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updated 7/15/2011 1:52:04 PM ET 2011-07-15T17:52:04

Guests: Michael Steele, David Corn, Alex Wagner, Darren Rovell, Martin Bashir, Ron Reagan, Barbara Boxer, Bob Shrum, Maggie Haberman

CHRIS MATTHEWS, HOST: Country on the brink.
Let‘s play HARDBALL.
Good evening. I‘m Chris Matthews up in New York.

Let me start tonight with the civil war going on in Washington today. It‘s not North versus South or even right versus left. It‘s an historic test of who will take the wheel, who will drive the car? Will it be the grown-ups in the front seat or the kids crying and complaining and threatening in the back seat?
On one side of those kids in the back seat, Tea Party members of Congress and their stay-at-home blogging cheerleaders, who either don‘t understand or don‘t care about the consequences of default, of the U.S. not meeting its obligations, of us looking like a joke. They‘re willing to risk calamity, even embrace it, just to show how dedicated they are to not raising the debt ceiling.
On the other side are Democrats and some Republicans who understand that this is not a game, that there‘s no fail-safe position after default. So who‘s going to win? Will it be the men and women who worry about the country, or those who fear most of all not a failure of their country to meet its bills but how scary it might be to go to the next Tea Party meeting, when the town misfit stands up and says, You have betrayed us. You have voted to raise the debt ceiling.
That‘s what it‘s about. That‘s what this civil war is all about. And the question before the country is whether we‘re going to keep our economic soundness, if we want our treasury notes to turn out to be, on the other hand, junk bonds. Do we want the land of the free to be the land of the deadbeat?
If not, try something right now. Call your congressman or woman and say you don‘t want this crisis to go where it‘s headed right now. The number, by the way—I‘ll give you a minute to think about this, if you want to write this down. The number of Congress—and this is for any member of Congress or Senate, you can go through this phone number and ask for them, and they may even help you find out who your congressman is, if you don‘t know -- 202-225-3121. Again, 202-225-3121. If you forget that, it‘s in the phone book or on 411.
Let‘s start right now with the meeting at the White House this evening. It‘s going on right now. David Corn‘s the “Mother Jones” Washington bureau chief and Michael Steele, former chairman of the Republican National Committee. Both are MSNBC analysts.
Chairman Steele, you‘re used to running meetings. You‘re used to getting things done. This fight—I don‘t think it‘s left versus right right now, although there‘s always the element of ideology in everything we do.
MICHAEL STEELE, MSNBC POLITICAL ANALYST: Right.
MATTHEWS: It seems to be about people who recognize that if we default on our debt in this country, if we don‘t meet our bills, do we get into big trouble, or don‘t we? Some people are holding out and saying this isn‘t a problem, we can slither through this thing. Where are you on that?
STEELE: Well, no, I think it is a problem. And in fact, you know, we have slowly stair-stepped our way into this mess. And certainly, within the GOP caucus, the right-on-right crime that‘s, you know, perpetrated there, with the different messages, and you know, who‘s on top of who, who‘s the leading voice today, has done nothing more than muddled the debate for a lot of the American people right now.
You‘re seeing it begin to reflect in the polls. You‘re beginning to see it reflect amongst some of the other members of the caucus, who are just sick and tired of not getting to a point of resolution.
So I think there are very serious people there are beginning to step up within the party on both sides, quite frankly, to move the participants to a point where we can actually begin to get something done.
I think, Chris, there will be a deal done. The question right now is, what exactly does it look like? And who‘s prepared to stand before the American people and say, We did the best that we could, whether it‘s short term or long term, to begin to solve this problem?
MATTHEWS: OK, Let‘s take a look at—well said, I believe, anyway—
South Carolina Republican senator Lindsey Graham told “The New York Times” that he and his fellow Republicans are themselves to blame for this impasse.
Quote—this is from Lindsey Graham—“Our problem is we made a big deal about this for three months. How many Republicans have been seen on TV saying, I‘m not going to raise the debt limit? We have no one to blame but ourselves.”
My—I hate ballistic references. But let me tell you, David Corn and Michael, I think a of bank robbing team. They go into a big bank, they‘re carrying guns, but they don‘t intend to use them because they can‘t use them. They don‘t want to kill anybody. And the leader of the gang, when they realize it‘s time to hold up the money, say, Wait a minute, don‘t pull—don‘t use those guns.
That‘s McConnell. Don‘t blow up the country. I know you want the money, you want the debt ceiling deal, but don‘t blow up the—they basically found themselves in a situation where they couldn‘t rob the bank, they couldn‘t get what they wanted because they didn‘t really know what they want, at this point, and they couldn‘t shoot anybody. It‘s a weird situation we‘re in right now on the Republican side.
DAVID CORN, MSNBC POLITICAL ANALYST: Well, the way I see it, too, is it‘s really like saying, We‘re not going to give oxygen to granny unless you give us what we want. And so that was spending cuts, otherwise we explode the economy. and that‘s not a very responsible opening—
MATTHEWS: Well, why is it bad politics?
CORN: Well, I think—I think what‘s turning out is that they‘re looking unreasonable because, basically, raising the debt ceiling is a mandatory action that has never been exploited really politically in this way for decades. Democrats and Republicans, when they were in charge of Congress, both went through and they did this because it was making good on decisions previously made. It‘s kind of a mature thing to do.
But in rode the party—the Republican Party, Tea Party eyes (ph), and said, This is an opportunity for us to exploit. But the only way they can exploit this is by blowing up the village to save the village. And there are enough Republicans in the leadership—not a lot, but enough—who don‘t want to be blamed for that, and you see them coming out of the corner now.
MATTHEWS: I think McCain‘s one of them. Also, here‘s Mitch McConnell, the leader of the Senate Republicans, (INAUDIBLE) Laura Ingraham‘s show, admitted that he‘s concerned the president will be able to blame this all on his party. Let‘s listen to this guy, who is a shrewd pol. Let‘s listen to McConnell.
