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updated 5/24/2011 12:12:39 PM ET 2011-05-24T16:12:39

Guests: Jonathan Alter, Hampton Pearson, Chuck Todd, Eric Boehlert, John Feehery, Steve McMahon, Abed Foukara, Michelle Sigona

CHRIS MATTHEWS, HOST:  The eye of Newt.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews in Washington.  Leading off tonight:

Who you going to believe, Newt Gingrich or your own eyes?  I know that‘s a Groucho Marx line, but boy, does it fit.  How bad are things for Newt Gingrich?  This bad.  He now says we‘re lying if we quote him.  Did you hear that?  If we show you tape from television of what he said this week, we‘re being dishonest.  I have never heard such insanity.  This guy belongs in a rubber room.  But please, Newt, keep it up.  With Trump gone and Bachmann getting her pitch ready, we need you to remind us just how bad you are.

Plus, is there anything he can do or say now to save himself?  the HARDBALL strategists will be here to crack at that one.

Also, President Obama‘s big speech on the Middle East today.  He called for negotiations based on those pre-1967 borders with Israeli and Palestinians able to swap land, depending on the deal they reach.  Well, Republicans are lining up to criticize, of course.  No surprise there.  Leadership does carry a price.  But can the president sell the need for an end to the stalemate over there, for a change for the better?

And the IMF boss, or ex-boss, was officially indicted today on seven charges while his lawyers say his relations with that New York hotel worker were—I love it—consensual.

Finally, “Let Me Finish” tonight with the risky stand President Obama did take today on the Middle East and why he has to lead.

We start with Newt Gingrich.  With me now is MSNBC political analyst Jonathan Alter and Media Matters‘s Eric Boehlert.  Eric, I want you to start on this.  You do chronicle this fellow.  Let‘s watch it now.  Newt Gingrich went on Rush Limbaugh today and denied that he attacked Paul Ryan‘s Medicare plan, even though everybody who watched “MEET THE PRESS” heard him do that very thing.  Let‘s listen.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R-GA), FMR. SPEAKER OF THE HOUSE, PRES. CANDIDATE:  By the way, it was not a reference to Paul Ryan.  There was no reference to Paul Ryan in that answer.

RUSH LIMBAUGH, RADIO TALK SHOW HOST:  Well, then what did you apologize to him about?

GINGRICH:  Because it was interpreted in a way which was causing trouble which he doesn‘t need or deserve, and it was causing the House Republicans trouble.

(BEGIN VIDEO CLIP)

MATTHEWS:  Well, here‘s what he really said on “MEET THE PRESS” after he referred to the Republican plan to overhaul Medicare as right-wing social engineering.  We have the tapes.  Let‘s listen.

(BEGIN VIDEO CLIP)

GINGRICH:  So there are things you can do to improve Medicare.

DAVID GREGORY, MODERATOR:  But not what Paul Ryan is suggesting, which is...

GINGRICH:  I think...

GREGORY:  ... completely changing Medicare.

GINGRICH:  I think that that is too big a jump.  I think what you want to have is a system where people voluntarily migrate to better outcomes, better solutions, better options, not one where you suddenly impose upon—

I don‘t want to—I‘m against “Obama care,” which is imposing radical change, and I would be against a conservative imposing radical change.

(END VIDEO CLIP)

MATTHEWS:  So there you have it.  Let me go to Boehlert right now.  Eric, you‘re excellent at this because thank God for tape.  Thank God there actually is a record now of what we do on television.  Is Newt trying to do one of those “Superman” movies where you go back into time and you somehow change it through willpower, and all of a sudden, history is changed?  We have the tape.

ERIC BOEHLERT, MEDIAMATTERS.ORG:  Yes, now five or six days later, he‘s gone back and realized—he‘s going to re-parse what he said, and realize, Oh, my gosh, I never mentioned Ryan‘s name.  Therefore, none of this...

MATTHEWS:  Why is he doing this?

BOEHLERT:  ... none of—why?  He is so far—he has dug a hole to deep for himself.  What‘s amazing here is it‘s not, you know, the evil liberals who are after him or the liberal media, although he claims that‘s happening.  He is getting absolutely demolished and pummeled by the conservative movement and the conservative media in this country because he failed their litmus test.

And so we‘re seeing a pummeling we really haven‘t seen in many years.  And so it‘s amazing that—you know, Gingrich, up until very recently, I mean, he was a Fox News contributor.  He played this media game for a living.  This was his job.  And to see him fall down like this time after time is really amazing.  I mean, he had set a new sort of land speed record for blaming the media.  His campaign wasn‘t even a week old, and he was out yelling this week about how the press was after him.  But this is really an amazing spectacle to watch.

MATTHEWS:  You know, I don‘t know—Jonathan, you‘re a historian, as well as a journalist, and you and I talk about history all the time.  It‘s like one of those boxers, though, that comes back—you know, Sugar Ray Robinson, for example, he came back and had a pretty good second career for a while.  But this is—this is more like Jersey Joe Walcott (ph) by the 1950s, I mean, coming way back years later and getting beat to hell out of by your own failure to be in shape, just out of shape, out of touch.

JONATHAN ALTER, MSNBC POLITICAL ANALYST:  Or maybe becoming more like Harold Stassen.

(LAUGHTER)

ALTER:  He was the—you know, a one-time...

MATTHEWS:  He ran every time, yes.

ALTER:  ... one-time serious presidential candidate in 1948.  And by the ‘60s, he was still running for president and had become kind of a joke.  Look, the reason this week is so important is not because of the fate of Newt Gingrich, who wasn‘t going to win the Republican nomination anyway.  This was an even better week for the Democrats than when bin Laden was killed because what‘s happened now is by turning the big tent of the Republican Party that Ronald Reagan envisioned into a pup tent by saying, No, there is not room for differing views on privatizing Medicare, they are essentially locking the whole party in...

MATTHEWS:  Yes.

ALTER:  ... to privatizing the most popular social program of the last 50 years.

