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updated 2/15/2011 10:54:42 AM ET 2011-02-15T15:54:42

Guests: Richard Wolffe, Amanda Drury, David Corn, Abderrahim Foukara, Danielle Pletka, Eric Boehlert, Josh Marshall, Jack Lew

CHRIS MATTHEWS, HOST:  The right goes wild.

Let‘s play HARDBALL.

Good evening and happy Valentine‘s Day.  I‘ve got a tie for the occasion.  I‘m Chris Matthews in Washington.  Leading off tonight: The far side.  Whenever you think progressives need to calm down and get real, you should head over to something called CPAC.  It‘s the right-wing jamboree that puts the zany in the same room as the zanier, where Ron Paul wins the presidential straw poll, where Dick Cheney and Donald Rumsfeld get booed—a rare moment of sanity over there—and where a real-life Mitt Romney shows up only to be upstaged by a fake Sarah Palin.  Talk about switcharoos!  Usually, it‘s Romney doing the pretending.

We missed a lot of the fun last week because of the revolution in Egypt.  Well, tonight, what you need to know about how the right plans to run against President Obama.  If this is the starting, lineup I can only imagine what characters they‘ve got sitting on the bench.

And about that revolution in Egypt—it‘s spreading.  Today the unrest erupted in Yemen, in Bahrain, and most delightfully, I must say, for all of us, Iran.  There is no footage, of course, because they won‘t allow it, but NBC News producer Ali Aruzi (ph) reports thousands have gathered and fought with security forces in Teheran and fought tear gas and other methods used against them in other Iranian cities.  Could we be witnessing the start of a new Iranian revolution, and you might even end up having a republic over there?

Also, Obama presents his budget.  Is what he showed us and the Republicans today simply, a lure, a first attempt to bring both sides together and really cut the debt?

And Glenn Beck may be losing it.  What else can you say when he say the communists are behind the Egyptian revolution and the Islamists are trying to infiltrate the American right wing?

Finally, “Let Me Finish” with the propaganda that got us to attack Iraq in 2003, lies so void of truth that even Donald Rumsfeld has stopped repeating them.

Let‘s begin with the right-wing jamboree called CPAC.  David Corn is the Washington bureau chief for “Mother Jones” and an MSNBC political analyst and Josh Marshall is the founder and editor of Talking Points Memo.

Here‘s a taste, a little collage or montage, of what we heard at CPAC during—well, and interesting things were happening in Cairo.  This is what we missed.  Let‘s listen.

(BEGIN VIDEO CLIP)

HERMAN CAIN ®, PRESIDENTIAL CANDIDATE:  The American dream is under attack.  But the good news is we are fighting back!

(CHEERS AND APPLAUSE)

ANDREW BREITBART, BLOGGER:  I don‘t know why I decided to make my career trying to destroy the institutional left.  I thought that would just be a fun thing to do and it would look good on a resume.

(LAUGHTER AND APPLAUSE)

BREITBART:  It‘s so fun.

JOHN BOLTON, FMR. U.S. AMBASSADOR TO THE U.N.:  We do not accept an America that is weak and declining!

(APPLAUSE)

ANN COULTER, COMMENTATOR:  What do you mean knowing that there are jailed journalists?  I think there should be more jailed journalists!

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

MATTHEWS:  You know, sometimes it‘s better not to comment, but I‘m asking you guys to comment.  David and Josh, that—you know, there‘s some people that you don‘t want to meet in a bar.  That‘s for sure even, or if you‘re watching “Star Wars.”  But what an amazing group of people there, David.  And I think what you‘re seeing there is—it‘s almost like a levitation, like in some carnival act, like they‘re levitating.  It has nothing to do with reality over there.

DAVID CORN, “MOTHER JONES,” MSNBC POLITICAL ANALYST:  Well, maybe it‘s like the sideshow at a carnival...

MATTHEWS:  Right.

CORN:  ... where you go in and you see all these creatures (INAUDIBLE) if they‘re real or not.  I mean, this is what—this is like a zoo where you‘re allowed to feed the animals.  In fact, you‘re expected to feed the animals.  So while you and I and Josh and others were spending Thursday and Friday thinking about Egypt, what were they doing?  They were attacking Obama for being a socialist, for believing America is evil, for causing the economic downturn.

(CROSSTALK)

MATTHEWS:  ... the words come from their mouths.  Here it is, CPAC speakers on President Obama.  Let‘s listen.

(BEGIN VIDEO CLIP)

RICK SANTORUM (R-PA), FORMER U.S. SENATOR:  President Obama, when he first came into office, went around the—went around the world and apologized for America.  He didn‘t see America as good, he saw America as something that was a force for disruption, even evil, even sinister aims.

REP. MICHELLE BACHMANN ®, MINNESOTA:  We have seen President Obama usher in socialism under his watch over the last two years!

(CHEERS AND APPLAUSE)

NEWT GINGRICH (R-GA), FMR. SPEAKER OF THE HOUSE:  And I hate to tell this to our friends at MSNBC and elsewhere, Barack Obama is no Ronald Reagan!

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

MATTHEWS:  That‘s Newt Gingrich doing his Orson Bean impression.  Nobody else talks like that.  Anyway, Josh Marshall, that accent of his is just—I don‘t know where it comes from.  But anyway, it‘s a strange character (ph).  Newt Gingrich with his personal history, you got to wonder.  He‘s running against Barack Obama.  You‘ve got them attacking him for his foreign—not loving America enough.  I‘ve never heard anybody speak so beautifully about America, at least going back to Reagan, as this president.  What do they want him to say about America that would convince them that he loves this place and cares about this place?  It made him, it was his opportunity for existence, and yet they keep knocking him, saying he hates America.  What is that angle about, with Santorum and the rest of them?

