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updated 1/3/2011 4:37:39 PM ET 2011-01-03T21:37:39

Guests: Howard Fineman, David Corn, Jonathan Allen, Bennie Thompson, Melissa Harris-Perry, Jeanne Shaheen, Steve McMahon, John Harris

CHRIS MATTHEWS, HOST:  Republican death panels.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews down in Washington. 

Leading off tonight: That‘s right, Republican death panels.  Good name for them, isn‘t it.  How else do you describe the Republican caucus in the U.S. Senate?  All they do is kill things, their leader a proud, chilling (ph) killer of bills and Democratic presidencies, he hopes.  Their mission, to destroy whatever gets in their way.

Consider this crowd‘s rap sheet.  They voted against the job-creating stimulus bill, against the health care bill, against financial regulation.  Their leader, Dr. Death himself, Mitch McConnell, now chortles with chilling delight about what he intends doing next year.  Here he is talking to Politico about the Democrats.  Quote, “There‘s much for them to be angst-ridden about.  If they think it‘s bad now, wait‘ll next year.”

And yet the public is encouraged by President Obama‘s willingness to compromise.  But how do you compromise with a taunting Republican leader whose chief goal is to see you defeated, see your presidency dead in the gutter?  And yet, despite McConnell‘s best efforts to oppose something simply because President Obama supports it, the new START treaty, the nuclear arms treaty, now has the votes to pass, thanks to at least 10 Republicans.  Chalk up one more big win for the president in this lame duck session.

Plus, once again, the Kinsley rule—that‘s Michael Kinsley‘s rule—the rule that people get in the most trouble when they say what they actually believe.  Somewhere in his mind, Governor Haley Barbour remembers some good things that those old white Citizens Councils did.  He got quoted saying just that.  Well, today, he called the groups totally indefensible.

And the census numbers are out.  No surprise.  Republicans‘ red states gain and Democratic blue states lost.  We‘ll talk to the HARDBALL strategists about how these changes—how all these changes and the population shifts changes the calculus for 2012.  It certainly helps—we know this—Hispanic power in the Southwest.  It also certainly helps the state of Florida, which has become a very, very important big and growing state.

“Let Me Finish” tonight with why people on the right are all of a sudden talking states‘ rights again, nullification, secession.  What‘s all this talk about that down in Texas, even in Virginia?  What‘s all this talk about?  What‘s afoot in all these Confederate states, and what‘s all this Confederate talk about?  And what‘s this battle they‘re cooking up?  I want to know.

We start with Mitch McConnell‘s latest threat against the Democrats.  David Corn is Washington bureau chief for “Mother Jones” and Jonathan Allen is with Politico.

David, I have never seen a character like this before, Mitch McConnell.  He seems like a character that only Charles Dickens could have fully created, you know, somewhere in there with Scrooge, I think.

DAVID CORN, “MOTHER JONES”:  Well, it‘s Christmas season.

MATTHEWS:  Or Fagin.

CORN:  It‘s Christmas season, but he‘s showing lots of chutzpah here.

MATTHEWS:  Yes.

CORN:  I mean, they had 89 filibusters this past Congress, which was a record.  They set a record.  And he‘s out there saying, You know what?  We‘re going to come back and do it all over again.  I mean, he‘s showing a lot of hubris at a time—you just noted that the president on START and also on “Don‘t ask, don‘t tell” just figured out how to peel off some of Mitch McConnell‘s Republican allies to pass important legislation at the end of the lame duck session here, and yet Mitch McConnell‘s coming on, saying, We‘re going to say no, no, no, no, no all the way home—

(CROSSTALK)

MATTHEWS:  I think it‘s vicious.  (INAUDIBLE) right.  Well, let me ask

Jonathan, let me get your thoughts.  Here‘s what I think is vicious.  If you draw the line and create what‘s basically the old British Labour Party or Tory party and say, Our party‘s going to vote in lockstep against everything the other side offers, you force the president‘s party, in this case the Democrats, to do everything party line themselves.  They‘ve got to go over to the left.  If they‘re lucky, they can put a sort of center-left coalition together, but mainly the left, forcing everything on the left.  Then they can attack it, kill it.  So they basically cut it off and then kill it.  That strategy, unfortunately, works with voters.  I‘m not sure it works with good American history.  Your thoughts.

JONATHAN ALLEN, POLITICO:  Well, look, in the 111th Congress, that‘s exactly what we saw happen with Republicans.  They said no.  The electorate rewarded them with a majority in the House and bigger numbers in the Senate.  Mitch McConnell is the single most powerful member of Congress, the biggest stick up here on Capitol Hill.  That‘ll continue in the next Congress.

When the president wanted to cut a deal on taxes, he put together a six-party talking group, and then went around them, cut a deal with Mitch McConnell.  Everybody knows it.  It‘s—the rules of the Senate, the number of votes that Mitch McConnell has now and will have in the next Congress, and his own political abilities, which should not be underestimated—this is a guy that really sees around corners.  So this START treaty notwithstanding, “Don‘t ask, don‘t tell” notwithstanding, Mitch McConnell was able to strike a deal with the president—

MATTHEWS:  Yes.

ALLEN: -- that would have made George Bush blush in its ambition in terms of taxes.

MATTHEWS:  Well, you know, my—let‘s take a look at—here‘s some more of McConnell in action here, talking to Politico.  Quote, “Any time the president is willing to do what we think is in the best interests of the American people, we have—we‘ll have something to talk about.”  And that reminded me of this scene from the movie “Love Actually,” which I‘ve seen about a million times, and a conversation between Billy Bob Thornton playing the president and the British prime minister, a sort of a Tony Blair character.  Let‘s listen.

