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updated 4/27/2011 1:26:32 PM ET 2011-04-27T17:26:32

Guests: Pat Buchanan, Simon Hobbs, Michael Steele, Steve McMahon, Terry McAuliffe, Joan Walsh, Doug Holtz-Eakin, James Stewart

CHRIS MATTHEWS, HOST:  Beyond birther.

Let‘s play HARDBALL.

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

Leading off tonight: Where‘s the party?  What if they threw an election and nobody showed up?  Look at the possible Republican candidates for 2012.  Haley Barbour out, Mike Pence out, John Thune, Chris Christie, Jeb Bush, out, out, out.  They‘ve got the issues.  Gas prices are up.  House prices are down.  And people are feeling pessimistic about the economy.  So where‘s the campaign?  Where are the candidates?

Plus, Donald Trump just jumped in the deep end of the crazy pool.  He‘ treating President Obama like some kind of Manchurian candidate.  He‘s gone beyond birther.  He‘s now questioning how Mr. Obama made it into the Ivy League, even if he went to some of the schools he said he did.  It‘s an even wilder theory that makes the GOP look even fringier.

Also, speaking of gas prices, more than anything else, they may be what‘s pulling the president‘s numbers down.  The good news for President Obama, if the poll numbers go down because gas prices go down (SIC), they ought to go back up when, if prices go back up—back down at the pump.

Anyway, the tangled webs tonight, author James Stewart tonight on the outing of Valerie Plame.  Did Dick Cheeney (SIC) -- that‘s how you pronounce it—know about the leak?  Did Scooter Libby lie to protect Cheney?  Well, we know he lied.  And did Karl Rove lie to President Bush?  Now, that‘s a fascinating one, and it‘s in the book, and he did.

Finally, “Let Me Finish” tonight with Donald Trump‘s “Seinfeld” theory about President Obama, it‘s all about nothing.

We start with the lack of a serious 2012 Republican candidate.  Michael Steele‘s the former chairman—and still our chairman—of the Republican National Committee, sir!

(LAUGHTER)

MICHAEL STEELE, FORMER RNC CHAIRMAN:  Good to be with you.

MATTHEWS:  And Steve McMahon‘s a Democratic strategist who tonight will be a true non-partisan analyst, as best he can.

STEVE MCMAHON, DEMOCRATIC STRATEGIST:  There we go.

MATTHEWS:  Yes, sir.  I want analysts—analysis tonight.

MCMAHON:  OK.

MATTHEWS:  Here‘s the list of Republican 2012 drop-outs so far.  There they are, the pictures up there—Barbour, Congressman Mike Pence, Senator John Thune, Governor Chris Christie of New Jersey right here, and Jeb Bush, the guy we keep talking about.

Now, I‘m going to start with the Republican here, Michael Steele.

STEELE:  Yes.

MATTHEWS:  This is the strangest thing in the world.  The Reagan library debate was supposed to be,. like, now.  That‘s gone until next September.

STEELE:  Right.

MATTHEWS:  The Fox thing is supposed to be in, what is it, South Carolina?  It‘s supposed to be—

STEELE:  May 4th, right.

MATTHEWS:  -- in a week or two.

STEELE:  Right.

MATTHEWS:  There‘s no real front-running group of candidates like we‘ve always had before.  Why are these big names pulling out, first of all?

STEELE:  Well, I—

MATTHEWS:  Why‘d Barbour pull out yesterday?

STEELE:  Well, I—

MATTHEWS:  Why‘s Pence thinking about something else?

STEELE:  Well, I—

MATTHEWS:  Thune everybody thought would be the dark horse.  Your thoughts.

STEELE:  No, I think it‘s—I think you‘ve added some people who you‘re saying had jumped out who never jumped in, you know, like a Jeb Bush.  And I think people (INAUDIBLE) he should run, he should run.  The reality of it is, as a friend of mine on the Hill said recently, you know, this is lot like the whole Clinton thing in 1992, where no Democrat would get in, and then lo and behold, you know, Clinton winds up winning the nomination and the presidency.

I don‘t know if something like that‘ll play out here, but I think what you‘re seeing in the case of a Haley Barbour and some others is that they‘ve looked at this race and they‘ve made the calculation, either because of money or other issues, that this is not the fight for them that or they don‘t have the fight for it.

MATTHEWS:  Well, Steve, the big difference between—that‘s a fair comparison except for one thing.  Back when Bill Clinton was smart to run early, running in ‘92 and winning, George Herbert Walker Bush was about 91 percent in the polls.  He had just won the Iraq war.  He looked like Winston Churchill—though he ended up getting beaten in ‘45.  He couldn‘t be beaten.

This president is running, when he bounces to the top of his bounce, around 50.  Sometimes he gets above it.  This is a winnable race, depending on conditions.  Why do you think, as an analyst watching the Republican side, these guys are all Chicken Littles?  They‘re all bopping across—yes, they can‘t—it‘s not my year, I don‘t know, I don‘t think I got the ID.  When‘s going on here?

MCMAHON:  Well, I think it‘s because of conditions, Chris.  You identified it correctly.  One condition is this president is hovering around 50 percent approval rating, but he‘s going to raise and spend $1 billion in this race.

The second condition that‘s a real condition and a fact of life for the Republicans now is the Tea Party and the conservatives are driving the conversation—

MATTHEWS:  OK—

MCMAHON:  -- which is why you see people like Michele Bachmann, Donald Trump and others getting so much attention and serious people like—like the group that you just listed on the supreme screen and Haley Barbour yesterday getting out of the race because they think that‘s a sideshow.  It is.

MATTHEWS:  Well, that‘s the question I guess I get—I‘ll go back to that question.  Michael, can somebody come along—I guess what I don‘t—

I thought Haley Barbour, despite his Mississippi accent and all that—I thought he‘s a smart guy.  You know he‘s a smart guy.  I thought you need to be somebody who can appeal to the Tea Party wing of your party but not be one because—

STEELE:  Yes, I—

MATTHEWS:  -- if you‘re a Tea Party, you can‘t win the general election.  But I thought he was one.  I think Thune was one.  I think Mitch Daniels is one—

STEELE:  Yes, but—

MATTHEWS:  -- Jeb and Christie.  Who in your party can unite the right-wing fringe—

STEELE:  Well, I think—

MATTHEWS:  -- with the regular right wing?

MATTHEWS:  Well—well, you know, I—you know, the right-wing fringe and the regular right wing—look, you‘ve got a very strong conservative base that‘s active in the GOP nominating process, and I think that a number of those who are announced already, like a Tim Pawlenty and certainly a Newt Gingrich, can galvanize that base—

MATTHEWS:  Oh, geez!

STEELE:  -- around a set of ideas.

(LAUGHTER)

STEELE:  Look—no, you—

MATTHEWS:  You think Newt Gingrich is fit to be president of United States?

STEELE:  Wait a minute.  Wait a minute.  See, you‘re assuming—

MATTHEWS:  Give me a break!

STEELE:  You are assuming—

MATTHEWS:  Newt Gingrich president of the United States?

STEELE:  Wait a minute.  This is not about your personal peeve with Newt Gingrich—

MATTHEWS:  No, it‘s not about my peeve.

STEELE:  -- or your views about Newt Gingrich.

MATTHEWS:  Look at the rap sheet—

STEELE:  This is about—

MATTHEWS:  -- on the guy.