JOSH MARSHALL, TALKINGPOINTSMEMO.COM:  I think it goes back to what you were saying a few moments ago.  They‘re just operating in an alternate reality.  I don‘t think there‘s anything that President Obama could say that would change what they‘re saying in any way.

But you know, when you listen to those voices, what it shows me is that the kind of candidates and the kind of—you know, the kinds of slogans that can do pretty well for you in a mid-term campaign really don‘t play well in a national campaign, a presidential campaign.  And I think that‘s the pivot that the Republican Party is dealing with right now, that these—a lot of these same people really helped the Republicans, you know, wallop the Democrats in the House last year.

MATTHEWS:  Yes.

MARSHALL:  But you know, going into a—going into a presidential, this kind of stuff, like the president hates America and he‘s brought us under socialism in two years—that sounds very out there, I think, to a broader...

MATTHEWS:  Well, I think the “out there” is true.

MARSHALL:  ... (INAUDIBLE) of people.

MATTHEWS:  And I think here‘s a question.  How much will the people who end up—the person, the team that ends up running against President Obama next year—how much will they have to kiss butt with this crowd to get to that nomination?

MARSHALL:  I think a lot.  I think a lot.

MATTHEWS:  That‘s the scary part.  Now, here‘s Congressman (INAUDIBLE) I‘ve never met him before.  I have an open mind for about 30 seconds here before I hear from him.  And here‘s former governor Tim Pawlenty, who‘s doing more kiss butt than anybody I‘ve ever seen.  They‘re cracking birther jokes.  He‘ll do anything to prove that he‘s insane.  And actually, he‘s not.  This is the sad thing about the Republican Party.  Credible people like Pawlenty, the governor of Minnesota, have to act zany to get the nomination.  Here he is.  Here they both are.  Let‘s listen.

(BEGIN VIDEO CLIP)

REP. PAUL LABRADOR ®, IDAHO:  I‘m fortunate enough to be an American citizen by birth, and I do have the birth certificate to prove it.

(CHEERS AND APPLAUSE)

TIM PAWLENTY ®, FMR. MINNESOTA GOV.:  Now, I‘m not one who questions the president‘s birth certificate and the existence of his birth certificate, but when you listen to his policies, don‘t you at least wonder what planet he‘s from?

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS:  You know, I have to tell you, you know, what it is—the idea that you use the president‘s American citizenship as set-up material for jokes—now -- (INAUDIBLE) like in Vegas, you tell a joke based on a set-up, and the set-up is somehow he‘s not really one of us.  That‘s the chuckle.

CORN:  Well, that‘s the whole theme of the conference, that we have to take our country back from this secret socialist Muslim who actually wants to destroy it because he hates it so much.

MATTHEWS:  And if you follow Glenn Beck, who takes them all the way to Pluto, he says that, basically, the communists, the socialists, Obama...

CORN:  Are working together.

(CROSSTALK)

MATTHEWS:  ... and they‘re infiltrating the conservative groups.

CORN:  Yes.  I was at the meeting last Tuesday.  But you know—but Mitt Romney, who‘s supposed to be one of the adults in the room, he came out—he came out and gave his speech, and he said that the economic downturn was caused by Obama and the Democrats.  So they really are, as Josh says, creating this alternative world where there‘s no history no, there‘s no truth, and it‘s just about one liners and feeding the base.

MATTHEWS:  Well, here‘s Ron Paul.  He won the CPAC straw poll.  They think he should be president.  And actually, I respect his basic libertarianism.  I don‘t think it really applies to real life, but I like the sentiment, at least, but it‘s not real.  Here‘s Mitt Romney—now, let‘s take a look here.  He took second.  Look at these numbers.  We‘re looking at the numbers now.

It‘s interesting there how poorly Palin did, Josh, I mean among the zanos.

MARSHALL:  Right.  Right.  You know, I think she‘s...

MATTHEWS:  She couldn‘t even win among the zanos.

MARSHALL:  She‘s—and you know, that has to be her constituency.  I mean, I think she‘s taken a real—she‘s taken a real hit over the last few months.  And you know, she really has become more and more of, you know, sort of like a talk radio, a chat show TV person than even—you know, even the level of seriousness that she may have had as a presidential candidates, you know, six months ago or a year ago, which is not saying much.

You know, going back to what David was just saying, I think, you know, there‘s this very weird inverse relationship that‘s playing right now among Republican presidential candidates, that the more—you know, the more in the reality-based world you actually are, the crazier the things are that you have to say to inoculate yourself...

MATTHEWS:  Yes!  That‘s what I was saying about...

MARSHALL:  ... against the relatively sane.  You‘re absolutely right about Pawlenty.  He is—this is a—you know, this is a fairly run-of-the-mill, you know, Midwestern Republican governor.  But he‘s out there saying, you know, no raising the debt ceiling and the president‘s from Mars.  He kind of has to crazy it up to even get into the game.

MATTHEWS:  It‘s like the first primaries in crazy land.  You have to go into crazy land and prove it.  You have to be like Mitt Romney pretending you‘re funny.  You have to (INAUDIBLE) Pawlenty and say you want to bring back DADT, bring back “Don‘t ask, don‘t tell,” anything to appeal to the crowd.

(CROSSTALK)

MATTHEWS:  But I do respect this guy because he‘s never tried to really run for president by saying—by pretending he‘s somebody he isn‘t.  He is what he is, 100 percent -- 100 proof, really—libertarian.  Here he is at CPAC, Ron Paul, the guy they love.  Let‘s listen.

(BEGIN VIDEO CLIP)

PAUL:  What if I could offer you and say, Look we‘re not doing such a good job in government these days.  We make promises and we don‘t know about the future.  But would you consider opting out of the whole system under one condition—you pay 10 percent of your income, but you take care of yourself.  Don‘t ask the government for anything!