(BEGIN AUDIO CLIP)
SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: I refuse to help Barack Obama get reelected by marching Republicans into a position where we have co-ownership of a bad economy. If we go into default, he will say that the Republicans are making the economy worse, and try to convince the public, maybe with some merit, if, you know, people stop—not getting their Social Security checks and military families start, you know, not maybe getting letters saying their service people overseas don‘t get paid—maybe—you know, it‘s an argument he could, you know, have a good chance of winning. And all of a sudden, we are co-ownership—we have co-ownership of a bad economy. That is very bad positioning going into election.
(END AUDIO CLIP)
MATTHEWS: Let‘s take a look at those poll numbers. I think you just alluded to them a couple minutes ago, Michael. Let‘s take a look at the latest Quinnipiac poll. It‘s a new poll. It shows America—how they blame. They blame Republicans 48 percent and 34 percent of them blame the president, President Obama, if the country fails to raise the debt ceiling.
So you‘ve seen those numbers I guess. What do you make of them?
STEELE: Yes. No, I think—I think they‘re a tell-tale sign and they really speak to what Mitch McConnell just referred to in that interview with Laura. And the reality for the GOP right now is, they walked out of the 2010 election with a lot of momentum, a very strong economic message which galvanized the country.
And then instead of taking that momentum and building and growing into the argument they needed to make, whether it was on the debt limit or future spending or whatever it happened to be, they got mucked and mired into all kinds of stuff that now the American people looking and going, Well, it‘s been seven months. What are you going to do?
And so now you‘re going to have a situation where the party‘s got to reconcile with itself or how exactly they‘re going to go and handle this thing in the next three-and-a-half weeks. Otherwise, McConnell‘s got it dead right.
MATTHEWS: Well, I don‘t even think they‘ve got a week or so. But let‘s talk about this. When asked about—the public, in the same Quinnipiac poll—asked of the agreement to raise the debt ceiling should include just spending cuts or also include taxes on the wealthy and big corporations, it‘s 67 percent to 25. So overwhelmingly, they‘re with you on this—
STEELE: Right.
MATTHEWS: -- issue of priorities and fairness, I would argue, but—
CORN: The Republicans who did win the election—I‘m not sure they had much of an economic message, but they did win the election by overwhelming margins—have now got themselves on the wrong side of a number of related economic issues. One is blowing up the economy over raising the debt ceiling. People are getting nervous about that within their own party.
And that poll just shows, if all they talk about is spending cuts or ending the Medicare guarantee, which was the issue two months ago, the people, the American public is saying, Wait a second. These guys are not being reasonable. Barack Obama looks reasonable. And now on policy matters, we‘re not sure we like what they‘re proposing with Medicare or—
MATTHEWS: OK, let me back up that one. You just said (INAUDIBLE) poll. When asked who Americans blame for the state of the U.S. economy right now, Barack Obama or the recent president, George W. Bush, they say Bush 54, Barack Obama 27.
However, in fairness to all, Bush W. is probably not going to try to get reelected at this point.
(LAUGHTER)
MATTHEWS: He‘s not running against that fellow, I don‘t think. So it doesn‘t do much good to blame Bush coming into next year. Your thoughts on that, Michael?
STEELE: Well, exactly right. You know, I‘ll take exception to a couple of things that David has said already. One is that there was an economic message that was a very strong message in 2010, and that was, Stop the spending. The members who are in the caucus right now came to Congress with a very singular mission, and that was to help bring the spending of this country and this government under control.
The president has yet to identify explicitly what it is he‘s prepared to cut, whether it is in entitlements, in defense, or any other part of the budget.
MATTHEWS: OK—
STEELE: And that‘s the wall the Republican find themselves up against. Now, they‘re the ones—
MATTHEWS: That is the argument your party‘s making. I think it‘s a good argument. Let‘s take a look at Michele Bachmann, whose argument doesn‘t make sense. She argued about the United States has the option of default last night on Greta Van Susteren on Fox. She‘s one of those people I say are in the back seat, complaining, are not trying to drive the car, they‘re just talking. Here she is on Greta last night.
(BEGIN VIDEO CLIP)
GRETA VAN SUSTEREN, “ON THE RECORD”: So you don‘t care if we get downgraded?
REP. MICHELE BACHMANN (R-MN), PRESIDENTIAL CANDIDATE: No, we won‘t. We won‘t get downgraded if we pay the interest on the debt. The president knows and Secretary Geithner know that we have sufficient money to pay the interest on the debt.
VAN SUSTEREN: Well, why is Moody—why is Moody‘s saying that to scare the country, then?
BACHMANN: What they‘re saying is that if we fail pay the interest on the debt—
VAN SUSTEREN: Then they (INAUDIBLE)
BACHMANN: -- we‘ll be downgraded.
VAN SUSTEREN: Then they will?
BACHMANN: But there‘s no reason to do that. We have plenty of money to pay the interest on the debt! That‘s why I think the president is—
VAN SUSTEREN: Well, if we have—
BACHMANN: -- playing politics.
(END VIDEO CLIP)
MATTHEWS: This is how you earn the title “balloonhead.” This is where it comes in. And I‘m telling you, these people on the right, the guy we had on last night, that‘s when they put the balloonhead on.
Today, Moody‘s, the Standard & Poor‘s said it will lower the U.S. rating if we just pay down the debt and don‘t pay our other payments.
And the facts are there. And what I don‘t understand is when I put these people on the air, when they have the guts to come on this show—and I do appreciate that a lot—they come on, I say, Name one expert you‘re talking about. This horse sense they keep relying on—I raised a family, I know international finance. What are you talking about?
We can all disagree, and we all have areas of ignorance. Mine is international finance. But when every single expert says we‘ve got to pay our bills or we‘re in trouble, doesn‘t anybody listen to that?
CORN: You know, America has a choice. This is what elections are about. But sometimes the choices happen in between elections. They can either—
MATTHEWS: OK—
CORN: -- listen to Michele Bachmann or Timothy Geithner.
