelation, is the blood of the saints, this false cult system that was born in Genesis 10 and progressed through Israel and became Baal worship.  God says, The day is going to come when I‘m going to cause this beast to devour this apostate system.  So you can say very clearly that while the church is in heaven, this false religious system is going to be totally devoured by the anti-Christ.

(END VIDEO CLIP)

MATTHEWS:  That‘s the great John Hagee.  His comments came to light during the 2008 presidential race, when he had to express regret, as he put it, for, quote, “any comments that Catholics have found hurtful.”  In other words, it‘s Catholics who had a problem with what he said, not that he or his followers had a problem with what he was preaching.  And there was Hagee up there below the Lincoln Memorial enjoying the day with Glenn Beck, just as he was standing up there with John McCain before he had to express those regrets to Catholic voters.

Joan Walsh is editor of Salon and Bob Shrum is a Democratic strategist.  Joan, I couldn‘t believe it when I read it this morning that Hagee was back up there with Glenn Beck, getting all the hosannahs for being a great American, and this is this guy‘s track record.

JOAN WALSH, SALON.COM:  It‘s pretty unbelievable, Chris.  And to my knowledge, Glenn Beck didn‘t—there were no other prominent Catholics who got a speaking role.  They may have been there, but—to pick Hagee is either ignorance, or you know, I think more likely, he simply doesn‘t care.  Now, Beck was raised Catholic himself.  He converted to Mormonism.  And this year, he said something that was very hurtful to a lot of Catholics when he—I think it was his radio show—urged religious people whose churches preach social justice to leave their churches, absolutely leave them.  A lot of people took this as another slap at Catholicism.

MATTHEWS:  Yes, Dorothy Day Catholicism especially.  Let me ask you, Bobby Shrum, this whole question—you know, I thought it was unacceptable to share company with people who make these comments about other religions.  And this guy—by the way, he later apologized during the heat of the campaign, but you don‘t apologize for saying, That religion‘s a whore religion.  That‘s the anti-Christ.  That‘s the blood of the saints.  That‘s the false cult.  I mean, oh, excuse me, I misspoke.

(LAUGHTER)

BOB SHRUM, DEMOCRATIC STRATEGIST:  Yes, that used to be the rule.  But Beck himself clearly is riding a bandwagon of bigotry and fear to gather millions of followers and millions of dollars.  He‘s made anti-Muslim remarks.  He‘s made remarks about the president that are certainly tinged with racial overtones.  So why wouldn‘t he associate with an anti-Catholic?

MATTHEWS:  OK, let me get to the roots of this because a lot of this

stuff going on on the right has its roots, Joan—and you know, Bob, well

back in the old roots, way back with the “no nothings,” the KKK, the nativists.  There‘s a smell to this commentary by Hagee, which is anybody that has their religious vaguely from Europe or somewhere else or from Rome, that somehow, it‘s bad, it‘s un-American.  It‘s the old nativist cry against the newcomer.

But we thought this was sort of dying off somewhere during World War II, when, you know, several million Catholics were fighting the bad guys.  We thought this was over with, you and I and Bob.  Apparently, it‘s still going on with Hagee and his new buddy, Glenn Beck.

WALSH:  Well, you know, I‘ve seen this in the mosque debate, as well.  We know that, you know, our ancestors, and not very far back, Chris, our very right to participate in public life was questioned because we were supposedly, you know, the subjects of a foreign power, the pope.  And so, you know, there‘s been a lot of this in right-wing politics for a long time.  There have been a lot of battles, and many Catholics have felt, frankly, unwelcome in the Christian right.

The other thing, though, that Beck is trying to do here is to unite the Tea Party with the Christian right—

MATTHEWS:  Right.

WALSH:  -- which has felt a little bit excluded by the Tea Party.  If you look at polls, Tea Partiers are less into the Christian right than they are into, say, big business.  And it‘s been—

MATTHEWS:  Yes.

WALSH:  There‘s been a little bit of waning of their power, so that‘s the other thing that went on on Saturday.

MATTHEWS:  OK, this guy had some other thoughts, by the way.  This is Glenn Beck‘s saddle buddy here.  Here he is—not just going after Catholics, but here he is, blaming Hurricane Katrina on gay people.  He‘s quite specific here.  This is John Hagee, the man up there at the Lincoln steps the other day.  Here he is on gay people.

(BEGIN AUDIO CLIP)

HAGEE:  All hurricanes are acts of God because God controls the heavens.  I believe that New Orleans had a level of sin that was offensive to God and they are—were recipients of the judgment of God for that.

(END VIDEO CLIP)

MATTHEWS:  So there‘s a gay pride parade down in New Orleans which apparently launched this hurricane.  This guy believes God was wreaking havoc on all people in—because he was mad at some gay people, just to get (INAUDIBLE) particular here.

SHRUM:  This is a cruel, vengeful, ungodly God, apparently, who, because he‘s mad at a certain group of people has to go out and drown or kill—

MATTHEWS:  A city!

SHRUM:  -- a whole lot of other people, an entire city.  But look, this happens—also, you are very right about the history of this.  This happens in times of real economic stress.  In the 1930s, you had Father Coughlin, the radio priest, who was anti-Semitic, who was out there defending, basically, the Germans.  And you‘re seeing the same thing again.

And I think the other thing that‘s adding to it is a sense of real crisis, psychic crisis among a lot of American who see a society changing, demographically changing, majority, minority.  All of that‘s happening and they‘re rebelling against it.

MATTHEWS:  There‘s a real contradiction.  Not to get too specific about Glenn Beck‘s theology, such as it is, but did you notice, Joan, that he preached—he‘s against collective salvation, collective damnation.  And here he is, espousing friendship with this guy, who believes that the entire city of New Orleans was drowned because of the behavior of a few people he didn‘t like!