STEELE:  Wait a minute.  Hold up.  This is about a Republican nominating process.  Now, if you want to talk about a general election campaign or strategy, that‘s something else.

MATTHEWS:  OK.

STEELE:  But you‘re talking about a Republican—you asked me about a Republican nominating process, and I‘m giving you the square deal here.

MATTHEWS:  OK.

(CROSSTALK)

MATTHEWS:  Just to correct the record, it wasn‘t my peeve, if there is one with Newt Gingrich, that threw him out of the Republican leadership.  He was speaker of the House.  What happened to him?  He‘s a young man.  Why isn‘t he still speaker, let‘s ask ourselves.  Well, I think there were personal problems with finances—

STEELE:  Yes, but so what, Chris?  So what—

MATTHEWS:  -- lifestyle, if you want to be polite.

STEELE:  -- there‘s a lot of water—so what?

MATTHEWS:  You guys threw him out.  I didn‘t.

MCMAHON:  I think—I think Michael is showing us again why he was such a good and effective Republican Party chairman because he can make an apology for any of these clowns.

(CROSSTALK)

MATTHEWS:  -- back to your stripes.

MCMAHON:  No, no.  I‘m sorry.  I‘m being an analyst now.

MATTHEWS:  OK.

MCMAHON:  The candidates who are serious, substantive people who would have been formidable nominees and would have put up a great fight for the president—I think the president would have beaten any of them—were the seven that you listed on your screen.  And what you have left are people who either want to enhance their wealth, in the case of Sarah Palin and Mike Huckabee—

STEELE:  Oh!

MCMAHON:  -- you have people who are—who are running for other reasons, like Michele Bachmann and Donald Trump, who are, frankly, just a sideshow—

STEELE:  Wait a minute.  Steve?  Steve?

MCMAHON:  -- and then you have a couple of people who might be able to grow into serious candidates, including Pawlenty and Mitch Daniels, if he runs.  But I bet you he doesn‘t run.  And that‘s the condition of the Republican Party right now.

STEELE:  But wait a minute.  Wait a minute.

MCMAHON:  Nobody wants to run.

STEELE:  Steve, you can‘t in the one breath saying that some of the people you just mentioned are good and honorable and probably would have been the perfect candidate, Oh, but they‘re going to lose against Obama anyway.

MCMAHON:  No, no.  I said they‘d be formidable.

MATTHEWS:  OK—

MCMAHON:  Michael, I said—

STEELE:  Yes, but you said—

(CROSSTALK)

STEELE:  You said they‘d formidable but they would lose.  That‘s what you said.

MCMAHON:  I said they will lose.  That‘s right.

MATTHEWS:  OK, let me ask you about—

(CROSSTALK)

MATTHEWS:  Michael—

STEELE:  So what‘s the point?  What‘s the point of having an election if Obama‘s got this sewed up?

MATTHEWS:  Michael, do you think America‘s in peacetime right now?

(LAUGHTER)

MATTHEWS:  Are we in peace?  Just an objective—we‘re all objective people here now.  Are we in peacetime right now?  When you look around the world—

STEELE:  No, no.  No, Chris.

MATTHEWS:  OK.

STEELE:  To answer the question—

MATTHEWS:  I know somebody who believes—

STEELE:  -- we are not in peacetime.

MATTHEWS:  -- that we‘re in peacetime.  He wrote an op-ed, which you

re-edit a couple of times and (INAUDIBLE) people help you with them and you

get them right.  But after a lot of deliberation and editing, here‘s what Mitt Romney wrote in an op-ed in “The Manchester Union-Leader” up in New Hampshire.  Quote, “Barack Obama‘s facing a financial emergency on a grander scale, yet his approach has been to engage in one of the biggest peacetime spending binges in American history.”  And when questioned on the use of the word “peacetime,” his spokeswoman said he meant to say—well, he didn‘t say it, it was written down—since World War II.

Is this up there with Jerry Ford and Poland has been liberated?  I mean, is this one of those delusional statements that really disqualifies a guy from even thinking about running the country?

STEELE:  No, it does—no, no, it does not.  And you know, Mitt Romney is one of those serious individuals who‘s looking to run for the nomination—

MATTHEWS:  Well, explain.

STEELE:  -- who I think will put on a good race and you cannot—you cannot hold him—you cannot hold him to that.  I mean, that‘s just an editorial mishap and you move on.

MATTHEWS:  So if he were president of the United States and he said, We‘re enjoying peacetime in his inaugural address, you wouldn‘t take that as a problem.

STEELE:  Pardon me?

MATTHEWS:  If he said this during his inaugural address or his acceptance speech, would it be a problem then?  At what point does missing the reality of our time—we‘re on four war fronts right now.  We‘re fighting in Pakistan.  We‘re fighting in Libya—

(CROSSTALK)

MATTHEWS:  Everybody knows this.  We‘re fighting in—we got 100,000 troops fighting in Afghanistan.

STEELE:  Chris, it has—

MATTHEWS:  We got half that many fighting in Iraq, and this guy thinks we‘re living in peacetime.  That‘s a problem.

STEELE:  Right.  And President Obama thinks there are 57 states. 

What‘s your point?

MATTHEWS:  Oh, OK.

(LAUGHTER)

MCMAHON:  Listen, this is just—

STEELE:  What‘s your point?

(CROSSTALK)

MATTHEWS:  One is a misstatement.  The other one—

STEELE:  OK, so give me a break.

MATTHEWS:  -- is a misreality.  Go back to Steve McMahon—

STEELE:  Oh, yes.  Oh, I—oh, is that how this works, one‘s a misstatement and the other‘s a misreality?

MATTHEWS:  I just think one guy—

(CROSSTALK)

MCMAHON:  Please.

MATTHEWS:  -- edited the paper.  This was written down, Michael.  This wasn‘t a misstatement.

MCMAHON:  This is just—

MATTHEWS:  His spokesperson said it was a misstatement.  This was an op-ed piece—

STEELE:  Look, I just—

MATTHEWS:  -- in “The Manchester Union-Leader”—

STEELE:  Chris—

MATTHEWS:  -- he had a chance to edit, approve and write.

STEELE:  You are sophisticated enough to know how this process works. 

When you‘re in the middle of putting together a campaign, and all of that -

-

MATTHEWS:  So he didn‘t write it.

STEELE:  It was a mistake.  If it happens more than once, then let‘s have this conversation.

MATTHEWS:  OK.

MCMAHON:  Give him the nuclear button!

(CROSSTALK)

MATTHEWS:  OK.

(CROSSTALK)

MCMAHON:  This is just another thing that Mitt Romney‘s going to flip-flop on, and it looks like the flip-flop is beginning already.  He‘s going to say—

STEELE:  Oh, gosh.

MCMAHON:  -- I didn‘t really say that, or, I didn‘t really mean it, or, That‘s not what it appears to be in the editorial that you can read with your own eyes.

MATTHEWS:  OK, let me run through a couple of names just to run this because I don‘t—think there‘s a point here.  And my point is that people that could be president aren‘t running.  I think in a different year, Jeb Bush could have a great run for president.  I don‘t think this is his year, necessarily.  I think Chris Christie‘s got something.  I think he‘s a hotshot.  I think he‘s verbal.  He knows how to talk like East Coast guy, quick and smart, and he‘s interesting.

STEELE:  Right.

MATTHEWS:  And that separates him from Pawlenty—

STEELE:  Right.

MATTHEWS:  -- and it separates him from Romney.  He‘s interesting. 

