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updated 11/19/2010 12:45:53 PM ET 2010-11-19T17:45:53

Guest Host: Michael Smerconish

Guests: Hampton Pearson, Norah O‘Donnell, Jonathan Turley, George Pataki, Gov. Jennifer Granholm, Bob King, Jay Newton-Small, John Feehery

MICHAEL SMERCONISH, GUEST HOST:  A terror conviction rings hollow.

Let‘s play some HARDBALL.

Good evening.  I‘m Michael Smerconish, in for Chris Matthews. 

Leading off tonight: Trial and error?  President Obama pledged early on to close Guantanamo and try some of the most infamous terror suspects, like Khalid Shaikh Mohammed, in civilian court.  But his plan was dealt a serious setback yesterday when the first Gitmo detainee tried in federal court was acquitted on all but one of 285 charges related to the 1998 African embassy bombings.

Now, Republicans say this verdict failed the test, and they‘re urging the president to abandon civilian trials for Gitmo terrorists.  Democrats say the prosecution still won the case, the defendant will do serious time, and this was a victory for the rule of law.  Our top story tonight, the terrorist trial turned political football.

Plus, remember all that heat the Obama administration took for bailing out General Motors, how critics derisively called the company “government motors”?  Well, today, GM stock raised as much as $23 billion in what could be the biggest initial public offering in history.  So can the president now turn this into a win for himself and make the case that the revitalized auto giant is on the verge—having been on the verge of liquidation, actually now has saved hundreds of thousands of jobs?

And despite her complaints about the “lamestream media,” Sarah Palin has certainly gone mainstream lately.  She talked to “The New York Times” magazine and sat down with Barbara Walters.  Is this another sign that she‘s getting serious about 2012?

Also, the Republican governors are meeting this week to put their stamp on the party, and they want Michael Steele out as RNC chair.

And “Let Me Finish” tonight with what I need to see before I‘m convinced the economy is on its way back.

We start with the political fallout over the trial of that Guantanamo detainee.  George Pataki is, of course, the former governor of New York.  Jonathan Turley is an attorney who‘s handled national security and terrorism cases.  He‘s also a law professor at George Washington University.

Professor, why was a key witness not permitted to testify in this trial?

JONATHAN TURLEY, GWU LAW PROFESSOR:  Well, for a very simple reason.  The Bush administration tortured him.  And while many people engage in euphemisms and ambiguous language, waterboarding is torture.  It‘s been found to be torture under international law.  It‘s been found to be torture in U.S. courts.  And what the judge said is, I‘m not going to allow in evidence that was derived by torture.  And those people that want us to introduce evidence derived from torture are taking us back not just to the founding of this country.  It‘s a perfectly medieval concept that we long ago rejected.

SMERCONISH:  So we lawyers would call this a fruit of a poisonous tree having been barred from introduction into this trial.

TURLEY:  That‘s right.  And this is a particularly poisonous tree because what it does is it says that our country is fighting terrorism and the means used for terror, but we ourselves are willing to use torture.  Why?  Because it‘s useful or because we‘re afraid or because we hate someone.

SMERCONISH:  Governor, can...

GEORGE PATAKI ®, FORMER NEW YORK GOVERNOR:  Yes, I—you know...

MATTHEWS:  Can anyone say that the outcome would have been different in a tribunal?

PATAKI:  Well, I certainly believe it would have and I hope it would have.  But the professor‘s recent rant is exactly what‘s wrong with the whole idea of trying these murderers in a civilian court system.  He just talked about not the fact that this person was intimately involved in the murder of 224 innocent civilians, including 12 Americans, but he goes after the Bush involvement in enhanced interrogation.  This should be about, was this person a murderer and a criminal and a terrorist...

SMERCONISH:  But Governor...

PATAKI:  ... not about our system of law.

SMERCONISH:  Governor, respectfully...

PATAKI:  We need to protect ourselves!

SMERCONISH:  ... I need to ask you—I‘ve got to ask you an evidentiary question, though, Governor.

PATAKI:  Sure.

SMERCONISH:  Is it so clear to you, sir, that this evidence would have come in in a tribunal?  Because it‘s certainly not clear to me.

PATAKI:  Well, Judge Kaplan in a footnote said he had reservations about whether or not it would, and that‘s perfectly understandable.  But the whole point here is that we should never be having these trials in the first place.  We tried that after 1993, when the towers were bombed the first time.  We brought criminal proceedings in the civil justice system against those terrorists who were responsible for murder.  And what was the growth (ph) of that?  September 11.

SMERCONISH:  Professor...

PATAKI:  And now we have captured foreign combatants.  This person was captured in Pakistan after being intimately involved in the murder of 224 people.  We shouldn‘t have to listen to the propaganda about how what the United States did was wrong.

SMERCONISH:  Professor Turley...

(CROSSTALK)

SMERCONISH:  Hang on, men!  Professor Turley, I read in “The LA Times” today that 400 terrorists since September 11 have been successfully tried in civilian courts.

TURLEY:  That‘s right.  We‘ve had hundreds of trials.  I‘ve been counsel on terrorism cases.  We have an entire system that tries terrorism cases.  We tried the blind sheik and convicted him and gave him life.  We have a system that works very, very well.  But the governor‘s problem in this case is not just with the judge, but 12 citizens that looked at this evidence and said, We don‘t buy most of these counts.  But he was still convicted...

PATAKI:  That—that‘s—that‘s totally wrong!

TURLEY:  If I could finish, Governor...

