Guests: Maria Bartiromo, Hampton Pearson, John Heilemann, Jim VandeHei, Michael Crowley, Clarence Page, Steve McMahon, Todd Harris, Ray LaHood
CHRIS MATTHEWS, HOST: Drop in stock.
Let`s play HARDBALL.
Good evening. I`m Chris Matthews in Washington.
Leading off tonight: Fear. The stock market was having a tough time
the last couple of weeks. Today we saw bad times. The Dow dropped 513
points today, shaving off more than 4 percent of its value. The Dow had
its lowest close in eight months.
What happened today is bad for the economy, bad, of course, for
President Obama. The fact that the market sell-off was largely about
Europe`s debt crisis is going to be of little solace to the people running
Mr. Obama`s reelection campaign.
If you`re hoping -- if they`re hoping the president`s political skills
plus a loser Republican opponent will get him through next November, don`t
count on it. I worked for President Carter against Reagan, and voters will
not accept the argument that you have no choice but to stick with the
incumbent. It`s a losing strategy.
Plus, how exactly did the Tea Party, a minority even in one half of
one third of the government, the House of Representatives, manage to shape
the direction of the country to its will? Facts, history, evidence do not
matter to them. All that matters is a commitment to ideology and a
willingness to risk, among other things, bringing down the economy if they
don`t get their way. Senator Pat Moynihan of New York once said, You`re
entitled to your own opinion, not entitled to your own facts. Well, the
Tea Party disagrees.
Also, up in the air. Some 200 construction projects were halted,
70,000 construction workers were out of work. Why? All because of another
squabble in Congress, this one an effort by Republicans to make it harder
for airline employees to unionize. The dispute was resolved today, and
we`ll hear from Transportation Secretary Ray LaHood.
And are we seeing the first signs that Tim Pawlenty`s campaign may be
on the brink of extinction? The HARDBALL strategists are with us tonight.
Finally, "Let Me Finish" with the economic fear which stalks the land.
Let`s begin with the big drop on Wall Street. CNBC`s Maria Bartiromo
joins us from the New York Stock Exchange. Thank you, Maria. What
happened?
MARIA BARTIROMO, CNBC: Well, today we saw Europe really set the tone,
Chris. You have a debt situation in Europe that is spiraling downward, the
peripheral countries getting involved, the target on Italy, whether or not
Italy will be able to pay its bills. Same with Portugal. So really, a bit
of a spiraling going on in Europe. That is one issue that certainly set
the tone.
The market accelerated the decline in the final hour of trading
because a new focus happened on the U.S. economy. Remember, we`re just
coming off of a two-month stalemate, where virtually -- people weren`t
doing much of anything, whether it`s companies, corporations or
individuals. We were all worried about the debt, the deficit, and we were
watching what was happening in Washington, the back and forth. And in
fact, it materialized in people sitting on their hands, unable to make
long-term decisions on anything, and as a result, that is impacting
economic activity.
We have a jobs number tomorrow, the employment report coming out
tomorrow after two reports the last two months that were very weak. So
there is renewed worry about the unemployment situation -- of course, that
being the biggest issue for the economy in the U.S. -- all of that
culminating to create fear, as you said, and uncertainty about where this
market heads next. People sold first and they will be thinking about it
later.
So I think you had a couple of concerns coming together today on the
heels of economic data that was weak, manufacturing coming in weak
recently, retail sales coming in weak, and all expectations that we are
failing to actually see any real sustained job creation growth.
MATTHEWS: Are we in possibly a -- I should say a perfect storm
economically, whereby there`s trouble in Europe, there`s this periphery
countries like Italy and Ireland and I guess Portugal, all looking like
they`re headed towards Greece, and our country is somewhere in that murky
neverland somewhere between good and bad, and at the same time, this sense
that here in the largest market in the world, our politicians are in this
clinch, this inability to govern because they`re just wrapped in this
endless fight? How`s it all work together?
BARTIROMO: It`s -- it`s very tough, Chris, because that`s exactly
what it is. And I think the American people are tired of hearing, "He
said, she said," "It`s your fault, no it`s your fault." People want to see
leadership and want to see the country come together and recognize that
these are real issues. We`ve got real problems on the employment front and
real problems on the economic growth front.
And on the global stage, you`ve got growth happening outside of the
United States, and this is a real issue here, corporations in the U.S.
generating much of their growth as result of growth in China, growth in
Brazil, growth in India.
And I think -- you know, I don`t want to be all gloom and doom because
there is one part of this story that is very positive. And the fact is, is
that the corporate sector is sitting on $2.5 trillion in cash. Balance
sheets are very strong post-2008 because they are lean and mean. They`ve
cut jobs. They`ve cut R&D spending. They`ve cut IT spending. And as a
result, you are looking at a strong sector in terms of the corporate
sector. That in and of itself is positive.