Thune I think has the look of a rangy Westerner.

STEELE:  Yes.

MATTHEWS:  He‘s got sort of the cowboy manner, and he‘s clean as a whistle and he‘s the new kid on the block and he might just knock the president off.  Pence—

STEELE:  Oh, yes.

MATTHEWS:  -- is not exactly the happiest guy I ever met in my life, but he seems to approving—he seems to fit with the sensibility of the party, which is not having a good time anyway.  The guys who are not running look like good candidates, Michael.  I tell you this—

STEELE:  Of course they do, Chris—

MATTHEWS:  -- New Gingrich is never going to—

STEELE:  -- because they‘re not running!

MATTHEWS:  -- be president of the United States.  These guys you have on your list—Tim Pawlenty‘s not going to be president.  I don‘t think Mitt Romney‘s going to be president.

STEELE:  OK.

MATTHEWS:  Do you?

MCMAHON:  I like—I like the field.  I like the field that they‘re running right now.

STEELE:  I—I—look, I—

MATTHEWS:  Michael, do you think any of these guys running—

STEELE:  Yes.

MATTHEWS:  You said when we started tonight—

STEELE:  Yes.

MATTHEWS:  -- when your IQ was popping about 10 minutes ago before you got beaten down by me, you had a smart thought.  Somebody‘s going to come in this race like Bill Clinton came into the Democratic side—

STEELE:  I do.  I believe that.

MATTHEWS:  -- back in ‘92.  So who do you think‘s going to be your Wendell Wilkie, the guy that comes in and wows you?

STEELE:  I don‘t—I don‘t—I don‘t know who that person—in all honesty, I don‘t know who that person is just yet, but I do believe that that is something that‘s very true.  I was saying going back to my days as chairman that I think the dynamics of this time and this race will allow someone to come in that will surprise people.  At one time, I thought it was Mitch Daniels.  It still may be.  We‘ll see if he gets in.  I don‘t know.

But this is the point.  You guys are sitting there in your comfort zone with this race right now and because of the people who aren‘t running you think should be running.  I guarantee you that if any on that list were running, you‘d be eating them alive—

MATTHEWS:  OK—

STEELE:  -- just like you‘re going after Tim Pawlenty and Gingrich now.

MATTHEWS:  Well, Michael—

STEELE:  So let‘s—let‘s call it what it is, all right?

(CROSSTALK)

MATTHEWS:  -- admitted why I‘m in my comfort zone (INAUDIBLE) comfort zone for the same reason you‘re in your discomfort zone.  You‘re not happy with the current field, and you‘re still (INAUDIBLE) your torch lit for some guy that hasn‘t even shown up at the party yet.

MCMAHON:  Someone he can‘t even name.

STEELE:  No, I don‘t have my—

MCMAHON:  He can‘t even name!

STEELE:  I don‘t have my torch lit for anybody.  I‘m waiting to see, when the race begins, how these gentlemen emerge.  And the race begins right now.

MATTHEWS:  Would you call me when you find out who it is?

STEELE:  I will.

MATTHEWS:  I can use the lead.

(LAUGHTER)

MATTHEWS:  I want him on the show!

(CROSSTALK)

MATTHEWS:  Thank you, Michael Steele, the all-time chairman of the Republican Party.

STEELE:  You got it.

MATTHEWS:  Thank you, Steve McMahon, for doing a pretty good job as an analyst tonight.

Coming up: First Donald Trump questioned whether President Obama was actually born here.  OK, he‘s just a birther.  Now he‘s going all the way with this.  He‘s launched a new campaign.  Trump wonders out loud whether the president deserved to get into Columbia and Harvard Law—I guess he‘s head of Harvard Law Review.  He also questions in other statements whether the president ever went to any of the schools he said he went to, like he was some kind of spooky—spooky Manchurian candidate who‘s been created, a mole!  What is he saying here?  And how far can he go out onto this ledge without looking crazy?

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Well, South Carolina‘s often the big make-or-break state in the Republican primary season.  It votes just after Iowa and New Hampshire.  And a new poll from Winthrop University shows Mike Huckabee ahead of the pack down there among likely primary voters.  Huckabee has 19 percent.  Mitt Romney‘s at 17, close behind.  Donald Trump—well, he‘s in the run at 11.  He‘s showing, anyway.  Newt Gingrich and Sarah Palin round out—they‘re down to 5.  I said Gingrich ain‘t going anywhere.  And Palin‘s not running.

We‘ll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DONALD TRUMP, TRUMP ORGANIZATION:  The reason I have a little doubt, just a little, is because he grew up and nobody knew him.

If I ever got the nomination, if I ever decide to run, you may go back and interview people from my kindergarten.  They‘ll remember me.  Nobody ever comes forward.  Nobody knows who he is until later in his life.  It‘s very strange.

(END VIDEO CLIP)

MATTHEWS:  So what‘s he up to?  I‘m into something here.  I want to know what Trump is selling out there.  It‘s not just the birtherism, whether he was born in the United States and came here two minutes later or three days later, whatever.  He‘s suggesting he wasn‘t really the guy, isn‘t really the guy he says he is, the president of the United States.

That was Donald Trump six weeks ago, starting this bandwagon.  He began the media tour with that, considering a run for president still.  Trump‘s out of the way right now with spin stories about the president.  First, that no one knew him as a child in school, and now Trump‘s not sure how Obama was accepted into Columbia and then Harvard Law.  The birth certificate saga is growing.  It‘s metastasizing.  Trump told CNN last night that he believes it‘s missing, the birth certificate, it‘s not even there.  The state of Hawaii, of course, disagrees.

Joining me now is MSNBC political analyst Pat Buchanan and Terry McAuliffe, who was the campaign chairman for Hillary Clinton‘s 2008 presidential bid.

I want to start with Pat Buchanan because I am looking around for birthers, and I consider a birther—and this is my rule, Pat, my colleague—anybody who has questions, anybody who thinks this is a significant issue in this campaign coming up, this guy‘s identity as a fellow American.  Is it a significant question to you whether he is, in fact, a fellow natural-born American?

Oh, no.

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  -- question as to—

MATTHEWS:  Let‘s go to Terry.  Pat—

(CROSSTALK)

MATTHEWS:  -- you had your mike off.  Go ahead again.  Say it again.

TERRY MCAULIFFE, FORMER DNC CHAIRMAN:  He doesn‘t like the question.

BUCHANAN:  Oh, I‘m sorry.  Look, I believe he was born in the United States, in Hawaii.  And in that same week, the newspaper said he was.  But I have a real question.  I‘m puzzled why the president of the United States doesn‘t call the state of the Hawaii, say, Look, send the birth certificate to me.  Release a copy of it—

MATTHEWS:  So you‘re a birther.

BUCHANAN:  -- to the press.

MATTHEWS:  So you‘re a birther.

BUCHANAN:  Let‘s get it—no!  Chris, I want to know why you don‘t even want to see it and other people don‘t want to see it!

MATTHEWS:  No, I don‘t.  I don‘t—I wouldn‘t mind seeing it.  I wouldn‘t mind seeing a lot of things.  But why do you think it‘s important that he go out there and ask and basically get extraordinary treatment, by the way, VIP treatment, and ask to see it?

BUCHANAN:  For the same reason you said, Chris, the issue has metastasized!  For heaven‘s sakes—

MATTHEWS:  By the wackies!

BUCHANAN:  By Chris Matthews also!  It‘s all over our network and every other one!