(BEGIN VIDEO CLIP)

HUGH GRANT, “LOVE ACTUALLY”:  Now, there is one final thing I think we should look at.  It‘s very close to my heart.  Just give me a second.

BILLY BOB THORNTON, “LOVE ACTUALLY”:  I‘ll give you anything you ask for.  As long as it‘s not something I don‘t want to give.

(END VIDEO CLIP)

MATTHEWS:  Well, that prickish comment from him—

(LAUGHTER)

MATTHEWS: -- is exactly seeming what the Republican strategy is—I will give you nothing unless it‘s what I want to give you, and I don‘t think I‘m going to give you much.

CORN:  Can we remind Mitch McConnell that he‘s still in the minority?

MATTHEWS:  Well, it doesn‘t matter—

(CROSSTALK)

MATTHEWS: -- 60-vote rule.

CORN:  It doesn‘t seem to matter.  But I think this is going to force Barack Obama.  I think Barack Obama probably figures that come the next year or two, the act of legislating in Washington may be over, that we may see the last hurrah here with the tax cut deal, “Don‘t ask, don‘t tell”—

MATTHEWS:  Yes.

CORN: -- and all this stuff and that it‘s going to be a titanic battle between two, you know, conflicting perspectives, political views.

And if Mitch McConnell wants to—keeps telling the American public, We‘re not going to engage with this president unless he bends over and does exactly what we want, and the president comes out and says, Listen, these guys are blocking progress when we‘re still facing economic hard times, that‘s the fight we‘re going to carry to the 2012 election.

MATTHEWS:  OK, here‘s something else I‘ve never heard.  Jonathan, you check me on this.  I‘ve been following politics since I was a kid, as everybody knows.  I‘m fanatical about history of this world, American politics especially.  And I have to tell you, I‘ve never heard a political leader say, My purpose in life—I‘m talking about the head of a Senate body—is to basically destroy the presidency of the other party.  He has said from day one, since weeks or months ago, Mitch McConnell says, My goal in life is to destroy the Obama presidency, get him out of there.  In other words, that is my goal, not something else, not some philosophy, but to get him out of there.  That‘s what he wants to do.

I guess that always political parties would like to win the next election.  They always have a convention.  They always name a nominee for president.  I‘ve never heard them put it this starkly, that their goal in life is to kill the other side politically.

ALLEN:  Usually, we project such cynicism on politicians, but we4 don‘t actually see it that nakedly.

(LAUGHTER)

ALLEN:  I mean, I think we all believe that they want to beat the other guy.  And the thing is, it‘s not—it‘s not that bad of a thing if it‘s not his first priority.  If his first priority—

MATTHEWS:  Sounds like it.

ALLEN: -- is to help his constituents and his country, then it‘s all right to want to beat the other guy.  If he‘s going to sacrifice his constituents and the country in an effort to beat the president, that‘s a bad thing.

MATTHEWS:  I think he‘s trying to replace Dick Cheney as the troll under the bridge.

(LAUGHTER)

MATTHEWS:  He waits for the kid to cross the bridge and bites him on the ankle.  In this case, he wants to kill him and drown him.  Here‘s Senator McConnell playing politics on the floor, followed by a response by Senator John Kerry.  Let‘s listen to this colloquy, we used to call it.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER:  Our top concern should be the safety and security of our nation, not some politician‘s desire to declare a political victory and host a press conference before the first of the year.

SEN. JOHN KERRY (D), MASSACHUSETTS:  The facts are that this treaty is not being rushed.  This treaty was delayed at the request of Republicans.

(END VIDEO CLIP)

MATTHEWS:  You know, the term “death panel” was cooked up by the former governor of Alaska, but I think it fits the Republican caucus better than anybody.  Here‘s a guy who wants to kill a nuclear arms treaty worked out with the connivance and support of every Republican secretary or state going back to Doomsday—in the beginning of our history, rather—all the support of everybody that knows anything they‘re talking about—a lot of Republicans, by the way, serve on Armed Services and Foreign Relations know it‘s a good treaty.  It‘s safe.  It‘s good for us.  It reduces the number of nuclear warheads, et cetera.  And here‘s a guy who sees it in totally partisan terms, Here‘s a way the screw the president.

CORN:  These guys are substituting good cheer for—

MATTHEWS:  He and Kyl.

CORN: -- yes, for crankiness.  Put McCain into that—

MATTHEWS:  Dickens.

CORN: -- group, as well.  I mean, they are saying that, We don‘t care about the substance of the matter.  We‘re going to make this political. 

And they‘re going to do it time and time again.  Now this is what got them

Jonathan‘s right.  This is what got them the majority in the House and what improves McConnell‘s number in the Senate.  So their incentive is to do more of this.

So Barack Obama is going to have to find a way to make that the story

not the fact that they‘re attacking him, but to show that they‘re not acting in the public good.

MATTHEWS:  Are they going to replace the Republican icon, the elephant, the mascot, with a toad?  I mean, is that what this party‘s going to be, a toad, Jonathan Allen?

ALLEN:  I don‘t think—

MATTHEWS:  Just somebody who basically—

ALLEN:  I don‘t think the logo committee—

MATTHEWS: -- is against—

ALLEN:  I don‘t think the logo committee at the Republican National Committee is going to change the elephant for a toad.  I would disagree with David on this point.  I think that‘s what got them in the majority, the no, the killing of bills, standing in the way, but I think they do have a need to govern.  And I think we‘re seeing that in this lame duck Congress, part of the productivity—

MATTHEWS:  OK, let me give you a chance on that—give me the ideas, the positive ideas of the Republican Party.  They want to kill health care.  They want to kill—they want to make sure that taxes stay down, basically, cash out of government.  They want to reduce, reduce, reduce.  What they want to do?  Why are they in Washington?