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

MATTHEWS:  So this is where they lose traction, when they get into practical stuff.  You‘re never going to go onto a federal highway again.  You‘re never going to go to an airport that is regulated by FAA.  You‘re never going to eat a can of tuna fish (INAUDIBLE) inspected for ptomaine.  You‘re going to do your own inspections for ptomaine.  You‘re going to inspect the...

CORN:  And your own cancer research.  Don‘t forget about that.  And you‘re going to defend yourself if we‘re invaded by Canada.

MATTHEWS:  You‘re going to defend yourself from the enemy if anybody attacks America.

CORN:  Listen...

MATTHEWS:  And by the way, when you get old and sick and you need help, you‘re going to remember you made this deal, Josh.  And of course, everybody—my dad and I used to have these arguments as a kid when I bought some of this libertarian -- (INAUDIBLE) wait a minute the very people who say, I‘ll just pay my 10 percent are the ones you‘re going to have to take care of later because they‘re all going to be older.  They‘re going to be sick because everybody gets sick at some point.  Everybody definitely gets old.  And everybody needs help.  And everybody gets on an airplane sometime.  And everybody needs help.  And they never want to admit it.  It‘s this whole—well, it‘s a carnival.

Anyway, thank you.  I do like the theory, by the way, of self-reliance, but when you get into the real world, it doesn‘t work.  Thank you, David Corn.  This has been too easy.

(LAUGHTER)

MATTHEWS:  It‘s not fair.  Josh Marshall—and by the way, sometimes I think this whole CPAC thing is put up by the Obama people.

(LAUGHTER)

MATTHEWS:  This is what the alternative is.

Coming up, the battle over the budget.  President Obama‘s proposing a budget that makes some cuts by calls for new investment in education, energy and infrastructure.  We knew that was coming.  Republicans say they want to spend less and have deeper cuts.  Is the president trying to lure Republicans into a real negotiation?  That‘s what I think he‘s up to, a few of these loss leaders, things that they want to cut, like CDBG and things like that, community block grants and community organizing so they know he‘s packing (ph) some paint (ph).  He‘s trying to get them into a discussion.  I‘m going to talk to the smart new director of the Office of Management and Budget, Jack Lew.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  One week from now, a big night on MSNBC.  Catch the premier of my new documentary on the global phenomenon, Bill Clinton.  It‘s called “President of the World” because no other politician has ever had Clinton‘s worldwide reach, rock star appeal and historic mission.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE:  Ladies and gentlemen, please welcome the 47th president of the United States, William Jefferson Clinton.

WILLIAM JEFFERSON CLINTON, FMR. PRESIDENT OF THE UNITED STATES:  I

look out beyond the world leaders and I see Barbra Streisand and James Brolin and I see Geena Davis, who played a better president than I did.

(LAUGHTER)

CLINTON:  And I never thought in my lifetime I would be on this stage and the Rolling Stones would be watching me perform.  So thank you, Mick Jagger.  Thank you, Ronnie Wood.

MATTHEWS:  Clinton moves at a whirlwind pace.  I spent a week with him in the fall of 2010 trying to keep up.  And propelling his global effort is just one part of what does.  It‘s election season, and his party needs him.  Bill Clinton can‘t resist the call of the campaign stump.

CLINTON:  Hello!

MATTHEWS:  It was what he was born for.

CLINTON:  You know, the great thing about being a former president, you can say whatever you want.

(LAUGHTER)

CLINTON:  And then, of course, the bad thing is nobody really cares anymore, but you can say it.

(LAUGHTER)

MATTHEWS:  Hardly.  Millions care what this former president has to say.

UNIDENTIFIED MALE:  I think in his post-presidential phase, his legacy is in the power of his personality and the example he sets of somebody being willing to persevere.  It‘s been one of the most consequential ex-presidencies that we‘ve seen.

(END VIDEOTAPE)

MATTHEWS:  Well, if you want to have some fun next Monday night, get the popcorn, lots of homemade popcorn, lots of soda, whatever else you want to drink, and enjoy an hour feeling good about America and its ex-president, Bill Clinton.  “President of the World” premieres next Monday night, a week from now, at 10:00 o‘clock here Eastern time on MSNBC.

HARDBALL back after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  The only way to truly tackle our deficit is to cut excessive spending wherever we find it, in domestic spending, defense spending, health care spending, and spending through tax breaks and loopholes.  So what we‘ve done here is make a down payment.

(END VIDEO CLIP)

MATTHEWS:  Welcome back to HARDBALL.  That was President Obama selling his budget plan up in Baltimore today.  It projects $1.1 trillion in savings over the next 10 years but doesn‘t go after the entitlements.  Jack Lew is president—well, he‘s President Obama‘s budget director.

Jack, Mr. Director, it‘s great to have you on.  You know, I have a sense watching you, knowing that you‘re an expert and have the best values of anybody I know, that this is just the beginning of a discussion in this country, that it‘s going to go on in the next months and years to try to find a bipartisan way to try to deal with the long-term debt problem.  Am I wrong?

JACK LEW, DIR., OFFICE OF MANAGEMENT AND BUDGET:  Chris, good to be with you.  The president‘s budget is always the beginning of the process.  And I think it‘s important that this year that we do begin the process with a comprehensive plan, which in the four corners of the budget that we present, would take on the real challenge that we face, which is to prove that we can live within your means, that we can cut spending, that we can also find the means to invest in the things we need to, to have a strong future, to invest in education, in infrastructure and innovation.

But we do have tough cuts that we have to make in order to achieve the deficit reduction and to make room for the new investments.  We put together a budget that goes to every part of the budget.  We don‘t have any illusion that Congress is just going to sign on the bottom line, but we think that it is an important budget that on its own stands up to the test of rigorous analysis.