MATTHEWS:  Because this is an incredible assertion, Pat.  It‘s an incredible assertion to make about the president of the United States that somehow—let‘s go through everything Trump said.  I‘m going to go through it later tonight in my close.

BUCHANAN:  Right.

MATTHEWS:  He is saying nobody knew him in school, that nobody ever comes forward and says they ever knew the guy, like he was some guy that never really went to these schools.

BUCHANAN:  Well, can I talk to that?

MATTHEWS:  There‘s a funny paper trail.  What‘s that about, Pat?

BUCHANAN:  I‘ll tell you what—

MATTHEWS:  What‘s that about?

BUCHANAN:  He went to Occidental College.  Then suddenly, he shows up at one of the best schools in the country, Columbia.  He vaults from there to Harvard Law School.  Suddenly, he‘s on Harvard Law Review.  Suddenly, he‘s the editor of Harvard Law Review.  We‘ve never seen any grades of the guy.  These are legitimate questions.  What I want to know from you, Chris, is—

MATTHEWS:  Well, they got—they got the grades at Harvard—

BUCHANAN:  What I want to know from you—

MATTHEWS:  Harvard law let him in—

BUCHANAN:  Well—

MATTHEWS:  -- and he was elected to the Law Review.  They have the records.

BUCHANAN:  Chris, this is what I want to ask you.  Why is it that the national press corps, when Donald Trump is out there supporting the people‘s right to know, you guys are all supporting the president‘s right to conceal?

MATTHEWS:  OK.  So, you have questions about whether the president was

did attend these schools or not.  First of all, let‘s—

(CROSSTALK)

BUCHANAN:  Oh, he attended the schools. 

(CROSSTALK)

MATTHEWS:  How far do you go on the Trump bandwagon?

Was he in fact in these schools that Trump says nobody knew him in? 

BUCHANAN:  I think he went to those schools, and I think the way was very probably greased.

MATTHEWS:  So, why was Trump saying—

BUCHANAN:  And I think he‘s probably affirmative action all the way.

MATTHEWS:  Greased by whom?  Greased by whom?

BUCHANAN:  I think he‘s affirmative action all the way. 

MATTHEWS:  Oh, it‘s an affirmative action case.  But there‘s no mystery about it.  It‘s just affirmative action, as you see it?

BUCHANAN:  Oh, I think he‘s at those schools, sure. 

MATTHEWS:  But you don‘t think he had outside help getting into these schools? 

BUCHANAN:  Well, look, I think all he‘s got—look, Chris, you know how the system works.  You apply.  He‘s an African-American kid at a time when everybody‘s saying let‘s bring those guys in, give them an advantage, move them ahead. 

(CROSSTALK)

MATTHEWS:  So it‘s about race, then?  It‘s about—

BUCHANAN:  It‘s about whether he benefited from affirmative action. 

Is that an illegitimate question? 

(CROSSTALK)

MATTHEWS:  No, it‘s—well, sure.

BUCHANAN:  Why?

MATTHEWS:  You can ask any question you want on this show.  But my question is, why‘s that coming up now as part of a question of his identity, whether he‘s an American or not?  The question then expands to—

BUCHANAN:  Because Trump is running for—

MATTHEWS: -- did he really go to these schools? 

(CROSSTALK)

MATTHEWS:  And then Donald Trump is suggesting that there was something mysterious about it.  You say you understand it. 

BUCHANAN:  Well, Chris—

MATTHEWS:  You said it‘s affirmative action, which you don‘t like.

Trump says there‘s a mystery here. 

Let‘s go to Terry McAuliffe. 

(LAUGHTER)

MATTHEWS:  What is he really raising here, Pat—Terry?  Because he raises the question—

TERRY MCAULIFFE, FORMER DEMOCRATIC NATIONAL COMMITTEE CHAIRMAN:  Yes. 

MATTHEWS: -- he wasn‘t a popular kid in school.  I‘m working on this book on Kennedy.

MCAULIFFE:  Yes. 

MATTHEWS:  A lot of guys didn‘t know they went to school with him. 

(CROSSTALK)

MATTHEWS:  Not everybody is a big-shot BMOC walking around, strutting, saying hello to everybody, learning everybody‘s first name. 

(CROSSTALK)

MCAULIFFE:  And, Chris, let me be very clear.  For those students who went to Georgetown Law School with me, many of them will not remembering seeing me there many times either. 

(LAUGHTER)

MATTHEWS:  OK. 

MCAULIFFE:  I hate to see the overtones of what is going on.

MATTHEWS:  Well, what are the overtones? 

(CROSSTALK)

MCAULIFFE:  Well, you know, what‘s Pat talking about?  He got special treatment. 

Listen, Barack Obama, magna cum laude at Harvard Law School.  He was editor of the law journal.  What I think the American public—and I‘m not in the business of giving the Republican Party advice.  But let them continue on this path, because to the independents and to the 17 million people who are not working in the jobs that want to be working in, they think this entire conversation is ludicrous.

And when it comes time to vote, they‘re going to pull the lever for Barack Obama, who is talking about jobs, national security, and here you have the fringe Republicans out here talking about issues that they‘re not talking about around their kitchen table.  People are worried about China and everything else.

MATTHEWS:  OK.

(CROSSTALK)

MATTHEWS:  Pat, I want to get back to this strain here. 

(CROSSTALK)

MCAULIFFE: -- and everything else.  And they‘re talking about this ridiculous issue. 

MATTHEWS:  Pat, you suspect he wasn‘t qualified to get into Harvard—

I admit these schools are hard to get into—that he wasn‘t qualified to get in there.  You suspect that he got to be head of the “Law Review,” you think that was some affirmative action number there, too? 

(LAUGHTER)

BUCHANAN:  Sure.  Look, I have seen—look, I have seen applications for “Law Review” that have special—special slots for minority students.  That‘s correct.

MATTHEWS:  He is head of the “Law Review.”  You think he got a break there?

BUCHANAN:  It would be my guess, but, Chris, what I want to know is why—

(CROSSTALK)

MATTHEWS:  OK.  Why is it your guess?  Why do you keep—

(CROSSTALK)

BUCHANAN:  Because—

MATTHEWS:  You and Donald Trump. 

(CROSSTALK)

MATTHEWS:  Trumpy says he didn‘t even write the book because he‘s not good enough a writer to write the book. 

BUCHANAN:  Chris, what I want to know—

MATTHEWS:  How do you make these assumptions he‘s not smart enough to be head of the “Law Review,” he‘s not smart enough to write a book? 

Do you know how this bothers people that you make these charges?

(CROSSTALK)

MATTHEWS:  You‘re assuming a priori there‘s something intellectually deficient about this guy because he couldn‘t possibly have done all this stuff, and yet we watch him every day showing these kind of brains. 

(CROSSTALK)

MATTHEWS:  Your thoughts? 

BUCHANAN:  Chris, what I want to know—what I want to know is why you don‘t want to see the test scores, why you don‘t want to see any of these things?  You are supposed to be a journalist. 

MATTHEWS:  Test scores?

BUCHANAN:  The people‘s right to know. 

MATTHEWS:  I don‘t want to see his essays and his test scores.  I read his book.  I mean, what, am I supposed to become a master of his paperwork? 

(CROSSTALK)

BUCHANAN:  Would you not want to know if he was a beneficiary of affirmative action?  Is that an illegitimate question?