(CROSSTALK)

ALLEN:  Well, I think they‘re in Washington to reduce, reduce, reduce for sure.  I think they want to cut spending.  And frankly, Chris, I think the American public wants to see some cuts in spending.  The question is, will the public go along with the concomitant revenue increases that are also needed to try to bring—

MATTHEWS:  Yes.

ALLEN: -- the budget into balance and get rid of deficits on an annual basis and the massive debt.  And I think, you know, that answer is still unclear.  People want the government to spend more money than it has and they want it to tax them less than it needs to keep afloat.  I mean, that‘s the pure politics of it.  Even this tax deal did just that.

CORN:  Well, we‘re still—

MATTHEWS:  It seems that—except in a recessionary period like this, I think they‘re killing the Republican Party in the Northwest and the West.

CORN:  We‘re still in an economic—

MATTHEWS:  Northeast and the West.

CORN:  We‘re still in an cocaine crisis.

MATTHEWS:  Yes.

CORN:  And there‘s nothing they‘re saying that really responds to that.  And that may be what they‘re happy doing for the next two years.

MATTHEWS:  I think they‘re a death panel right now.  Thank you, David Corn.  Thank you, Jonathan Allen.  Happy holidays.  But I‘ll see you guys again.

Coming up: Is all this talk about states‘ rights a recap of the old days, the bad old days?  Why do we keep hearing about secession from the governor of Texas, about nullification from the attorney general of Virginia?  Why did Haley Barbour go off the other day about how great the old Citizens Councils were, the white citizens councils?  What‘s going on?  Is there some sort of second childhood of the Confederacy coming on here?  It‘s the latest example of conservatives pushing states‘ rights.  What‘s going on here?  This is bigger than politics.  This is—what is it, insurrection?

HARDBALL on MSNBC coming right back.

(COMMERCIAL BREAK)

MATTHEWS:  New polling from PPP finds the one question where Sarah Palin actually does well with Democrats.  The question, “Which Republican do you want to win the Republican nomination in 2012?”  I think this is strategic, by the way.  They want somebody they can beat.  Democrats in Iowa and Wisconsin prefer Palin as Obama‘s challenger in 2012.  Twenty-two percent of Ohio Democrats chose Palin, Mike Huckabee second at 16, while 21 percent of Wisconsin Democrats want Palin, with Huckabee again in second place.

National polling suggest Palin matches up weakest against President Obama.  But if Palin can prove she knows the issues—something she hasn‘t done for a while—that might change, of course.

HARDBALL—I think these voters, these Democrats want to see her up there so they can beat her.  Be right back.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  In a magazine interview—it was “The Weekly Standard”—Governor Haley Barbour of Mississippi remembered some good those old white Citizens Councils did back during Civil Rights days.  Today he called those groups something very different.  He said they were totally indefensible.

Well, Democratic congressman Bennie Thompson of Mississippi and Melissa Harris-Perry is joining us right now.  She‘s an MSNBC contributor, and of course, a Princeton professor of politics and African-American studies.

Congressman, I want to give you the full opportunity to talk about the governor right now, but first, but I want to first of all give you a big quote from him before.  This is what he said in that “Weekly Standard” interview that got him into all this mess.  Governor Haley Barbour talks about why school integration in his hometown of Yazoo happened without violence.  He said in that article, quote, “Because the business community wouldn‘t stand for it.  You heard of the Citizens Councils.  Up North, they think it was like the KKK.  Where I come from, it was an organization of town leaders.  In Yazoo City, they passed a resolution that said anybody who started a chapter of the Klan would get their ass run out of town.”

Well, there he is saying they were certainly the better of two organizations.  In fact, he paints them in a positive light.  Today, his statement says they‘re indefensible.  What‘s your view of the white Citizens Councils‘ role in modern Southern history?

REP. BENNIE THOMPSON (D), MISSISSIPPI:  Well, I think it‘s clear, Chris, that the White Citizens Council no better than Klansmen in a business suit.  They intimidated anybody who promoted desegregation.  Any kind of effort was met with absolute hostility.  So the governor‘s initial response was unfortunate.  His opinion of the group does not bear out the facts, if you look at them.  And I think his stepping back, saying, I was wrong, is clearly because he was caught.

MATTHEWS:  Do you think that‘s what he thinks.

THOMPSON:  Well, it‘s his opinion, but the record does not reflect it. 

Yazoo City, Mississippi, was just like every other small Mississippi town.  They resisted any desegregation effort.  The federal government had to sue every school district in the state of Mississippi to desegregate.  It wasn‘t because of local leaders, it was because federal government came to states like Mississippi and said, Look, you can‘t have separate and unequal schools.  So my governor‘s description of Yazoo City, Mississippi, during the ‘60s is totally inaccurate.

MATTHEWS:  Let me go to the professor.  Professor Harris-Perry, thanks for joining us, as always.  You know, I see something here more nefarious than one person maybe having badly placed nostalgia, or even evil nostalgia, if you will, in this case.  Whatever.

Getting back to the general thing, I‘ve noticed a pattern on the right lately—and of course, we all grew up—I grew up listening to it.  I wasn‘t involved, but the Civil Rights movement was successful because it said Civil Rights were more important than states‘ rights.  It came down to that.  We Americans honor people‘s rights and we find a way to honor them.  We don‘t sit around and talk about states‘ rights all day as a way of not doing that.  And then we delve into history books, with nullification and secession.

Now we‘re hearing all these words again from Perry, from Cuccinelli in Virginia.  Why are the Republicans on the right talking like antebellum Southerners?

MELISSA HARRIS-PERRY, PRINCETON UNIVERSITY:  You know, Chris, it‘s an incredibly instructive moment, Barbour‘s sort of reflection on the idea that the Citizens Councils were better than the Klan.  And I think we want to pause for just a second and take him at his word there, which is only to say that he‘s trying to draw a distinction between kind of the horror of physical violence and lynching, and this other thing, which he sees as somehow more benign.