(CROSSTALK)

MATTHEWS:  Newt was trying to break out of that and proved you can‘t -

here‘s what he said, by the way...

ALTER:  A disaster for Republicans.

MATTHEWS:  ... on Fox, with governors just two nights ago.  It is so interesting to watch this unraveling here.  You‘re right, he makes a point.  They‘re so disciplined, they‘re like the old Labor Party in London.  Here he is trying to break free, and he got killed.  Here he is two nights ago trying to get out.  Let‘s listen.

(BEGIN VIDEO CLIP)

GINGRICH:  I made a mistake.  And I called Paul Ryan today, who‘s a very close personal friend, and I said that.  The fact is that I have supported what Ryan‘s tried to do on the budget.  And the budget vote is one that I‘m happy to say I would have voted for, I will defend.  And I would be glad to answer any Democrat who attempts to distort what I said.

(END VIDEO CLIP)

MATTHEWS:  You know, Eric, this is crazy because just a moment ago, we heard him deny that he was talking about Ryan.  Now we hear him apologizing to Ryan by name.

BOEHLERT:  Yes, it‘s amazing.  If you take the clips out of—from a few different days, you don‘t really know what story he‘s talking about.  But Jonathan was right.  I mean, we have seen—particularly with the Tea Party movement in the last year or two, certainly since Obama‘s election, we have seen a far, far right movement in this country largely driven by the far, far right radical conservative media in this country that has completely displaced traditional Republican leadership, the RNC.  They are running the show, and they are throwing down the markers that almost no one can match, not even Newt Gingrich.  Who would have thought Newt Gingrich wasn‘t conservative enough for today‘s conservative movement?

MATTHEWS:  OK...

(CROSSTALK)

ALTER:  ... hostage video, you know, hostage video, where he‘s, like forced to do an apology like they used to have...

MATTHEWS:  Yes, I know.

ALTER:  ... in the communist regimes or something.

MATTHEWS:  But why do—maybe Bill Clinton with his 190 IQ tried this years ago.  Remember he got caught talking about Mario Cuomo being a mobster, and then saying—he calls him up and apologizes to him, then he says, I didn‘t—wasn‘t talking about you, of course.

Let‘s (INAUDIBLE) Newt is outdoing them all.  Here he is trying to launch a preemptive strike against any Democrat who dares write an ad that features his own words about Ryan‘s Medicare plan.  This is something new here.  Let‘s listen.

(BEGIN VIDEO CLIP)

GINGRICH:  I want to make sure that every House Republican is protected from some kind of dishonest Democratic ad, so let me sign the record, any ad which quotes what I said on Sunday is a falsehood and because I have said publicly those words were inaccurate and unfortunate.  And I‘m prepared to stand up and—when I make a mistake, and I‘m going to on occasion, I want to stand up and share with the American people, that was a mistake because that way, we can have an honest conversation.

(END VIDEO CLIP)

MATTHEWS:  You know, he‘s saying, You can‘t quote me because that‘s dishonest, and then he‘s saying, Of course, I wasn‘t talking about Ryan.  We do have an ad, though, that whatever (ph) these (ph) things (ph) has been made.  And Democrats have got this ad out.  It‘s a Web site ad.  I think we‘ve got it ready.  Have we got it ready now to show?  Oh, we don‘t have it ready.  We‘re going to have it later in the show.

This ad, the Democrats—Jonathan, they already have an ad showing Newt destroying their own plan, which you point out they have to get away from somehow.  And now the Democrats are using Newt to destroy the Republicans with their own plan!

ALTER:  You know, Charles Krauthammer, the conservative columnist, said that there will be an ad.  It will be devastating for Republicans.  It will use Newt.  The question is, how devastating.  Can they conceivably take the Congress back, take the House back, with that kind of ad...

(CROSSTALK)

MATTHEWS:  Well, here it is.

ALTER:  ... in the fall of 2012?

MATTHEWS:  As per, as per Jonathan, here‘s a part of the Web ad the Democratic National Committee just put out using Newt to destroy the Republicans.  Let‘s watch.

(BEGIN VIDEO CLIP)

GINGRICH:  I don‘t think right-wing social engineering is any more desirable than left-wing social engineering.

UNIDENTIFIED MALE:  He did nothing less than attack a sacred cow in the Republican Party.

(CROSSTALK)

UNIDENTIFIED FEMALE:  And now Republicans—well, they‘re all fired up.  Syndicated columnist Charles Krauthammer told Fox‘s Bret Baier Mr.  Gingrich, quote, “didn‘t have a big chance in the beginning, but now it‘s over.”

UNIDENTIFIED MALE:  So on Tuesday night, this happened.

GINGRICH:  I made a mistake.

UNIDENTIFIED MALE:  Newt learned the hard way ending Medicare is the new GOP litmus test.

(END VIDEO CLIP)

(CROSSTALK)

ALTER:  That‘s an ad for insiders, Chris.

MATTHEWS:  I know.  Well...

(CROSSTALK)

ALTER:  ... litmus test.  It makes no sense.  The ad that will be run by professionals on television, not on the Web, in the fall of 2012 will say, The Republican Party, they want to privatize your Medicare, take away your Medicare and cost you, according to neutral estimates, more $6,000 out of pocket.  Even Newt Gingrich calls this radical.  Vote Democratic.  It‘ll be something very simple like that.

MATTHEWS:  Very high concept.  Yes.  You agree with that, Eric, it‘s going to be a simple ad that brings them down now, and Newt gave them the tool?

BOEHLERT:  Yes, he did.  The only hope the Republicans have is Gingrich has so discredited himself with this sort of media circus that it won‘t hurt them.  And they‘re going to—they‘re doing their best to discredit him as much as possible this week.

MATTHEWS:  OK, here we go.  This is—I want you to wrap this up.  Here‘s Newt‘s spokesman, Rick Tyler (ph).  Now, this guy‘s a piece of work in himself.  He‘s an anthropologist of the new school here.  He responded to the implosion of his boss‘s campaign in this way.  I can‘t give you the whole quote, but it‘s incredible.