MATTHEWS: Well, I don‘t know. Let me ask—
(CROSSTALK)
MATTHEWS: You deal with a lot of people left—not left, but right and center.
STEELE: Right.
MATTHEWS: What is Mrs. Bachmann, the congresswoman, saying there that makes sense to you?
STEELE: Well, I think—I think, an overall sense, it‘s just the idea that she‘s prepared, as she‘s articulated, to go out and tackle these issues. And again, this going back to the argument that was made in 2010 by a lot of Republicans who were running at the time, that we want to deal first and foremost with spending, not the tax issues—
MATTHEWS: I know, but what about the debt?
STEELE: -- not other things—
CORN: Yes, but she‘s saying—
MATTHEWS: Wait a minute. Is ignorance bliss?
STEELE: Well, with respect to the debt? With respect to the debt? Well, I mean, I—she‘s got it—she‘s got it half right. And the reality of it is, Moody fills out the rest of it by saying—and I know this as a bond lawyer, many years working on Wall Street—
MATTHEWS: I know you know your stuff.
STEELE: -- the reality of it is, if you don‘t pay—you can pay part A, but if you don‘t pay part B of that debt, guess what? The impact on bond holders, the residual income that they expect is not coming in, that increases your interest rates. That pushes the markets down, and it‘s a real problem. And that‘s the problem right now with the party finds—
MATTHEWS: OK. OK. Let‘s—
STEELE: -- itself in.
(CROSSTALK)
MATTHEWS: I think you have another problem, and that is your far right that doesn‘t want to face facts. And I agree that ideologues on the right and far left rarely want to deal with actual facts.
STEELE: Right.
MATTHEWS: They‘d rather deal with philosophy. Here‘s the hard-liner House Republicans continuing to blame the president as the leadership meets at the White House even as we speak. Here‘s a few members earlier today. Let‘s listen to their cacophony.
(BEGIN VIDEO CLIP)
REP. LOUIS GOHMERT ®, TEXAS: Instead, you have a scarer-in-chief who goes out and frightens senior citizens with wrong information!
REP. LARRY BUCSHON ®, INDIANA: I‘m here today standing with my colleagues to ask the president to dispense with political rhetoric, dispense with scare tactics.
REP. NAN HAYWORTH ®, NEW YORK: We need to work together, Mr. President, to solve problems, not to make political threats, not to take hostages!
(END VIDEO CLIP)
MATTHEWS: Well, the leader of that faction, by the way, is one Louis Gohmert, congressman from Texas, most well known as a birther. Michael, defend this guy.
(LAUGHTER)
MATTHEWS: Is this the wacko wing of your party?
STEELE: Now I know why I was hired, right? OK!
(LAUGHTER)
MATTHEWS: I want you to be our spotter on the far right.
STEELE: No, I think, again, you know—I know it‘s kind of repetitive, but it is really where the party has started this thing but has come off the rails. There was a very legitimate argument that many of these members were making a year ago and left about spending in Washington.
And now that has become muddled because when you have, you know, Boehner‘s message being trumped by Cantor and Cantor‘s message being trumped by McConnell, people don‘t know where we are. And they need to solidify the message. They need to focus on how they‘re going to go to the American people over the next week—
MATTHEWS: OK—
STEELE: -- and go to the White House and negotiate this thing—
MATTHEWS: OK—
STEELE: -- so that they can come out on top.
CORN: Your guys are—
STEELE: The people.
CORN: Your guys, Michael, are delegitimizing themselves—
MATTHEWS: I agree.
CORN: -- by the minute.
STEELE: I‘m not going to argue with that. I would agree with you on that one, David.
(CROSSTALK)
MATTHEWS: By the way, in the words of the great Al Roker in the name of one of his books, from NBC, if you kids don‘t stop causing trouble, I‘m going to stop the car.
(LAUGHTER)
MATTHEWS: Anyway, thank you, David Corn, and thank you, Michael Steele.
Coming up: Democrats have found a new boogeyman in this debt fight.
It‘s Majority Leader Eric Cantor. He is taking all the heat. He‘s Mr. Troublemaker. He‘s the Katzenjammer kid there. He‘s clashing with everybody, right, left and center. Cantor—well, not far right. Cantor may be the Tea Party‘s hero, or everybody else‘s goat. Let‘s find out what this guy‘s all about. He‘s the new kid on the block in terms of big-time politics, Eric Cantor of Richmond, Virginia. Why is he causing so much trouble?
You‘re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: Republican Presidential candidate Ron Paul, a real Libertarian, is launching his first ad of the campaign, going on the air to push back against raising the debt ceiling.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: This August, the next chapter will be written, defining moment, $14 trillion in debt, millions unemployed, the dollar in decline. We know where they stand, but will our party‘s leaders repeat the mistakes of the past? Will they choose compromise or conviction.
(END VIDEO CLIP)
MATTHEWS: Oh, gosh! Ron Paul‘s running the ad in both Iowa and New Hampshire. It‘s a six-figure buy in each state, making it the largest by any candidate so far in the 2012 campaign.
We‘ll be right back.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
REP. ERIC CANTOR (R-VA), MAJORITY LEADER: The speaker and I have consistently been on the same page. And it‘s just as he laid out in terms of the principles that we are operating under, that our conference is fully behind, that we‘re not going to raise the debt ceiling if we don‘t have cuts in excess of that amount, that we don‘t want to raise taxes, and that we want to structurally change the system so that we stop this from happening again.
(END VIDEO CLIP)
MATTHEWS: Oh, wow. Welcome back to HARDBALL. Reminds me of one of those POWs saying something he can‘t believe. Anyway, Eric Cantor, the House Republican leader, has emerged as the lightning rod in debt negotiations right now. And today, Democrats made clear he‘s the villain they‘ve been waiting for.
Alex Wagner‘s an MSNBC contributor and a Huffington Post reporter.
Ron Reagan, of course, is a political commentator and author.