MATTHEWS:  Yes.

HARRIS-PERRY:  But I think precisely the point that the congressman is making is that it‘s not more benign, that economic terrorism, political terrorism, social terrorism that the white Citizens Councils engaged in was just as profound as lynching, which is to say, you know, they went and actually took people‘s homes from them for organizing.  They made sure that people couldn‘t go to school if their parents were involved in organizing.  They took people‘s farms and—

MATTHEWS:  Yes.

HARRIS-PERRY:  You know, so these were—these were real issues.  But part of what happens in this kind of rosy moment is that we look back and we imagine that people just had different opinions and that it wasn‘t about a fundamental violation not only of Civil Rights but of human rights.  And so it then allows, I think, in this kind of contemporary context, the idea that, Well, we disagree with the current pattern of the federal government, and therefore we have a right to stand in massive resistance in opposition to that government. 

And that only happens because we have such historical forgetfulness about the nature of precisely what these good businessmen‘s councils really were all about.

MATTHEWS:  Well, you‘re doing a good teaching moment here. 

Here, let‘s take a look at something.  We have this video now.  This should be very instructive to a lot of people, including me.  Here‘s a White Citizens‘ Council member back in Birmingham in 1957 who‘s fighting integration. 

Let‘s listen to him in his words.

(BEGIN VIDEO CLIP, 1957)

ACE CARTER, WHITE CITIZENS‘ COUNCIL, ALABAMA:  We‘re going to have city commissioners in this city of Birmingham and especially police commissioners who will say this to the federal government.  Your injunction is of no effect.  Your federal law has no effect in the city of Birmingham.  We will segregate the buses.  And, if necessary, I shall arrest every agent of the federal government who attempts to conspire to put—

(END VIDEO CLIP)

MATTHEWS:  Wow. 

Congressman, you remember that kind of voice, I guess. 

THOMPSON:  Well, absolutely. 

As you know, I live in Mississippi, been there all my life.  Those kind of voices, I remember as a child.  And, clearly, it was the federal government who stepped in and stopped state governments from discriminating against African-Americans. 

MATTHEWS:  So, is all this talk about states‘ rights we‘re hearing now, nullification, secession, all this babble, is it just another code for, we don‘t like civil rights?  Is that what they‘re talking about, Congressman?

THOMPSON:  Well, you know, again, somehow, people are trying to rewrite history, to say that this era in our past was not nearly as bad as people think it is. 

MATTHEWS:  Yes. 

THOMPSON:  But, clearly, you have to talk to people like myself, who had to endure separate, unequal and all of that. 

MATTHEWS:  Well, why are they doing it?  Why are they doing it? 

THOMPSON:  Well, I just think it‘s part of this revisionist theory in history that, somehow, Southerners didn‘t do as bad toward African-Americans as you think.

And I just think that the governor, by stepping back now, saying, well, I misspoke, this organization was a bad organization, is because now MSNBC and other stations have taken the cover off him and he can‘t just say these things and continue to be in the public venue. 

MATTHEWS:  Professor, is this really a reaction to Barack Obama being president?  Would this be going on if McCain were president, this chatter, this clatter of old talk?

HARRIS-PERRY:  Well, I don‘t think it would be going on if McCain were president, but it very well might be going on if say Hillary Clinton or even John Edwards were president, which is to say it could be about having a Democrat. 

But let me just say one thing so we‘re really clear.  There are some people right now with this kind of anti-federal government perspective who are doing nothing more than a kind of Confederate—Confederacy-rising-again narrative.  And it really is about racism and anti-immigrationism and white supremacy.

MATTHEWS:  Yes. 

HARRIS-PERRY:  But the fact is, they‘re in a coalition with a bunch of good-hearted Americans who are talking about anti-federal government issues who don‘t think that. 

MATTHEWS:  No, I understand.

HARRIS-PERRY:  And so what I want to do is, I want to speak to that part of the coalition and say the history of America tells you that, when you start hearing people talk about this kind of separation, secession, nullification, states‘ rights, you are aiding and abetting a history of the most ugly kind of violence, the thing that we fought a bloody war against, the thing that we spent 100 years—that is Hollywood you are aiding and abetting, even if what you mean is, I want lower taxes. 

I just want us to be careful about the coalitions in which we find ourselves, because this is what the history of those kinds of states‘ rights narratives really are all about. 

MATTHEWS:  I remember back in the ‘60s growing up, a lot of libertarian kids thought Goldwater was cool.  But then all the racist got behind him and you saw all the rebel flags behind him, because he voted against civil rights.

Congressman, I looked at that poll we had last week at NBC.  And I‘m proud of our polls because it teaches you stuff if you really look closely at it.  There‘s a portion of the American people who hate Michelle Obama. 

Now, I can‘t think of a reason in the world why you would hate this well-turned-out woman, who‘s bringing up her kids well, who‘s done nothing more really than fighting childhood obesity and looking out for her family.  And if a person hates her, I have got to believe it‘s race, it‘s tribal.

What do you think?  Why would you hate Michelle Obama?

(CROSSTALK)

THOMPSON:  Well, there‘s no question about it.  Race is still a problem in this country, just like some people say the White Citizens‘ Council was a neighborhood watch organization, rather than a terrorist organization. 

(LAUGHTER)

THOMPSON:  So, we have a lot of things like this. 

(LAUGHTER)

MATTHEWS:  You‘re a funny guy on a serious matter.  Thank you so much. 

That was a wisecrack, but I love it.  They were just a neighborhood watch. 

Thank you for joining us, Congressman.  It‘s always great to have you, and professor as well.