MATTHEWS:  I‘m sure—I will bet you any money Kennedy got into school with some help.  I will bet you Franklin Roosevelt got into school with some help.  It doesn‘t bother me. 

I‘m sure George Bush didn‘t—he didn‘t exactly hit a triple to become George Bush Jr.  That doesn‘t shock me. 

(CROSSTALK)

BUCHANAN:  But if Donald Trump is raising this in a campaign as an issue, what makes it illegitimate?  He‘s got a right to raise any issue he wants.

(CROSSTALK)

MATTHEWS:  Because of the presumption you guys are making, there must be something spooky about this.  How could this guy have become head of the “Harvard Review”?  I want to see some paper on this.  You still want to see his basic paperwork to justify him being president. 

(CROSSTALK)

BUCHANAN:  Chris, what is making this spooky is the White House stonewalling. 

MATTHEWS:  Stonewalling? 

Well, take over here, Terry.  Suppose the White House starting issue -

-

(LAUGHTER)

BUCHANAN:  Take over, Terry. 

MATTHEWS: -- paper to these guys.  Do you think they would stop asking for more? 

(LAUGHTER)

MATTHEWS:  I‘m just asking. 

MCAULIFFE:  No.  And I think that‘s the position of the White House. 

But I go back to my bottom line.  I love it that Pat Buchanan is continuing to talk about it—

(LAUGHTER)

MCAULIFFE: -- because this is so offensive -- 

MATTHEWS:  He is a birther.  I‘m sorry. 

Pat, you‘re a birther. 

(LAUGHTER)

MCAULIFFE: -- to independents and to people in this country today who want to worry about their job, who worry that China now owns $1.1 trillion of our debt.  Our trade deficit last year with them was a quarter of a trillion dollars.  They‘re worried about their job.  They‘re worried about their children‘s job. 

MATTHEWS:  Sure. 

MCAULIFFE:  And this gibberish that they talk about on television is doing nothing.  And other countries are moving at warp speed ahead us on renewable energy, wind, electric cars.

And we are sitting here talking about a man who was magna cum laude at Harvard Law School, whether he was smart enough to be president. 

MATTHEWS:  Pat—

MCAULIFFE:  He has got to run on his track record as president of the United States.  He‘s already been elected.

(CROSSTALK)

MCAULIFFE:  And the Republicans have got to put forth what they will do for America. 

And this is good for us because it‘s turning people off. 

MATTHEWS:  You know, Pat, the one thing I love about you is you do say exactly what you‘re thinking.  But what you‘re thinking is what drives a lot of African-Americans absolutely crazy about this country. 

They get a guy they may not agree.  They may think he‘s too conservative on a lot of issues.  He hasn‘t—he has let them down on some things.  But they see him being questioned in a way nobody else gets questioned. 

(CROSSTALK)

MATTHEWS:  Here‘s the guy who busted his butt to become head of “The Harvard Law Review.”  You have got to have law boards through the roof to get in that place.  And then he does all this.

(CROSSTALK)

BUCHANAN:  All right.  Let‘s see them.

MATTHEWS:  He goes back.  He doesn‘t go for the money. 

(LAUGHTER)

MATTHEWS:  He becomes a community organizer.  He gets elected to the U.S. Senate.

(LAUGHTER)

MATTHEWS:  And you still don‘t buy it. 

(LAUGHTER)

MATTHEWS:  You don‘t buy him. 

BUCHANAN:  Look, if he‘s got all these—look—

(CROSSTALK)

BUCHANAN:  Take a look at my—I know how I got into Columbia.  You can take a look at any of his—let‘s look at him.  He‘s got all these great grades and wrote these great articles.  Let‘s see the magnificent work he did to achieve the greatness he achieved.

(LAUGHTER)

MATTHEWS:  Pat, I got my job here without showing any paperwork from school. 

(LAUGHTER)

MATTHEWS:  You got your job without ever showing your paper.

BUCHANAN:  Well, that‘s -- 

(CROSSTALK)

(LAUGHTER)

MCAULIFFE:  Yes.  Yes. 

MATTHEWS:  Terry—Terry McAuliffe didn‘t have to show his paperwork

--

MCAULIFFE:  Right.  I did not.

MATTHEWS: -- to become Hillary Clinton‘s campaign manager. 

(LAUGHTER)

MATTHEWS:  Most people don‘t have to keep carrying around with them buckets of paper to prove they exist. 

(CROSSTALK)

MATTHEWS:  Donald Trump is saying this guy didn‘t go to the schools he went to.  He‘s some sort of phantom figure.

BUCHANAN:  He did go to the schools, I guess. 

MATTHEWS:  Oh, no.  He says nobody knew him, nobody knew him, and nobody will come forward and say they knew him. 

MCAULIFFE:  Yes. 

MATTHEWS:  Terry, what is he charging here? 

MCAULIFFE:  Well, first of all—

(CROSSTALK)

MATTHEWS:  What is Trumpy up to? 

(LAUGHTER)

MCAULIFFE:  He‘s getting press.  He‘s trying to move ahead of the Republican field.

Listen, Donald Trump has talked about some important things, China. 

They‘re moving far ahead of us. 

(CROSSTALK)

MCAULIFFE:  How we should deal with them.

But by talking about these issues, I just think it marginalizes him.  Have Donald Trump him talking about these issues is good for President Obama.  It‘s good for the Democratic Party. 

I literally—if I could help fund Pat Buchanan and all the rhetoric he‘s putting out and the rest of them, we should do it, because when people go vote, they vote about their—

BUCHANAN:  Right. 

(LAUGHTER)

MCAULIFFE: -- pocketbook and how they‘re going to move forward. 

I have got a question for Pat Buchanan. 

BUCHANAN:  Sure.

MCAULIFFE:  I was at Saint Luke‘s Church in McLean the other day on Easter Sunday.  Where was Pat Buchanan?  That‘s what people wanted to know. 

(CROSSTALK)

BUCHANAN:  I was down at Saint Mary‘s at the real Latin mass is where I was.  You know that, Terry. 

(LAUGHTER)

MCAULIFFE:  Yes, yes. 

BUCHANAN:  But, look—

(CROSSTALK)

MATTHEWS:  Let me ask you—

(CROSSTALK)

MATTHEWS: -- Terry McAuliffe, are you running for the governorship of Virginia next time? 

MCAULIFFE:  Well, listen, I‘m very excited.

As you know, “The Washington Times”‘ front-page story today, I was pretty excited.  It‘s first time I have gotten a good story in “The Washington Times.” 

(LAUGHTER)

MATTHEWS:  It‘s probably the first time you read “The Washington Times,” too. 

MCAULIFFE:  I actually bought it.  It was actually good for me.  I bought a copy—

(CROSSTALK)

MCAULIFFE: -- for my mother and my five children. 

MATTHEWS:  Twenty-five cents for all that publicity.

(LAUGHTER)

MCAULIFFE:  But, listen, I‘m focused on—as you know, I went to China, bought one of their big electric car companies, moved that manufacturing plant to America, now building U.S. jobs and selling—

(CROSSTALK)

MCAULIFFE: -- back to China.

MATTHEWS:  I want to buy stock in Terry McAuliffe.

MCAULIFFE:  Yes.  Good.  Good man.

MATTHEWS:  Anyway, thank you, Pat Buchanan.  You have elucidated the birther thinking.

Anyway, I think—I think Donald Trump‘s becoming the whoopee cushion of the Republican Party. 