The issue is, they`re sitting on that money. They`re not putting that
money to work because they do not have the certainty, certainty, on the one
hand, of the regulatory environment. They don`t know what their business
is going to look like because they`re afraid of policies coming out of
government right now. And on the second hand, they`re afraid that demand
is not going to be there because it hasn`t been there.
We continue to see weakness on the housing front. That`s stuck in the
mud. And we continue to see the retail environment uneasy. So as a
result, you`re not really seeing much movement of that cash. On the one
hand, it`s positive because there`s wiggle room there. We`ve got that
strength in the corporate sector. Eventually --
MATTHEWS: Yes.
BARTIROMO: -- you hope that money goes to work in terms of job
creation. Hasn`t happened yet, Chris.
MATTHEWS: What a clear picture. Thank you so much, Maria Bartiromo
from CNBC, for coming to join us this tough night.
The fear about this economy may be the biggest obstacle facing
President Obama right now. I surely think it is. Jim VandeHei wrote about
the headwinds facing the president on Politico today. Also with us, "New
York Times" -- "New York" magazine, rather, John Heilemann, with a big
cover about the Republican fight.
John, this thing -- John Heilemann first. This situation, this
perfect storm, where you have Europe in turmoil, you have these countries
on the periphery of hell (ph) ready to drop out because of their fiscal
crises, their inability to pay their debts, the United States just going
day-to-day, basically, in this clinch, not very decisive clinch -- was the
smartest guy on the block Mitch McConnell by saying, All right, I`m not
going to let the Republicans be blamed, this is all Obama`s baby? Let him
have it.
JOHN HEILEMANN, "NEW YORK" MAGAZINE: I think it was, Chris. And you
know, you mentioned before you were working for Jimmy Carter. The last
time we`ve had nine consecutive drops in the Dow, nine days in a row where
the Dow has dropped, was February of 1978. So the memories are -- should
are strong for you of this kind of thing.
I think that what we had was -- we managed this week to avoid a debt
ceiling default, but I think the markets saw over the course of the last
three months, and more particularly, the last three week, a political
default on the part of both parties. And they`re reacting to a lot of
things -- obviously, a lot of economic data in Europe, bad economic data
here, but also to this notion, as you put it, a clinch, a political
default, that there is no -- that the government in the United States right
now is incapable of doing anything significant, only of avoiding the worst
possible catastrophe.
MATTHEWS: Yes.
HEILEMANN: And that`s part of what the market`s reacting to. And
you`re absolutely right, it`s a huge problem for President Obama going
forward because Republicans have done pretty well in laying this at his
doorstep.
MATTHEWS: Let me go right now to Jim VandeHei. You know, I`m pretty
pro-Obama in many ways. I certainly like the spirit of this
administration. I like the whole direction it`s taken in terms of
responsibility and what it stands for in our country`s history. But I have
to wonder about the jobs program. Right now, let`s talk jobs.
The two toughest opponents he`ll probably face, if he faces either one
of them, is Romney and the governor of Texas, Rick Perry, and all they talk
about is jobs. The president can`t play that game. He can`t get on a bus
and drive around like he`s Pawlenty, saying, I`m going to create jobs.
He`s got to do it, Jim. How can he say, I`m pivoting towards jobs, and get
on a bus? What`s going on? Has he got a program?
JIM VANDEHEI, POLITICO.COM: I mean, that`s his problem is he
certainly doesn`t have a program that people are buying into and that
business is buying into. Government`s not going to stimulate this economy.
And the economy doesn`t need a nudge, it needs a jolt. So until that $2.5
trillion you were talking about that businesses are sitting on, until that
gets pumped into the economy, we`re going to have this stagnation.
And that`s bad for him, so he has to figure out a way to articulate a
plan, a strategy for creating jobs. Maybe that`s tax reform, by lowering
the corporate tax rate, getting these free trade deals through. He`s got
to convince business that there`s stability and some predictability in this
market going forward.
If he doesn`t do it, we`re going to continue having this cycle.
Business hates instability. And what they saw in the default crisis is
that Congress might do something nuts and force the country to default at
some point, or it might not do the right thing in getting the balance
sheets in order.
So they`re looking. They`re looking for signs. They`re nervous about
what`s overseas --
MATTHEWS: OK --
VANDEHEI: -- they`re nervous about what`s happening here.
MATTHEWS: You know, I look at this, I look at what the president`s
done, he signed onto a debt ceiling bill that reduces spending. That`s
going the wrong way, you could argue. He talks about creating jobs through
green jobs, through trade perhaps with Korea, with something to do with an
infrastructure bank, and none of it sounds right to the me. The word
"bank" just jumps out at me, infrastructure bank. That`s not a solution.