(CROSSTALK)

PATAKI:  Professor, you just commented on what I believe...

TURLEY:  Can I just finish...

(CROSSTALK)

PATAKI:  ... I‘m critical of this administration for making the false step in the first instance to use the civilian system and not the military tribunal system.  I‘m not criticizing the jury.  This person is a terrorist and a murder and should have had—murderer...

TURLEY:  No, but...

PATAKI:  ... and should have had...

(CROSSTALK)

SMERCONISH:  Professor, you take the floor, then the governor.  Go ahead, Professor.

TURLEY:  Thank you very much for the opportunity.  You are criticizing the system.  You don‘t like the results, and so you want to change the system.  And that‘s not the meaning of the rule of law.  This whole debate of, Well, let‘s look at the outcome to determine if we want to use federal courts, is a terrible type of argument.  We don‘t look at the results of cases to decide whether we want to use our court system.

PATAKI:  Professor...

TURLEY:  We‘ve convicted hundreds of people of terrorism, and it‘s a system that works very well.  This individual is going to go away for at least 20 years and probably life, but because the U.S. government didn‘t sweep the field on all these counts, people are saying, My God, our system must be flawed.

SMERCONISH:  Governor Pataki, go ahead and respond to that, and then I want to ask you another question.

PATAKI:  (INAUDIBLE) 285 charges.  He‘s acquitted 284 times!  When we had to listen to a jury say not guilty to someone who is a criminal, who is a murderer and who is a terrorist.  But for that one conspiracy conviction, this murderer, mass murderer would have walked.

And Professor, I agree with one thing you said.  I‘m not criticizing the decision after the fact.  I was critical of the decision of the Obama administration on day one to use the civilian court system instead of military tribunals.  And under the rule of law in the United States since the days of President Washington, and particularly under President Lincoln during the Civil War, we have the legal and constitutional right to try enemy combatants as military—in those military tribunals.

And forgive me, Michael, for being a little emotional, but I was there on September 11 and I saw the consequences of our failure to respond appropriately after the bombings of 1993 and the bombings of the Cole.  And I don‘t want to wait until there‘s another catastrophe for people to say that this decision to use the civilian court system is wrong.

SMERCONISH:  Governor...

PATAKI:  It has been and always will be.

SMERCONISH:  ... allow me to follow up, if I may, about venue because there‘s been a lot of conversation—you‘ll recall the initial plan was to try KSM in federal court in Manhattan, and a lot of concerns were expressed in these parts that the city wasn‘t prepared for that.  It strikes me, sir, that there has now been this successfully tried case—meaning without any violence, without any backlash—right here in New York.  How, if at all, does that change your perspective as to whether New York should be a venue for this type of a trial?

PATAKI:  Well, Michael, first of all, I wouldn‘t say that this was a successful trial.  When a terrorist caught in Pakistan, responsible for the murder of 224 people, is convicted of one conspiracy charge, I think it is a failure...

SMERCONISH:  But sir, that‘s...

PATAKI:  ... of our system of justice.

SMERCONISH:  That‘s the—that‘s the irony.

PATAKI:  And by the way...

SMERCONISH:  I mean, to me—wait a minute.  To me, here are federal jurors seated in New York who acquitted him of all those charges...

(CROSSTALK)

PATAKI:  ... playing (ph) with the evidence they were allowed to see, which did not include the evidence of the person who said that he sold the TNT used to the blow up the embassies to the defendant.  It did not include the defendant‘s confession that he knew that this was going to happen the day before.  They weren‘t allowed to hear that testimony because...

TURLEY:  Because it was under torture.

PATAKI:  ... it was under the civilian system and not under our military tribunal system.  And you throw around the word “torture,” Professor—you‘re just dead wrong.  Attorney General Mukasey and others have detailed what enhanced interrogation is allowed to do consistent with our Constitution and with human rights.  And I believe—I have confidence in those who put their lives on the line to defend us that they do it the right way.  And what is being done the wrong way...

SMERCONISH:  But you don‘t have confidence...

PATAKI:  ... is the decision of the Obama administration and Attorney General Holder.

SMERCONISH:  Go ahead, Professor.

(CROSSTALK)

TURLEY:  But apparently, you don‘t have confidence in American citizens...

PATAKI:  Yes, I do!

TURLEY:  ... sitting on juries...

PATAKI:  But they were not allowed...

(CROSSTALK)

PATAKI:  They were not allowed to hear the evidence.  They were not allowed to hear the testimony...

(CROSSTALK)

PATAKI:  ... who said that he sold the TNT used to blow up those embassies to the defendant, who was acquitted of murder and terrorism.

TURLEY:  Michael...

PATAKI:  They did not get to hear his confession, not elicited under torture.  He said that he knew the day before...

TURLEY:  Governor...

PATAKI:  ... that this was going to happen.  They didn‘t get to hear that because it was used—it was tried in the wrong venue.  In a military tribunal, this murderer would have been...

TURLEY:  Governor...

PATAKI:  ... convicted of murder...

SMERCONISH:  Professor, go ahead.

PATAKI:  ... as he should be.

SMERCONISH:  Governor, let him respond.  Go ahead, sir.

TURLEY:  Thank you, Michael.  First of all, in military tribunals, the Obama administration did change the rules, in one respect, to say that you could not introduce evidence that was derived from coercion or torture.  But more importantly, the argument being made by the governor of his frustration in listening to acquittal after acquittal before getting to the conviction is basically judging the system by its outcome.