MATTHEWS:  Do you think this budget—well, you designed it, probably, or drafted it for the president.  Do you think this budget is the best we can do right now to put people back to work?  If you think about we‘ve got a 9 percent unemployment rate—of course, a lot of people underemployed—how does this budget address that problem?

LEW:  Well, this budget takes both the view towards the immediate needs but also a little bit over the horizon.  You know, there are things in this budget—for example, the accelerated pace at which the infrastructure program would begin the first year with $50 (ph) billion of spending—that have immediate impact on job creation.

But the president is taking a longer view.  And he‘s asking the question—and that‘s why he was in a school in Baltimore today with students who were studying math and science, engineering.  The future requires that we teach our kids the skills that they need to do the work they will keep America competitive.

And we also need to do the science, so that we can continue to have to the greatest innovation of any country in the world.  And we also need to have, you know, highways and ports and airports, so that we can both be a center of commerce and participate in commerce with others. 

That‘s what this budget does.  But it does make tough cuts in order to get that done. 

MATTHEWS:  Well, you know, I heard this wonderful story, Mr. Director, about President Reagan and Tip O‘Neill.  And it had to do with the fact of how they began that wonderful ability, the two of them, a bipartisan duo, if you will, to basically save Social Security for 30 years, for three decades.

And I was told that what happened was the president initiated that by saying that Tip O‘Neill, our old boss, let‘s go for a walk on the South Lawn.  And during that walk they sort of decided that they were going to deal with this issue.  It ended up being a Democratic solution, more taxes than benefit cuts, of course, as you know.

But it ended up being a decision to take the heat, as there was, from the older folks that were going complain about it and whatever.  And they put it together. 

LEW:  Yes.   

MATTHEWS:  And is there something like this in the wings—is there something like this in the wings down the road?  Is it—can you imagine the president, your boss, meeting with Boehner and McConnell and at some point doing a walk in the woods and deciding, you know, we‘re all going get hit on this thing, but down the road, not right now during this recession we still have, but down the road, we can‘t have this imbalance between spending and outlays—I mean, spending and revenues; it can‘t go on?

LEW:  You know, I think that, if you look back to the 1980s, we can learn some lessons, and from the 1990s too. 

You find room for bipartisan agreement when you have leaders who are -

want to find that place where they can agree...

MATTHEWS:  Yes. 

LEW:  ... who are willing to leave aside the things that are so polarizing and find that center where you can build a bipartisan consensus.  It happened in 1983 on Social Security in part because—and you and I worked together on this—for the two years prior to that, there was a process drawing lines, but also leaving things on table. 

I think what the president did in the State of the Union, what we are doing in the budget, is laying out a blueprint for the things that we need to do right away.  On Social Security, that isn‘t an immediate issue.  It doesn‘t address the deficit this year or next year or even in this 10-year window.

It‘s something that the president has said it‘s the right thing for us to do together looking down the road. 

MATTHEWS:  Right. 

LEW:  I think that we need to deal with the deficit in this immediate time.  The president has put out a budget that would get us to a place where we have a sustainable deficit, we stop adding to the national debt in the middle of the decade. 

I think we‘re going to need to work together on a whole host of issues, not the least of which is getting agreement on the immediate funding of the government in just a couple of weeks. 

MATTHEWS:  I got you.

Thank you very much, Jack Wolf (sic), budget director for the United States.  Thanks for joining us today, the day the president puts out his budget.

Let‘s go Richard Wolffe, MSNBC political analyst. 

You know, I think I know what they‘re saying.  I watched this all day try to evolve.

RICHARD WOLFFE, MSNBC POLITICAL ANALYST:  Yes. 

MATTHEWS:  I still think they are hoping to get a deal down the road, because the only way you‘re ever going to leave this presidency and call it a transformative president, which is he wants to be, an historic president, not just a get-by president, you get by in the short run, and you reduce the debts, deficit, but in the long run, everybody who looks at this says we‘re not paying for the government we‘re getting.  We‘re just not doing it. 

WOLFFE:  Right.  But this is also about politics.  This is about setting up 2012 here.  Look at how disciplined they are...

MATTHEWS:  How—how—OK, tell me why this is a political document. 

WOLFFE:  Well, look how disciplined they are with the messaging, one thing they haven‘t been for the last two years, everything from Director Lew just then and the president, win the future, investments, yes, we will do some cuts, they are painful, but it‘s all about the future and investments. 

That language has been repeated over and over and over again.  That‘s not something they used to do.  And what does that set up?  Well, it‘s saying, we all agree on cuts.  It‘s what you cut.  Can you do it with a heart?  Can you do it with a brain? 

MATTHEWS:  Who is listening?

WOLFFE:  Who is listening?

MATTHEWS:  Yes. 

WOLFFE:  Well, at the moment, it‘s not the broader public. 

(CROSSTALK)

MATTHEWS:  Who are they talking to? 

(CROSSTALK)

WOLFFE:  At the moment—well, they‘re talking to independents.

(CROSSTALK)

MATTHEWS:  The netroots?

(CROSSTALK)

WOLFFE:  No, independents.  Independents care about deficits.  They lost them in the midterms. 

But the turnaround for President Obama in independents has been a double-digit turnaround.  So, he‘s got—he‘s made up big ground with what we saw in the end of the last Congress.  This kind of language says he‘s not just taking the sledgehammer to it.  He‘s trying to use a scalpel. 

MATTHEWS:  So, you‘re talking to parents of kids in their 20s.  You‘re talking to grandparents of kids in their 20s scared to death they can‘t get jobs because they can‘t compete worldwide.  Is that who you‘re talking to?  Or are you talking to the 55-year-old guy who just got bounced from a job he had for 30 years and wants to get back into that exact job he had?

WOLFFE:  You know, he‘s not talking to the unemployed here.  Here, he‘s talking to people who don‘t like the partisan bickering.  They like the stuff—they have obviously got kids.  This is about the future, but they are independents.  They want to see both parties working together here.  That‘s why they are taking this reasonable line. 