SHRUM:  Collectively—

(CROSSTALK)

MATTHEWS:  So in other words, it‘s a direct contradiction from even the craziness of what Beck has been preaching.

WALSH:  Yes, the craziness goes in circles.  You really don‘t know where the crazy starts or where the crazy ends, Chris.  I think—one thing I wanted to point out specifically to you because you‘ve done so much work on this—he also talked about the formation of this black-robed regiment.

MATTHEWS:  Yes.

WALSH:  Well, this comes straight from the revolutionary war, where a lot of Protestant—again, Protestant—ministers were active in rebelling against the British.  They were on our side.  But what‘s weird about this is, again, we have this language of revolution, as though the man who is in the White House—

MATTHEWS:  Oh, I love it!

WALSH:  -- is somehow not there correctly.

MATTHEWS:  You‘ve nailed it.

WALSH:  Yes, and so—

(CROSSTALK)

MATTHEWS:  -- “Don‘t tread on me” flag, which was used—you know, it‘s the Gadsden flag from South Carolina.  We used it to fight the British.

WALSH:  Right.

MATTHEWS:  They‘re using that flag to fight their own elected government.  Like somehow, Barack Obama wasn‘t elected by a majority of the American people.

WALSH:  Exactly.

MATTHEWS:  Did they miss that step?

(CROSSTALK)

MATTHEWS:  Bush wasn‘t elected that way!

SHRUM:  -- can‘t deal with it.

MATTHEWS:  Yes.

SHRUM:  They can‘t deal with the fact that he got elected, that he‘s African-American, that the country is changing not only demographically but in all sorts of other ways.  I mean, same-sex marriage, which is going to happen in this country—

MATTHEWS:  Right.

SHRUM:  -- is traumatic to a lot of these people.

MATTHEWS:  You know, I have to ask you, Joan—you and I talk about

this.  It‘s about being an American.  And the wonderful thing about this

country is you can grow up to be, basically, what you—you know, it‘s a

“Great Gatsby” country.  You can actually create your own identity and

become a person.  This guy, Barack Obama—not to get too basic about it -

did everything right.  He studied hard in school.  He obeyed the law.  He raised a family.  He took care of his family.  He was an excellent student.  He was on the “Harvard Law Review.”  He did every—he went through the democratic process.  He didn‘t go out and make a lot of money on Wall Street.  He gave himself to his community.  This guy is almost pluperfect, and they don‘t like him!

WALSH:  He is the American dream.  He lived it.  He embodies it.  And somehow, he did something wrong.  I don‘t know what it is, but—

(LAUGHTER)

(CROSSTALK)

MATTHEWS:  He didn‘t show up there at Glenn Beck‘s house of love, or whatever it is!

(LAUGHTER)

WALSH:  Yes.

SHRUM:  They might have made him sit in the back row.

(CROSSTALK)

MATTHEWS:  I don‘t know.  This—we‘re going to learn more about—

I‘m going to make more of an effort now to study who hangs out with Glenn Beck because he‘s got an interesting cotillion up there.  I didn‘t know about this person, John Hagee.  I honestly couldn‘t believe it when I read this morning—

WALSH:  Couldn‘t!

MATTHEWS:  -- that he was up there, that this guy Hagee‘s up there getting all those hosannahs.  Thank you, guys.  Thank you, Joan Walsh.  You spotted it, too.  Bob Shrum, you‘re great.

Coming up: President Obama‘s primetime address marking the end of combat operations, we hope, in Iraq.  We‘re told that Saddam had chemical and biological weapons, that he had nuclear weapons.  Dick Cheney told us that.  It was going to be a cakewalk.  We were going to be greeted as liberators.  We‘re going to get cheap gas, in fact, free gas.  Everything‘s going to be great.  Let‘s see how many of the promises were true.

We‘ll be right back with more.  You‘re watching HARDBALL, only on

MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  More sobering news for the Democrats heading into the November mid-terms.  A new Associated Press GFK (ph) poll—that‘s a Gallup poll—finds that voters who have the strongest opinions about the country‘s most pressing issues are largely unhappy with the way President Obama is handling those issues.  In 9 of 15 issues, the voters who expressed the most interest in an issue also voiced strong opposition to the president‘s work on it.  That includes the economy, unemployment, the deficit and terrorism.  And to make it worse, most Americans extremely concerned with 10 of the issues say they‘re going to vote Republican in their local House race.

We‘ll be right back.

(COMMERCIAL BREAK)

MATTHEWS:  Back to HARDBALL.  Tonight President Obama will mark a milestone in his presidency when he formally declares an end to U.S. combat operations in Iraq.  The war has spanned seven years now and was promoted by ideologues, who offered an evolving set of reasons for the war.  The first, of course, was the nuclear threat they saw, a weapon that could be hit or shot right here to the United States.  They also complained that (ph) Iraq and 9/11, of course, saying Iraq seemed to have had something to do with 9/11, and then put forth the argument that Iraq would become a beacon of democracy that would transform the Middle East.  And lastly, the Bush administration argued for regime change on humanitarian grounds because Saddam was a brutal tyrant who needed to be deposed.

So were the war hawks right about any of their reasons for taking us to war with Iraq?  David Corn is the Washington bureau chief for “Mother Jones” magazine and Dan Senior served as senior adviser to the Coalition Provisional Authority in Iraq.

I want to start with David Corn.  Let‘s talk about the issue a lot of us thought was the most powerful political argument, that got at least half of the American people that supported the war.  That was the nuclear threat.  Let‘s listen.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa.

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES:  And we believe he has, in fact, reconstituted nuclear weapons.