“The literati sent out their minions to do the their bidding.  The firefight started when the cowardly sensed weakness.  They fired timidly at first, then the sheep, not wanting to be dropped from the establishment‘s cocktail party invite list, unloaded their entire clip, firing without taking aim their distortions and falsehoods.  Now they‘re left exposed by their bylines and handles.  But surely they had killed him off.  But out of the billowing smoke and dust of tweets and trivia emerged Gingrich, once again ready to lead those who won‘t be intimidated by the political elite and who are ready to take on the challenges America faces.”

What is this?  What‘s this, post-modern—what—what are we doing here, Eric?  Is this some new way of flacking for a—I mean, I used to do this for a living.  But flacking in this way, in this level of weird sophistication, is talking to nobody but fools.  I don‘t know who it‘s talking to.

BOEHLERT:  You got the weird.  I don‘t know about the sophistication.  I mean, it just doesn‘t make any sense.  It sort of matches the incoherence of the Gingrich media strategy.

MATTHEWS:  This is the guy who‘s supposed to clarify...

(CROSSTALK)

ALTER:  They‘re are trying to play off against elites because they know that one of the things that‘s made Republicans popular is when you dump on elites, dump on the Beltway.  All that stuff is super, you know, inside baseball.  What‘s relevant is that they have taken on this unbelievably popular program and tried to kill it.  And that‘s a fact.  That‘s not spin.  That‘s not some—you know, it privatizes—the Ryan plan privatizes Medicare.

So the question is, can they get away from the Ryan plan the way Mitch McConnell today is running as fast as he can away from the Ryan plan.  And it‘s really hard when all Republicans except four in the House of Representatives have already voted for it.  So they‘re stuck with this.  And even if there‘s a big budget deal, the budget deal only lasts 10 years.  And the Ryan plan starts at year 11.  So they will still be wedded to the plan in the fall of next year, when they run for reelection.

MATTHEWS:  Just remember to get our definitions straight (INAUDIBLE) define terms.  An elite today is someone who reads the newspapers.

(LAUGHTER)

MATTHEWS:  By their definition.  I mean, it‘s not Yale five generations.  It‘s anybody who keeps with stuff.  Anyway, thank you, Jon Alter, my buddy, and thank you, Eric, Boehlert, for coming on again.

Coming up: Every time Newt speaks, he makes things worse for himself, of course, but there‘s anything—we‘re trying to be fair here.  He‘s got to do another Sunday show this weekend.  He‘s trying to get back out of the hole.  He‘s going to do “Face” this week.  He didn‘t too well on “MEET.”  He‘s blaming him for everything, David Gregory.  He‘s going to try it better with Schieffer.  Schieffer‘s going to be tough, as well, this Sunday.  Can he fight his way out of this paper bag he‘s put over his head, or should have?

HARDBALL, the strategists left and right tackle this one when we come back.

You‘re watching it only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  It‘s a first for President Obama.  Republicans have successfully filibustered his nominee for the federal judiciary.  The president nominated Goodwin Liu for the 9th circuit—court of appeals out in California, but Republicans called him an ideologue.  Even John McCain and Lindsey Graham, part of the “gang of 14” that negotiated the deal to prevent judicial filibusters except in extraordinary cases, voted against him.  The only Republican to break from the party was Alaska‘s Lisa Murkowsky, who was also part of that gang of 14.

We‘ll be right back after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  Your excellency?  Here‘s your water.  What in the world is the matter?  Your excellency, I thought you left.

GROUCHO MARX, ACTOR:  Oh, no.  I no leave.

UNIDENTIFIED FEMALE:  But I saw you with my own eyes.

MARX:  Well, who are you going to believe, me or your own eyes?

(END VIDEO CLIP)

MATTHEWS:  Who you going to believe, me or your own eyes, the great Groucho Marx line.  Welcome back.  That famous Marx Brothers scene encapsulates the situation Newt Gingrich finds himself in right now.  He‘s on the record on “MEET THE PRESS” criticizing the Republican plan on Medicare, but he says his own words are not to be believed, even if they turn up in Democratic ads.  Has Gingrich upended Republican strategy on everything?

Steve McMahon‘s a Democratic strategist.  John Feehery‘s a Republican strategist.  Let‘s go at it, guys.  Feehery, you get the—you‘re in the box right now.  Can this guy get out of this?  He‘s on “Face the Nation” next week.  You got to figure that Bob Schieffer, the old pro, is ready for this bout.  He‘s got to at least match up be as tough as David Gregory was last Sunday.  Old Newt has apparently already set up this bout.  How does Newt win this fight against Schieffer this week when Schieffer‘s going to be holding him to every word he‘s spoken?

JOHN FEEHERY, REPUBLICAN STRATEGIST:  Well, what I would have done if I were Newt is I would have advised him to do some major league speeches getting into the depth of what he meant on health care.  He knows more about health care than almost any other Republican.  He has some very good ideas.  He gets caught up in these 30-second sound bites of his own making.  He‘s got to explain to people what he means about the incentive-based system that he‘s talking about.  How do you get—how do you get Medicare reformed in the future?  He‘s lost—off his message completely because he‘s not talking about policy, he‘s talking in sound bites, and that‘s where he gets himself into huge problems.

MATTHEWS:  Who‘s going to listen to his long speeches at the point he seems to be imploding?

FEEHERY:  Well, you know, that‘s a big question.  Of course, now he‘s got everybody‘s attention.  And he‘s not going to win the presidency anyway, so at least use this as a reason to start talking about serious policy.

MATTHEWS:  OK, let me ask Steve.  It seems to me this is an opportunity for Democrats to achieve a couple of goals.  One, they can use him as their battering ram to destroy the main Republican plan, which is to get rid of Medicare.

STEVE MCMAHON, DEMOCRATIC STRATEGIST:  That‘s right.  That‘s exactly what‘s going to happen.  And ads like Jonathan Alter just laid out are going to be seen all across the country.  Newt‘s seen this movie before, and one of the reasons he‘s trying to run away from this Medicare plan of Paul Ryan‘s is because he knows how the movie‘s going to end.  Next week, Harry Reid‘s going to have a vote in the Senate, and the Republicans are going to have it take a stand on whether or not they support this Medicare plan, which is deeply, deeply unpopular.  I think Paul Ryan has put the House of Representatives back in play for the Democrats single-handedly.