These are the same types of voices we heard back—this goes to the beginning of our country.  When John Adams was representing the accused soldiers in the Boston massacre, there were many like the governor who insisted that we should have special justice.  They shouldn‘t be entitled to access to our courts.  And John Adams stepped forward and said, No, we‘re not going to change who we are because of who we hate.  We‘re not going to change it because we want a particular result.

We‘ve convicted hundreds of terrorists in this country, and we‘ve done it in a way that is transparent and legitimate.  And when the governor talks about this debate about torture, it is a debate that has made the United States a laughingstock.  Internationally, we have been condemned for our use of torture.

SMERCONISH:  Professor, let me ask you a question...

(CROSSTALK)

SMERCONISH:  Should the—should the—a quick answer, if you‘re able.  Should the target determine the way in which we proceed with these cases, whether it was a civilian or whether it was a military installation or government facility?

TURLEY:  No.  In my view, we should try terrorists in civilian court and use the system they‘re trying to destroy to convict them.  That‘s how we defeat terror, not by becoming more like them, but remaining who we are.

SMERCONISH:  Governor, if you‘d give me a quick answer on that same question, I‘d be...

(CROSSTALK)

PATAKI:  ... who we are is to uphold the rule of law, and the rule of law in this country since our founding has been that in the case of enemy combatants, and certainly in the case of terrorists who are not American citizens and not entitled to the full protection of our American criminal justice system because they are not subject to our constitutional protections, that we have every right, and in fact, I believe an obligation, to try them in military tribunals so we can do everything in our power to bring justice to those who murdered so many of our fellow Americans who were innocent of anything but trying to lead their lives!

SMERCONISH:  Gentlemen, thank you for a lively  conversation—

Governor George Pataki, Professor Jonathan Turley.  Much obliged.

TURLEY:  Thank you, Michael.

SMERCONISH:  The new General Motors held its initial public offering today, and it‘s a big first step toward getting the bail-out money back.  But can President Obama turn GM‘s success into a political victory for himself?  And will he get credit for helping GM turn itself around?

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

SMERCONISH:  Congressman Charlie Rangel is about to learn his fate.  The House Ethics Committee is deliberating what the New York Democrat‘s punishment should be after he was found guilty of financial and fund-raising misconduct in violation of House ethics rules.  The top attorney for the Ethics Committee recommended censure, and if the committee agrees, the full House will vote, and Rangel will likely be made to stand in the well of the House chamber to be firmly (ph) chastised by the Speaker.  Short of expulsion, it‘s the most serious punishment in the House.

We‘ll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  Well, I think our first role should be shareholders that are looking to get out.  You know, I don‘t want to run auto companies.  I don‘t want to run banks.  I‘ve got two wars I‘ve got to run already.  I‘ve got more than enough to do.  So the sooner we can get out of that business, the better off we‘re going to be.

(END VIDEO CLIP)

SMERCONISH:  Welcome back to HARDBALL.  That was President Obama in April of 2009 talking about the government‘s bail-out of General Motors.  Now today, the shareholder-in-chief officially started to get out.  GM shares went on sale at the New York Stock Exchange in what could be the largest initial public offering in U.S. history.  And late today, President Obama reacted to the first day of trading.

(BEGIN VIDEO CLIP)

OBAMA:  Today, one of the toughest tales of the recession took another big step towards becoming a success story.  General Motors relaunched itself as a public company, cutting the government‘s stake in the company by nearly half.  What‘s more, American taxpayers are now positioned to recover more than my administration invested.

(END VIDEO CLIP)

SMERCONISH:  Joining us now is Michigan governor Jennifer Granholm. 

Governor, thank you for being with us.  What did it mean to your state?

GOV. JENNIFER GRANHOLM (D), MICHIGAN:  Well, there‘s an old expression that says, As goes General Motors, so goes Michigan.  Obviously, this was great news for us.  I mean, you know, can you imagine, Michael, what would have happened if the administration didn‘t intervene?  In fact, there was a national—an organization yesterday called the Center for Automotive Research that issued a publication that described what would have happened, and in America, we would have lost 1.4 million jobs.  What a horrible tragedy that would have been.

Instead, the United States did the wise thing, and the taxpayers are going to be paid back, and we have an auto industry that‘s lean and lighter and people are working.  And for the first time now since the year 2000, we‘ve actually seen hiring in the American auto industry.  It is—it‘s really terrific.

SMERCONISH:  You make reference to the taxpayers being paid back.  Is it your expectation that they‘ll be paid back in full?  And second part of that question—is that a fair barometer by which to evaluate this whole transaction?

GRANHOLM:  Well, that second question is a really good question, but obviously, everyone wants the taxpayers to be paid back in full.  It won‘t be done by this first initial public offering, but they expect to have subsequent sales that should be able to get them there.  And they certainly did very well in this one.  I think it is the largest public offering in United States history.  And if you do the “green shoe” expansion, as they say, it could be the largest global public offering, which is pretty amazing.

But the question that you asked about, Is it worth it, essentially?  Is it worth the taxpayers having stepped in, even if they didn‘t get fully paid back?  And I would say, boy, the consequences of not stepping in are so horrific to the manufacturing sector, to the whole tentacles of U.S.  manufacturing that is certainly is worth them stepping in.

SMERCONISH:  Governor, you heard president perhaps at the outset of this conversation, where he said, Look, I‘m already, you know, dealing with two wars, I don‘t want to be in the banking business and I don‘t want to be in the automotive business.  And yet the suspicion lurks in some quarters that he does want to be in all of these things.  Address that issue from a political standpoint, if you would.