(END VIDEO CLIP)

MATTHEWS:  And of course, there was the talk about the mushroom cloud from Condi Rice, the secretary of state, lots of comment about nuclear, nuclear, nuclear, the button was about to be hit.  David Corn, that argument, did it stand up?

DAVID CORN, “MOTHER JONES”:  And aluminum tubes and a lot of other things.  Remember that, Chris.  It didn‘t stand up at all.  It turns out Saddam Hussein had no nuclear weapons program.  He wasn‘t even close.  He had had one previously, before the prior war.  But there was no good intelligence indicating that he had anything going on now.

In fact, the—I mean, I‘ll take slight issue with you.  I think the four reasons that you put up on the screen there, you know, are not in balance.  It was really the weapons of mass destruction was 80, 90 percent of the argument, nuclear weapons being the core of that but not entirely that.  So when you had Dick Cheney coming out and saying in August of 2010 Saddam Hussein is amassing weapons of mass destruction to use against the United States, that was not true.  But more importantly, months before that, the head of the DIA, the Defense Intelligence Agency, had testified to Congress that Saddam Hussein had no more than residual WMDs, nothing even important on the nuclear front.

So Cheney, right there at the very beginning of the run-up to the war, was saying stuff that wasn‘t true about weapons of mass destruction and particularly about nuclear weapons.

MATTHEWS:  You‘re right.  I mentioned the list because the list was put out there.  I agree with you that nuclear was the winning argument that got at least half of the American people to support the war.

Your thoughts on that now, Dan Senor, that argument.

DAN SENOR, FMR. SR. ADVISER, COALITION PROVISIONAL AUTHORITY:  Look, Chris, all those ideologues who were making the case based on weapons of mass destruction—ideologues like Hillary Clinton, Joe Biden, Richard Holbrooke, Rahm Emanuel, people who populate the majority of the foreign policy and national security staff and advisers in the current Obama administering were making the case for action against Iran, Iraq on weapons of mass destruction.

And many of them, by the way, were doing it even before George Bush was in power.  Go look at the floor statements by of the many Democratic senators who voted to give Bush the authority to go into Iraq.  Look at the floor statements and the speeches by Clinton administration officials before Bush took office.

We can relitigate the weapons of mass destruction debate all we want.  I think a more pressing and more urgent discussion is sort of the here and now and what we have learned—

MATTHEWS:  OK, let me get to that.

SENOR:  -- certainly in the last couple of years—

MATTHEWS:  Let me get to that.  Let me get to that.  Let me ask the questions.  And by the way, you have a good point.  A lot of the Democrats seeking the presidency—you listed it quite well, they were all presidential candidates—were afraid they‘d be called weak if they didn‘t back the right wing on this.  I agree with you.  They were intimidated.  And by the way, you keep using the word weapons of mass construction.  You keep conflating it.  It was the nuclear that scared the heck out of people.

CORN:  But Chris—

MATTHEWS:  Yes.  Go ahead.

(CROSSTALK)

SENOR:  I‘m simply saying the majority of Democrats were for action in Iraq.

CORN:  Well, you know, they were—Dan, they were not in charge at the time.  They did not always have their hands on the most pressing intelligence.  Condi Rice made that remark that we should worry about a mushroom cloud, and she said that the aluminum tubes that Iraq had been importing could only be used for nuclear devices.  Well, guess what?  That wasn‘t true.  The intelligence at the time within—the nuclear experts at DOE and elsewhere said that that wasn‘t the case.  So the people who had the responsibility for making sure—

MATTHEWS:  Yes.

SENOR:  David—David—

CORN:  -- we were going to war—

SENOR:  David!

CORN:  -- on the right—

(CROSSTALK)

SENOR:  There was terrifying intelligence—there was terrifying intelligence—

CORN:  Dan, they were cooking—

SENOR:  David!  David!

(CROSSTALK)

MATTHEWS:  OK, one at a time.  Senor‘s turn.  Let me ask you, Dan, the same question, though—

SENOR:  Thank you.

(CROSSTALK)

SENOR:  I just want to make one point.

MATTHEWS:  OK, you want to—

SENOR:  The terrifying weapons of mass destruction debate and the case on WMD—

MATTHEWS:  Right.

SENOR:  -- was made before Bush was in power.  I agree that it was certainly escalated on the nuclear front.  But there was a terrifying case about why Saddam was a threat—

MATTHEWS:  OK—

SENOR:  -- to regional stability—

(CROSSTALK)

MATTHEWS:  I think very few other presidents would have taken us to war.  I don‘t even think Reagan would have takes us to war.  It took a unique combination of a president who knew little of foreign policy and lacked the philosophical base to fight with you guys and Dick Cheney, who wanted the war in the worst way.

Here‘s Cheney famously talking about Mohammed Atta meeting with an intelligence official in Prague, trying to blame 9/11 on Iraq so we could go to war on his ground. 

Here he is.  Let‘s listen. 

(BEGIN VIDEO CLIP, “MEET THE PRESS,” DECEMBER 2001)

DICK CHENEY, 46TH VICE PRESIDENT OF THE UNITED STATES:  It‘s been pretty well confirmed that he did go to Prague and he did meet with a senior official of the Iraqi Intelligence Service in Czechoslovakia last April, several months before the attack. 

(END VIDEO CLIP)

MATTHEWS:  That‘s the heart of it. 

I want to give David Corn a shot here.

That‘s the heart of it.  It‘s the argument.  This is payback.  We went to the war in Iraq to get even for what they did too us on 9/11, brilliant American psychological warfare, getting us to believe we‘re just getting even, when, in fact, Iraq had nothing to do with 9/11. 

Your thoughts, then Dan‘s.

DAVID CORN, WASHINGTON BUREAU CHIEF, “MOTHER JONES”:  Well, he said pretty well confirmed, the vice president, the man who is second in power and has to help make the decision to go to war. 