MATTHEWS:  And what‘s Newt done?  What‘s Newt‘s part in this?

MCMAHON:  Well, I think what Newt has done is—you know, he knows how this thing polls.  He‘s running for president.  What‘s interesting to me, Chris, is I think Newt‘s running away from it because he wants to be able to survive in a general election, even though he won‘t get to a general election.

What is interesting to me, Chris, is, I think Newt is running away from it because he wants to be able to survive in a general election, even though he won‘t get to a general election.  What is interesting to me is that there is not another Republican in the presidential field who has endorsed the Paul Ryan Medicare plan, because, presumably, they have done their polling and they understand just how unpopular and how unfair this plan is for seniors. 

MATTHEWS:  OK.

To add to this craziness—and I can‘t even follow her on this—and I can usually follow Sarah Palin‘s fairly basic brain at work. 

(LAUGHTER)

MATTHEWS:  Here she is knocking Newt for apologizing for what he said and at the same time defending him against the tactics of the—of what she calls lamestream media. 

But if you follow her logic, she is saying, keep it up Newt.  Keep attacking the Ryan Republican plan on Medicare, even though you are destroying our main party platform. 

Listen to her. 

(BEGIN VIDEO CLIP, FOX NEWS CHANNEL)

SARAH PALIN ®, FORMER ALASKA GOVERNOR:  I don‘t know why politicians feel that they have to apologize for something that they said just because they have gone through a 24-hour cycle of the lamestream media giving them a hard time for something that they said. 

A politician either believes in what they just said in an interview or they don‘t in what they just said.  And if Newt Gingrich believes that it is right-wing social engineering to undo Obamacare and reform Medicare to make sure that we provide a safety net for our seniors who are going to need health care coverage, then say so.  But don‘t apologize later just because the media has dinged you on what it is that you said. 

(END VIDEO CLIP)

MATTHEWS:  This is so pathetic, watching her on television.  It‘s so pathetic that Roger Ailes has put her on television, sitting up in some box, some loony bin up in Alaska, sitting there answering these questions she doesn‘t know anything about. 

Did you hear what she said, John?  She said he could—should continue to attack the Republican plan.  What is she up to here?  Is she just not thinking or capable of thinking?  What is going on here?

(CROSSTALK)

MATTHEWS:  Do you really think she should have been vice president of the United States?  Or was Steve Schmidt, the campaign manager right; she doesn‘t know anything?  Who is right? 

JOHN FEEHERY, REPUBLICAN STRATEGIST:  Let me spend just one second defending Sarah Palin. 

MATTHEWS:  OK, please.

FEEHERY:  And she is not my favorite.  Let me—in one sense, she is right.  And that is that Newt Gingrich needs to further explain what he means and what his ideas are on health care and Medicare reform, because I think they‘re important ideas. 

MATTHEWS:  I see.

FEEHERY:  And he is not doing that.  Now he is kind of getting all the he said/she said, I‘m against this, I‘m for this.

He has got to talk about his ideas.  In one sense, Palin is right, because he does have interesting ideas on how to reform Medicare. 

(CROSSTALK)

MATTHEWS:  What did she—did she say that or did you say that?  You said that intelligently.  You are telling me that‘s what she said or that‘s what you‘re saying? 

(CROSSTALK)

FEEHERY:  Well, what—

(CROSSTALK)

MATTHEWS:  You‘re not translating her.  I could play her 50,000 times and nobody would hear her say what you just said. 

FEEHERY:  Well, that‘s what she should have said. 

MATTHEWS:  She said something almost daffy.  And you just thought of something intelligent and said it‘s what she said. 

MCMAHON:  John is a cleanup artist. 

(CROSSTALK)

MATTHEWS:  This guy is the best flack I have ever seen in my life. 

You are much better than the flack for Newt Gingrich, who talks of this philosophical stuff.  You actually speak English.  You‘re Irish, obviously.  Keep going here.

(LAUGHTER)

MATTHEWS:  Let me go. 

Steve McMahon, your thoughts. 

MCMAHON:  Listen, I think Sarah Palin is trying to do two things.  She‘s trying to make Newt sort of an opportunistic fraud, and she‘s trying to make him dig a deeper hole with the Republican right, because she thinks she might run for president. 

MATTHEWS:  Right.  She wants to kill him. 

(CROSSTALK)

MCMAHON:  And she wants to totally kill him. 

MATTHEWS:  Yes.

MCMAHON:  And she is just kicking him apart limb by limb, which is why it doesn‘t make exact sense. 

And the truth of the matter is that where Newt Gingrich is, saying that this is right-wing social engineering, is where most Americans are and it certainly is where most seniors are.  So, he‘s in the right place politically.

(CROSSTALK)

MATTHEWS:  OK.  You got your flackery in there.  I got you.  You got the flackery.  And I understand why the Democrats want to destroy—but we are talking about Newt now.

Here is Palin who, you‘re right, is somewhat envious of the attention that Newt grabbed this week, and maybe envious if Bachmann jumps in.  But I don‘t want to anticipate her on that.

Clearly, she wants to take away—she is messing with Newt‘s rhubarb here.  Here she is on her presidential plans.  Let‘s listen. 

(BEGIN VIDEO CLIP, FOX NEWS CHANNEL)

PALIN:  I‘m still seriously considering it, and praying about it and talking about it with family, because of course it is a monumental leap for a family to put themselves out there again in the limelight and be ready for the scrutiny that ensues in a campaign.  So, still talking about it and assessing, yes, the field, looking for others who are ready to go rogue and fight against the machine on both sides of the aisle in order to get the economy back on the right track and do the things that the private sector needs done to implement some solutions to all the problems that America is facing right now. 

I want to make sure that we have a candidate out there with Tea Party principles. 