That`s just -- what is that, another commission?
John, it seems to me that he`s got to decide -- he`s like a kid riding
a bike along a curb. He`s either going to go into the ditch, into the
sewer, what do you call it, the sewer drain, or he`s going to stay up on
the -- on the sidewalk. But he`s riding right along the edge of it, not
doing anything.
And we`ve all been in that situation. I was a paper boy. He just
reminds me of a guy on a bike and he`s afraid to do anything but go
straight, and eventually, he`s going to go over the side. I mean, why
doesn`t he come out with a big jobs bill? The deficit`s going to go up
anyway. It`s going to go up because of unemployment.
Why not bring the deficit up at least positively by calling for a real
2 million person jobs program, everybody working? Make a list of
everything that needs to be done. Put the pictures on TV of the dangerous
bridges, the pothole-ridden roads. Show what it looks like that isn`t
getting done, and then call for it to get done and dare the Republicans
like Boehner to sit on their hands and say no.
Why doesn`t he at least call for something to be done on jobs?
HEILEMANN: Well, I think, Chris, because he knows he would fail. And
that --
MATTHEWS: Fail because Republicans would say no.
HEILEMANN: I understand that, but I`m just trying to explain. I
think that President Obama -- if there`s one thing that we have seen over
the course of two-and-a-half years of Barack Obama`s administration is he
is averse to hand-to-hand combat. He does not do that.
There are many liberals, many progressives who want the president to
do various things. They wanted him in the debt ceiling fight to brandish
the 14th Amendment and push Republicans into the corner. We could talk for
a long time about -- about whether that`s the right or wrong thing to do,
or whether what you`ve just suggested is the right or wrong thing to do.
President Obama is not a confrontationalist. At heart, his entire
career, even before his career in politics -- this is a guy who does not
want to fight in that way. And you can ask him to be -- to try to be -- to
do something else, but you`re asking him to be not Barack Obama when you
ask him to do that.
MATTHEWS: Jim, do you agree with that, that he could never do a big
public works jobs program because that would require hand-to-hand combat?
VANDEHEI: I think Heilemann`s spot on in the calculation that he`s
making. I think it`s the only option he has right now is to come out with
something bold and try to fight for it because the truth is, you can`t get
the things you`re talking about, like, Let`s do some short-term stimulus --
not happening, not in this Congress. There`s way in hell, after the fight
that they just went through, that you`re going to get (INAUDIBLE) these
Democrats who are up in the Senate for reelection in 2012 to start doing
more spending.
Everybody in Congress is convinced, with the exception of liberals,
that it`s bad politics right now. A lot think it`s bad policy to be doing
more spending, especially when independents have recoiled --
MATTHEWS: Well, then he`s done.
VANDEHEI: -- at the idea of more government.
MATTHEWS: Then he`s done. But Jim, then he`s done. If he has to be
a faux Republican, if he has to act like his main goal is deficit cutting
or debt cutting, he`s just a sort of a watered-down conservative. Doesn`t
he have to be an activist Democrat to have a good shot at being a leader in
this country? Otherwise he`s following the Tea Party, not fighting it.
Jim?
VANDEHEI: It would require a pretty radical switch from where he`s at
right now. They made the decision right after the election that they`re
going to or the center. They`re going to try to win back independents and
they`re going to try to at least somehow navigate this countrywide mood,
where they want less spending.
And so you saw where his heart at is at the beginning of those
negotiations on the debt ceiling. He wanted to do something big, get at
entitlements and get to tax reform because lowering that corporate tax rate
is something that the administration believes that they could support that
would get those businesses to start hiring.
Once they start hiring, the atmosphere changes. Politics changes.
And you can start to readjust. Until that happens, he is locked. He is a
prisoner of this economy. He is a prisoner of a Congress that has no
appetite whatsoever for more spending.
MATTHEWS: This business community, John, has built up its treasury of
$2.5 trillion in cash by firing people, by not hiring people, by squeezing
those who are working. They`ve done it in every corporation I know
anything about. That`s what they do. They remove as many as they can of
permanent employees, hire temporaries, hire part-time, whatever. They
don`t like -- they do overtime. They don`t like to hire people.
Why do you think, or anybody thinks, that cutting corporate taxes,
giving business more of a break, is going to get them to do what they know
doesn`t make money, which is getting rid of permanent employees?
HEILEMANN: Well, I think, Chris, there`s a logic to tax reform in
general. The argument would be that if you could get a broader -- if you
could cut taxes across the board after getting rid of a lot of loopholes
and flattening the code out, that it would drive consumer demand, and that
if you had consumer demand go up, that would create a greater degree of
demand for the products for American corporations and they would therefore
be able to produce more and therefore would have to hire more in order to
produce more.