It wasn‘t pretty well confirmed.  It wasn‘t even confirmed.  The CIA and the FBI both had told the administration that they didn‘t believe these reports, that they were shaky at best.  And, as it turns out, according to the 9/11 Commission, there was no evidence.  There was nothing to believe this.

So Cheney—and he didn‘t just say it just once.  You remember this, Chris.  He went on again and again and said this. 

MATTHEWS:  I know.

CORN:  And the president said that Saddam Hussein was dealing with al Qaeda—again, no intelligence showing an operational connection. 

MATTHEWS:  OK. 

CORN:  So, you know, Dan can say every—everything he wants about Democrats. 

MATTHEWS:  Well, let me him do it.

CORN:  The people in charge said things that they had reason to believe were not true to move the country to war.  That‘s just undeniable.

MATTHEWS:  Dan—let me ask Dan. 

Was 9/11 -- was the Iraq war payback for 9/11? 

SENOR:  I don‘t think the Iraq war was payback for 9/11. 

I—look, let me tell you what my—my view at the time was.  My view at the time was simply this.  There was ultimately going to be no pure military strategy that we could execute in response to 9/11.  As long as there were angry young men on the streets of many of these cities in major Arab Muslim countries that were angry because of the dreadful socioeconomic conditions under which they were living, and they were living under governments that were propped up by America, and they had no outlet, zero outlet, no free speech, no elections, no electoral outlet, to change their circumstances, you bet that that anger and that resentment, mixed in with sort of toxic and extremist madrasas and mosques, would wind up in the worst possible way on our doormat. 

And unless we tried to inject some kind of reform in the region, so that people had an outlet to change governments and hire new governments and speak their minds, that—that we—

(CROSSTALK)

CORN:  So, we kill 100,000 Iraqis?

MATTHEWS:  Your turn, David?

(CROSSTALK)

MATTHEWS:  Because we killed 100,000 Iraqis on national, international television, do you think that helped win the hearts and minds? 

(CROSSTALK)

CORN:  Dan, I can‘t believe—just read this great story on the front page of “The New York Times” today by Anthony Shadid.  He talks about 20,000 unidentified Iraqi civilian bodies that came through the Baghdad morgue.  You can find a lot of people—

(CROSSTALK)

SENOR:  No, no, no, no.  David, David, that‘s—OK, I‘m not going to say that the early stage of the war and the post-war period was not executed disastrously.  That, you and I can agree on. 

CORN:  Well, but that‘s the whole point, then.

SENOR:  I‘m simply saying—I‘m simply saying that—no, no, no, I‘m simply saying that the strongest case for doing something in the Middle East after 9/11 wasn‘t for revenge.  It simply was to say, unless we tried to stoke some kind of reform in the region and change out some government, perhaps the worst one, the worst violator of human rights and the worst violator of U.N. Security Council resolutions, we would never have a shot at anything. 

(CROSSTALK)

CORN:  As Hemingway—as Hemingway might say, isn‘t it pretty to think so? 

(LAUGHTER)

CORN:  It sounds like a great theory.  I know the neocons were pushing it hard before the war.  But it wasn‘t the key argument made by Dick Cheney or George W. Bush. 

And it turns out, you can‘t say, well, we want to do this and support this, but then say, at the end of the day, oh, it turns out to have been too hard to do and a little too messy, because we end up with 100,000 dead Iraqis and four million displaced Iraqis, that, otherwise, it would have been fine if it had just been executed a little bit better. 

MATTHEWS:  Well, let me ask you a question, Dan.

(CROSSTALK)

MATTHEWS:  I have to ask you a question of fact.  Did you have anything to do with the arguments advanced by Paul Wolfowitz, deputy secretary of defense, or Larry Lindsey, the president‘s economic adviser, that the war would pay for itself, that somehow the oil reserves that we would have access to—

SENOR:  No.

MATTHEWS:  These comments selling the war were unbelievable. 

(CROSSTALK)

SENOR:  I joined—I joined the administration to serve in Doha and Qatar and in—at Central Command Forward and then in Iraq once major combat operations had gotten under way. 

But, today, President Obama said quite clearly that Iraq is actually on a course in which the Iraqi people are better off than they were under Saddam.  He said that Iraq is more secure, America is more secure today.

MATTHEWS:  Yes. 

SENOR:  So, I mean, David, for you to say that—citing Hemingway, for you to say that it is all for naught, I actually don‘t think it‘s that black and white. 

(CROSSTALK)

CORN:  Who paid the price?  Dan—

(CROSSTALK)

SENOR:  I think, like much in life, there‘s a lot of gray there. 

(CROSSTALK)

SENOR:  And the reality is, the reality is we are dealing with a lot in the region today, particularly as it relates to Iran.  And having the government that—or the government that we have there and the government I think we will have in Iraq today is a better ally for America in the region than the government -- 

(CROSSTALK)

CORN:  A government that has been playing footsie with Iran.

(CROSSTALK)

MATTHEWS: -- stop here, David. 

All things considered, Dan Senor, and all things considered, David Corn, was it right for America to fight this war in Iraq, yes or no, Daniel? 

(CROSSTALK)

CORN:  Not at all.  It was a disaster.  It cost $750 billion. 

MATTHEWS:  OK. 

CORN:  And the president himself says that it was a mistake to go in. 

(CROSSTALK)

MATTHEWS:  Dan, same question.  Right or wrong to fight the war?

SENOR:  Yes. 

My—my—my—yes, yes, my view, Chris, is that it was a necessary step after September 11 if we wanted to have a real war on terror, if we really wanted to reform the region, but it wasn‘t sufficient.  It wasn‘t in it of itself going to solve all of our problems in the region. 

CORN:  It solved none.