(END VIDEO CLIP)

MATTHEWS:  OK.  Look, Feehery, you and I are about as alien from her as we could be.  But she is going to go up there and chat with God, and then she‘s going to check in with Levi and Brewster McCloud and the rest of her incredible family up there.

Is she really going to check in with that cast of characters up there about whether she should run for president, seriously?

FEEHERY:  Well, I think she probably will pray and figure out—

(CROSSTALK)

FEEHERY: -- run for president.

(CROSSTALK)

MATTHEWS:  What‘s Levi think and all these—who are they?  Give me the names of that family again.  What‘s her—never mind.  I can‘t keep up with the names.  Your thoughts. 

(CROSSTALK)

(LAUGHTER)

FEEHERY:  Listen, what that sounded to me like was she was thinking, if we don‘t get the right Republican candidate, she might run as a Tea Party candidate and run a third party. 

MATTHEWS:  Right.  Oh.

FEEHERY:  That‘s the thing that I‘m hearing from that.  I‘m not sure if she could win a Republican nomination, although, with Huckabee out, she does have—she can fill a vacuum.

But that sounds to me about Tea Party that she might want to run a third-party candidate.  That‘s what I read into that.

(CROSSTALK)

MCMAHON:  I‘m for Sarah Palin.  I think she‘s a great candidate.  I think she will make a fine nominee.  And I hope the Republicans nominate her.

(CROSSTALK)

MATTHEWS:  Steve, put on your analyst hat for a second.  Take off your Democratic hat for 30 seconds. 

MCMAHON:  OK. 

MATTHEWS:  Is it possible that John is on to something, that what she is saying is, I don‘t like the cut of the jib of these guys running, I don‘t like Mitt Romney, I don‘t like Pawlenty, I don‘t even like this guy Mitch Daniels; they are all boring insiders to me; if you guys don‘t come up with somebody I‘m excited by—in fact, if I‘m excited by them, I may want to be them; I don‘t like those people that might do what I want to do, which is be the star of this convention, of this campaign by being a third party out there debating the president and the Republican in a three-ring circus come next November?

MCMAHON:  Yes, I mean, she may do that because she might be just unstable enough to want to pursue that path. 

And if you‘re a narcissist, then that may be the thing that you want to do.  But it‘s a road that leads nowhere, except to embarrassment, and probably puts at risk her ability to make $10 million a year, which I‘m sure she is doing right now. 

MATTHEWS:  Oh.

MCMAHON:  And I think one of the reasons that Michele Bachmann is so interested in running herself is because she sees that you don‘t really have to have an understanding of American history or really be anything other than somebody who is kind of a gadfly, and you can end up on the back end of a campaign very famous and very able to make a lot of money. 

MATTHEWS:  Yes. 

FEEHERY:  Well, let me jump in here. 

In a sense, I think Steve is wrong, because there are plenty of people who have run viable third-party candidacies, going back to Teddy Roosevelt and Ross Perot. 

MCMAHON:  How many of them win, John?

FEEHERY:  There is a vacuum there.  And there is disaffection with both parties, especially with the Tea Party.  And I wouldn‘t put it past her.  So, to say that she is some sort of narcissist, that may or may not be true, but to say that there is no vacuum out there, I think is a misunderstanding of the politics.

(CROSSTALK)

MATTHEWS:  I say that with no criticism on this front.  Her show business ability is spectacular. 

MCMAHON:  Absolutely.

MATTHEWS:  Her ability to be president, I think, is really out to lunch.  But she is so good at the show business with the way she presents herself.  She is very attractive.  She does the waving.  She does all that stagecraft.  Look at it.  It‘s always spectacular.

She is Buffalo Bill‘s Wild West show.  And that‘s what she really is.

(LAUGHTER)

MATTHEWS:  She is fantastic as the Wild West show from out West.

Anyway, thank you, Steve McMahon, and thank you, John Feehery. 

MCMAHON:  Thank you. 

MATTHEWS:  Up next:  Newt Gingrich gave Jon Stewart and Steve Colbert amazing stuff last night, and they delivered.  Let‘s stick around and hear from these two guys about Newt in the “Sideshow.” 

You‘re watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

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

First up, so, who do you like better, Jon Stewart and Stephen Colbert or Gingrich, the guy they had so much fun with last night?

(BEGIN VIDEO CLIP, “THE COLBERT REPORT”) 

NEWT GINGRICH, FORMER SPEAKER OF THE HOUSE:  I have said consistently we ought to have some requirement that you either have health insurance, or you post a bond, or, in some way, you indicate you‘re going to be held accountable. 

DAVID GREGORY, MODERATOR, “MEET THE PRESS”:  But that is the individual mandate, is it not?

GINGRICH:  It‘s a variation on it. 

STEPHEN COLBERT, HOST, “THE COLBERT REPORT”:  Yes, it‘s a variation, just like wife three is a variation on wives one and two. 

(LAUGHTER)

(END VIDEO CLIP)

(BEGIN VIDEO CLIP, “THE DAILY SHOW WITH JON STEWART”)

GINGRICH:  I don‘t think right-wing social engineering is any more desirable than left-wing social engineering.  I don‘t think imposing radical change from the right or the left is a very good way for a free society to operate.

JON STEWART, HOST, “THE DAILY SHOW WITH JON STEWART”:  Wow. 

(LAUGHTER)

STEWART:  Appealing to the moderate wing of the Republican Party, a wing which, as you know, has been closed for renovation since Nelson Rockefeller died. 

(LAUGHTER)

BRIT HUME, FOX NEWS:  Does he really want to be nominated by the Republican Party?  One wonders. 

UNIDENTIFIED MALE:  He was never a likable guy. 

UNIDENTIFIED MALE:  This is a capital offense. 

JUAN WILLIAMS, FOX NEWS:  How can I say this politely?  He was urinating inside the family circle. 

(LAUGHTER)

STEWART:  What would the impolite way have been to say that? 

(LAUGHTER)

(END VIDEO CLIP)

(LAUGHTER)

MATTHEWS:  Newt is so nasty, he even attacks himself. 