THOMPSON:  Thank you. 

MATTHEWS:  You both have a merry Christmas. 

Up next:  Arlen Specter has some tough talk to talk about his party.  He doesn‘t like the way the Republicans become—the Republican Party has become lately.  He left it of course.  He said they have become rigid and they moved to the right and they have got no room for moderates like him, obviously.  He doesn‘t like it.  He said so today on the Senate floor. 

Let‘s look at that in the “Sideshow.”  It‘s coming up next. 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

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

First:  Arlen Specter bids adieu.  There are farewell addresses on the Senate floor that are all about love and admiration for the institution and one‘s colleagues, and then there‘s ones like today, which have live grenades in them.  Here it is. 

(BEGIN VIDEO CLIP)

SEN. ARLEN SPECTER (D), PENNSYLVANIA:  In some quarters, compromise has become a dirty word.  Senators insist on ideological purity as a pre-condition. 

President Reagan‘s big tent has frequently been abandoned by the Republican Party.  Republican senators contribute to the primary defeats of Bennett, Murkowski, and Castle.  Eating or defeating your own is a form of sophisticated cannibalism. 

(END VIDEO CLIP)

MATTHEWS:  Wow.  Well, it‘s a good question to ask.  It‘s not about Arlen, but about the parties.  Do we want people who can vote independently -- good question—or do we want the old British system, where you vote the party line or you get kicked out?

Next:  Bill Clinton wins again.  PETA—you know, the People for the Ethical Treatment of Animals—a great organization, just named him, the former president, its person of the year.  The group applauded Clinton for his recent embrace of a vegan diet, which of course allowed him to drop all that weight.

It obviously works for him.  I feel for the guy, not having become a vegan.  I like being the sixth guy at Five Guys. 

Now for the “Big Number.”  Outgoing Empire State Governor David Paterson has just been fined for accepting those five tickets he took to the 2009 Yankees World Series game.  How much will those tickets end up costing the governor, thanks to the state‘s ethics board?  You won‘t believe this.  You will not believe this fine: $62,125, $62,125. 

That‘s $2,000 for value of the tickets and a whopping $60,000 in penalty for accepting the tickets improperly -- $62,000-plus for a baseball night—tonight‘s cautionary tale about taking things for nothing, “Big Number.”

Up next:  President Obama‘s about to chalk up another big victory.  The New START nuclear treaty with Russia now has the votes in the Senate to pass—what it means for the president, the country, the planet.  I think it‘s all good. 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

AMANDA DRURY, CNBC CORRESPONDENT:  I‘m Amanda Drury with your CNBC “Market Wrap.”

Well, stocks heading into the end of the year on a strong note, the Dow Jones industrials climbing 55 points, the S&P 500 adding seven-and-a-half, and the Nasdaq up by 18. 

Not huge gain, but some cheery earnings reports.  Today‘s new Net neutrality rules and the strong financials enough to push all three indices to two-year highs. 

Software giant Adobe reporting a 33 percent jump in quarterly revenue and better-than-expected earnings.  Carnival also delivering stronger-than-expected results, booking volumes growing.  It says it will raise prices next year. 

And a good day for financials led by T.D. Bank.  It will buy Chrysler Financial for $6.3 billion.  That could add about $100 million to T.D.‘s earnings in 2012. 

Finally, service providers like Comcast and Time Warner and content providers like Netflix and Google all benefiting from the FCC‘s first rules in governing the Internet. 

And that is it from CNBC.  We are first in business worldwide—back to HARDBALL. 

(BEGIN VIDEO CLIP)

SEN. LAMAR ALEXANDER ®, TENNESSEE:  I will vote to ratify the New START treaty between the United States and Russia, because it leaves our country with enough nuclear warheads to blow any attacker to kingdom come, and because the president has committed to an $85 billion 10-year plan to make sure that those weapons work. 

(END VIDEO CLIP)

MATTHEWS:  Wow. 

Welcome back to HARDBALL. 

That was Republican Senator Lamar Alexander of Tennessee declaring his support for the new START arms control treaty today.  Ten Republican senators have announced their support for the president‘s treaty, clearing the way for Senate ratification tomorrow.

Well, we have got Jeanne Shaheen, the senator from New Hampshire, to join us.  She‘s a member of the Foreign Relations Committee.

Thank you so much, Senator. 

Could you explain one of the mysteries of the U.S. Senate to me?  For weeks, we wondered whether this would pass.  It was like “The Perils of Pauline.”  We thought it was going to be so partisan, the way you folks looked at it.  And then out of nowhere came all these Republicans, like the cavalry.  Where were they hiding and why were they so quiet? 

(LAUGHTER)

SEN. JEANNE SHAHEEN (D), NEW HAMPSHIRE:  Well, I—I‘m—I‘m not sure I can explain the mysteries of the Senate to you, but I think this is the result of a careful effort over the last several weeks and months to address the concerns that were raised by critics of the treaty and by a number of Republicans. 

And, as you point out, we have heard from Senator Alexander, from Senator Corker, and several other Republican senators in the last two days, who have made strong statements in support of passage of this treaty.  So, that‘s very good news.  I‘m confident that we‘re going to have a strong bipartisan vote tomorrow. 

MATTHEWS:  It seems to me that the members—and I don‘t want to make a value judgment.  Well, I will.  The senators who knew the most about this on the Republican side voted for it. 

You‘ve got Senator Lugar, who is an expert on arms.  You know, he‘s done so much with the Soviet arms, especially. 

SHAHEEN:  Right. 

MATTHEWS:  Johnny Isakson, a member of your committee from Georgia, Bob Corker, who is from Tennessee.  It seems like their education on this issue, as committee members, was helpful to making them—making them make a case for it. 

SHAHEEN:  Well, that‘s right. 