GRANHOLM:  Why would he want to be?  That‘s so crazy!  Why would he want to be engaged in running an auto company?  What he wanted to be engaged in was saving American jobs, and that‘s exactly what he did.

The great thing, if you talk to—like, Dan Akerson, who is, you know, by all accounts, a Republican—he runs the company.  They were not engaged in selecting the new head of General Motors.  They haven‘t been engaged in the day-to-day discussions of how to do this.  They wanted simply to save a great American company, and most importantly, the jobs that go with it, including the entire manufacturing backbone of the United States.

So this is one step.  This is not the whole thing, but it certainly is a great step for recovery of the national economy.  Chrysler‘s initial public offering, which will, hopefully, be next year, we hope to be equally successful.  But I can tell you just from my seat in Michigan, where every single month this year now, Michigan has seen our unemployment rates ticking down—because, of course, we had the largest unemployment rate in the nation due to our concentration in automotive manufacturing—this is really great progress.  And I am so grateful.

SMERCONISH:  I was about to ask, the—the national unemployment number at about 9.6 percent.  Michigan, you still have your hands full at 13 percent. 

What needs to take place in order for you to... 

GRANHOLM:  Twelve-point-eight -- 12.8.

(LAUGHTER)

GRANHOLM:  It actually yesterday came out at 12.8, not that you can declare victory on that, but it was almost 15.  And we are seeing—in fact, the Michigan unemployment numbers, Michael, have actually beat, in terms of the drop of unemployment claims, every single month in 2010 have beat the U.S. unemployment claim drops percentage wise by almost double. 

So, we feel good.  We feel like manufacturing is back on track.  But we certainly have a long way to go.

SMERCONISH:  Governor Granholm, many thanks for your time.  Appreciate it. 

GRANHOLM:  You bet.  Thank you. 

(CROSSTALK)

SMERCONISH:  Let‘s go now to Bob King, the president of the United Auto Workers. 

Mr. King, I saw where you were quoted as saying, “It is today a dramatically different company.”

How so, sir? 

BOB KING, PRESIDENT, UNITED AUTO WORKERS:  Well, in many different ways. 

One is the level of cooperation and involvement of our membership, the great quality that we‘re producing working together with management, the tremendously global, best productivity of our plants, the great products that we‘re providing to consumers, the level of involvement from our membership. 

So, it‘s exciting times.  And today‘s IPO is just great for our members, both active and retired. 

SMERCONISH:  Am I correct in saying that your current hold, the UAW‘s hold, is at about 17.5 percent?  And if so, do you intend to exercise your right to sell any of that soon?

KING:  Well, technically, it‘s the VEBA.  And under the law—the court decisions and the court-approved VEBA documents, we actually have an independent fiduciary who makes the final decisions on when stock will be sold or not sold.

SMERCONISH:  I would be remiss if I didn‘t ask you about today‘s effort by the Republicans in the House to block the extension of unemployment benefits. 

Here‘s my question.  Do you believe that at any point the perpetuation of unemployment benefits become a disincentive for individuals to find work?  You know that argument.  I would love to hear you respond to it. 

KING:  You know, that‘s ridiculous.  That‘s ridiculous.  That‘s ridiculous.

There are five or six people laid off for every job there is available.  People want to be back working.  I know when our members are laid off, they‘re calling us all the time wanting to get back to work.  People want to work.  There are so many great Americans who are laid off today through no fault of their own. 

It‘s just to me morally wrong not to extend unemployment and help them through this really difficult time.  And we should be creating public works jobs.  We should be putting people to work and building a new infrastructure, a new power grid, new highway system, new sewer systems. 

There‘s so much to do in America to make us competitive.  I have seen reports that it takes $2 trillion to get our infrastructure competitive.  China is spending so much more money to be make that country globally competitive than we are. 

It‘s time for the Republicans in government to do what we did in Michigan.  In Michigan, we took people that used to have really different viewpoints, from labor, from management, from government, and we showed that we can all work together for the benefit of America. 

This is a victory today not just for UAW members, not just for GM shareholders, but for all of America.  We need manufacturing jobs in America to be a strong county.  And we need this country to come together and work together to be able to compete in the 21st century. 

Republicans‘ unwillingness to spend on our infrastructure is wrong.  And I call on them, in the spirit of cooperation, in the spirit of working together that we have done at General Motors, with the UAW and with the government, at Chrysler, with Ford.  We‘re working together today for the good of everyone.  We need our government to come together.  We need the political parties to come together and support President Obama‘s leadership in wanting to rebuild the infrastructure. 

(CROSSTALK)

SMERCONISH:  Thank you so much.  Thank you, Bob King.  Appreciate your time very much. 

Up next:  If you think there‘s too much partisanship in Washington, take a look at this fight in Argentina.  We will tell you what that is all about next in the “Sideshow.” 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

SMERCONISH:  Welcome back to HARDBALL.  Time now for the “Sideshow.” 

First up, let‘s put political fights in  perspective.  We complain here about the coarsening of political discourse.  Well, check out what happened in the Argentinean legislature during a budget fight.  Explaining her smack, the Argentinean pol said, “He wore me out because I have been putting up with him all year long.  He kept shouting without making a single proposal.”

Does that sound familiar?

Next: Sheriff Joe Arpaio‘s new posse.  If you are on the Mexico border and you think you see the Hulk, you‘re not hallucinating.  Crusading Sheriff Joe Arpaio has enlisted Lou Ferrigno, who played the Hulk, and actor Steven Seagal to be illegal immigration fighters. 