(LAUGHTER)

MATTHEWS:  Anyway, up next—

(LAUGHTER)

MCAULIFFE:  Yes. 

(LAUGHTER)

MATTHEWS: -- speaking of Donald Trump, Stephen Colbert—

MCAULIFFE:  Yes. 

MATTHEWS: -- tweaks Trump for the way he talked up his popularity among African-Americans, you know, the blacks, as he puts it.  That‘s wonderful. 

That‘s next in the “Sideshow.” 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Back to HARDBALL.  Let‘s go to the “Sideshow.” 

First: the Trump thump.  And it beats on.  Here‘s Stephen Colbert last night. 

(BEGIN VIDEO CLIP, “THE COLBERT REPORT”) 

STEPHEN COLBERT, HOST, “THE COLBERT REPORT”:  Trump is the only GOP candidate who can cut into Obama‘s base, as Trump told the talk radio. 

DONALD TRUMP, CHAIRMAN & CEO, TRUMP HOTELS & CASINO RESORTS:  I have a great relationship with the blacks. 

(LAUGHTER)

TRUMP:  I have always had a great relationship with the blacks. 

COLBERT:  See? 

(LAUGHTER)

COLBERT:  He has a great relationship with the blacks. 

(LAUGHTER)

COLBERT:  He must.  How else could he get away with calling them “the blacks”? 

(LAUGHTER)

COLBERT:  And Trumps—

(LAUGHTER)

(CHEERING AND APPLAUSE)

COLBERT: -- and Trump‘s special relationship with “the them” goes back decades.

(LAUGHTER)

COLBERT:  We all remember his historic visit to the traditionally black community of Bel Air. 

(LAUGHTER)

COLBERT:  Jim? 

(BEGIN VIDEO CLIP, “THE FRESH PRINCE OF BEL-AIR”)

UNIDENTIFIED ACTOR:  It is my esteemed pleasure to introduce Mr. and Mrs. Donald Trump. 

(LAUGHTER)

(CHEERING AND APPLAUSE)

ALFONSO RIBEIRO, ACTOR:  It‘s the Donald.  Oh, my God!

(LAUGHTER)

(END VIDEO CLIP)

COLBERT:  Interesting fact.  Carlton went on to become chairman of the

RNC. 

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS:  Wow. 

Well, next up: a thriller in Wasilla.  Levi Johnston, the father of Sarah Palin‘s grandchild, says he‘s written a tell-all that will set the record straight.  He put out the following tease: “I want to tell the truth about my close relationship with the Palins, my sense of Sarah, and my perplexing fall from grace.”  That‘s a big word, perplexing.  “I‘m doing this for me and for my boy, Tripp, and for the country.”

Levi‘s book title—I love the title—“Deer in the Headlights: My Life in Sarah Palin‘s Crosshairs.”

Wow.  It‘s set for release this fall.  I‘m sure it‘s going to be written quickly.

Finally, the 112th Congress has a category.  It was on last night‘s edition of “Jeopardy.”  Watch what happened. 

(BEGIN VIDEO CLIP, “JEOPARDY”)

UNIDENTIFIED FEMALE:  One hundred and twelfth Congress, 400, please.

ALEX TREBEK, HOST, “JEOPARDY”:  This House minority leader has routinely won 80 percent of the vote in her reelections to California‘s 8th District. 

Chuck? 

UNIDENTIFIED MALE:  Who is Feinstein? 

TREBEK:  No. 

Ryan? 

UNIDENTIFIED MALE:  Who is Nancy Pelosi? 

TREBEK:  Yes.  We‘re talking about the House. 

UNIDENTIFIED MALE:  Congress for 600. 

TREBEK:  In 2000, this Virginian won his primary by 263 votes.  Now he‘s House majority leader. 

(BEEPING)

TREBEK:  And that would be Eric Cantor. 

(END VIDEO CLIP)

MATTHEWS:  Oh, Alex Trebek had to tell them. 

Come on HARDBALL, Eric Cantor.  We will get you well-known out there. 

Up next: pain at the pump.  For President Obama, it means pain in the polls, of course, how the rising price of gasoline is hurting the president and what, if anything, he can do about it coming up.  That‘s coming up.  And it‘s important to a lot of people.

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

SIMON HOBBS, CNBC CORRESPONDENT:  And good evening.  I‘m Simon Hobbs with your CNBC “Market Wrap.”

The American stock market is at its highest level in two years this evening on robust earnings and a surprise jump in consumer confidence.  The Dow Jones industrials soared 115 points.  The S&P 500 added 12 to a level we have not seen since June 2008 and the Nasdaq jumped 21. 

An avalanche of earnings and an ever-lower dollar driving the markets.  Ford posted its best quarterly profit in 13 years on strong U.S. sales, especially of its fuel-efficient Focus and Fiesta.  UPS beating expectations and raising its forecast, despite higher fuel costs.  Coca-Cola earnings fell short of estimates on rising costs and a drop in revenue from Japan.  And U.S. Steel sank after reporting a bigger-than-expected loss due to surging raw material and retiree benefit costs.  Amazon delivered disappointing results after the close, a big drop in profits offset by solid revenue and an upbeat forecast.

Finally, in economic news, a surprise jump in consumer confidence in March, with shoppers saying they feel better about the job market and inflation. 

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

HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

Rising gas prices could play a pivotal role in the 2012 election.  Here are the latest numbers from AAA.  Nationwide, regular gas goes at $3.87 a gallon right now for regular.  That‘s a 29 cent jump from a month ago, a dollar jump from a year ago. 

Well, the new ABC/”Washington Post” poll drills down to gauge the opinions of independent voters, who say surging gas prices have caused them serious help—hard—in other words, these are people who are in the middle, independent, independent politically, but are saying that these gas prices are killing them.  Sixty-seven percent of this group disapprove of President Obama‘s job performance.  Sixty percent say they definitely won‘t even vote for the guy. 

So this is cutting into him among I guess these independent voters, who are hard-hit.  I guess they have to travel a lot. 

And in a head-to-head matchup among these voters, Mitt Romney—they choose Romney 24 points, by 24. 

So, Joan Walsh, this is tough one.  She‘s editor at large for Salon.com.  And Douglas Holtz-Eakin is a former economic adviser to John McCain in the presidential campaign.

Joan, I believe that we lost like—if you look at it, gas prices is one of those things that hits people right in the face.  They look at that pump.  It goes up to maybe $80 now for supreme—

JOAN WALSH, EDITOR IN CHIEF, SALON.COM:  Yes. 

MATTHEWS: -- and a couple of times a week, if you have to really commute a distance. 

And they go:  Wait.  This is taking all the cash money out of my life.  I can‘t buy shoes for the kids.  We can‘t have a good meal once a week.  We can never go to the movies.  I ain‘t got anything.  It‘s killing me, not just our extras, but our basic living. 

I do think they‘re going to blame the president for this, to some extent.  In fact, they may blame him mostly. 

What is your thinking? 

WALSH:  I think—you know, I think it‘s tough.  There‘s no doubt about it.  It‘s particularly going to be hard.

You know, we‘ve talked a lot about swing states like Pennsylvania, Wisconsin, where certain kind of working class voter is feeling the pain at the pump and can‘t change his or her life style dramatically.  They have to drive.  They have to get the kids to school.  Those are the people who are really having a hard time.