And that‘s why the ball is now with the Republicans.  What are you going to cut?  And are you going to come to the table?

MATTHEWS:  Did you hear Jack Lew earlier today?  I didn‘t get to it.

He said, if you stick your neck out and say you are going to cut Social Security and Medicare, one of those things, you get killed.

WOLFFE:  Right. 

MATTHEWS:  Because the other side always exploits it.  It never gets you anywhere.  It never gets to you a bipartisan agreement.

So, we always like to say courage counts, profiles in courage, and we would like to see them do it.  But we know, the minute they do it, Boehner and Cantor and all those guys on the Hill will jump them. 

WOLFFE:  Right. 

Well, that‘s the experience of health care reform, right?

MATTHEWS:  Right. 

WOLFFE:  The ads against their cuts on Medicare.  But the interesting thing, this is why it‘s a political document.  Neither side is really dealing with the long-term deficit here. 

MATTHEWS:  OK.

Well, let‘s talk about the SEIU, the steelworkers, people like that, the unions out there, the ones that care about the unemployed, who want to get a largest membership, let‘s be honest.

WOLFFE:  Right. 

MATTHEWS:  Are they going be happy with this? 

WOLFFE:  No.  No, they‘re not.

MATTHEWS:  Why?  Tell me why.

WOLFFE:  Because—because there are too many community grants...

MATTHEWS:  CDBG, community block grants.

WOLFFE:  They just don‘t want to see that go down. 

But actually that kind of criticism is going to help this president. 

You know that two-thirds of the money here in deficit reduction comes...

(CROSSTALK)

MATTHEWS:  OK.  They might like him in the infrastructure, because they accelerate public works and start putting people back to work, replace the smell of decay with the smell of construction, as I have said many times, quoting David...

(CROSSTALK)

WOLFFE:  It‘s about choices.  OK?  So, they are going to still have some of that money.  Republicans are still going to say cut the whole thing. 

(CROSSTALK)

MATTHEWS:  You know, I don‘t think the Republicans are right.  I think people want government. 

Anyway, thank you, Richard Wolffe.  Thank you. 

Up next, why don‘t—why won‘t John Boehner stand up to the birthers?  Here‘s a guy who could lead.  Why isn‘t he?  He‘s the most powerful Republican in Washington right now.  He has a real job under the Constitution to protect the Constitution.  People in his zany right wing are saying the president is not an American.  And he won‘t take them down.  I thought he was leader.  You got to take the job with the title.  Check out the “Sideshow,” because that‘s where he belongs today. 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

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

First, it‘s not my job.  On “Meet the Press” John Boehner was asked about that Iowa focus group where 10 of 25 Republican caucus-goers said President Obama is a Muslim.  Did Boehner step up and condemn the lies?  Not one bit. 

(BEGIN VIDEO CLIP, “MEET THE PRESS WITH DAVID GREGORY”)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE:  It‘s not my job to tell the American people what to think.  Our job in Washington is to listen to the American people.  Having said that, the state of Hawaii has said that he was born there; that‘s good enough for me.  The president says he‘s a Christian.  I accept him at his word.

There‘s a lot of information out there.  People read a lot of things. 

GREGORY:  You shouldn‘t stand up to misinformation and stereotypes? 

BOEHNER:  But I have made clear what I believe the facts are. 

GREGORY:  But is it because it weakens the president politically?  It seeks to de-legitimatize him that you sort of want to let it stay out there? 

BOEHNER:  No.  What I‘m trying to do is to do my job. 

(END VIDEO CLIP)

MATTHEWS:  It was a pretty good discussion there on “Meet the Press.”

There is an alliance I believe today between the Republican establishment represented by that fellow who care about business and lower taxes, the usual stuff, and they want and need the backing of the people who have wilder politics, wilder hatreds, and even wilder fears.  And they‘re willing to exploit them.

Next, Haley Barbour talked shop on FOX yesterday.  The Mississippi tried spinning gold with his biggest negative. 

(BEGIN VIDEO CLIP, “FOX NEWS SUNDAY”)

GOV. HALEY BARBOUR ®, MISSISSIPPI:  I‘m a lobbyist and had a career lobbying.  The guy who gets elected or the lady who gets elected president of the United States will immediately be lobbying.  They would be advocating to the Congress.  They‘ll be lobbying our allies and our adversaries overseas.  They‘ll be asking the business community and labor unions. 

You just—that‘s what presidents do for a living.  Ronald Reagan was the—he was the ultimate lobby wrist, the great communicator. 

(END VIDEO CLIP)

MATTHEWS:  Well, when you‘re stuck in quick, stop wiggling.  Bobby Kennedy would have understood, however, that tactic.  It‘s called hanging a lantern on your problem.  You calling me a lobbyist?  Damn straight I am one.  We will see if it works.

Now for tonight‘s “Big Number.”  You can call Supreme Court Justice Thomas the quiet man.  I mean it.  When the court returns from its winter break this month, how long will it have been since Justice Thomas said anything during Supreme Court arguments?  Five years.  Five years riding the quiet car.  Clarence Thomas, five years without speaking a word—tonight‘s “Big Number.”

Up next:  First Tunisia, then Egypt, and now it‘s happening in Yemen, Bahrain, and, yes, Iran.  Unrest is spreading throughout the Middle East.  Which regime will be the next to fall, and how far will this revolution go? 

You‘re watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

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

Stocks ending mixed in very light trade, the Dow Jones industrials giving up five points, the S&P 500 climbing three, now up 100 percent in the last two years, And the Nasdaq finishing seven points in the green. 

Well, no economic big news coming out today, but investors were weighing the impact of President Obama‘s budget proposal.  Defense stocks were slightly lower on plans to cut $78 billion from the Pentagon over five years.  But investors know this is just the opening gambit.  They are waiting to see which programs will survive. 