Also sworn in, “Mission: Impossible” actor Peter Lupus, a retired Chicago police official whose name is Dick Tracy, and Wyatt Earp, nephew of the other Wyatt Earp.  Look out, illegal immigrants.

And now to the Texas birther bill.  A Texas state rep has introduced a bill requiring any candidate for president to show his or her birth certificate to the Texas secretary of state.  Representative Leo Berman, who filed the bill, says it‘s necessary because—quote—quote “We have a president whom the American people don‘t know if he was born in Kenya or some other place.”

“The Dallas Voice” may have summed up this story best with the headline “Texas Hops on the Crazy Train Again.”

And now for tonight‘s “Big Number”: the Philadelphia Eagles.  Lincoln Financial Field is about to become the greenest in the world.  By opening day next September, this stadium in the steel and coal state of Pennsylvania will be fitted with at least 2,500 solar panel.  And that is tonight‘s “Big Number”: 2,500.

Up next:  Sarah Palin often calls the mainstream media the “lamestream media.”  With a new book, a profile in “The New York Times” and an interview on ABC where she says she could beat President Obama, she‘s happy to go mainstream if it helps her.

But with her handpicked candidate losing in the Alaskan Senate race, how mainstream is her appeal? 

This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

HAMPTON PEARSON, CNBC CORRESPONDENT:  I‘m Hampton Pearson with your CNBC “Market Wrap.”

Today‘s GM offering fueling a global rally, the Dow soaring 173 points, the S&P climbing 18, the Nasdaq jumping 38 points. 

General Motors shares rising more than 3.5 percent after this morning‘s IPO at $33 a share.  More than 100 million shares traded hands in the first 30 minutes, sending prices soaring about 7 percent.  But prices were leveling out by mid-afternoon, early purchasers losing about $1 a share by the closing bell.

Investors also feeling a bit better about Ireland‘s debt crisis, after the head of its Central Bank said he expects—quote—“a very substantial bailout among to tens of billions of euros.” 

In earnings news, Staples posted a boost in profits, thanks to tight cost controls and gains in market shares.

Sears plunging to the bottom of the S&P after delivering a wider-than-expected loss.  And Dell shares are surging in after-hours trading on blockbuster profits posting after the closing bell.

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

HARDBALL. 

(BEGIN VIDEO CLIP, ABC NEWS)

SARAH PALIN ®, FORMER ALASKA GOVERNOR:  I am looking at the lay of the land now, and—and trying to figure that out, if it is a good thing for the country, for the discourse, for my family, if it‘s a good thing. 

BARBARA WALTERS, ABC NEWS:  If you ran for president, could you beat Barack Obama? 

PALIN:  I believe so. 

(END VIDEO CLIP)

SMERCONISH:  Welcome back to HARDBALL.  I‘m Michael Smerconish. 

Now, both in that ABC interview with Barbara Walters and in this Sunday‘s upcoming “New York Times” magazine interview, Sarah Palin is engaging with a group she usually disdains, the mainstream, or, in her words, lamestream media. 

Why is Sarah Palin doing this and is it a good move for her? 

Norah O‘Donnell is of course NBC‘s chief Washington correspondent. 

Jay Newton-Small is Washington correspondent for “TIME” magazine. 

Norah, does this represent some kind of a change on behalf of Governor Palin? 

NORAH O‘DONNELL, NBC CHIEF WASHINGTON CORRESPONDENT:  Well, this is the second time this week that she has suggested she is interested in a presidential run. 

I think the reason that she‘s giving more interviews—she‘s usually pretty secretive and doesn‘t like the lamestream media—is because she‘s got a book to sell that is out, “America by Heart,” and also because she has a reality TV show on Bravo.

And so all of these interviews, all this press attention just increases the Palin brand, Palin, Inc., for whether she wants to run whether she just want to continue to make lots of money. 

SMERCONISH:  Jay, how do you read the tea leaves on this?  And does she require engagement of the mainstream or lamestream media in order to win a Republican nomination? 

JAY NEWTON-SMALL, WASHINGTON CORRESPONDENT, “TIME”:  Well, certainly, I think, if you‘re going to become—if you‘re going to actually run for president, you have to do a certain amount of lamestream media, no matter what.

(LAUGHTER)

NEWTON-SMALL:  But—but I think, you know, honestly, this was very much her playbook when she ran for governor of Alaska.  And she quit her job as the head of the oil and gas commission, started calling Juneau corrupt, saying it was an all—old boys‘ club, the establishment was terrible.

And she went around the state giving lots of speeches, drumming up a lot of the anticipation.  And then everyone was going, is she going to run, is she going to run?  She kept saying, if the candidates aren‘t good out there, maybe she would step in.  And, then, at the last possible minute, she announced her candidacy and then became governor, won the governorship that way.  So, I think it‘s very similar.

(CROSSTALK)

SMERCONISH:  Norah, I guess what I‘m thinking is that that bedrock of support that she maintains within the GOP, they don‘t care if she sits down with “The New York Times.”  In fact, they probably cheer her on if she doesn‘t give the time of day to “The Times.”

O‘DONNELL:  Oh, that‘s no—there‘s no doubt that if she runs for president, she‘s going to do it in a very different way, a non-traditional way, that she scores points with the American public by running against the media, the lamestream media. 