I think that`s the logic. I`m not endorsing it, but that is the logic
of those who believe that that kind of tax reform would ultimately lead to
more and better jobs in America.
MATTHEWS: Sounds Republican.
VANDEHEI: And you`re right, Chris -- you`re right, Chris, we`re in a
hell of lot of trouble here, if you believe that these companies don`t want
to do any hiring because government`s not going to create the jobs, not in
the next couple of years. There`s no appetite for it. So if we don`t
figure out a way to get business to do it, I don`t know who else creates
jobs. There`s only two places where they come from, and one is not -- is
at gridlock. They`re not going to do it. There`s not going to be short-
term stimulus.
So there has to be some kind of compromise --
MATTHEWS: OK --
VANDEHEI: -- some sort of concentrated effort by both parties to get
business doing what it needs to do, which is help grow this economy.
MATTHEWS: I think we disagree. I think the American people have to
be confronted with a choice -- Do you want the government to sit and
nothing or go out and create jobs? And I think they`re going to say create
jobs, the worse this number gets. Anyway -- and tomorrow, we`ll get more
reason to think about it, sadly enough, if that number goes up near 10.
Thank you, Jim VandeHei. Thank you, John Heilemann.
Coming up: How did the Tea Party manage to take over this country?
How`s that for a question? They control less than half of the Republican
part of the House of Representatives, which is one third of the government.
How did they get control of the whole government? Well, they don`t seem to
care about history or facts, only slashing government, and they`re willing
to risk wrecking the economy -- we`ve seen that -- if they don`t get their
way. How come? Well, maybe I`ve answered the question. They`re willing
to extort.
You`re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: Well, Americans don`t like this deal to raise the debt
ceiling. This week, a new "USA Today"/Gallup poll finds 46 percent
disapprove of the agreement, versus 39 percent who do approve. Only 1 in 5
says it`s a step towards addressing the growing national debt. And
ironically, Democrats favor the deal far more than Republicans, despite the
fact that Republicans got nearly everything they wanted in the deal.
Fifty-eight percent of Democrats approve, only a quarter of Republican do,
a third of independents.
We`ll be right back.
(COMMERCIAL BREAK)
MATTHEWS: Back to HARDBALL. It wasn`t long ago that Senator Harry
Reid predicted the early demise of the Tea Party, so much so that -- so
much, I guess, for that prediction. Well, how many -- how has a small
minority of political activists managed to amass so much power? That`s our
big question tonight. And they`ve done it in so little time.
Joining me right now is Michael Crowley, who wrote the cover story on
the Tea Party in this week`s "Time" magazine, a big cover. There it is.
And Clarence Page, a columnist for "The Chicago Tribune."
Michael, you start. It`s your column (ph). I`m asking you now to do
something you didn`t do in the column, update it to right now. We`ve got a
513-point drop in the Dow. Will that convince the Tea Party it was right
or convince the enemies of the Tea Party that they were causing more hell
than we could take on top of this bad market?
MICHAEL CROWLEY, "TIME" MAGAZINE: Well, I think everyone is going to
feel vindicated by this. And part of what I wrote about in my story,
Chris, is that we have a situation right now where everyone sees their own
truth. Right? So as you know, Daniel Patrick Moynihan used to say, You`re
entitled to your own opinion, but not your own set of facts. But
increasingly, I think the Tea Party in particular sees the world -- sees
their own set of facts as they want to see it, not necessarily the same
facts everyone else sees.
To answer your question more specifically, I think what the Tea
Partiers would say is -- because, as you know, they really didn`t like this
deal in the end. I mean, they brought the debate in their direction quite
successfully, but ultimately, the Michele Bachmanns of the world opposed it
and complained that it was weak tea, so to speak. And I think they would
say that the markets are reacting in part to the fact that Washington was
not getting serious about the deficit. A lot of people would disagree with
that.
MATTHEWS: So it`s not the overseas markets that`s caused this, it`s
the weakness of the deal.
CROWLEY: That`s what they would -- they would say, I think.
MATTHEWS: This thing about the ability to dictate your own facts --
there is no global warming -- there was not going to be a default of any
significance -- they just --
(CROSSTALK)
PAGE: And Barack Obama was born in Kenya.
(LAUGHTER)
MATTHEWS: And also -- and Michele Bachmann, who is actually the
leader of this thinking, would say things like, the founding fathers
opposed slavery.
PAGE: Right. Right.
MATTHEWS: And then she would dictate who founding fathers were, going
all the way to 30 or 40 years later, to John Quincy Adams, and saying he`s
the leader of the founding fathers.
PAGE: Yes.