Next up: Dick Cheney back in the hunt.  The former V.P. has just released the cover of his upcoming book, “In My Time”—there it is—and set the publication date for August 30 this year.  The book was written with Cheney‘s daughter Liz, who says the book will show off her father‘s sense of storytelling and sense of humor. 

Wow.  Well, I‘m hoping that two of them will agree on how the family name is pronounced.  Dick and Lynne Cheney pronounce it Cheney, the correct family way.  Liz pronounces it differently.  She calls herself Cheney. 

We report; you decide.

Finally, talk about damning with faint praise.  Here is what Republican Senator Chuck Grassley has to say about the latest flavor of the month in the presidential candidate search, Indiana Governor Mitch Daniels -- quote—“Sometimes, I hear Mitch Daniels and I thought, well, maybe I ought to back him because it would be an opportunity to show that people who don‘t have charisma could be elected president.”

Nerd alert.  Beware.

Next:  President Obama calls for reform across the Middle East.  He laid out his vision today for a democratic Mideast and the role America should play to help create it.  But he is catching flak, as you might thought—or might have thought for saying a future Palestinian state should be based roughly on the ‘67 borders. 

That‘s ahead.  You‘re watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

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

A choppy trading day ending in modest gains, the Dow Jones industrials climbing 44 points, the S&P 500 tacking on three points, and the Nasdaq adding eight. 

The big story of the day, that blockbuster IPO for professional networking site LinkedIn.  It priced at $45 a share and finished at $94, a gain of 109 percent.  It also sold about four times as many shares as predicted. 

But Intel dragged on the Dow after ratings downgrades based on slowing processor shipments and rising competition.  In earnings, Sears reported a bigger-than-expected quarter loss on declining sales.  Dollar Tree beat forecasts, as shoppers continue to keep a close eye on spending.  GameStop delivered strong results, but a disappointing second-quarter outlook. 

And Sodastream, the maker of home carbonation systems, was a hot ticket for the second day in a row.  Today, they announced plans to expand into offices, restaurants, and hotels. 

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

HARDBALL. 

(BEGIN VIDEO CLIP) 

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  A choice between hate and hope, between the shackles of the past and the promise of the future.

It‘s a choice that must be made by leaders and by people.  And it‘s a choice that will define the future of a region that served as the cradle of civilization and a crucible of strife.

(END VIDEO CLIP)

MATTHEWS:  Welcome back to HARDBALL. 

That was President Obama today in a big speech about the Middle East and North Africa.  Israeli Prime Minister Benjamin Netanyahu is set to meet with President Obama Friday night at the White House.  That‘s tomorrow.

Here‘s more of President Obama today.  Let‘s listen. 

(BEGIN VIDEO CLIP)

OBAMA:  The borders of Israel and Palestine should be based on the 1967 lines, with mutually agreed swaps so that secure and recognized borders are established for both states. 

The Palestinian people must have the right to govern themselves and reach their full potential in a sovereign and contiguous state.

(END VIDEO CLIP)

MATTHEWS:  Well, Chuck Todd is NBC News White House correspondent and political director, of course.  And Abed Foukara is the Washington bureau chief for Al-Jazeera.

Chuck, let‘s just talk this—I was just over there and I was over there last year in Israel with the vice president.  And, if you talk to most people, they sort of aren‘t surprised by the parameters of this.  They will be roughly the ‘67 borders with a lot of adjustments up with the territory.  Israel picks up some territory, gives away some territory—basically, a fairly substantial Palestinian state the number—the size it would have to be. 

Then you talk to people on the far right, far right, Likud far right, American politics, Christian right, and they are still operating under the notion that Israel will somehow annex or something that part of the world, somehow magically exempt themselves from responsibility for all those Arab people. 

CHUCK TODD, NBC NEWS POLITICAL DIRECTOR:  Right. 

MATTHEWS:  So, it seems like the president was talking the regular diplomatic line here. 

How is it—why did he do it?  Why did he stick his neck out to say something that is going to be so incendiary to the right and to friends of Israel generally in many cases?

(CROSSTALK)

TODD:  Right. 

Well, let‘s lay out what—what does he—what did he say that was new?  Position-wise, he didn‘t say anything that was new.  What was new is that a president of the United States said it. 

The ‘67 -- the idea of using the ‘67 borders as sort of the basis, the baseline of creating the two-state solution is not new.  Having a president say it publicly is what was new. 

Now, what seems to be missed—on one hand, I‘m stunned by the venom and the vitriol in the disagreement with the president on this.  I‘m not surprise by the disagreement, but the venom and the vitriol in the disagreement does seem to surprise me because there seems to be two types of criticism on this. 

One is a criticism of, hey, what are you giving away anything for?  And the other line of criticism, which seems to be a little more of the mainstream conservative criticism on this, has to do with, hey, don‘t publicly talk about this because but by publicly, you put the Israelis in the corner.

But what‘s missed here is what the president also said about the Palestinians, which he essentially gave Israel a pass to walk away from any talks if Hamas doesn‘t renounce the violence and recognize Israel.  So—

CHRIS MATTHEWS, HOST:  Yes, that‘s what I heard, too.  I heard that too.

TODD:  Sort of like he gave—I‘m surprised we‘re not hearing at least some acknowledgement that the president did give the Israelis what will probably be the easy way to walk away from negotiations because—you know this, Chris, the likelihood that Hamas is going to somehow immediately start recognizing Israel is very unlikely.

MATTHEWS:  It‘s a big break for Netanyahu, he‘s the man of the right.  Whatever you think of Netanyahu, he gets a big break with Hamas join the coalition, because they‘re not going to recognize Israel and they‘re not going to put away violence as part of their tool kit.

TODD:  That‘s right.

MATTHEWS:  Here‘s the president on questions facing the Palestinians. 