Well, Wal-Mart shares under pressure on a downgrade from J.P. Morgan.  It says Customers may be heading back to higher-end stores as the economy improves.  Netflix, meantime, soaring 7 percent, as investors gave up short positions on an analyst upgrade and relentlessly upbeat industry reports. 

But FedEx shares slipping in after-hours trade.  It lowered its quarterly guidance after the closing bell on rising fuel costs and weather problems. 

That‘s it from CNBC for now.  We‘re first in business worldwide—now it is back to HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

The uprising in Egypt is spreading like a good contagion throughout the Middle East -- 2,000 protesters in Algeria clashed with riot police over the weekend and vowed to assemble again this coming Saturday.

In Yemen, hundreds marched toward the presidential palace before being turned back by security forces.  Police in Bahrain fired rubber bullets and tear gas on more than 2,000 Shiite protesters at the anti-government rally there today. 

And, in Iran, tens of thousands of demonstrators took to the streets of Tehran and other major cities.  Look at them.  Clashes with the militia were growing violent there, and Internet and phone lines were being blocked by the government.  Secretary of State Hillary Clinton issued a clear call of support for the Iranian protesters this afternoon. 

Let‘s listen to the secretary.

(BEGIN VIDEO CLIP)

HILLARY RODHAM CLINTON, U.S. SECRETARY OF STATE:  Let me very clearly and directly support the aspirations of the people who are in the streets in Iran today.

And I would add that what we see happening in Iran today is a testament to the courage of the Iranian people and an indictment of the hypocrisy of the Iranian regime, a regime which, over the last three weeks, has constantly hailed what went on in Egypt.  And now, when given the opportunity to afford their people the same rights as they called for on behalf of the Egyptian people, once again illustrate their true nature. 

(END VIDEO CLIP)

MATTHEWS:  Give it to them, Hillary.  That was a great line from an American.

Can the revolution in Egypt embolden the Iranians to topple the regime? 

Abderrahim Foukara is a Washington bureau chief for Al-Jazeera in

Washington.  And Danielle Pletka is vice president of foreign and domestic

or actually defense policy studies at the AEI.

Gentleman and lady, thank you very much. 

I want to start with my friend Abd (ph). 

I‘m so proud of our secretary of state, because she‘s caught these people as hypocrites.  The fellow Ahmadinejad over there, this clown, is running around saying he supports the revolutions of the people.  He wouldn‘t know what a republic is.  Isn‘t this—Secretary Shultz, George Shultz, told me this again the other weekend.  This is the great opportunity to point out it‘s not really an Islamic republic.  It may be Islamic, but it‘s not a republic, that country. 

If it were a republic, they would have democracy of some kind.  What‘s going on over there, do you think?  Is there a chance for change? 

ABDERRAHIM FOUKARA, AL-JAZEERA:  Well, clearly, what initially happened in Tunisia has happened in Egypt.

And the ancient political axiom in the region is that, if it happens anywhere else in the Middle East, it may not necessarily happen in Egypt.  But, if it does happen in Egypt, you can be sure that it will happen elsewhere in the region. 

Iran is no exception to this.  The only difference is that the government in Tehran has been telling people that the revolution in Egypt happened because of the peace treaty with Israel, when, in fact, the demonstrators in Egypt, as we all followed over three weeks, they did not mention Israel.  They did not mention the West.  They had grievances with their own political regime. 

That regime has fallen.  But they are now saying the battle against the remnants of the regime is not over. 

MATTHEWS:  Do you think—we haven‘t been on this subject together, you and I, Abd (ph), but I want to—it‘s a tough question.  When these leaders spend all their time talking about Israel, I can understand, I think, the Arab historic problem with Israel.  It‘s not hard to figure it out.  They see it as an interloper.  They see it, to some extent, as a colonial enterprise.

I understand their arguments.  But when they get up in the morning, is that really what they think about?  Is that what‘s good for their countries?  The Egyptians decided, under Anwar Sadat, you may have this as a disturbance in your life, but it is not something you get up in the morning and think about all day and run your country on the basis of.

Does Ahmadinejad give a damn, a rat‘s butt about Israel?  Or is it just a good call to arms?

FOUKARA:  I think Ahmadinejad knows that he enjoys a certain measure of support inside of Iran and that certain measure of support inside of Iran, obviously, is taking a hostile attitude vis-a-vis Israel.

MATTHEWS:  Right.

FOUKARA:  But, obviously, he has been trying to mobilize Iranian public support and a lot of people outside of Iran, including in the Arab world, they‘ve been saying, well, the way he‘s using the Palestinian issue is obviously to capitalize on that hostility to Israel and put Arab public opinion on his side.

MATTHEWS:  Yes.

FOUKARA:  Obviously, the dynamics of this are shifting quickly.  The Israelis have for many, many years been saying we are the only democracy in the Middle East.  It‘s interesting to see if democracy does pan out in Egypt to what extent that will change the Israeli narrative, though.

MATTHEWS:  Let me—let me go to Danielle, I never had you on, Danielle.  Thank you for coming on—Danielle Pletka for the AEI.

You know, this whole thing about the “Freedom Agenda”, it looks very good right now because the “Freedom Agenda” that George W. talked about, the former president, in this case seems positive.  It‘s not a justification for a war in Iraq or wherever else.  It‘s the idea that the Egyptian people, the middle class, the working class—the people you get to know if you go there and spend a week over there, people you actually come face with face—are real people with real aspirations and real desire for freedom and respect and dignity.  And that‘s something you don‘t often get a chance to see on worldwide television.

DANIELLE PLETKA, AMERICAN ENTERPRISE INSTITUTE:  Well, first of all, I think George Bush‘s “Freedom Agenda” was more than justification for war.  But, look, this is a great thing for us.