MATTHEWS: So, am I answering my own question?
(LAUGHTER)
MATTHEWS: They make their own facts up.
PAGE: You are helping me to segue into saying that -- I agree with
Michael, but I think that the Tea Party -- I mean, when a crash happens,
everybody in Washington points fingers at everybody else. We can expect
that.
The Tea Party does not have a right to absolve themselves here
actually, because before the debt ceiling deadline was hit, Washington
people in both parties were telling Wall Street, don`t worry, we`re going
get a debt ceiling agreement. When they finally got one, it was so messy,
it was so ugly, it was so crazy that Wall Street, which strives on
predictability and hates unpredictability and instability, I think that the
whole Tea Party fracas just helped to drag things further down.
MATTHEWS: Here is the key, I think, to Tea Party thinking about
economics. Here`s rush Limbaugh describing Keynesian economics, which we
all were taught in school, spend money by the government when the economy
is down to offset the drop in spending by consumers and business. That`s
what we were all taught.
It comes out of the Great Depression, how Hoover didn`t do it,
Roosevelt did do it and it worked. Here`s Rush Limbaugh talking to one of
his listeners.
(BEGIN VIDEO CLIP, "THE RUSH LIMBAUGH SHOW")
RUSH LIMBAUGH, RADIO TALK SHOW HOST: John Maynard Keynes. If you
want to know what Keynesian economics is, you`re living it, Barack Obama,
massive government spending, massive debt, massive redistribution of
wealth, the lie that government spending, deficit spending can propel
economic growth.
They had no intention of saving capitalism. They wanted to destroy it
and replace it with socialism or Marxism or fascism or whatever you want to
call it.
(END VIDEO CLIP)
(LAUGHTER)
MATTHEWS: You know, ever since he lost weight, he loves that word
massive.
(LAUGHTER)
MATTHEWS: He`s using it all the time, Rush.
But it`s this idea. I think that is the heart of the Tea Party,
Michael, this fear of government massive spending, hemorrhaging,
hemorrhaging.
CROWLEY: Yes.
MATTHEWS: That stimulus program of about $800 billion to $900 billion
dollars was a waste.
CROWLEY: Right.
MATTHEWS: It didn`t bring the economy back. And they have got a good
argument with that, because when you have a 9-plus percent unemployment
rate, how can you claim you turned the economy around? In simple Crayon-
level thinking, it works, doesn`t it, the Tea Party argument?
CROWLEY: Sure. Yes.
I mean, the experience of the stimulus was a big setback for Keynesian
economic theory, because it`s hard to explain to people that it might have
really prevented things from getting a lot of worse. And so the Rush
Limbaughs of the world point to the unemployment now and say that the thing
was a complete waste that didn`t work.
But I think there`s also another trademark there. It`s a kind of
conspiratorial aspect, Chris. So it`s not just that this economic theory
doesn`t work. Never mind that there`s a lot of data that says it does.
There`s a lot of supporting data. It`s that this is a cover story for
eliminating capitalism and big government running amok. It`s a lie
basically.
It`s a valid economic theory, but Rush Limbaugh is turning it into --
they`re trying to hoodwink you and lie to you. And I think that really
characterizes the movement right now.
MATTHEWS: What do you think the Democrats want to replace the
capitalism with? I have never been able to make that connection. They
raise most of their money from capitalism.
(CROSSTALK)
PAGE: Rush is making up facts like he often does.
No, look, the fact is, we didn`t spend enough money on the stimulus.
You see, that is the argument that is not getting a chance to be heard.
Keynes would say that. And that`s what you had as a percentage of GDP
during the Roosevelt administration.
And, in fact, the right says, well, it wasn`t until World War II that
we were really pulled out of the Depression, yes, which is massive
government spending for the war, right?
(CROSSTALK)
MATTHEWS: And buying stuff from private industry. That`s what
government does. It buys stuff.
(CROSSTALK)
PAGE: Let`s bring it up to this year. This recent bad report we got
of very low productivity in the first quarter, it is because of all the
public money that was pulled out of the economy at the state, federal and
local level.
MATTHEWS: Yes.
PAGE: The private sector did a little bit of a job of creating some
new jobs, but all that money, all the public money was pulled out. So
what`s the Tea Party solution? Pull more money out of the economy.
Obviously that`s just going to bring more recession, possibly depression,
and Rush Limbaugh is completely oblivious to all that.
MATTHEWS: Well, the Tea Party prescription, which you have just laid
out pretty well, is just cutting spending.
What happens when they see that the cutting and spending, which has
now begun, is just going to bring more economic bad times, in fact, worse
things? What will they say then? Have they got a new line then?
CROWLEY: Well, I think you`re already starting to see -- yes, we need
to cut more spending. Government is still too big. We`re not moving fast
enough.