Here‘s where he shoves it back at the other side.  Let‘s listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  Recognizing that negotiations need to begin with the issues of territory and security does not mean that it will be easy to come back to the table.  In particular, the recent announcement of an agreement between Fatah and Hamas raises profound questions for Israel.  How can one negotiate with a party that has shown itself unwilling to recognize your right to exist?  In the weeks and months to come, Palestinian leaders will have to provide a credible answer to that question.

(END VIDEO CLIP)

MATTHEWS:  I think the president, Abed, is trying to go to other side

the Palestinian side—and say, whatever else you think about any other president, you will never get a better deal than from me.  I‘m here.  The other guy isn‘t here.  There is no George W. around.  There‘s no George Schultz around.

           

I‘m here, you can deal with me.  You come forward.  You make the commitments that Israel wants to hear, you make it tougher, you make it easier for me.  But you got to deal now.

What do you think he is saying?

ABED FOUKARA, AL JAZEERA WASHINGTON BUREAU CHIEF:  Well, Chuck

MATTHEWS:  Is he pushing it to the Palestinian side by being so strong on behalf of the Arab solution here which is the ‘67 line basically?

FOUKARA:  Chuck said that there‘s nothing new in the speech and I totally agree with that.  The idea of a ‘67 border and land swaps is nothing new in the administration‘s parlance.  Now that‘s a -- 

MATTHEWS:  It‘s the Clinton plan.

FOUKARA:  It‘s a Clinton plan.  It‘s a huge problem now for him in the part of the world that he was supposed to be addressing.  People are saying, not only is there nothing new in it, this is something that we—he was supposed to have moved away from given his speech in Cairo two years ago.

MATTHEWS:  Away from?  Where would he go to?

FOUKARA:  Well, the idea is that speech is actually a regression from the spirit of—

MATTHEWS:  Well, what‘s the spirit of Cairo?

FOUKARA:  Well, the spirit of Cairo is that we want the settlement to stop.  We want to give the Palestinians a legitimate chance to establish their own state.

Today, when he talks about the U.N., he told Palestinians, “Don‘t even think about going to the United Nations for statehood.”  So, where does that leave them?

What we are hearing from the Palestinians of a the speech is that it doesn‘t leave them anywhere else to go as far as Obama is concerned.

MATTHEWS:  Well, I don‘t know.

Chuck, you can check out Abed on that.  I guess I‘m hearing—I‘m an American and the president is staking out what I think is an internationally recognized middle of the road.  The Europeans would say there is the middle of the road.  The Saudis would say this is the middle of the road.  And he‘s sticking his neck out as an American politician to get elected here next year.

Your thoughts, Chuck?

I think there‘s a lot of guts.  But I don‘t think it was anti-Israel, but I think it was international.  I think it was trying to find that international tone.  Yes?

TODD:  You brought up a good point about Europeans.  And, look, what he‘s doing is rhetorically jump-starting the rhetoric.  It‘s not going to jump-start talks because, let‘s be realistic, as we pointed out, the idea that Hamas is going to somehow tomorrow recognize Israel and put down arms -- you know, he has given Israel an easy way out, and for the United States to support Israel, to walk away from any sort of future talks.

That said, it is going to force Netanyahu to probably curtail whatever plan he was going to come with, because they knew that he‘s going to come with his form of where to—of how to begin these talks.  And then the other part of this is that, you know, the land swaps isn‘t—isn‘t an unimportant part of this—you know, people are focusing on ‘67 borders, but the land swaps—in talking to some people that are close to this, the land swaps is a pretty good deal for the Israelis here because its settlements in exchange for frankly uninhabited parts of the desert.

MATTHEWS:  Yes, I‘ve been there.  There‘s a lot of it out there.

Anyway, thank you, Chuck Todd.

Thank you, Abel Foukara, for different views here.

Up next: a judge in New York has granted bail—a certain kind of bail for the former head of the IMF.  He‘s got to stay in sort of a locked house basically with a guard outside, with $5 million basically as a bond.  He is indicted for an alleged sexual attack on that hotel maid.  What a story this is.

We‘re going to have a minute or two on that when we come back.  In fact, five minutes, we‘re going to get the latest on this guy.

This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Wow, catch this.  The FBI has announced it‘s investigating whether Ted Kaczynski, the Unabomber, was also responsible for the Tylenol poisonings back in ‘82.  The FBI in Chicago confirmed that the bureau has asked Kaczynski for DNA samples and so far Kaczynski has refused.  No surprise there, of course.

The Tylenol case involved potassium cyanide.  Seven people in the Chicago area died in those poisonings.  We forgot that part of the story.

We‘ll be right back.

(COMMERCIAL BREAK)

MATTHEWS:  What a story this one is.

We‘re back.

Dominique Strauss-Kahn, the former IMF chief accused of an attempted rape of a housekeeper in New York City this weekend, was indicted this afternoon on seven counts by a grand jury.  A lot of them were felonies.  A judge granted him bail of $1 million.  He‘ll be confined in his wife‘s apartment with armed guards monitoring him.  By the way, a $5 million insurance bond, which he‘s going to take an insurance policy of $5 million, to say he wouldn‘t flee.

For more on this case, we‘re joined by Michelle Sigona, who‘s an investigative crime reporter.

I couldn‘t have you at a better time, Michelle.  What are we seeing here?  I mean, it seems to me that the defense here is going to try to basically impeach the witness, the main witness who was the victim here.  Tell me what‘s—where they‘re headed with this.  Why don‘t they just—well, they can‘t just pay up the guy and be in jail for 20 years?

MICHELLE SIGONA, INVESTIGATIVE CRIME REPORTER:  You‘re exactly right.  And a lot of times in these cases, Chris, we see this on and on—you know, on and on again, especially with rape victims.  Every two minutes in the United States, a woman—

MATTHEWS:   Attempted rape on this case.

SIGONA:  -- exactly—is attacked, sexually attacked.  Sixty percent of those people, of those victims don‘t come forward because of situations like this.  It‘s very—it‘s troubling, it‘s taxing, it‘s long.  This is going to be a long, drawn out process, unfortunately.