Let‘s watch this, Ron and Alex. Here‘s the Democrats have made clear that Cantor—he‘s now going to be the focus of their anger. They got a name for their pain. Here‘s New York senator Chuck Schumer and Majority Leader Harry Reid both today. Let‘s listen.
(BEGIN VIDEO CLIP)
SEN. CHUCK SCHUMER (D), NEW YORK: There‘s really only one person who has not made any concessions of all the eight, nine in that room, and that is Majority Leader Cantor. He is basically standing in the way, and it‘s a shame. It‘s a shame.
SEN. HARRY REID (D-NV), MAJORITY LEADER: House Majority Leader Eric Cantor has shown that he shouldn‘t even be at the table. And Republicans agree he shouldn‘t be at the table. He has walked out on the meetings with the vice president of the United States. It was childish.
(END VIDEO CLIP)
MATTHEWS: Well, these are getting personal, these commentaries right now.
Ron, to call somebody childish, he is younger than a lot of these other guys, but they don‘t just mean that.
RON REAGAN, POLITICAL COMMENTATOR: No. He‘s becoming a perfect face for—for Republican incorrigibility around the tax issue and the sort of juvenile attitude that the Tea Party people are bringing to this fight.
You have got to wonder, with Eric Cantor, did he ever have a strategy going into these talks that would result in the debt ceiling being raised and him getting a good deal on spending cuts, while giving up just a little on the revenue side?
He doesn‘t seem to have had an endgame strategy here. It seems to be his high cool yearbook page again. “I want what I want when I want it.”
(LAUGHTER)
MATTHEWS: That‘s right. That‘s apparently what was in—Alex, that was apparently in his high school yearbook.
But, you know, the smart move, whether you‘re “Dog Day Afternoon”-ing it in a bank robbery, or whatever you‘re up to—
(LAUGHTER)
MATTHEWS: -- is, the barricade situation is never the one you want to be in.
ALEX WAGNER, MSNBC POLITICAL ANALYST: No.
REAGAN: No.
MATTHEWS: -- because, ultimately, the barricade situation falls. You fall. You never set up a barricade around yourself, which it looks like what he has put himself into here and the Tea Party.
WAGNER: Absolutely. Absolutely. And I think McConnell‘s plan is evidence of how—how sort of far off the rails this has run. He‘s put himself—he‘s—he‘s painted himself effectively into a corner.
MATTHEWS: Paint of picture of Eric—of Eric Cantor. Tell us about him.
WAGNER: OK. Eric Cantor—first of all, constitutionally, I mean, I think the big comparison that is being made right now is between the president and Eric Cantor. And they are constitutionally as far off as it is—as two people could be.
I mean, aside from the yearbook quote, Eric Cantor has—is notoriously partisan. He‘s very brash. He‘s an up-and-comer. And, you know, remember, in 2009, this is the guy that circled up all of the Republicans and got them to vote against the stimulus bill.
He‘s not someone that has been known as sort of a party-crossing, across-the-aisle, bipartisan-minded fellow in—in—in the Congress.
MATTHEWS: But he knows which way the wind is blowing in this party.
Isn‘t he smart?
WAGNER: Sure. And to—look, to some degree, he‘s been very powerful. He‘s got John Boehner to walk back from a much broader package. He still yields a great deal of influence. And that‘s in large part because he‘s the face of the Tea Party.
MATTHEWS: Here he is speaking for himself. He told his version of the event to reporters last by saying the president stormed out of the meeting, his own meeting at the White House.
And Cantor said—quote—“Obama”—That‘s the way you talk about
the president? -- “got very agitated seemingly and said that he had sat
there long enough and no other president, Ronald Reagan, would have sit
there like this, this and that. He‘s reached the point something‘s got to
give. And he said to me, ‘Eric, don‘t call my bluff.‘ And he said, ‘I‘m
going to the American people with this.‘”
So, there you have—but a Democratic aide rebutted that story by saying—quote—“For someone who knows how to walk out of a meeting, you think he‘d knew it when he saw it. Cantor rudely interrupted the president three times to advocate for short-term debt ceiling increases while the president was wrapping up the meeting.”
Ron Reagan, two different accounts of a meeting. One puts the president in a very good light. The other one puts—well, the other one is Eric Cantor‘s putting himself in a very good light.
REAGAN: Well, I suppose it‘s a he said/he said situation. But in this case, you have got to wonder.
Barack Obama, the guy who pulled the trigger on the bin Laden operation, the guy who pulled the trigger on the Somali pirate operation where they shot the hostage-taker in the head, is he really going to start sweating through his socks sitting across the table from Eric Cantor?
(LAUGHTER)
REAGAN: I think not. I trust his version much better than Cantor‘s.
(LAUGHTER)
WAGNER: Well, I would also say, Chris, this is—look, the White House is using—this is a great moment for the White House, for Obama.
Setting aside the bin Laden stuff, there‘s been this contention that Obama‘s been weak, he hasn‘t—he hasn‘t really defined the issues. You had the gay marriage stuff, but you—sort of that won‘t—that won‘t—he—he can‘t sort of establish his platform there.
And here he is really laying down the line with Eric Cantor. And now you have the White House sort of embracing this narrative and you even have the DSCC fund-raising around it.
MATTHEWS: OK. Well, just remember, one guy is president of the United States, having run for hardly anything before.
WAGNER: Sure.
MATTHEWS: And other the guy is still the congressman from Richmond, who has no statewide potential.
Let‘s take a look at the interesting fight, which is always the intramurals, as you guys know. Intramurals are always more fun in politics. Here‘s House Speaker John Boehner making a show of unity with Eric Cantor. This is sort of like the Al and Tipper kiss, I guess.
(LAUGHTER)
MATTHEWS: Let‘s listen or watch this thing.
(BEGIN VIDEO CLIP)
REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: Let me just say—
(LAUGHTER)
BOEHNER: -- we have been in this fight together. And any suggestion that—that the role that Eric has played in this meeting has been anything less than helpful is just wrong.