(CROSSTALK)
MATTHEWS: So, we didn`t do enough? The standard line of an ideologue
is, you didn`t do enough.
CROWLEY: I think that`s probably what would happen.
And I would just say, to reiterate the point, it`s not that you can`t
find a credible mainstream economist who would have skepticism about
Keynesian theory, but Rush Limbaugh is not showing you the two sides of the
economic debate. He`s presenting this as a conspiracy theory. It`s a
fraud. You`re being hoodwinked.
And you get a lot of that in Tea Party rhetoric, that the
establishment, the system has these fancy stories to lie to you to promote
some other agenda. So even the global warming stuff, cap and trade, that`s
another assault on capitalism. That stems from this hatred of the free
markets, which has nothing to do with science or empiricism. And that is
what makes it so hard for anybody to have a serious conversation that gets
anywhere around here, because people are just talking right past --
(CROSSTALK)
PAGE: -- Detroit, where the auto industry was largely saved by
government.
MATTHEWS: By the way, who saved capitalism in the 1930s? FDR. FDR.
FDR.
PAGE: Oh, yes, socialism comes in and saves capitalism.
(CROSSTALK)
(LAUGHTER)
MATTHEWS: Hoover was not doing a very good job saving capitalism. It
was Roosevelt that I thought -- and the war. But Roosevelt really kept it
on his feet until the war came.
PAGE: It doesn`t hurt to put more money into the economy when you
have got a recession. It`s very simple.
MATTHEWS: I think the Tea Party people need to read history.
PAGE: I wish they would. I will read it to them.
(CROSSTALK)
MATTHEWS: And that starts with Michele Bachmann. Take a look at the
founding of our country, first.
Anyway, thank you, Michael Crowley.
Nobody knows all the answers. They know less of the answer.
Anyway, Clarence Page, sir.
CROWLEY: Thanks.
PAGE: Thank you.
MATTHEWS: Coming up, something you don`t see every day, a major
Republican politician sticking it to the full-mooners in his own party who
talk up this phony threat of Sharia law. I like this guy Christie. Watch
Christie in action. That`s the governor of New Jersey, a real Jersey guy -
- coming up next in the "Sideshow."
You`re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: Back to HARDBALL. Now to the "Sideshow."
First up, hidden talents. We got a glimpse of the non-political side
of a couple of the Republican candidates this week. While greeting
supporters in New Hampshire yesterday, Jon Huntsman bent down and began
playing something on the piano. Let`s listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Come on. Sit down and hit a few.
(MUSIC)
(END VIDEO CLIP)
MATTHEWS: Well, the bass of course is the hard part there. He did
both sides. That`s the theme to Charlie Brown.
But he`s not the only one. Rick Santorum`s campaign might be scraping
the bottom of the barrel for cash, but that won`t stop the candidate
himself from handing out free goodies. He told a group in Iowa yesterday
that he and his family harvested 600 peaches from his home in Pennsylvania
and plan to hand out homemade jam at the upcoming straw vote.
Well, he plans to call it Pennsylvania presidential peach preserves.
With a name like Santorum, it`s got to be good.
Up next: the voice of reason. New Jersey Governor Chris Christie took
some initial heat after appointing Sohail Mohammed, a Muslim American, to
the New Jersey state bench. Well, Christie fired back as only he can when
it was suggested by someone out there that the new appointment means that
Sharia law could be coming to his state, to New Jersey.
Let`s listen.
(BEGIN VIDEO CLIP)
GOV. CHRIS CHRISTIE (R), NEW JERSEY: I nominated Sohail Mohammed
because he`s a good lawyer and an outstanding human being.
Sharia law has nothing to do with this at all. It`s crazy. This
Sharia law business is crap. It`s just crazy. And I`m tired of dealing
with the crazies.
(END VIDEO CLIP)
(LAUGHTER)
MATTHEWS: Tired of dealing with the crazies. I love it. How`s that
for putting the issue to rest? This guy`s a Jersey guy.
And now for the "Big Number." President Obama has announced plans for
a bus tour throughout the Midwest in an effort to refocus his initiatives
on job creation. This pivot is not the first of its kind, however. How
many times has Obama announced a shift to focus on job creation? Seven
times since the beginning of his presidency back in 2009 -- not an easy
feat. That`s tonight`s "Big Number."
Up next: What`s President Obama`s best argument for reelection? And
what`s the best Republican argument against it?
We will be right back. The strategists join us next.
You`re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
HAMPTON PEARSON, CNBC CORRESPONDENT: I`m Hampton Pearson with your
CNBC "Market Wrap."