We actually had 12 hearings in the Foreign Relations Committee.  We heard from 21 witnesses.  Over 900 questions have been posed by senator to the administration and answered.  And I think those answers and the witness testimony, the number of people in the foreign policy and national security and military establishment, both Democrat and Republican, who have come out for this treaty have really answered the questions of the critics in a way that I think that has gotten agreement that passing New START is in the best interests of the country. 

MATTHEWS:  I‘m older than you, Senator, and I remember—and Howard Fineman will be here in a minute—some of us remember what it was like to hide under our school desks to—

SHAHEEN:  Well, I remember that, too. 

MATTHEWS: -- to prepare for a possible nuclear attack—a nuclear attack.

Just speak to us, us boomers, what does this treaty mean in terms of the possible outlandish threat of a nuclear exchange between us and the Russians?  What does it mean?

SHAHEEN:  Well, about 95 percent of nuclear weapons are controlled by the United States and Russia. 

It means that we are voluntarily reducing those numbers of weapons.  It means we‘re going to have on-site inspections.  We have been over a year now without inspectors on the ground in Russia gathering intelligence about what‘s happening there. 

And it is also important as we think about addressing any loose material or loose nukes, so to speak, that might get into the hands of terrorists. 

MATTHEWS:  Yes. 

SHAHEEN:  And for all of us who remember the Cold War days, when we got under our desks, when we had nuclear drills, it‘s good news to see this leadership from the United States and from Russia. 

MATTHEWS:  Thank you so much.  Have a nice, merry Christmas up there in New Hampshire—

SHAHEEN:  Thank you. 

MATTHEWS: -- Senator Jeanne Shaheen from the Foreign Relations Committee.

Let‘s turn now to MSNBC analyst Howard Fineman, who has been sitting with me and remembering those days.  He‘s of course with The Huffington Post now and an MSNBC political analyst, a senior one. 

I think rarely do you have a vote on the Senate that really affects life and death on this planet.  I mean, we‘re past the Cold War.  What do you think it meant politically? 

HOWARD FINEMAN, NBC CHIEF POLITICAL CORRESPONDENT:  Well, I think Senator Shaheen mentioned something important.  It‘s no longer the under-the-desk thing.

It‘s now the fear of loose nukes.  And that‘s something that both the United States and Russia are very, very concerned about.  We‘re at one with them on that.  And that‘s something that Senator Dick Lugar has made almost his life‘s calling. 

MATTHEWS:  Nunn-Lugar.

FINEMAN:  Senator Lugar.  So, he carries a lot of weight there. 

That‘s number one.

Number two, the administration did a very good job of getting the Pentagon and the Joint Chiefs of Staff and all of the military people behind this.  If there had been division within the military establishment, it would have given Republicans—

MATTHEWS:  Yes.  So, getting Mullen out the other night—

FINEMAN:  Getting Admiral Mullen out—

(CROSSTALK)

FINEMAN:  This is sort of also kind of a going-away present from Bob Gates, the head of the Defense Department, a Republican, to the Democratic president, saying, “Let me help you do this thing.”

MATTHEWS:  Yes, but do you think—

(CROSSTALK)

FINEMAN:  And John Kerry, also. 

(CROSSTALK)

FINEMAN:  Let‘s give a—let‘s say John Kerry.

MATTHEWS:  You have just—you teased me.  Is he leaving, Gates? 

FINEMAN:  Oh, I think he‘s going to leave, sure, after the next—after—after the turn of the year.  Everybody assumes he‘s—

MATTHEWS:  Senator Clinton could be the defense chief?

FINEMAN:  I don‘t know about that.  But let me also mention John Kerry.  Senator John Kerry, who was a presidential candidate in ‘04, who found his calling and all those—Senator Shaheen just said, 12 hearings, 900 question, this is kind of dogged pursuit of a treaty really suited John Kerry‘s talents.

MATTHEWS:  But let‘s talk about Brent Scowcroft, a great Republican.  He‘s former national security adviser of George Herbert Walker Bush.  He offered this rational for why Republicans were opposed to START.  He said, “I‘ve got to think that it‘s the increasingly partisan nature and the desire for the president not to have a foreign policy victory.”

He was so tough on the critics of this by saying the only reason you could be against it is for nasty politics.

FINEMAN:  Well, I‘ve got to say, Senator Mitch McConnell, who in some situations, likes to play the role of statesman.

MATTHEWS:  Not lately.

FINEMAN:  OK.  But in this situation, he said, well, we don‘t have to just give the president—we don‘t have to line up and give the president a political victory.  I mean, Mitch McConnell sort of—

MATTHEWS:  How small?

FINEMAN:  Well, he laid his cards on the table.

MATTHEWS:  Yes, he said it was politics.

FINEMAN:  He basically said it was politics.

MATTHEWS:  Yes.  I think this is interesting.  Let me ask you about the Republican Party right now.  This was a rare moment.

And I‘m going to go down the list here of the people that voted with this against their party leader and against Kyl, the number two leader.  Lamar Alexander, could run for president.  Bob Bennett, who‘s living, he‘s out.  He‘s been knocked out by the Tea Party.

Scott Brown, who wants to get reelected up in Massachusetts; Cochran of the South and Collins up in Alaska and Corker from Tennessee, and Isakson from Georgia, and Lugar from Indiana, and Murkowski from Maine and Snowe from Alaska and Voinovich from Ohio—a lot of Republicans.  We‘re looking at their pictures here, stood up against their party leader and said, no, I want nuclear peace.

FINEMAN:  OK.  Well, that is the very definition of the non-Tea Party right there.

MATTHEWS:  They‘re not—

FINEMAN:  That gallery of faces you put up there, that‘s not the Tea Party crowd.  But interestingly, this was also not a high agenda item for the Tea Party.