And so it works for her, as this sort of untraditional candidate.  However, she will have to submit to questions, not just in interviews with reporters or Barbara Walters, but if she decides to sit on a stage with 10 other Republicans who are vying for the Republican presidential nomination.  So, she will have to take questions in that respect, not only from whoever is asking the questions at a debate, but other Republicans who may be slinging broadsides and questioning her qualifications. 

SMERCONISH:  Jay, let‘s success the success Bristol Palin is having on “Dancing With the Stars.”  How do—how do you...

(LAUGHTER)

SMERCONISH:  Come on, I have waited three questions to get into it. 

So...

(LAUGHTER)

NEWTON-SMALL:  I think it definitely shows that there are people out there, there‘s a big base out there that‘s hungry to vote for Sarah Palin.  And, in the meantime, they get to press the button as many times as they like for Bristol Palin. 

(LAUGHTER)

NEWTON-SMALL:  So, if she is running, it‘s a good sign for her that she‘s got a very excited base.

SMERCONISH:  Norah, some of the book excerpts have been leaked online. 

For example, Palin writes of Levi Johnston, who fathered a child with her daughter Bristol: “Because the new father wasn‘t there until the end of Bristol‘s labor, I helped deliver Tripp.  I cut the cord between my daughter and her son.”

O‘DONNELL:  I mean, the book is called “America by Heart,” but she uses this book to rip the heart out of Levi Johnston once again and settle some old scores. 

So, not only does she go after him, talking about the fact that he wasn‘t there for the birth and that she had to cut the umbilical cord, but also she goes after some of the reality TV stars on “American Idol,” even though her daughter is on a reality TV show, and even though Sarah Palin is on a reality TV show, or a travel docu-logue, or whatever it‘s called, the “Sarah Palin‘s Alaska,” that is on TLC. 

So, she takes a lot of potshots, even depending her own daughter Bristol and her chastity and saying, “I would take Bristol over Murphy Brown” any day.  She‘s dredging up Murphy Brown, for goodness‘ sake. 

(CROSSTALK)

SMERCONISH:  Allow me to put that up on the screen as well.  She brings up—you‘re right—the old Murphy Brown debate in this except—quote—“I‘m biased, of course, but given a choice of role models between Bristol and Murphy Brown, I choose Bristol.”

Jay Newton-Small, that, too, plays well with the base.

NEWTON-SMALL:  Absolutely. 

All of this just plays super well with the base.  The more you throw at her and the more sort of that she seems like everybody else, the sort of everyday woman, common America, soccer mom, protect—mama grizzly protecting her cubs, the more they love her for it. 

And so it has—it just makes her more popular, and it‘s going to be very hard for I think her competition, if she does run, to actually get criticisms that will stick against her. 

SMERCONISH:  How does it play, Norah, within the establishment Republican crowd?  The show, by the way, the way on TLC I thought was a great postcard for Alaska.  I don‘t know what it does to expand her base.

But how is she regarded by the establishment types within the Grand Old Party? 

O‘DONNELL:  Oh, well, look, Karl Rove has said openly that he doesn‘t think that she has the qualifications to be commander in chief, that doing a reality show is not something that proves you have the gravitas to be commander in chief. 

There‘s a lot of people certainly involved in Republican politics that turn their nose up at her, the establishment . But she doesn‘t represent the establishment.  And if there‘s any proof of what happened in the last election, there‘s an anti-establishment wave out there that Sarah Palin wants to ride. 

And that‘s why I think that many Republicans view her as dangerous to their own power structure.  And so there is a sense of concern about sort of how to weigh this if she does get in the presidential debates. 

My—I‘m personally fascinated that there‘s no Republican that‘s really willing to take her on directly, to question her, her qualifications, her policy ideas.

The only person that seems to be taking on Sarah Palin these days is Lisa Murkowski, another woman who just dealt Sarah Palin and her brand and her power structure serious blow by actually winning there in Alaska.

SMERCONISH:  Jay Newton-Small, if I‘m Mitt Romney, do I want her getting in this on the argument that she‘s going to split the conservative vote and if there‘s—there will certainly be other conservatives in it, so she divides that pie and enable me to get a nomination?

NEWTON-SMALL:  I think if I‘m Mitt Romney, I‘m terrified at the idea of a Sarah Palin candidacy because she‘s really a base whisperer.  I mean, she‘s someone who speaks to the base in a way that he doesn‘t and cannot, you know?  And she‘s—I think she‘s the 800-pound gorilla in the race until she actually gives into it and the all the other candidates are going to be waiting to see with bated breath what she does.

SMERCONISH:  But I guess what I‘m thinking, Norah, is that if she gets in, she splits that conservative vote with Newt, maybe Huckabee and whomever else from the more right side of that aisle, gets in to the presidential race.

O‘DONNELL:  Look, I think it‘s a great point.  Certainly, Huckabee won in Iowa last time.  If Palin‘s in there, they could split the vote and that would benefit someone like Romney who may be a more establishment choice, a more mainstream choice, whatever you want to call it.  So, I think that‘s one calculation.  But still, Mitt Romney and others are concerned that if she gets in the field, that she can win it, because she, at this point—she can really bring out the base.  People love her, even though we haven‘t gotten to discussion about policy or solutions, or ways to sort of change this country.

SMERCONISH:  Jay, did you see anything in the TLC show that surprised you, having covered her as closely as you have?

NEWTON-SMALL:  No.  I mean, that‘s sort of classic Palin.  When I was with her in Alaska last year in Dillingham, she taught me how to smoke a salmon.  I went out with her fishing.