(CROSSTALK)

MATTHEWS:  I wish that wasn‘t the reason why he sold it.  But go ahead.  Go ahead.  I‘m sorry.  Go ahead.

PLETKA:  It wasn‘t the reason why he sold it and it wasn‘t the reason for the policies.  They actually had a—they actually had a policy of supporting these kinds of people in Egypt and elsewhere.  The problem was the Bush administration never followed through on it.

But this isn‘t about the past.  This is really about the people.  You rightly said this is about the aspirations of the people in the Middle East.  And, you know, how it‘s going to come out is going to be a challenge.  That‘s why we need to be in on this game from the beginning because it‘s not just about revolutions.  It should be for the United States about supporting the evolution of all these countries towards a more pluralistic society, not a choice between, say, the Muslim Brotherhood and Hosni Mubarak.  And we really need to be in on the game—

MATTHEWS:  I agree.

PLETKA:  -- from the beginning in every one of these places.

MATTHEWS:  How do we do that without looking like we‘re calling the shots in their country politically?

PLETKA:  Because it‘s not about calling shots.  You know, the building blocks of democracy are not about telling people who to choose, how to vote, or picking winners.  It‘s really about education people about choice.  It‘s a lot about how we live in this country.  It‘s about how you create a political party.

It‘s about using our moral, economic, and frankly, you know, diplomatic weight to have free press.  It‘s to have freedom of religion.  It‘s so emphasize our values, treatment of minority—those are the kinds of things that are the building blocks in a civil society that make things work.

We saw them at work in Egypt.  We saw people stood up for that.  Not as you said because of Israel or because of Islamism or certainly because of Iran.  That‘s not interference.  That‘s about standing for our values, and we can do that no matter who the president is.

MATTHEWS:  But do you think that‘s as easy as said?  I wonder if it‘s—we start talking about women‘s rights, we talk about freedom of speech, we‘re going right up against the people who are the most arch traditionalists, aren‘t we, in those societies?

FOUKARA:  Look, the entire Middle East region seems to have been going in recent decades through a phase of, if you will, social and religious conservatism.  And I think we‘ve seen this manifesting in one way or another in what‘s happened in Egypt, although the revolution in Egypt has not been led by the Muslim Brotherhood.  It has not been led by any religious sloganeering, if you will.

It has been by people who had enough of a regime they say has not been able to give them their freedom.

MATTHEWS:  Yes.

FOUKARA:  And about the democracy agenda, it‘s interesting that even in Iraq, we have seen now demonstrations against corruption and the like as the demonstrators have been saying.  It is really ironic, Chris, that when the regime toppled in Egypt, there was euphoria throughout the Arab world that it happened peacefully in Egypt.

MATTHEWS:  Yes.

FOUKARA:  But there‘s also a lot of sadness that it happened in Iraq in 2003 and the cost, as many people in the region feel, was actually the destruction of Iraq.

MATTHEWS:  OK, thank you.  I‘m with you.

Thank you, Abder Foukara.  Thank you, Danielle Pletka, for the AEI. 

Thanks for coming.

Up next: Glenn Beck still warning his viewers, you got to wonder about this guy‘s condition, that Muslim radicals were actually working for the communists and socialists.  And, by the way, we‘re—by the way, the people in this country, the communists and the socialists.  He believes the president of the United States is part of this communist, socialist overtake attempt out there to create chaos over there.  He thinks there‘s an infiltration by the right, in fact, of the Islamists.

I don‘t know what he‘s selling.  There must be somebody must be buying this stuff.  We‘re going to talk about it.  It is very crazy.

Back with HARDBALL in a minute.

(COMMERCIAL BREAK)

MATTHEWS:  Congresswoman—oh, there‘s a great news—

Congresswoman Gabrielle Giffords continues to make progress.  She‘s now, interesting, lip syncing to songs and speaking by phone to a brother-in-law who‘s at the international—he‘s on the International Space Station up there.  Doctors continue to caution that she has a long road ahead of her and her aides say she‘s not speaking as she once did, but she‘s improving every day.

And that‘s giving Democratic political strategists, the smart guys, hope that should her physical condition allow, she could be a candidates of the United States Senate out there in Arizona to fill the seat of retiring Republican, Jon Kyl.  I‘m still amazed that Jon Kyl is retiring, one of the most ambitious guys in the world here.  If she‘s decided to run, her incredible story alone could actually make her a formidable candidate perhaps.

Meanwhile, on Republican side, U.S. Congressman Jeff Flake announced his candidacy for Kyl‘s seat, didn‘t let that get cold in what is expected to be a crowded field of contenders.

We‘ll be right back.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back.

Glenn Beck is still at it, warning his listeners and viewers that Muslim radicals, communists and socialists are still at work, creating chaos, and planning an insurrection right here in the United States.

Here to break it down with me is Eric Boehlert.  He‘s a senior fellow of “Media Matters.”

Sir, I think, Eric, you know what you‘re doing here.  Let‘s take a look at some of this and let‘s do the analysis.  Here‘s Beck on FOX on Friday.  Here he is, reacting to the news that Mubarak has stepped down.  Good news to most people, not to him.

Let‘s listen.

(BEGIN VIDEO CLIP)

GLENN BECK, FOX NEWS:  There‘s a lot more to it than just this utopian storyline being fed to you right now that it‘s just the average 1776 loving, you know, Thomas Jefferson kind of guy out there in the street that just wants change.  Really?  Is it?  While the media cheers, they are completely oblivious to the fact that socialists, communists and extreme Islamicists all working together in Egypt to bring this about, along with the amazing technology and help of Google.

(END VIDEO CLIP)

MATTHEWS:  You know, is this his mental condition?  His emotional condition?  Is it good merchandising?