But, you know, the president is being a grown-up about this and being a grown-up, as you know, that‘s not often rewarded.  But he‘s acknowledging that‘s very little he can do in the short term.  I mean, we all talked about this, including Doug, back in 2008 when prices shot up under President Bush.  There‘s very little in short term a president can do.

So, he‘s got to keep the conversation going about alternative energy sources.  We all know we need to reduce our dependence on foreign oil.  But in the short term, I don‘t know how persuasive that‘s going to be to swing voters.

MATTHEWS:  You know, Doug, people are pretty sophisticated when you ask them what‘s causing the prices to go up.  Most people say, proudly say, well, it has to do with the Middle East.  Obviously, that‘s where we get most—a lot of our oil.  And then the second mostly blamed, the oil companies.  And they get down to blaming the president.

Of course, none of the other interests are—the Middle East isn‘t running for president next year, neither are the oil companies.  Obama is.

So, he‘s going to be the last guy in the gang to get out the door if you‘re blaming somebody.  Your thoughts, Doug?  The pockets and the economics of this.

DOUG HOLTZ-EAKIN, FMR. WHITE HOUSE CHIEF ECONOMIST:  I mean, on the politics, they blame the president.  The sitting president always gets blamed for these situations.  We‘ve seen this movie again and again.

And on the substance of policy, the Obama administration has not been very good on oil.  They‘ve been, you know, a little weak on onshore drilling—

MATTHEWS:  What would McCain have done?

(CROSSTALK)

MATTHEWS:  What would McCain have done it differently?  Let‘s get through it.

HOLTZ-EAKIN:  But even if they had done differently, you can‘t change this.  We had $140 a barrel for oil back in 2008.  The whole world went into a recession.  Oil prices went down.  We didn‘t add any new supply in the interim.  So, now, the economy‘s recovering.  We‘re seeing oil prices go back up.

So, the president‘s stuck and he, as a matter of politics, is doing about the only thing he can do, which is try to change the subject as fast as he can.  But he doesn‘t have many places to go.  He‘s not great on jobs.  He‘s not been great on debt and spending.

WALSH:  Well, you know—

HOLTZ-EAKIN:  And so, now, he‘s got a problem with gasoline.

MATTHEWS:  Well, let me ask you this.  If we were raping this continent, if we were drilling offshore everywhere, deep drilling, risking everything—just like we did, down in—with BP, if we were taking apart the ANWR and drilling everywhere, would the price of gas be much different?  In the world market, since this all fungible, if we were doing all that here in the United States, would the price of gas be much different?  I‘m just asking that question.

HOLTZ-EAKIN:  No, he can‘t change the price very much.  So, I mean, he‘s trying to do things—

MATTHEWS:  But the conservatives are saying all you have to do is pump like—all you got to do is drill like—Pawlenty said, just got at this, dig, dig, and dig, drill, drill, and drill, and somehow the price of the gas is going to down on the world market.  You‘re saying that‘s not true?

HOLTZ-EAKIN:  Well, I mean, you can‘t change the oil price very much with the U.S. exploration.  It certainly can‘t change it quickly.  We know that.  And I think Republicans have been honest about that.

You also aren‘t going to change the price of gasoline attacking oil companies.  You know, the president is saying, oh, we got to get rid of $4 billion subsidies.  That‘s 3 cents a gallon, OK?  That‘s not a solution.

MATTHEWS:  Would you get rid of them?

HOLTZ-EAKIN:  Yes, but it‘s not going to change gas prices that way.

MATTHEWS:  Yes.  But you would get rid of them?

HOLTZ-EAKIN:  You‘ve got to have a tax reform at the levels of the playing field.  We know that.

MATTHEWS:  OK.  All I know, guys, is the profits the oil companies are making go through the roof every time we get a quarterly report.   It‘s unbelievable.

WALSH:  Every time.  And, you know, it was 2008 we saw it and we are seeing it again.  They‘re up 45 percent, 50 percent already this year, and I think Obama‘s right to say with that kind of situation, we can‘t afford these subsidies.

You know, Doug, you are being incredibly honest and I appreciate that.  But there are Republicans who are saying that drill, baby, drill would make a difference when we know it would not.

And people who criticized the president for taking a pause after the BP spill to figure out how those permits were being issued and to say we‘re not going to let happen to the Gulf again, that was hugely popular at the time.  To be demagoguing him for doing that at this point I think is irresponsible.  Other people are doing this.

HOLTZ-EAKIN:  He has flip flopped back-and-forth on oil and he has long record of that.  We have seen that.

MATTHEWS:  Wait a minute.  You‘re talking about Boehner, right?

HOLTZ-EAKIN:  No, no, I‘m talking about the president of the United States.

(CROSSTALK)

MATTHEWS:  Boehner was saying we got to hit the oil companies.  The other day, he got the word.  I guess informed him to stop talking.

HOLTZ-EAKIN:  While we‘re being honest, let‘s be very clear that demagoguing the oil company profits does nothing either.  You get 3 cents off a gallon of these subsidies.  You‘re not even going to get a quarter of all oil company profits.  You could confiscate the whole thing.

So, those aren‘t solutions, and to go after that as the president has is not a solution.

WALSH:  Well, I think—

HOLTZ-EAKIN:  And to offer up—I mean, this makes no sense.  I get rid of the oil company subsidy and give a renewable subsidy.

(CROSSTALK)

MATTHEWS:  Wait a minute.  I think you guys are against redistribution.

HOLTZ-EAKIN:  One corporate welfare for another.  That‘s not change.

MATTHEWS:  But, Doug, you‘re against redistribution.  Why are you for

redistributing the money for a person driving a car back-and-forth from a

suburb

(CROSSTALK)

MATTHEWS:  Wait a minute—give the money to the oil companies. 

Isn‘t that redistribution?  Isn‘t that just giving money to rich people?

HOLTZ-EAKIN:  I don‘t believe it‘s (INAUDIBLE).  I‘m talking about not giving corporate welfare to renewables when you‘re opposed to corporate welfare for anyone else.  It makes no sense.

WALSH:  I don‘t think it‘s corporate welfare.  Right now, we need an investment in renewables.

HOLTZ-EAKIN:  That‘s all it is.

WALSH:  It‘s the only way we‘re going to get it.

MATTHEWS:  OK, thank you, guys.  This is what everybody is talking about in the real world, by the way.  We‘re talking about it right now.

Joan Walsh, Doug Holtz-Eakin, thank you, sir, for coming on.  Thank you, Joan, as always.

Up next, going back to into the money pit here.  This is the story that has always amazed me.  How so many people could be so dishonest and how we got into the war with Iraq and we‘re finally finding out—thanks to the great reporting of James Stewart.

           

He‘s talking about America suffering from a perjury endemic right now

or pandemic.  He‘s going to talk about it in his big book of how we got in the rush to war and Mr. Cheney and all the people around him, and how they nailed that whistleblower Joe Wilson.

           

This is HARDBALL—it‘s going to be exciting, coming back here in a minute—only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Well, as if one brash New Yorker wasn‘t enough, former New York City Mayor Rudy Giuliani is heading to New Hampshire next month, fueling speculation he may try again for president.  Giuliani famously bet the farm on Florida last time around, a move that backfired and netted him a grand total of one delegate.

We‘ll be right back.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back.

During the investigation that lasted from 2003 to 2007, federal investigators found out who leaked the identity of CIA agent Valerie Plame.  No one was ever charged in the leak itself, but Vice President Cheney‘s chief of staff, Scooter Libby, was convicted by a jury in Washington of lying and obstruction of justice.