SENOR:  And the way things were managed, particularly pre-surge—

MATTHEWS:  OK.  All right. 

SENOR: -- was—was disastrous. 

And as we have learned, by the way, since the surge, not only have we been able to turn things around in Iraq, but it‘s served as the basis for America‘s policy in Afghanistan.  The surge strategy in Afghanistan, President Obama‘s strategy in Afghanistan—

MATTHEWS:  OK. 

SENOR: -- is predicated on what we did in Iraq. 

(CROSSTALK)

CORN:  And there‘s still no victory there.

MATTHEWS:  Let me remind, Dan, a lot of us opposed the war in Iraq on the other side politically.  And I will have a comment on that at the end of the show. 

And, by the way, wonderful quotation there from “Sun Also Rises,” David Corn, well quoted, very accurately as well.  That was Jake Barnes talking to the love of his life,  Lady Brett Ashley.

Anyway, thank you, David Corn, Dan Senor. 

CORN:  Thanks, Chris. 

MATTHEWS:  Up next:  Michele Bachmann insists at least a million people turned out at Glenn Beck‘s rally.  By the way, she‘s getting even bigger in her estimates.  Every day, she comes out with a bigger estimate of the crowd.  Wait until you hear the celestial number of people that she says showed up at that place on Saturday.

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Back to HARDBALL.  Now to the “Sideshow.” 

For two years now, we have heard top staffers in the McCain campaign give their not-so-kind assessments of Sarah Palin.  Well, this morning, we heard from the closest yet source to Senator McCain, his daughter Meghan. 

Here she is on “Good Morning America” promoting her new book. 

(BEGIN VIDEO CLIP, “GOOD MORNING AMERICA”)

GEORGE STEPHANOPOULOS, ABC ANCHOR:  You say there are a lot of things you like about Sarah Palin, but you also point out that she snubbed your mom‘s efforts to reach out to the Palins, that she wasn‘t much of a team player.  You believe—you talk about doubts you had at the end where you thought she actually hurt the campaign. 

MEGHAN MCCAIN, DAUGHTER OF JOHN MCCAIN:  Yes, but I do clearly state at the end that we did not lose because of her.  And I am speaking out now because I do have conflicting feelings about her. 

I mean, she brought so much momentum and enthusiasm to the campaign.  I mean, you saw the crowds double and you saw a lot more women coming to the rallies. 

STEPHANOPOULOS:  But you also write that she brought—quote—

“drama, stress, complications, panic, and loads of uncertainty.”

(LAUGHTER)

MCCAIN:  True.  I mean, a lot of things happened.

(END VIDEO CLIP)

MATTHEWS:  Well said, George.

One person whose real candid opinion we‘re still waiting for is John McCain himself. 

Penny for your thoughts, Senator, on Sarah Palin, now that you‘ve got your reelection.

Now to tonight‘s “Big Number.”

We heard a lot of numbers on the crowd size at Glenn Beck‘s Saturday rally.  CBS News came out with an estimate of 87,000, rather precise, using aerial photos.  Sarah Palin said she believed the crowd was over 100,000.  Fair enough.  Glenn Beck cited an estimate of up to 500,000 during the event.

Well, guess what?  They have all been outdone by Michele Bachmann. 

The U.S. congresswoman from Minnesota said there were at least a million.  That was yesterday on the radio.  She upped it by the way.  In a new one, Bachmann says she talked to a member of the Park Police, who told her—well, here‘s the new number: 1.6 million, over three times what Glenn Beck says as a high end of his assessment. 

Beckman‘s—

(LAUGHTER)

MATTHEWS:  Bachmann‘s imagined 1.6 million-person march—as I said last night, it used to be the Democrats who had a problem with inflation. 

(LAUGHTER)

MATTHEWS:  It‘s tonight‘s “Big Number.” 

Up next, a different kind of big number and one that doesn‘t bode well for Democratic hopes to hang onto Congress.  The new Gallup congressional poll, believe it or not, has Republicans up right now to take the House by 10 points.  That‘s the biggest spread for the Republicans in recorded history.  What it means and what Democrats can do about it between now and November—coming up next.

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

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

Stocks putting the cap on a pretty dismal August with a mixed close today, the Dow Jones industrials adding five points, the S&P 500 up fractionally, but the Nasdaq slipping six points. 

Now, Chris, I cannot sugarcoat this.  It was a pretty brutal month for stocks in August, the Dow and S&P losing around 4.5 percent, the Nasdaq, the tech-heavy Nasdaq getting absolutely walloped, plunging more than 6 percent. 

Investors, for the most part, sitting on the sidelines, just trying to ride this thing out.  August volumes this year were off about 30 percent from a year ago.  And now we‘re heading into September, which is historically the most bearish month of the years. 

Not a surprise that most of the moves higher this month were in defensive sectors—shares in gold companies, for instance, climbing 8 percent.  How about dividend payers, like Pfizer, McDonald‘s and Kraft, all gaining between 2 percent and 6 percent this month?

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

HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

Gallup Poll has got a shocking new number for the midterm.  Republicans now lead by 10 points, 51-41, on the generic ballot.  That‘s how people would vote generally.  It‘s the largest lead Republicans have ever had in the polls going back to 1942, which you wouldn‘t have thought would be a great year, but I guess it was for Republicans. 

Even before those numbers hit, here‘s what “TIME” magazine‘s Mark Halperin told Politico—quote—“Based on the current national environment, the enthusiasm gap, the state of the economy, the failure to materialize on a lot of what the Democrats were counting on, like health care and getting more—getting more popular, and a recovery summer taking hold, and polling in individual races, on the current trajectory, with no unexpected intervening events, Republicans are in a position to pick up as many as 60 seats.”