(END VIDEO CLIP)
MATTHEWS: Well, that‘s—that‘s called a cover-up, I think, Ron.
REAGAN: Hmm. I think John Boehner‘s probably feeling pretty good, at least a little better than he was feeling maybe a few days or a week ago.
At the end of the day—we don‘t know what exactly is going to happen, but at the end of the day, it seems to me that John Boehner can go back to his people on the Republican side and say, look, I could have brought you unprecedented spending cuts that you liked, with just a little bit of revenue raising there on the side, and we could have solved this whole debt ceiling issue and lowered the deficit at the same time, but Eric Cantor blew it all up.
And look what we have got now.
MATTHEWS: You know, right, Ron. Your dad cut a deal with my boss, Tip O‘Neill, which you know. And the reason he cut the deal is he had just lost the ‘82 election. And so he gave Tip a real good deal, three for one, mainly tax increases, not benefit cuts.
And, Tip, being a pretty smart guy, my boss, the speaker, said, yes.
(CROSSTALK)
MATTHEWS: That‘s the difference between him and Eric Cantor.
(CROSSTALK)
REAGAN: Yes.
MATTHEWS: Anyway, thank you very much.
Because it takes two sides to deal, two sides to tango. And they‘re not doing it right. That‘s why these guys aren‘t pros yet.
Anyway, thank you, Alex Wagner, and up-and-coming pro, and Ron Reagan
--

(LAUGHTER)
MATTHEWS: -- who knows it all.
REAGAN: Thanks, Chris.
MATTHEWS: Up next—you‘re a very theatrical guy, very theatrical fellow, Ron, tonight. You gave a lot of good narratives there.
(LAUGHTER)
MATTHEWS: The new word in our game is politics as a narrative. And you have done it well.
REAGAN: Ah.
(LAUGHTER)
MATTHEWS: Thanks.
A FOX News host says he can‘t remember—this is the most ludicrous comment in recent American history. A right-wing commentator says he can‘t remember that the United States was ever hit by a terrorist attack any time in the first decade of this century, can‘t remember one, not even one. That‘s in the “Sideshow,” where he belongs.
This is HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: Back to HARDBALL. Now to the “Sideshow.”
First up: revisionist history 101. Watch here as FOX News host Eric Bolling props up George W. by strangely forgetting the terrorist attacks of September 11.
(BEGIN VIDEO CLIP, FOX NEWS CHANNEL)
(CROSSTALK)
ERIC BOLLING, FOX NEWS: America was certainly safe between 2000 and 2008. I don‘t remember any terrorist attacks on American soil during that period of time.
(END VIDEO CLIP)
MATTHEWS: “I don‘t remember any.” You don‘t remember any attacks between 2000 and 2008. Any? Well, try again. Think back to 2001. Does that trigger your memory?
You think that‘s bad? No one on that five-person panel you just saw ever corrected him.
Next up: comedic therapy. This week, we learned that Michele Bachmann‘s husband, Marcus, runs a clinic that promises to cure—that‘s their word—gays of homosexual behavior through prayer.
Well, using that logic, Stewart brought on trained professional Jerry Seinfeld to cure him of his comedic urging—urgings.
(BEGIN VIDEO CLIP, “THE DAILY SHOW WITH JON STEWART”)
JERRY SEINFELD, COMEDIAN: Having trouble, Jon? You‘re having that urge to ridicule again, aren‘t you?
JON STEWART, HOST, “THE DAILY SHOW WITH JON STEWART”: Yes, I am.
(LAUGHTER)
STEWART: Presidential candidates‘ husbands trying to cure gay people while himself—
SEINFELD: Mm-hmm. Mm-hmm.
STEWART: Just—just take a look. I think this—
SEINFELD: OK.
(MUSIC)
(LAUGHTER)
SEINFELD: Wow. OK.
(LAUGHTER)
SEINFELD: I‘m coming in.
STEWART: Oh, really? OK.
SEINFELD: Yes.
STEWART: Thank you. I appreciate that.
SEINFELD: You need to get it out here.
STEWART: I know.
SEINFELD: What‘s your body wanting you to say?
STEWART: I don‘t know.
(LAUGHTER)
STEWART: You know, something like, he‘s so gay, he calls “Top Gun” that volleyball movie.
You know—
(LAUGHTER)
STEWART: Oh, my God.
(CHEERING AND APPLAUSE)
STEWART: Wow.
SEINFELD: No. No.
STEWART: Jerry, aren‘t you—aren‘t you ever tempted by this stuff?
Doesn‘t it ever—
SEINFELD: Well, of course, I would love to say, Dr. Marcus Bachmann buys Brawny Paper Towels for the packaging.
(LAUGHTER)
SEINFELD: I have that in me.
STEWART: I know.
(LAUGHTER)
SEINFELD: Or, he‘s so gay, Richard Simmons tells him to tone it down.
(LAUGHTER)
STEWART: Or that he (EXPLETIVE DELETED) Pinkberry.
(LAUGHTER)
STEWART: Oh, God!
SEINFELD: No. No.
(APPLAUSE)
(END VIDEO CLIP)
MATTHEWS: Interesting area they‘re working here.
Anyway, speaking of Bachmann, she may need brush up on her Yiddish, specifically, her pronunciation of chutzpah.
(BEGIN VIDEO CLIP)
BACHMANN: The president doesn‘t want to be confronted with priorities of spending, because he has a lot of chutzpah. He spent a trillion dollars on the stimulus. It failed.
(END VIDEO CLIP)
MATTHEWS: I‘m just guessing, but I would say her Yiddish is right up there with her history.
And, finally, want to say goodbye tonight and good luck—I mean good luck—to the producer of HARDBALL and the “Sideshow” all these years, Vidia Marigesa (ph). And she is so great. She‘s done great work day in and day out. We‘re sorry to see her go.
Congratulations, Vid, the owner of the “Sideshow.”