And that‘s just very much her.  She really—you know, she lights up when she talks about Alaska.  She loves talking about Alaska.

When you sit down to interview her, it‘s a completely Dr. Jekyll and Mr. Hyde experience where she closes up and she‘s very suspicious.  And she sort of like, well, what do you want to know?  But in Alaska, she loves talking about it and she‘ll talk about it until (INAUDIBLE) on her face.

SMERCONISH:  It will be interesting to read the full—the totality of what comes out in the “Times” on Sunday.

Thank you, Norah O‘Donnell.  Thank you, Jay Newton-Small.  Appreciate your time.

O‘DONNELL:  Great to see you.

SMERCONISH:  Up next, some of the Republican Party‘s rising stars are its governors.  And despite the party‘s electoral success, the Republican Governors Association is putting more pressure on party chairman, Michael Steele, to give up his post.  That‘s ahead.

This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

SMERCONISH:  Here‘s a bombshell of bipartisanship.  President Obama will award the Presidential Medal of Freedom next year to former President George Herbert Walker Bush.  It‘s the nation‘s highest civilian honor.  And the 41 president leads an eclectic list of honorees, including Warren Buffett, NBA Hall of Famer Bill Russell, baseball Hall of Famer Stan Musial, cellist Yo-yo Ma, German Chancellor Angela Merkel and civil rights activist and U.S. congressman, John Lewis, among others.

HARDBALL will be right back.

(COMMERCIAL BREAK)

SMERCONISH:  Welcome back to HARDBALL.

Republican governors are celebrating their big wins at their annual convention this week in San Diego.  But they‘re also looking toward 2012 and a possible ousting of current RNC chairman, Michael Steele.

Joining me now: “Politico‘s” Jonathan Martin, who‘s covering the RGA in San Diego, and, Republican consultant John Feehery.

Jonathan Martin, you reported for “Politico” something that Haley Barbour had said that I want to put on the screen and let everybody evaluate.  He told you that, quote, “to defeat an incumbent president, even one that‘s got the political problems of this one, the RNC has to operate at absolutely maximum capacity, and this year, they operated far, far, far below that in terms of fundraising, in terms of grassroots organizations and in terms of building strong, self-reliant state parties.”

Some might say Michael Steele deserves better than that given the recent success of the GOP.

JONATHAN MARTIN, POLITICO:  Yes, he definitely has his defenders and he actually still has a core of support on the RNC.  And there‘s no doubt, this was a great year for Republicans.  What I think Haley Barbour and Steele critics are saying is that that was not because of Michael Steele, that was in some ways despite Michael Steele just because of the financial issues at the RNC.  They did not raise a whole lot of money compared to more recent years, and they did not fund the voter turnout operations because of that lack of money in some key states.

So, the concern among folks like Barbour is they left some races on the table this year because of the lack of funds at the RNC.  And looking towards 2012, I think there is this deep concern of not wanting to make the sort of same mistakes financially next time around when they‘re going to need even more cash taking on President Obama.

SMERCONISH:  John Feehery, you can‘t beat somebody with nobody.  If not Steele, who?

JOHN FEEHERY, REPUBLICAN STRATEGIST:  Well, that‘s a good question, Michael.

There‘s a couple of candidates, one is Maria Seno, who is an operations genius.  Probably one of the best people we know to turn campaigns around and get funding.  She has a wide experience in grassroots organizing.

And then Nick Ayers, who worked at the RGA under Haley Barbour.

And really, the RGA took over a lot of slack from the RNC because the RNC just did not perform at the top levels.  I think Haley Barbour knows more about how successful RNC can work, because he was probably the best chairman the party‘s had in the last 40 years.  So, he knows what he‘s talking about.

So, you know, Nick Ayers and Maria Cino, I think the two candidates that a lot of people here in Washington would like.

SMERCONISH:  Jonathan Martin, here‘s another governor, Governor McDonnell of Virginia on MSNBC earlier today.

MARTIN:  Yes.

(BEGIN VIDEO CLIP)

GOV. BOB MCDONNELL ®, VIRGINIA:  Michael Steele is a good person.  He helped me tremendously last year when I ran for governor.  But I can tell you, many of us have great concern about the fiscal state of the RNC, about the lack of effort and effectiveness of the grassroots ground game.  During this last election cycle, we lost a couple of close elections that might have made a difference.

(END VIDEO CLIP)

SMERCONISH:  All right.  So, it‘s not Governor Barbour and it‘s not Governor McDonnell.  Where is his bedrock of support among the Republican governors?

MARTIN:  Well, I think he is lacking support when it comes to governors.  There‘s no question about it.  The past two days here on San Diego, the GOP governors have met in private, talked at great length about the RNC.  I think there is overwhelming consensus that they want somebody else that is not Michael Steele.  So, that‘s the governors.

But, keep in mind, the folks that are going to be voting on the next RNC chairman are not the nation‘s governors, they‘re the 168 members of the RNC.  Those are state level activists.  Those are state level GOP chairmen and the committee men and women from each state.

So, this is not a smoke-filled room deal.  This is going to be among GOP activists, the governing body of the RNC.

Now, of course, governors have influence with their state parties, but they do not necessarily have sort of that direct access to leveraging their vote, at least in most cases.

So, while you‘re seeing folks, and like John in Washington, like the governors across the country, raising concerns about Michael Steele, this is a campaign that has taken place within the RNC‘s family.  So, there‘s an outside game and there‘s an inside game, Michael.