Mark Halperin joins us right now.  He is an MSNBC senior political analyst and co-author of the bestseller “Game Change” with “New York” magazine‘s John Heilemann, his grand co-author.

Mark, it—it seems to me that 60 seats is a pretty comfortable margin to take control of the House, grab subpoena power, basically run the U.S. government from the House, because, as any student of civics knows, the House of Representatives originates all tax legislation, all entitlement reform, or anything that goes on in entitlements.

The Republicans would be in charge of everything regarding Social Security, Medicare, taxation, and a lot of regulation. 

MARK HALPERIN, MSNBC SENIOR POLITICAL ANALYST:  Well, the president would still have his veto pen.  Or we would get either two years of confrontation and nothing happening, or there would have to be an absolute sea change and the president would have to figure out a way to govern with a big Republican majority in Congress.

It‘s not a foregone conclusion, but the Democrats are running out of time and options to keep what is a tidal wave right now from washing over them. 

MATTHEWS:  Well, here‘s a big number from Gallup.  It shows that twice as many as—Republicans as Democrats say they‘re very enthusiastic about the midterm, 50-25.

You know, John Heilemann, I used to not know about this number, but it tells you a lot.  I have seen people vote, the way they walk into the voting booth certain days, like when Carter was in trouble.  People went in there to flush him out.  They were so angry in 1980. 

If that‘s the mood of the Republicans, you have got to bet on that. 

JOHN HEILEMANN, “NEW YORK”:  Well, you don‘t have remember years ago -

stretch your memory back very far to remember what it‘s like to see an energized electorate. 

Just two years ago, in 2008 --

MATTHEWS:  It was the other way.

HEILEMANN: -- it was exactly the mirror image.  You had—Democrats were frothing at the mouth to get into the polls.  Republicans were totally dispirited, didn‘t love John McCain, were sick—were even sick of their guy, George Bush.  And when you get that kind of—that kind of enthusiasm behind the party, especially in a midterm election, where you have got low turnout, it can really be the pivotal, decisive factor. 

MATTHEWS:  Mark, you know that guy in “Lawrence of Arabia,” my favorite movie?  He gets lost in the desert.  He falls off his camel.  His name is Gasim.  And he keeps struggling.  So, he keeps taking off clothes.  He finally takes off his money belt, anything, so he can survive in the desert.

Watch what they‘re doing to Nancy Pelosi.  They‘re dropping her off their belt.  Look at this.  Speaker Pelosi.  Alabama Democratic Congressman Bobby Bright was asked recently if he would support for Pelosi for speaker again.  Here‘s his answer: “Never cross a bridge until you come to it.  She may get beat.  She may step away.  She may get sick and die.”

And here‘s North Carolina Democratic Congressman Heath Shuler, who used to quarterback the Redskins.  Here he is.  Let‘s listen. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Do you support Nancy Pelosi as speaker of the House? 

(LAUGHTER)

REP. HEATH SHULER (D), NORTH CAROLINA:  Great question. 

You know, here‘s what I have been talking about.  Who have I been talking about running—run our country?  The middle.  So, I haven‘t ruled out the idea that I might not run. 

So I may have a feeling.  So, we‘ll wait and see.  We‘ll see who‘s actually up for it and who decides to put their hat in the ring.  But you never know.  Maybe a Blue Dog will run.

(END VIDEO CLIP)

MATTHEWS:  Well, there you are.  The guys in the desert dropping off their money belt, they‘re all saying I‘m not sure I‘m with him.

Now, these are Southern guys.  But apparently, this is going on in border states.  People are not exactly backing the speaker who they have to vote for to be a Democrat basically—Mark.

HALPERIN:  There are still some things Democrats having—have going for them.  They‘ve got money.  They‘ve got the labor unions.  And they‘ve got the understanding with Nancy Pelosi and Barack Obama.

There‘s not going to be any hard feelings.  They want to win as many seats as they can in the White House and in the leadership.  They‘re not going to mind, if Democrats to save themselves or at least try, cut loose Nancy Pelosi and Barack Obama.  You‘re going to see it all over the country, not just in the South and not just in the border states.  They are not popular with a lot of the voters who are planning to vote in this election.

MATTHEWS:  Yes, I know—John.

HEILEMANN:  You know, in the 65 or 70 competitive House elections, I would bet you will not see Barack Obama campaigning in any of those congressional districts, the competitive ones.

(CROSSTALK)

MATTHEWS:  So, it‘s not just Pelosi, it‘s the president.

HEILEMANN:  It‘s the president and it‘s Pelosi.  And Mark is right—the Democrats too have one advantage.  They have this financial advantage.

Chris Van Hollen, the head of the Democratic Congressional Committee -

-

           

MATTHEWS:  Right.

HEILEMANN:  -- he‘s going to start cutting people off soon to be able to move those resources, to hold onto just enough seats to maintain the majority.  That‘s the one chance they have.

MATTHEWS:  OK.  This isn‘t exactly a fair fight.  “Newsweek” has a new poll.  Here‘s how they phrase the question: “Some people have alleged that Barack Obama sympathizes with the goals of Islamic fundamentalist who want to impose Islamic law around the world.  From what you know about Obama, what‘s your opinion of these allegations?”

Well, among Republicans, 14 percent say it‘s definitely not true, 38 percent said probably true, 33 percent said probably not true.  And 7 percent definitely not true.

Only 7 percent of Republicans, John Heilemann, are willing to say they don‘t think he‘s with the enemy.

HEILEMANN:  Yes.  And, in fact—and, in fact, 14 percent doubled the number who say it‘s definitely not true—double that number say it‘s definitely true—

MATTHEWS:  He‘s with the enemy.

HEILEMANN:  -- that he‘s with the enemy.