Did Libby do what he did to protect the Bush administration‘s case for war in Iraq and why did he think he‘d get away it?

Libby‘s story is featured in a new book called “Tangled Webs,” that profiles three other famous Americans, Martha Stewart, Scooter Libby, Barry Bonds and Bernie Madoff.

Let‘s focus on the actions here of Vice President Cheney‘s former top aide with the great author, James Stewart.  He‘s a contributor to “New Yorker” and “Smart Money.”

James, you are prolific in your investigations.  You have done due diligence here, like I‘ve never seen.  I had a piece of myself in this story.

I have to ask you, however to answer some he questions.  Well, I think I knew—I think I understood this case from day one.  They went to war.  There was a lot of back and forth when we got into the war when we found out there was no WMD.  There‘s a big ping match back and forth between the CIA, who didn‘t like being used the way they were, and the neocons and the vice president‘s office and over in the Defense Department.  And in that back-and-forth, they leaked the name of Valerie Plame on purpose.

Now, maybe Armitage had part of it.  But Scooter wanted to do and Karl Rove definitely wanted to do it.  They were leakers.  They wanted to nail that woman for being an agent of the CIA and their enemy.

Your reporting now?

JAMES STEWART, AUTHOR, “TANGLED WEBS”:  Absolutely.  You‘re completely right about that.  And one of the ironies to me of this story is that they die sided this he they wanted to destroy Joe Wilson because they felt there were lies being told about them, that it wasn‘t fair to say that they were lying about the weapons of mass destruction.

So, what do they do?  They leaked the identity and then, under oath—

I don‘t mean just staying it on TV or staying in the newspapers, but under oath, Scooter Libby lied about it.  And although Patrick Fitzgerald was being criticized for being overzealous in going after him and I admire his decisions, I think he made the right calls—but if anything criticized for being underzealous because he could have gone after Karl Rove and Richard Armitage as well.  And many people in that investigation thought he should have.

MATTHEWS:  Two questions I want to come out of this.  Why did Scooter Libby, a guy who was a clean lawyer, who gave up a white shoe practice in Philadelphia, a prominent, successful attorney, comes down to Washington, in the public interest—I know he‘s conservative—but public interest come downs and works for Dick Cheney?

He ends up basically committed.  He gets convicted by a jury.  They let him off basically.  The White House does.  But he‘s convicted guy.  He did this.  His career is ruined in many ways.

Why did he keep secret all this time?  Why won‘t he expose Cheney?

STEWART:  Well, look, this is the code of the Bush White House.  And, by the way, you know, he was in many ways an honorable man and maybe that‘s why he turned out to be such a bad liar, because when I looked into this, I thought, well, was he possibly innocent?  Was this unfair?

He was a terrible liar.  There were nine witnesses that contradicted his story.  He made up a story out of whole cloth, an alibi involving Tim Russert which never supported.  He was a terrible liar.

But why?  The only answer that makes any sense is he was protecting Cheney.  It‘s all spelled out in there.

MATTHEWS:  Why didn‘t Cheney—why didn‘t Cheney help him out by admitting the truth?

STEWART:  Which would have been so simple because, by the way, at that point, nobody would have cared.  Nobody was indicted for the leak.  But you didn‘t know that at the time.  That‘s with the benefit of hindsight.

No one admitted any errors in that White House.  And that was part of the problem and that‘s part of why people are led to lying.  They insist on perfection in themselves and in others.  And so, when there are human failing, they don‘t admit it.

I think it‘s a broad problem in politics especially.

MATTHEWS:  Did Cheney ever tell the truth to Bush?

STEWART:  Well, I don‘t know that he lied to Bush about this.

MATTHEWS:  No.  Did he ever tell him the truth?

STEWART:  The Cheney deposition, which I quote at length in the book is a masterpiece.  You could you call it deception, evasion, whatever.

He doesn‘t remember anything.  He says things are possible.  He wouldn‘t be surprised.  He doesn‘t admit a single fact—which either means he was deceiving the public or in my view, he wasn‘t mentally competent to hold the job.

MATTHEWS:  Did Karl Rove lie to Bush?

STEWART:  I believe he did.  The evidence strongly suggests in a very dramatic confrontation when asked point blank if he spoke to Karl—to Novak about the identity of the CIA agent, he said the subject never came up.  In his own grand jury testimony, he admitted that he was a confirming source for Novak and the FBI agents felt that it was possible that lying to the chief executive like that was in and of itself a crime.

MATTHEWS:  Great work.  What a great book.  I‘m so glad you‘ve done the work on this.  You‘ve done the due diligence, the honest reporting.  I hope this goes down as the historic record.  We needed one.

I was involved a bit in this case.  I‘m so glad to see it on the record, factually put together by a nonpartisan reporter.

James Stewart, you are a great guy, a great reporter, we need one desperately to get the truth.  Thank you.

STEWART:  Thanks so much.

MATTHEWS:  I hope everybody read it is just for the politics in it, that‘s my interest.  It‘s probably a hell of a book overall.

James Stewart, the name of the book “Tangled Webs.”

When we return, “Let Me Finish” with Donald Trump‘s rather spooky ghost story about the man in the White House.  He does make him seem like Casper the Ghost.  Does this guy even exist in the mind of Donald Trump?

Any way, you are watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  “Let Me Finish” tonight with the theory of a mysterious Barack Obama.  Not the American success story that went to a first-rate prep school, Columbia, Harvard Law and then made Harvard law review, who got elected to U.S. Senate and then the presidency.

No, not that story, though it is a pretty good story, isn‘t it, of the American Dream.  No, let me tell you the Donald Trump script.

Here‘s what he said back in February, two months ago, to that big conservative convention he spoke at, where he started this tour: “Our current president came out of nowhere—came out of nowhere.  In fact, I‘ll go a step further.  The people who went to school with him, they never saw him.  They don‘t know who he is.  It‘s crazy.”

So, what‘s Donald Trump saying here?  Is he suggesting that Barack Obama didn‘t actually go to those schools?  That he never existed in the worlds he said he did?  That there really wasn‘t a Barack Obama?  That those school records were all made up?  Not just the birth certificate, but the school records as well?

Now, we‘re cooking.  This fellow elected president not only wasn‘t born where he said he was, he didn‘t go to the schools he said he did.  Or what?  This is wild.  Tell us more, Donald.

OK, here he was with our colleague Ashleigh Banfield up in a plane in March.  Quote, “The reason I have a little doubt and just a little is because he grew up and nobody knew him.  Nobody comes forward, nobody knows who he is until later in his life.  It‘s very strange.”

Not kidding, Donald.  God, the people went to school with him never saw him?  They don‘t know who he is?  Nobody comes forward, nobody knows who he is?

Now, you tell us his birth certificate is missing.  It‘s not there. 

It doesn‘t exist.

So, what do we do?  No birth certificate.  No school records.  Nobody ever saw him.  There‘s no reason to believe there is a guy named Barack Obama.

So, who is the guy sitting in the White House, Donald?  Is he a secret agent, some creation of enemy forces, some alien come here, planted here, just to bring us down?

Donald, Donald, I‘m scared.  I‘m scared, Donald.

Tell me more.  Donald, this is really exciting.  It‘s so much better than other story they tell you—you know, the real one.  God!

This is HARDBALL for now.  Thanks for being with us.  More politics ahead with Cenk Uygur.

           

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