MATTHEWS:  So, they wouldn‘t try to knock a senator off for voting for nuclear.

FINEMAN:  No.  I mean, I attended a lot of Tea Party rallies.  I read their literature.  They didn‘t—stopping the START Treaty, it was never high on their agenda, cutting spending and taxes and reducing the role of government.

(CROSSTALK)

MATTHEWS:  I‘m glad to see that nuclear war is not on the agenda of the Tea Party.

Anyway, thank you, Howard Fineman.  Have a happy holidays, always, buddy.

FINEMAN:  Thank you very much.

MATTHEWS:  Up next—we‘re friends, by the way.

Up next, the census numbers are out, and as a country, we keep moving to the—well, out of the Northeast.  It‘s getting hallowed out.  (INAUDIBLE) these numbers, people are leaving the Midwest, leaving the Northeast.

Guess where they‘re going?  Down where it‘s warm in the wintertime, the South and Southwest.  In political term, it‘s the red states politically that are gaining and, of course, the blue states that are losing.

What‘s this going to do to 2012?  Our strategist joins us next.  This is fascinating stuff.  It‘s going to affect the election.

This is HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Well, senators on both sides of the aisle are taking another stab at bipartisanship.  Republican Saxby Chambliss of Georgia and Democrat Mark Warner of Virginia have assembled a group of about 20 colleagues, fellow senators, they say will strive for moderation and embrace that dirty word in some Republican circle, getting to used this word Franklin says, “compromise.”  Their first goal: finding common ground on a long term plan to tackle the nation‘s burgeoning deficit.  Well, that‘s a good goal.

HARDBALL will be right back.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.

The new census numbers are out today and there‘s a clear population shift to this country, from the Northeast and the Midwest to the South and Southwest.  Simply put, that means more electoral votes in red states and fewer in blue states.  We‘re talking politics here.

John Harris is editor-in-chief of “Politico” and Steve McMahon is a Democratic strategist.

John Harris, it looks to me like this just says the Republicans put Marco Rubio—Marco Rubio on your ticket next year.  You got Florida down there picking up four electoral votes.  Hispanics picking up power.  Two votes—you got two votes, I‘m sorry.  You got Hispanic states like Arizona and Nevada and Florida all picking up votes.

JOHN HARRIS, POLITICO:  Right.

MATTHEWS:  Look at the map there.  We‘re showing that.

So, the Southwest gains, that means Hispanics gain.  Florida wins. 

That means Rubio wins.

Just putting it all together, doesn‘t that say they needed a Hispanic on the ticket from the South?

HARRIS:  That means—certainly it makes the case that they cannot continue to be routed among Hispanic voters as they have been in the last couple of session, last couple of elections.  And there‘s no question, Florida always a big prize, with an even bigger prize.  It‘s now clearly a bigger prize than Ohio, it seems to me.  Both of those states are competitive.

MATTHEWS:  Yes.

HARRIS:  So, if Florida, there‘s going to be a lot of attention and if Republicans can take that off the table by putting Rubio on the ticket, that would be highly, highly attractive it seems to me.

MATTHEWS:  You know, I grew up, you did, too, knowing New York how powerful the Empire State was.  Look at it now.  It lost two, Florida picked up two.

Guess what?  Florida‘s got as much clout politically, 29 electoral votes, as New York.  Thirty-one actually, doesn‘t it?  Then you add up two for the—

(CROSSTALK)

MATTHEWS:  Go ahead.

STEVE MCMAHON, DEMOCRATIC STRATEGIST:  That‘s right.  In some sense—in some sense, it‘s not surprising.  Yes, in some sense, that‘s not surprising, because after all, if you could live in Florida, in the sunshine, in the wintertime rather than New York, in the cold and snow, who wouldn‘t want to do that?

But in another way, you know, it is going to be a challenge for the president as he looks at the map next time.  There are six votes—electoral votes that move from states that he carried to states that he didn‘t carry.  And, you know, he had a big margin last time, but it looks like going into this next election, it‘s pretty polarized and it‘s going to be a much different kind of playing field.  And so, all these things do matter.

I think the point that you both made about Hispanic voters is an important for Republicans because notwithstanding the fact that president had six fewer electoral votes in states that he carried, the Hispanic vote going two to one for Democrats right now.  George Bush, when he ran, made some inroads with Hispanic voters and those inroads have been taken away.  Marco Rubio might solve the problem, but I think it‘s a much more intractable problem for Republicans than one that Marco Rubio or any single person can solve.

MATTHEWS:  I keep looking ahead, John, I get used on this, to September, late summer 2012, where in Tampa, Florida.  It‘s steaming down there.  It‘s steaming that time of year.  Maybe 100 frankly, humidity 100-degree temperature.  It‘s not the most pleasant climate in the world.

HARRIS:  You make it sound great, Chris.

MATTHEWS:  The Tea Party people will be there.  We‘re all going to be there.  The Tea Party will be there en masse—even if they‘re not delegates, they will be there.

Can they, given these electoral changes in the population, run with anybody, any ticket but somebody who appeals to the Tea Party, given the fact of the geography shifts to the South?

HARRIS:  I mean, Republican—the Republican Party always nominates conservatives or has for the last several generations.  But I think they‘re going to appeal to the Tea Party.  To me, it doesn‘t seem like that big an issue.  They don‘t have to put a Tea Party around their ranks, in the ticket.  In fact, I doubt they would, because Tea Partiers in the past midterm showed that they can have a lot of clout in nominating contests but when Tea Partiers are on the ballot, they don‘t do as well in the general election.

So, yes, they‘re going to have to mobilize support among Tea Parties, but I doubt they want with the Tea Party to be the face of the Republican Party as they face a general election.