The market`s worse day since the start of the financial crisis back in
2008, the Dow Jones industrial plunging 512 points, now down about 1,200
points over the last two weeks, the S&P 500 sliding 60, the Nasdaq tumbling
more than 136 points.
It was the European debt crisis steering the bus today. The markets
were unimpressed with the European Central Bank`s attempt to stabilize bond
yields. And efforts to boost the size of a financial rescue fund were
quashed by the Germans and Dutch.
As you would imagine, the dollar soared against the basket of
currencies. In fact, Bank of New York Mellon said it will start charging
large depositors to hold cash due to the sudden increase in dollar
deposits.
In earnings news, GM`s growing market share helped it nearly double
its quarterly results. And Kraft beat estimates and announced that it`s
splitting into separate snack and grocery companies.
That`s it from CNBC, first in business worldwide -- now back to
HARDBALL.
MATTHEWS: Welcome back to HARDBALL.
The terrible news on the stock market, a drop of 513 points, gives
fresh ammunition to Republicans to make the case that President Obama is
not healing the economy. And what can the president say in his defense?
Time for the HARDBALL strategists. This is going to be a big night
for the Republicans.
Democrat Steve McMahon is playing defense tonight, I`m afraid to say.
(LAUGHTER)
MATTHEWS: Republican Todd Harris on offense.
Take it away. OK, this is batting practice for you.
(LAUGHTER)
MATTHEWS: Make the case on the easier night of your life why the
president should not get reelected for a second term, Todd Harris.
(CROSSTALK)
TODD HARRIS, REPUBLICAN STRATEGIST: Well, it`s very simple. You ask
the American people, is the country heading in the right direction?
And depending on what poll you look at, your latest poll was about 67
percent say no. I have seen it as high as 75 percent.
MATTHEWS: Yes. Well, make an argument. Don`t just cite the polls.
What`s your case?
(CROSSTALK)
HARRIS: Well, four things, jobs, the economy, spending, debt, every
one of those indicators, people are unhappy with the direction this
president is taking the country. If that`s what the question of the 2012
cycle is about, Barack Obama is in real tough shape.
MATTHEWS: What`s the biggest issue you got going for you?
HARRIS: The economy, clearly.
MATTHEWS: No, narrow it down.
HARRIS: Well, jobs specifically, the economy more broadly.
You look at economic indicators, economic confidence, in Gallup, the
latest numbers the lowest of the Obama presidency. People don`t think the
economy is heading in the right direction.
MATTHEWS: OK. You have made your point.
(LAUGHTER)
HARRIS: No, no, enough of you.
MATTHEWS: Steve? Steve?
STEVE MCMAHON, DEMOCRATIC STRATEGIST: Listen, Todd is absolutely
right.
MATTHEWS: Jobs?
MCMAHON: It`s the economy. It`s jobs. It`s the economy. And the
question on Election Day is going to be whether people feel like things are
getting better or whether people feel like things are staying the same or
getting worse.
(CROSSTALK)
MCMAHON: And if they`re staying the same or getting worse, he`s going
to have a very hard --
(CROSSTALK)
MCMAHON: -- that day, but --
(CROSSTALK)
MATTHEWS: OK. I think all elections are about the future. They look
at the backstory. That`s the past. But the future is the future.
You got kids. You got wives. You got children to raise. A lot of
people, you have got retirement living to get through. You need certain
things. Who`s your best bet for president? Enlightened self-interest.
What is your case? The enlightened self-interest. Why should a person
vote for, let say, Romney, or the other guy, that guy from -- that
character from Texas, what`s his name, Rick Perry?
HARRIS: Well, elections are about two things. One, it`s referendum
on the future, but it`s also a referendum on the incumbent.
(CROSSTALK)
MATTHEWS: Talk about the future.
HARRIS: But you don`t get to do that.
(CROSSTALK)
MATTHEWS: Why is your guy better than Obama?
HARRIS: When you`re running for reelection, it`s a referendum on the
track record of whoever`s running. You don`t get to do --
(CROSSTALK)
MATTHEWS: OK. Pretend I`m asking you the question. Pretend I`m
asking what does your crowd offer for the future to solve our economic
challenges? What does your crowd offer for the future?
HARRIS: Well, look, less government spending, more emphasis on
private sector economic growth, more emphasis on job creation through the
private sector, not through the government.
I sat and listened to you talking about Keynesian economics. The fact
is, most people believe that it`s the private sector that ought to be
creating jobs, not government.
MATTHEWS: It ain`t doing it.
(CROSSTALK)
HARRIS: And that`s the debate we`re happy to have.
MCMAHON: Todd, Todd, Todd, that`s what the president believes.
That`s what Democrats believe. That`s what most Americans believe, because
it`s true.