MATTHEWS:  Mark, this is trash talk that‘s been going on for two years now.  The Republicans‘ big lie that he‘s the bad guy seems to be working with the polls and it probably will work in the elections.

HALPERIN:  And there‘s no—there‘s no Republican leader who is willing or interested in speaking out against that—at least not before November—because energy matters in this midterm election.  The enthusiasm gap is not just been driven by that kind of horrible thing. But it‘s driven by anger about taxes and spending and deficits.

But there‘s a—there‘s a spice in the stew from that thing that Republican leaders are just not speaking out against because they know that it‘s energizing.  And the president can‘t speak out against that much either because the White House knows if he does, it draws attention to it.  It doesn‘t really help their cause.  They cannot convince those people—

MATTHEWS:  You know, the horrible thing is there might be some people, I don‘t think you actually believe he‘s a Kenyan-born Muslim who‘s lied about his religion, who‘s rooting for the terrorist.  It‘s hard to believe there‘s anybody actually believes that when they talk to the pollsters.

But I think it is trash talk.  I think they‘re telling pollster this is crap because they‘ve heard it and they know it‘s fun to say it.  It can‘t—I‘d like to put them under a lie detector test, some people, put them on sodium pentothal and ask them, “Do you really believe this crap you‘re selling and telling pollsters?”  I don‘t think they do.

Mark Halperin, John Heilemann, thank you.

Coming up: President Obama has been beaten up by the left.  They think he‘s not tough enough on Wall Street.  But Wall Street doesn‘t like the guy.  A lot of people are turning against him.  They want to give money—they‘re giving all the money to the Republicans now.  Is he—is he falling between the cracks?

We‘re going to talk about the big changes behind the change of heart up in Wall Street.  They don‘t like him because he‘s taking away their money.

This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Prominent Republicans have largely come out against that proposed mosque near Ground Zero in New York.

But now, one Republican senator is breaking ranks.  Utah Senator Orrin Hatch strongly defended the right to build the mosque.  He cited America‘s constitutional right to religious freedom and went as far as calling Islam a great religion.  As a member of the LDS Church—that‘s the Mormon Church—Senator Hatch also notes that his own religion has faced opposition over where to build a house of worship.

Good for him.  He remembers discrimination against his own faith.

HARDBALL will be right back.

(COMMERCIAL BREAK)

(BEGIN AUDIO CLIP)

FRANKLIN DELANO ROOSEVELT, 32CD PRESIDENT OF THE UNITED STATES:  They are unanimous in their hate for me and I welcome their hatred.

(CHEERS)

(END AUDIO CLIP)

MATTHEWS:  Wow, the old populous days, pure and simple.  Anyway, welcome back to HARDBALL.  That, of course, was FDR, embracing the disdain and hatred of Wall Street and big business in that reelection campaign of ‘36.

Today‘s “New York Times” business section has a headline along those lines, quote, “Why is Wall Street deserting Obama?”  My question: Should Obama adopt FDR‘s attitude?

Eugene Robinson is MSNBC political analyst and Pulitzer Prize-winning columnist for “The Washington Post.”  And Chrystia Freeland is editor-at-large for “Reuters.”

Chrystia, you‘re sitting here, you get first dibs.

This is so ironic.  Is he falling between the cracks?  The populists, including those people in this network, are very tough on the guy—very tough on him.  I‘m tough on him sometimes.  But now, the rich guys don‘t like him for the opposite reason.  They think he‘s too tough on them.

But who‘s right?

CHRYSTIA FREELAND, REUTERS:  You are absolutely right, Chris.  Obama is really getting it at both ends.  So, the—his traditional base, progressives, think he is in the pay of Wall Street.  But you talk to the Wall Street guys, including now the people who were these funders of his campaign, the people who are biggest Obama boosters, and they have all turned on him.

And it is—you summed it up at the beginning, you said it‘s about money.  They‘re worried he‘s going to make them pay more taxes and they don‘t like regulations.

MATTHEWS:  Gene, (INAUDIBLE) had a point today that, in “The Times,” that they liked him because he had fancy degrees like they had from Ivy League schools like Columbia.  And they identified him as a common—a fellow elitist, if you will.  Then they realized, my God, he‘s a Democrat.

(LAUGHTER)

EUGENE ROBINSON, MSNBC POLITICAL ANALYST:  Exactly.  It just dawned on them that he is, in fact, a Democrat.

And Chrystia is absolutely right.  They don‘t want—they don‘t want

to pay more taxes.  They don‘t want to be regulated.  They want to be able

to go back to running the casinos the way they used to, that they always

run it.  And so, they have turned against him and as yet, as you pointed

out, he gets criticized from the left for not being populist enough for his

--

           

(CROSSTALK)

MATTHEWS:  Well, should he increase the rhetoric?

ROBINSON:  Excuse me?

MATTHEWS:  Should he calibrate his rhetoric or synchronize his rhetoric with reality?  They‘re not going to like him.  Why not bash them?

ROBINSON:  Exactly.  Why not go one way or the other.  They‘ve turned against you.  They‘re not going to give you money.  They‘re going to bash you all the time.  Then, you know, prove them right, and at least excite your base.

MATTHEWS:  I know.

(CROSSTALK)

FREELAND:  I‘m going to go absolutely the opposite way from you guys actually.  I think that the one thing that he has done wrong that he should change is he has to change the whole discussion around taxes.  Right now, Obama does talk as if the reason these guys have to pay more taxes is because they have been bad.  They have been speculators.  They played at the casino, as Gene was saying.

MATTHEWS:  Right.

FREELAND:  I think he has to change that discussion completely and say, paying taxes is not punishment for a crime.  Paying taxes is contribution to society.

MATTHEWS:  Yes.

FREELAND:  And right now, we‘re living in an economy where the top 1 percent has gained since 19 -- between 1979 and 2006, the income of the top 1 percent increased by 256 percent.