Up next: The Rupert Murdoch scandal is now getting serious on this side of the Atlantic. The FBI just got involved. How far will they go and how far will this go?
You‘re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
DARREN ROVELL, CNBC CORRESPONDENT: I‘m Darren Rovell with your CNBC “Market Wrap.”
Stocks moving lower on mixed earnings and simmering concerns about the U.S. debt ceiling, the Dow Jones industrials down 55, the S&P down eight, and the Nasdaq down about 34.
Federal Reserve Chairman Ben Bernanke on Capitol Hill again today. He told the Senate Banking Committee that failing to raise the debt ceiling would be—quote—“a self-inflicted wound guaranteed to raise—increase the deficit.”
Meanwhile, News Corp. shares tumbled after the FBI opened an investigation into the alleged hacking of phones of 9/11 victims.
On the upside, earnings season is well and truly under way, and J.P. Morgan delivered much stronger-than-expected results boosted by lower costs for bad loans. Fast-food franchise giant Yum! Brands also topping expectations and raising its full-year outlook. And Google reporting after the closing bell. Shares are skyrocketing after-hours on blockbuster earnings and revenue boosted by a 53 percent jump in profits from outside the U.S.
That‘s it from CNBC, first in business worldwide—now back to
HARDBALL.
(BEGIN VIDEO CLIP)
NICK CLEGG, BRITISH DEPUTY PRIME MINISTER: My message to—you know,
to Rebekah Brooks, to the Murdochs, is just do the decent thing. You can‘t
you can‘t—you can‘t—hide away from this level of public anguish and—and anger and indeed interest.

(END VIDEO CLIP)
MATTHEWS: Welcome back to HARDBALL.
That was, of course, British Deputy Prime Minister Nick Clegg—he‘s a Liberal earlier today urging Rupert Murdoch and former “News of the World” editor Rebekah Brooks to fully cooperate with Parliament‘s investigation of the operation run by Murdoch.
Anyway, the FBI in this country has opened up an investigation today into whether the News Corporation run by Murdoch hacked into anybody here involved with September 11, the victims, especially their phones. They want to know if the same kinds of things happened here as happened over there.
Scotland Yard made its ninth arrest, by the way, today in a widening scandal over in Britain.
How far will this go, especially here?
Joining us right now is U.S. Senator Barbara Boxer of California.
Senator Boxer, do you think the FBI should be investigating the News Corp. of Rupert Murdoch?
SEN. BARBARA BOXER (D), CALIFORNIA: Absolutely.
And Senator Jay Rockefeller, who is chairman of the Commerce Committee, of which I am a senior member, he joined me. And we asked for an investigation by the Department of Justice and the Securities and Exchange Commission.
Listen, Chris, there are two laws that really may be implicated here, that may have been broken here. One is the Foreign Corrupt Practices Act that passed in the ‘70s. One is the so-called Wiretap Act.
And American corporations can‘t break American laws, and Rupert Murdoch, according to reports, became an American citizen. His corporation is American, because he wanted to be able to own TV stations. Well, the fact is, you have to abide by American laws.
MATTHEWS: Let me ask you, do you believe that he bribed foreign officials? I mean, isn‘t that what we‘re talking about, his corporation?
BOXER: Well, it‘s not a question of whether I believe it. The reports are coming out of Britain that, in fact, police were bribed. We don‘t know if it‘s true.
If it is true, that in itself is a violation of the Foreign Corrupt Practices Act, because that passed a long time ago. And the reason was that business communities were looking at each other and saying just America doesn‘t really have the best reputation on corporations, and they wanted to have some stronger laws.
And so this passed and was signed by Jimmy Carter so long ago, in the ‘70s. So, you know, if you believe what we‘re being told out of Britain, it looks like they did bribe officials.
But here—
MATTHEWS: Do you think your Republican colleagues—
BOXER: Yes.
MATTHEWS: -- would support a subpoena of Rupert Murdoch himself, or are they so much in bed with FOX and the News Corp. that they would stop any attempt to bring him before one of the committees of the Senate?
BOXER: Well, I don‘t really believe we‘re at that point yet. But I can tell you that I‘ve spoken with Chairman Rockefeller, and he and I both believe that it may come to that at some point, that we‘re going to have some hearings. But we‘re not there yet.
Rupert Murdoch has, in fact, testified before the Commerce Committee before.
MATTHEWS: Do you think his becoming an American citizen itself was somewhat suspect? I mean, you deal with immigration all the time in California. I‘ve never seen a 15-minute effort to become a citizen that was so successful. Did this guy have pull within the Reagan administration? How did he do it? I‘ve always been curious about that.
BOXER: Well, I don‘t know, Chris. All I know is that reports are very clear that he wanted to become an American, because he wanted the advantages here, to own, you know, TV stations. And the fact of the matter is, he couldn‘t have done it if he wasn‘t an American citizen.
MATTHEWS: Yes.
BOXER: I don‘t know what went on there. But the bottom line is, fine. You know, if he wanted to become an American citizen? Fine. But then you have to abide by our laws, and you can‘t hack into our people. And you can‘t take bribes, anywhere in the world. It‘s illegal to do that.
And there will be consequences if those things are true. And according to reports, the FBI has listened to the letter that Senator Rockefeller and I sent to the Justice Department. We hope it‘s true that they are looking at this, because it‘s very serious.
MATTHEWS: I know. It‘s great to have you on the show, Senator Boxer.
BOXER: Thanks.
MATTHEWS: Thanks so much, Senator Barbara Boxer of California.
Joining us right now is Martin Bashir, my colleague. He‘s host of the
“MARTIN BASHIR SHOW.”
And it‘s great to have you on our network, by the way. You are a pro in this business.
Let‘s talk about this world you know better than I—this whole News Corp thing over in London that‘s even bigger. Is this—what is this guy‘s story in terms playing by the rules, in terms ever owning politicians?