There‘s never any evidence presented.  It‘s just these incredible scare tactics to get—is it older feel he‘s working on?  He went to the Cold War.

Can you do an analysis of this guy and what he‘s up to?

ERIC BOEHLERT, MEDIA MATTERS:  Well, I think the merchandising is a pretty good place to start.  You know, this is Glenn Beck‘s shtick.  He basically—he reminds me of those old performance on “The Ed Sullivan Show” where they‘re spinning the plates, you know, running around, covering the floor, hoping, you know, the plates don‘t shatter—because he‘s got so many conspiracies in the air.

I mean, with the Egypt thing, he‘s trying to tie it in with Van Jones and ACORN and all the stuff from 2009, 2010.  So he continues to scramble.  And, you know, Beck is just an absolute true conspiracist.  And every new revelation proves he‘s right.

You know, last Thursday, when Mubarak didn‘t step down, that proved he was right.  On Friday, when Mubarak stepped down, that proves Glenn Beck was right.  So, he‘s got this sort of airtight bubble.

And sure, he‘s selling paranoia.  He‘s selling fear.  There‘s always a market in America.  What‘s different now, you know, in terms of a couple of decades ago, you know, the Birchers, John Birch Society, they didn‘t have a cable news channel at their disposal.

(CROSSTALK)

BOEHLERT:  They didn‘t have an irresponsible outlet.  So, he‘s doing what we‘ve seen over and over again in American history, but he‘s doing it on national TV.

MATTHEWS:  I grew up with some of these Bircher stuff.

Here‘s Glenn Beck, by the way, on radio.  He fuels the fire here that the Islamists and communist radicals are infiltrating conservative groups like CPAC, like we‘re just talking about them.  Let‘s listen to this theory.

(BEGIN AUDIO CLIP)

BECK:  This could be a wild conspiracy theory or it could have some merit to it, or it could be absolutely true.  I‘m not sure what it is yet.  Our organizations and our groups need to make sure that we haven‘t been infiltrated by, you know, communist or Islamic radicals.

(END VIDEO CLIP)

MATTHEWS:  This is what I said about as a kid watching “The Invisible Man” with Claude Rains and checking under the bed to see if there‘s an invisible man under there.  You did this when you‘re a kid.  But who‘s buying this now as grown-ups?

BOEHLERT:  Well, you know, this is—

MATTHEWS:  Grover Norquist, to some kind of Islamic eye for news (ph)?  What are we believing here?

BOEHLERT:  You know, this was pushed after 9/11, you know, the Frank Gaffneys of the world when there actually was true sort of fear in the air about what sort of infiltration there might be with the Islamic radicals.  To try to base that now on a peaceful, you know, pro-democratic revolution in Egypt doesn‘t make any sense.

But he—you know, he‘s preaching paranoia, and he‘s reaching through a far right anti-Obama crowd, the one who thinks he‘s a racists, who thinks he is a socialist, he‘s sort of a black Manchurian candidate, you know, ready to take down America from within.  All of this plays into that.  And again, we‘ve just never seen anyone irresponsible enough to broadcast it on television day after day.

MATTHEWS:  OK.  I can just imagine Roger over there watching this every night go, “I can‘t believe what we put on television.”

Anyway, Eric Boehlert, thanks for joining us.

When we return, let me finish with the truth about why we attacked Iraq, why we‘re finally getting it after years of propaganda.  This Rumsfeld book is unbelievable, what it admits, the confession.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Let me finish tonight with anger.  It‘s hard for me to reconcile my faith in this country and its history with the ease with which the war hawks took us to Iraq.  George W. Bush was not the great orator or persuader, but he persuaded us to attack a country that had never attacked us.  He took us there with talk of mushroom clouds if we didn‘t.  It was propaganda of the most potent type.

A thin majority of the American people bought it with the expectation that the costs would be light.  It would be a cake walk.  It turned it, by the way, over 4,000 Americans lost their lives there, where 100,000 Iraqis, civilians, were killed as the world watched.

Now, the books get written.  The truth trickles out.

Donald Rumsfeld, the former secretary of defense, has a book.  I looked for it a claim that Iraq had nuclear weapons in the run-up to war, the big propaganda campaign about mushroom clouds, about aluminum tubes, and Iranian yellow cake being bought in Niger—all that talk in 2002 and 2003.

Well, in 2011, now, Rumsfeld quotes from the October 2002 national intelligence report.  Get this—quote, “Although we assess that Saddam does not yet have nuclear weapons or sufficient material to make any, he remains intent on acquiring them.”

In her column, Maureen Dowd of “The New York Times” points to a memo Rumsfeld posted online dated September 9th, 2002, right in the middle of the push for the war.  It‘s a confession by the director of intelligence for the Joints Chiefs that they have no knowledge of Iraq buying or even attempting to buy a nuclear weapon, or the location of any facility to build a nuclear weapon.  So, it‘s not bombs he has, not bombs he‘s making, not bombs he has the intent, but only the bombs he has the intention of making or buying, whatever.

We went to war because the leader of another country had the intention to develop nuclear weapons.  Try putting that in your high school history book, on the immediate causes of the war, try saying that our country, the enemy of aggression, attacked another, killed anyone who stood in our way, took over, and leveled its government, ran the place for x many years because we figured—somebody figured—that its president had the intention to get a nuclear weapon.

Rumsfeld doesn‘t even try anymore.  With Diane Sawyer the other night, he didn‘t even claim or even bothered claiming Saddam had nuclear weapons or was building them.  No more mushroom cloud, no more P.R., no more B.S., just a book with a cover.  And that missing case for war, that got our—their argument, over the top with the American middle.  They got them—well, that argument got them their war, didn‘t it?

Shame, shame, shame.  All those people dead because words were spoken that had no truth.

Well, that‘s HARDBALL for now.  Thanks for being with us.

More politics ahead with Cenk Uygur.

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