MATTHEWS:  What are the cops making of—here, the forensic scientists, everybody is looking at it and they say the key to this is the credibility.  In the first instance, when you sit down and talk to the victim, if she comes across as credible, that really builds the whole case.

SIGONA:  It does.  And you also have to think that as soon as this attempted assault happened, that she immediately went and told someone about it.  Investigators were out there on the scene within 90 minutes, they took a statement.  They took her quickly down to the station.

MATTHEWS:  The police were involved within 90 minutes.

SIGONA:  The police were involved within a very short period of time.  A lot of times, rape victims when they—or attempted rape, or sexually assaulted victims, when they come forward, it takes them a long time.

MATTHEWS:  So, the idea that she cooked this up for any other reason, knowing the facts.

SIGONA:  Knowing the facts, you know, it‘s slim to none.  But you also have to think that the surveillance cameras, the keycards—the hotel keycards, things like that.

(CROSSTALK)

MATTHEWS:  There‘s a lot of stuff there they can get now.

SIGONA:  -- that is going to nail certain things down when she came forward, to be able to say one thing or another, and to be able to say, does this fit the timeline?

(CROSSTALK)

MATTHEWS:  OK.  You just told me why the guy‘s defense is consent.

SIGONA:  Consent, right.

MATTHEWS:  So, in other words, he cannot deny any of the physical realities of the event except state of mind.

SIGONA:  Exactly.

MATTHEWS:  Which is hard, it gives him a least a fighting chance to deny what looks to be the guilt here.

SIGONA:  You‘re exactly right and that‘s another thing that happens in a lot of these cases, it‘s he said against—you know, it‘s his word against her word, especially behind -- 

MATTHEWS:  What possible advantage would she have in racing down to her employers, bringing in the police, knowing what you say about how she would be impeached, unless it happened?

SIGONA:  I think some of it‘s going to be on surveillance.  I mean, you‘d have to think—

MATTHEWS:  What would be on surveillance?

SIGONA:  That hotel door was shut by someone.  So, if it caught a glimpse of someone, whether it‘d be a male or female, determining -- 

MATTHEWS:  Obviously, if he shuts the door, it means one thing.  If she shuts the door—

SIGONA:  The entrapment, exactly.  Then it shows that possibly, she may have been held against her will, possibly, behind closed doors.  So, you have to take that into consideration.

Also, how she left.  Did she leave—you know, was she running down the hallway, was she throwing things out, did she casually -- 

MATTHEWS:  Well, let me tell you something, not as a criminal expert -

but if his behavior is as charged, this guy is a brutalitarian (ph), it‘s ugly beyond belief.  This isn‘t one of these

           

SIGONA:  Alleged history.

MATTHEWS:  Yes. No, I‘m not just talking about what he did here, if he did what she said he did.  It‘s unimaginable.

SIGONA:  It is.  It is unimaginable.  It‘s heart wrenching.

MATTHEWS:  It‘s clearly criminal.

SIGONA:  It‘s criminal.

MATTHEWS:  It‘s felonious, and this guy deserves to go in to 10 or 20, even if it was impulsive.  Of course, we got to wonder about the kind of person that would do this impulsively.

SIGONA:  Exactly.

MATTHEWS:  Do you think this is a class thing?  I‘m trying to find out.  A lot of women say it‘s not, it‘s just men versus women—against women.  Do you think these guys just come from somewhere, they just think they own working-class people?

SIGONA:  Well, you know, I don‘t—I don‘t want to say that one way or another, but what I will say is that sometimes there‘s crimes of opportunities.  And sometimes, when you have certain impulses—and again, he is not convicted on these charges, but -- 

MATTHEWS:  I know, Michelle, we‘ll have you back.  Michelle Sigona, expert on this.

When we return, “Let Me Finish” with why President Obama did give that speech on the Middle East today, why it took guts to do it.  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  “Let Me Finish” tonight with President Obama‘s strong statement today for Mideast peace.  I know the price he will pay for that statement.  He dared to express the support of the United States for self-determination for the Palestinian Arabs.  He called for a boundary of roughly the 1967 borders with land swaps by Israel back and forth as part of the deal.

Obviously, I believe something more is going to be needed, something just as profound as those borders—a national commitment by the Palestinians to brutally enforce a deal with Israel.  This is a question right now to Fatah and Hamas, both: unless you‘re willing to punish severely those who violate the treaty with Israel—I mean, Palestinian Arabs—there‘s no reason in the world that Israel should even sign a deal with you.  And that to me is the heart of the matter.  Are the Palestinians themselves up to making such a commitment?  Again, if they‘re not, I wouldn‘t cut a deal with them ever.

Back to President Obama.  I understand why he did this.  There are great forces at work in the Arab world today, in the Islamic world larger.  Much of it is influx over there.

We don‘t know which way Egypt is going to go after Mubarak.  We don‘t know when or if Gadhafi will fall.  Or Assad in Syria is going to tatter.  We don‘t if there‘s a real hope for Iran to moderate.

President Obama, if he‘s to play a positive role in these changes, needs to be taken in good faith by those people.  He needs to be not just another American politician playing it safe, but an out-front champion for the rights of people, Arab people in particular, to govern their own affairs.

I think often of the potential of our president to work a real change of that part of the world, there‘s a chance at least for a positive change, one that offers hope to those hundreds of millions of people over there.  If there is, it will do much less to lessen the pull of the radicals over, the al Qaedas of this world—because if you‘re a young Arab, who can change things for the better in your life without blowing yourself up, that‘s the way you‘re going to go.

It‘s hopelessness that feeds the suicide bomber.  Hope feeds political involvement and eventually real self-government.

I understand why some are going to criticize what the president did today.  But to do nothing or simply go along with the direction that the Mideast has been going would, of course, be easier.  I believe this president is trying his utmost to be a leader and that takes guts, it takes vision.  And in the end, it takes commitment.

He needs to believe he holds in his two good hands the will and the power to change things.  And we‘re going to see after the dust settles how much he believes that.

That‘s HARDBALL for now.  Boy, is it hardball in his statement? 

Thanks for being with us.

More politics ahead with Cenk Uygur.

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