MARTIN BASHIR, MSNBC HOST: It‘s hard to imagine someone quite as powerful in this country. It would be like Eric Cantor and Barney Frank having a summer drink together at his house at the same time as you, Chris Matthews, alongside Rush Limbaugh.
MATTHEWS: Yes.
BASHIR: He overwhelmed and seduced everybody. He did it so effectively that in the end, the newspaper, “The Sun,” in 1987, after Margaret Thatcher won election, had a front page story saying it was “The Sun” that won it.
MATTHEWS: Yes, I saw that headline. So they bragged about bringing people into office?
BASHIR: Absolutely, completely. And they used a combination of rewards and punishments. If he didn‘t like what you were doing, then he would send journalists after you and they would undermine you. They pick stories in your personal story, for example, that would undermine you.
If he liked what were you doing, well then you‘d be included in the “News International,” News Corp group of --
MATTHEWS: Tell me about page three of “News of the World.” They used to naked pictures of, topless pictures, if you will.
BASHIR: You‘re talking about “The Sun” newspaper. And it still does.
MATTHEWS: How do they do this now, to intimidate politicians?
BASHIR: Well, here‘s an interesting story. In 2005, a cabinet minister called Clare Short said, isn‘t it time we stopped having semi-naked women on page three of “The Sun”? Rebekah Brooks, the editor, she sent 20 semi-naked women to stand outside Clare Short‘s constituency office to pose photographs and described Clare Short as frumpy, dumpy, ugly and jealous. So, it was a kind of humiliation and coercion.
MATTHEWS: Physical description to use against people.
BASHIR: And that was the power of the news.
MATTHEWS: Well, here‘s Rupert Murdoch defending News Corp with an
interview with “The Wall Street Journal.” I wonder how they snagged that
interview. “The Wall Street Journal,” which he owns. Anyway, “Despite a
public outcry, Mr. Murdoch said the damage to his company is ‘nothing that
will not be recovered.‘ ‘We have a reputation,‘ he says, ‘of great good
works in this country.‘” That‘s the United States. “Asked if was
aggravated by the negative headlines in recent days, he said he was ‘just
getting annoyed. I‘ll get over it.‘”
Isn‘t it great to care about his feelings? Isn‘t it great how “The Wall Street Journal” focused—is this bothering you, sir?
BASHIR: The scoop of the year.
(LAUGHTER)
MATTHEWS: What a get.
BASHIR: That‘s a journalistic endeavor.
But, you know, more seriously, I think that now that the attempt to buy B Sky Broadcasting has been withdrawn and that‘s where the money is. The rest of his newspaper holdings don‘t make him a profit. “The Times” loses money.
MATTHEWS: Do you think this is his—to use an infelicitous
reference—is this his Stalingrad? Is this the top of his empire when it
gets thrown back?
BASHIR: It‘s more like the Berlin Wall and the Soviet Empire post-1989. Everything‘s going to start truncating and falling. What you have is a situation of having to withdraw from the big money interests. Will he walk away from the newspapers? People are now saying, if he can‘t have the television that he wants, why is he investing this money in newspaper? He may even pull out of Britain.
MATTHEWS: I wanted to know why he couldn‘t have the news—couldn‘t have the television company but he owned the company.
BASHIR: Correct. Well, that‘s because they have huge profits, 9 billion pounds a year.
MATTHEWS: OK. Martin Bashir, I said before, colleague—it‘s good to have you.
Anyway, up next, big layoffs and bailouts—and Mitt Romney, what‘s he up to? We‘ve got a never aired campaign ad from the 1994 that tells you whether this guy is a job creator, which is what he says, or a job destroyer, which these ads are going to show that he is.
This is HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
(COMMERCIAL BREAK)
MATTHEWS: Well, it‘s 16 months until the presidential election, but here‘s some proof that campaigning in the early stage tends to help challengers. A new Mason-Dixon Poll out in Iowa, the first caucus state, shows Mitt Romney leading President Obama in a general matchup in the state in a November type election with 42-39. Of course, Romney has been campaigning in Iowa for months and that is clearly helping him in this poll.
By the way, the same poll found President Obama would defeat Michele Bachmann. Or rather, Michele Bachmann in Iowa, 47 to 42.
We‘ll be right back.
(COMMERCIAL BREAK)
MATTHEWS: Welcome back to HARDBALL.
Mitt Romney may have more than a surging Michele Bachmann to worry about. He‘s been touting his successful run at Bain Capital as evidence that he can create jobs.
But take a look at this. It‘s an ad by Senator Ted Kennedy that was in his arsenal but he chose not to use it in his run against Romney back in ‘94.
(BEGIN VIDEO CLIP)
NARRATOR: Mitt Romney says he saved Bain & Company, but he didn‘t tell you on the day he took over, he had his predecessor fire hundreds of employees. Or that the way the company was rescued was with a federal bailout of $10 million. According to the “Globe,” Romney‘s company failed to repay at least $10 million to a failed bank and the rest of us had to absorb the loss. Romney, he and others made $4 million in this deal which costs ordinary people $10 million.
Mitt Romney, maybe he‘s just against government when it helps working men and women.
(END VIDEO CLIP)
MATTHEWS: Well, of course, the question right now is, could the same line of attack against him work in 2012?
Bob Shrum is a Democratic strategist who was involved in creating the ad for former Senator Kennedy, and Maggie Haberman writes for “Politico,” which first reported on the ad.
Maggie, let me ask you about that ad. This gets to the crux of the question about this man. He runs not because he had a great, successful career in public life. He didn‘t have much. One term, he probably wouldn‘t have been re-elected. And yet he talks about being a job creator.
Is he?
MAGGIE HABERMAN, POLITICO: Well, it‘s the devils in the details, right? I think he‘s going to get very, very hit on this. You‘re already seeing the Democrats trying to lure him into that fight. David Axelrod is tweeted at him about his job creation in Massachusetts. And Bain has been the bane of his existence—no pun intended—for a long time. Every run he has done. I think you‘re going to see more of this going forward from the Republicans.