SMERCONISH:  John Feehery, we just showed a video clip of the new faces of the Republican governors.  Who are the potential superstars on that stage?

FEEHERY:  Well, I really think—like John Kasich.  When he was budget committee chairman, he‘s somebody who‘s got a lot of passion and I think that he‘s going to be a terrific leader.  You know looking at the governors entirely—I mean, you‘ve got a potential president in that group.  You‘ve got Mitch Daniels, who I think is a terrific governor.

You know the thing that reminds me of these governors is what happened in the mid-‘90s where you had John Engler and Tommy Thompson who really pushed through the reforms.  It‘s really where ideology meets the road and where ideology meets the policies.

And these guys all have to actually balance the budget.  They all have to actually do the job.  They can‘t just come up and pontificate here in Washington.

And I think that governors get away from the Washington nonsense and actually have to govern.  So, that‘s why I think that you‘re going to see the next president out of that group.

SMERCONISH:  Jonathan Martin, there are a lot of firsts on that stage.  Take a look at some the firsts among the new Republican governors: Susana Martinez of New Mexico, the first female Hispanic governor.  Nikki Haley, South Carolina, first female Indian American governor.  Mary Fallin, Oklahoma‘s first female governor.  Brian Sandoval, Nevada‘s first Hispanic governor.

It‘s face of diversity.

MARTIN:  Well, and for a party that is known as sort of a white guy‘s party, this was an important election year, and the operatives put a lot of effort into this, recruiting a more diverse array of faces to run for high office.  And they had some early impressive success.

There are now two Indian governors.  Both of them are Republicans.

So I think that they definitely made strides when it comes to minorities.  However, there‘s obviously still work to do for the party.  If you look at exit polling, part of the reason that the GOP didn‘t fare as well out west this year is because of Hispanics.  So, they still have that challenge when it comes to sort of moving beyond their core demographic group.

But there‘s no question about it.  They have an easier case to make to attract minorities when they have folks out there who are being elected to stay in office who are themselves are minorities.

SMERCONISH:  John Feehery, we just had a minute left.  I‘m also thinking that there were gains made in Rust belt states, in my own home state of Pennsylvania where Tom Corbett now stands on that state.  What are the political implications, in 45 seconds or less, for 2012, that now you got GOP governors in those sort of states?

FEEHERY:  Well, the party‘s more diverse, yes.  But also it‘s more geographically diverse.  We‘re going to be able to compete a lot more in the Rust belt, compete much more effectively in the Northeast.  I think that we‘re going to do very well in the Midwest.

And I think our message is going to be less Southern-based and more national-base and I think that‘s going to be—speaks well for our campaigners in the next election.  I think that we‘ll do very well.

SMERCONISH:  Give me one name from that group that you have your eye on as presidential timber, each fellow—real quick.

FEEHERY:  Well, I like Haley Barbour.  I think that he‘s going to be president.

SMERCONISH:  Haley Barbour for president.

Jonathan Martin?

MARTIN:  I think it‘s certainly Mitch Daniels from Indiana and Governor Barbour are two governors that you have to keep an eye on.  Down the road, don‘t keep your eye off of Bobby Jindal of Louisiana.

SMERCONISH:  All right.  Bobby Jindal.  Thank you.

MARTIN:  He‘s young.  But down the road—

SMERCONISH:  John Feehery and Jonathan Martin—thank you.

When we return, I‘ll have some thoughts about what I need to see to be convinced that the economy is getting strong again.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

SMERCONISH:  And finally tonight: a word about the economy.

Every day offers yet another set of economic indices to examine.  Me, I don‘t know what to make of the data.  I have a hard time distinguishing GDP from my GPS.

I hope the economy is turning around.  But in order for me to believe it, I need tangible signs—results I can see, hear, smell, touch, appreciate.

So, I‘ve developed my own list of economic indicators that will suggest things have really turned a corner.

First: less pessimism.  There‘s too much parroting of bad news taken becomes a self-fulfilling prophecy.  When Jim Cramer and other the financial gurus say that we‘re on our way back, we really will be.

Second: my wife and mother are both realtors.  They safe they‘ve got good product at affordable prices and low interest rates and still, many buyers remain on the sidelines.  When I hear from them that lower and moderately priced product is moving again, that‘ll be a good sign.

We get a number of magazines at our house.  I mentally weigh them.  Many had been very thin in the last few years.  I‘m looking for fatter magazines.

Fourth: when professional sports teams stop calling my house offering low rates for partial season ticket plans, I‘ll know the country is bouncing back.

Here‘s another: when the market for discretionary things for kids, like piano lessons, improves.

Six: have you noticed the uptick in resume padding, via online classes, and expedited career training?  Keep an eye for when those services are less in demand.

Seventh: visit a Home Depot on a Saturday morning like I often do, and you‘ll see a lot that‘s jammed with weekend warriors.  Now, I suspect many are doing work they would have once hired out.  Fewer cars at Home Depot might actually be a good thing.

Speaking of parking lots, we lock Cracker Barrel.  Every Cracker Barrel I pass is jammed but many fine-dining spots have openings.  When Cracker Barrel is less crowded and I again need a reservation at the Palm, we‘ll be on our way.

Ninth: it‘ll soon be Christmas card season—cards and postage are expensive.  And many have stopped sending them.  If this year‘s mail is heavy with season‘s greetings, that‘ll be a good sign.

And finally: if the office holiday party is at a restaurant or a catering hall instead of company lobby or lunch room, that‘s a good sign as well.

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

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

           

           

           

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