MATTHEWS:  Wow.  These guys, it ought to be their cover charge.

(CROSSTALK)

FREELAND:  Right.  Obama needs to say, I am not attacking you guys.  I‘m not anti you guys.  But the way the economy is shaped right now, you have to pay for education and social services and infrastructure.

MATTHEWS:  You know, Gene, the problem is that we have a system that is kind of a casino.  We‘re talking politics as well as business.  Most of the money that pays for campaigns comes from, what, trial lawyers, big business or Wall Street, and it‘s—it comes from the big cities of New York, San Francisco, L.A. and whatever vacation spot those people happen to be at at the time.  That‘s a fact.

(CROSSTALK)

MATTHEWS:  Or Martha‘s Vineyard or places like that, or Fishers Island.  The money, as Willie Sutton said, go where the money is.

ROBINSON:  Go where the money is.

MATTHEWS:  How will the Democrats run a campaign against the money pot?

ROBINSON:  Well, you know, they did—they did really well the last election.  We‘ll see how—the extent to which this turns, but they have been doing extremely well in the money category, and, in fact, going into the mid-terms, they‘ve also been doing well with money.  The big question for President Obama and I‘m sure there are people in the White House and in his political team thinking about this, is, you know, come 2012 --

MATTHEWS:  OK.

ROBINSON:  -- where is the big money going to come from for the presidential race.  But the money is—the money has been there for the congressional races.

MATTHEWS:  Well, here‘s the problem for the Democrats.  Republicans don‘t like government.  Democrats generally don‘t like big business and Wall Street.  Those are—those are the antagonisms that are real and have never changed in 100 years.

Democratic—if you want Democratic voters to get enthusiastic, your bad guy has got to be Wall Street, just like the Republicans‘ bad guy has to be always Washington, right?  So, if you don‘t have a bad guy to go out and vote against, why should somebody vote, cheerleading?

FREELAND:  See, I don‘t think that‘s quite right because Obama wasn‘t

elected on bad guy politics.  Obama was elected as a uniter and he has now

emerging hated by both groups that supported him.  So, I think he needs to

--

           

MATTHEWS:  Wait a minute.  You think the antipathy towards George W.

Bush didn‘t have a lot to do with this guy‘s election?

FREELAND:  True enough, but one of the secret sauces.

MATTHEWS:  Had a lot to do with my enthusiasm.

FREELAND:  No, no, no.

MATTHEWS:  I can tell that you.

FREELAND:  But, Chris, you can‘t disagree that one of the secrets of Obama was he was able to make—

MATTHEWS:  OK.

FREELAND:  -- a poor Hispanic kid and a guy on Wall Street think he represented them.

(CROSSTALK)

MATTHEWS:   Can he stay cool and above the crowd, the sweat (ph) of the poor?  Sooner or later, this guy has got to take sides.

ROBINSON:  Well, do I think he has to take sides.  Look at what‘s happening, not just Wall Street, but look at big business, which is sitting on this huge pot of $1 trillion or $2 trillion that they haven‘t invested, and they are complaining that he‘s—that his rhetoric is too anti-business.  Well, you know, they are not investing in spending that money and hiring people because there‘s no demand.  I mean—

(CROSSTALK)

MATTHEWS:  I‘m with you.  I‘m with you.  We‘re going to look at that big money—pile of money as we leave tonight.

Eugene Robinson and Chrystia Freeland, thank you.

When we return, I‘m going to have some thoughts about the end of combat operations in Iraq and how the Bush administration misled the country to get us into that war and why I was against it from the beginning and still don‘t like it.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Let me finish tonight with where this American war with Iraq started.

The people had their hearts step on this war, didn‘t really care what arguments would get us into it.  They just wanted us in.  They tried connecting it to 9/11.  Again and again they tried that, failing each time.

They tried connecting it to the anthrax that was mailed to Tom Brokaw and Tom Daschle.

They tried connecting it to the African country of Niger where they said Saddam Hussein had tried to buy uranium.

The president told us that in his State of the Union—he and his vice president deliberately overruling evidence to the contrary.

Finally, the ideologues pushing war told us Iraq had a nuclear weapon.  It could fire at us here in America.  What they had newly and strangely called our homeland.

They had found the magic bullet.  The one sales pitch that would get us into attacking a country that had not attacked us.  We were now launched in a war aimed at regime change—another strange new phrase—to battle an enemy newly sized up as the “Axis of Evil.”

All this Orwellian language, all this purposeful propaganda tying Iraq to 9/11, ended up working with about half the country.  People began to believe that those were Iraqis who hijacked the planes that hit us in New York and Washington.

For half the country, the sales job was complete.  We were getting even.  Iraq was payback.  Remember how you felt?

Here‘s what I wrote in December 2nd, 2001, as George W. Bush began his push for war with Iraq, 15 months before we invaded.  Quote, “Like victors before him, President Bush is being tempted with greater glories in the days ahead.  He is considering following his triumph in Afghanistan with a more magnificent destruction of Saddam Hussein.  It‘s a bad idea,” I wrote in “The San Francisco Chronicle.”

“If it was in my power to stop him, I would.  To attack Iraq now would be to forfeit all that the American president has won since September 11th.  I‘ve given up trying to understand the thinking of those who agitate for such a wrong and tragic course.”

If there‘s anyone who honestly believes the way to win the hearts and minds of the Islamic world, to end this drift towards Islamic terrorism is to attack a secular Arab country that has not attacked us.  Does anybody believe that?

I still believe that the central question here that should have been asked and answered before we went to war with Iraq and it never was: will this make terrorism less of a threat than it ever was before?

That‘s HARDBALL for now.  Thanks for being with us.

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

           

           

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