MATTHEWS:  The same question to you, Steve.  Can they run a couple stiffs from the Republican ranks, a couple of McConnells and Boehners?  Will they light up a crowd, those people?  How can a Mitt Romney light up the Tea Party people?  You‘d have to really script that guy.

MCMAHON:  Well, I don‘t know if Mitt Romney can light up the Tea Party people.  But I think John raises a good point again, which is why—excuse me, he is at “Politico” doing this every single day.  In the general election, the Republican Party has to move to the middle.  They need—they need the enthusiasm of the Tea Party to get their candidate nominated.

And I think there‘s probably going to be a moderate versus a Tea Party-like candidate who are in the finals for the Republican nomination.  But at the end of the day, the general election is about swing voters and about the independents who went 18 points for Obama in 2008 --

MATTHEWS:  OK.

MCMAHON: -- and who went 18 points for Republicans in 2010.  So, that‘s going to be where this game is going to get played out.

MATTHEWS:  Is it possible, John Harris, for the Democrats to win with just the Northeast and the West where they do have strength?  They do have a bicoastal power base.  Don‘t they have to do well in a state like Florida?  Don‘t they have to win Florida to win the general election?

Is there a state now that‘s become, outside the Northeast, Midwest, sort of, you know, continuous states?  Is there a state in the South they need to get now to win, in the Sun Belt, where everybody is moving?

HARRIS:  Well, I don‘t know that they necessarily have to win Florida, but what they have if they don‘t win those states and they are returned to their traditional historical bases, they got to thread the needle strategy.

What was so remarkable about Barack Obama in 2008 is he didn‘t thread the needle.  He expanded the map into Florida, North Carolina, Indiana, parts of the Rocky Mountain West.  That was an extraordinary achievement that he is going to be very hard-pressed to replicate based on the 2010 results.  So, you take those states out of play.  Then in fact, you do have a thread the needle strategy which requires early locking down the Northeast and California and then fighting over a small number of states.

MATTHEWS:  Can the Republican Party win on the other hand by just rolling up the anti-Hispanic vote in those state where Hispanics live?  I mean, historically, you‘ve seen white people in the South, we have a lot of African-Americans historically because of the cotton culture, they will vote in more right-wing than ever.

What stops Arizona, Nevada, and Florida, and all those states from voting more Republican because there are more Hispanics?  Your thought, Steve?  It‘s a tough one, but I think that‘s what Republicans are up to.  Your thoughts?

MCMAHON:  Well, no.  I mean, if look at—if you look at Texas, for instance, which picks up four new seats, the reason that Texas is growing so much is because the Hispanic population is growing there.

MATTHEWS:  Yes.

MCMAHON:  Nevada, Colorado, New Mexico, some of those states, too.  So, I think that you‘re seeing a greater diverge with the white conservatives voting more Republican and whites generally in some of those places, voting more Republican.  But that‘s being offset by the increasing numbers of Hispanics who are voting 2-1 for Democrats.

MATTHEWS:  OK.  All right.

MCMAHON:  If that continues, you know, states like Texas are competitive now.

MATTHEWS:  OK, thank you, John Harris.  Thank you, Steve McMahon - looking at the map.

UNIDENTIFIED MALE:  Thanks, Chris.

MATTHEWS:  When we return, “Let Me Finish” with what I think is behind this loose talk we‘re hearing today about things like nullification and secession and white citizens councils.  What is this going back before the Civil War, 150 years ago?  Why are people doing it?  I have a theory.

You are watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  “Let Me Finish” tonight with this incredible anachronistic fight that sounds like the Civil War all over again.

Why on God‘s Earth, why here in this United States to which we all pledge our allegiance, are men talking so loosely of nullification and secession?  Have they no feeling toward our country, how it grew, the pain that it suffered to grow to this great republic that it is today?

I think there must be something malicious in all of this.  Don‘t people know the power of these words, nullification, secession?  The issues are real.  They were then and they were solved then.

Can a state secede from the Union?  No.  Then why has a governor from Texas begun talking about it in recent campaign?  Was it just a cheap way to outflank a Republican opponent, a U.S. senator he knew would not talk so casually about secession as he would?

Can a state nullify, that is overrule an act of Congress?  Can a state or group of states get together and nullify an act of Congress?  Not according to the Constitution.  That‘s why this man of the right down in Virginia is talking about doing just that.  Is he doing it to make a name for himself on the far right to build a national movement to undercut federal authority?  Is that what he‘s up to?

You have to wonder why all this talk is creeping in now.  Why are we hearing voices raised against the federal government, as if this were 1860 instead of a century and a half after the horror of those words?

I ask all this as a question for the basic reason that people around me don‘t talk like this.  You don‘t hear people talking about nullification and secession.  You hear people argue over issues, all kinds of issues, but not whether the Union should prevail, not whether we should go back to some weaker system of organizing the country, something looser than the Constitution, something like a confederacy, for lack of a better word.

Is that the way people talk this way?  Is that the way they want us to go, a confederacy?  Is that their dream, a country of little farms and loosely allied states were decision about health care, education and the economy are made down in a little building down at the town‘s square?  Is that what they are selling?

If so, let‘s go all the way with this picture.  Let‘s get rid of the interstate highways and armies that fight in Afghanistan.  Get rid of all the airplanes that fly overhead, and the cell phones and all the other complicated stuff.  Let‘s go back to the old days we thought of ourselves as citizens of separate former colonies and not of the United States—before we complicate our lives by thinking of ourselves as united Americans pledged a certain fundamental American values under a strong Constitution that protects the rights of individuals.

Oh, wait a minute, is that what this state‘s rights thing is all about?  The same thing it about last time, about substituting state‘s rights for individual rights?  Well, now it makes sense, doesn‘t it?

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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