MATTHEW: But even before he was governor, Bob, tell us about—Bob Shrum, tell us about what the basis, the factual basis you had in making that ad.
BOB SHRUM, DEMOCRATIC STRATEGIST: Well, the ad is entirely accurate. Actually, it was a report in “The Boston Globe.” The reason we didn‘t run the ad was that Senator Kennedy who at one time had been slightly behind Romney, was far ahead after he crushed him in a debate at Faneuil Hall, and after we ran a series of other ads from workers in a company that he had taken over who had lost their jobs, been fired, had their health benefits taken away.
I think it‘s a big problem for him, Chris, in Republican primaries. It was a federal bailout. Everybody in America, who had a savings account or checking account, helped pay for it.
And I even think it‘s a problem in the general election, because people in Michigan are going to say, this is a guy who didn‘t want to bailout the auto industry but took a $10 million bailout for himself.
MATTHEWS: Yes. And also, I remember the ad because in that debate, Senator Kennedy was very able to point out the fact that Mitt Romney didn‘t know the details of a healthcare bill which he said, being a legislator is what it‘s all about.
Anyway, here‘s Kennedy ad, this is a Ted Kennedy ad that did run against Romney. Let‘s watch this one.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I would like him to show me where these 10,000 jobs that he‘s created are.
UNIDENTIFIED FEMALE: I don‘t like Romney‘s creating jobs because he took every one of them away.
UNIDENTIFIED FEMALE: I worked there 30 years and I never dreamed that I‘d lose my job.
NARRATOR: Mitt Romney says he helped create 10,000 jobs. The former workers at SCM in Marian, Indiana, say something else.
UNIDENTIFIED MALE: If he‘s created jobs, I wish he could create some here, you know, instead of take them away.
(END VIDEO CLIP)
MATTHEWS: Well, isn‘t this the problem of what equity companies do often? They go to a company in trouble and they cut cost by firing people. They ready it for sale. They sell and make some money, the very nature of the job that they follow. It cost jobs.
HABERMAN: Absolutely. There‘s no question. This is why there is such a double-edged sword for Mitt Romney. He had stop making claims like he did during the race that Bob was involved with where he would say, “I made 10,000 jobs.”
Now, he‘s not getting into specifics and his opening remarks when he declared for president, he said, you know, I created some jobs. I won‘t successful. I think this is a huge issue for him—I agree, not just in the Republican primary, also in the Democratic—you know, against Democrat in the general election. This is the sole thing people are focused on right now. That ad that you just showed is an incredibly effective ad because it‘s real people. You will see more of that coming out.
MATTHEWS: Bob, tell us what you can about the record of Bain Capital in doing the kind of chop shop work that a lot of equity firms do, which is you buy, you sell and fire people, because you‘re a stranger. It‘s easy to fire people when you don‘t know anybody. That‘s what these companies are good at it.
SHRUM: Well, Chris, you‘re absolutely right. That‘s what they do. And that‘s how they make money. And, you know, at the same time, by way, that he was getting this $10 million bailout, he and his partners were also taking $4 million from the takeover of Bain.
But what makes that ad and I think it is going to be the real people, not just an aggregated set of statistics that are going to be powerful against him, what makes it so powerful, is that it‘s hard enough to run against your opponent. To have to run against real blue collar Americans that you have hurt is very, very difficult.
These folks spoke in their own words, why I had written a script. As soon as the (INAUDIBLE) started filming, he said we don‘t need the script. These folks want to say their own thing.
And they were so powerful and so real. You know, they came to Massachusetts to try to talk to him. But he refused for days to meet with them which kept the story alive. I assume he got better advice than that now. But he can‘t do undo his past record.
MATTHEWS: So, this is going to be a big part of the campaign if he gets the nomination, right?
HABERMAN: No question. And it‘s going to be a big part of the campaign before that. But I don‘t think if he gets the nomination, you‘re going to see this kind of an ad, you‘re going to see this is the model for other things.
He will point to parts of his record where they created jobs. He had successful staples for instance. But it is such a mixed bag that it is extremely hard for him to point to. Somewhat like—not totally like—but somewhat like his healthcare record where there is not a great answer. He really needs one or else he‘s not going to go much further.
MATTHEWS: It‘s a pretty thin record.
Anyway, thank you, Bob Shrum, as always. What a great ad. You probably should have run all those ads, even just to run up the score.
Anyway, Maggie Haberman, thank you for joining us.
SHRUM: We won by 20 points.
MATTHEWS: I know. Well, you know, I think it was—I hate to tell you, Shrum, it wasn‘t the ad, it was the debate. He killed the guy in the debate.
SHRUM: I agree with that. He was fabulous.
MATTHEWS: When we return, “Let Me Finish” with the real battle on the budget fight, the battle against stupidity. I don‘t use that word very off then.
You‘re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: “Let Me Finish” tonight with the power of stupidity. I‘m not talking about ignorance. There are a lot things I know nothing about. There are things out there just about everybody out there knows that I don‘t. Hockey is one example.
No, I‘m talking about stupidity. It‘s one thing to not understand international finance, to understand what it will means if the United States says it can‘t pay its bills, if one day soon we tell the people we owe that we can‘t pay. No one really knows the full reality that will come that day or the day after. Actually, it‘s something to be happy to find out.
Stupidity—that‘s different. It‘s saying like some members of Congress are that we don‘t have to reckon with what will happen if America faces default. We don‘t have to understand what happens. We don‘t need to worry about understanding.
All we need are people who have raised families. They‘ll know the right thing to do. And if they say to let it slide, that‘s what we should do.
Well, that‘s the real fight tonight and the week ahead. It‘s between the people who fear American bankruptcy and those who refuse to think about it, who say it doesn‘t matter if the United States defaults or they don‘t really care if the United States ends up as one of the world‘s dead beat countries.
That‘s HARDBALL for now. Thanks for being with us.
More politics ahead with Al Sharpton.

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