But Chris raises a good point. And the question is, what are the
Republicans going to offer for a future and what, for instance, Mitt Romney
is going to say about the fact that he made money in business by buying up
businesses, shutting them down, firing workers, moving them overseas.
MATTHEWS: Which is what most businesses do now.
MCMAHON: That`s not exactly what -- it`s what they do, but it`s not
what people want a president of the United States to do. That`s happening
anyway. But people don`t want to elect a president who is going to
accelerate it.
Rick Perry, I think it would be great if the Republicans nominated
another governor from Texas, because it would make it easier for the
president to do what he needs to do, which is remind people about the last
governor from Texas who became president and what he inherited when he got
in office --
(CROSSTALK)
MATTHEWS: But they hate each other. That`s not fair.
(CROSSTALK)
MCMAHON: Well, it may not be fair, but politics ain`t beanbag.
(CROSSTALK)
MATTHEWS: Texas Governor Rick Perry, speak of the devil, gave an
interview with CNBC -- CBN, rather, Christian Broadcasting Network -- in
which he seems to dis Mitt Romney`s health care plan.
Let`s listen to him on the Christian -- boy, that`s a home game for
him, isn`t it?
(LAUGHTER)
MATTHEWS: Let`s go. Let`s listen.
(BEGIN VIDEO CLIP, CHRISTIAN BROADCASTING NETWORK)
GOV. RICK PERRY (R), TEXAS: If some state decides to do something
like pass a health care plan that, you know, is kind of like this Obama
thing and it`s a failure, then we kind of go, oh, we don`t want to do that.
(END VIDEO CLIP)
MATTHEWS: What do you think of that performance?
HARRIS: Well, look, Rick Perry is a masterful politician. And I say
this as someone who still has bruises from running a campaign against him.
If he gets in, he`s going to be formidable and there`s no question. I
mean, you don`t need to be a political scientist or pollster to know that
Romney`s health care plan going to be a major issue in the party and it`s
something that --
MATTHEWS: He`s your best bet to take on Obama, isn`t he?
HARRIS: Romney?
MATTHEWS: Perry.
HARRIS: I think Romney`s probably --
MATTHEWS: Who`s the best guy?
MCMAHON: Well, I think Romney matches up best. But I think there`s a
story about Mitt Romney that`s -- you have to be told that will hurt him
badly. I think that --
MATTHEWS: You`re going to tell the American people they have no
choice, they got to keep Obama? Is that going to be your strategy? So,
you`re stuck with --
(CROSSTALK)
MATTHEWS: So, your campaign`s going to be this is as good as it gets?
MCMAHON: Chris, elections are about choices. Spend the next month or
--
(CROSSTALK)
MATTHEWS: Has any Democrat or Republican ever gotten elected -- you
think I`m bad, wait until you see what`s coming?
MCMAHON: Yes, hundreds have, thousands have. Haven`t you been
watching modern campaign?
MATTHEWS: This is as good as it gets is your campaign strategy?
MCMAHON: The president is going to have to remind people of what he
inherited. He`s going to have to convince people what he is doing is
working. And if he can`t, that`s going to be a difficult thing for him and
then he`s going to tell people why he`s a better choice for the future.
MATTHEWS: OK. The unemployment rate comes out tomorrow, right? If
it`s up around 10, what`s that tell you?
HARRIS: Not a happy day in the White House. But I think even more
important than the national unemployment rate, there were nine states that
Barack Obama won in 2008 that George Bush had won in 2004.
MATTHEWS: Let`s take a look it right now.
President Obama must defend his turf. You made the point. The
Electoral College is slightly changed from 2008. Obama has to go back and
win over voters in key battleground states he won before.
Take a look at the map right here where you can see that nine states
Barack Obama won in 2008, that John Kerry lost four years earlier, a lot of
difficult turf. In other words, not naturally Democrat.
HARRIS: Well, and to further that point, unemployment is above 8
percent in six of those nine states.
MATTHEW: Yes.
HARRIS: So --
MCMAHON: Above 8 percent nationally, too. So, whatever the situation
is nationally is going to be mirrored largely in those states, and you`re
right. It`s a different map than it was four years ago. It`s going to be
a harder campaign.
But they know that. They`ll have $1 billion to spend, and don`t
underestimate the importance of that. And they`ll use it early to define
their likely opponent and don`t underestimate --
MATTHEWS: Respond to that. That is the Democratic strategist. I
heard that from both sides -- don`t really play defense. Play offense.
Obama knows he`s got terrible economics to deal with. He knows he`s
on tough terrain. It`s going to be a game fought in the mud or in the
snow. It`s not going to be an easy campaign. So, he has to knock the
other side.
HARRIS: That`s exactly right. Put $1 billion behind trashing whoever
the Republican is, basically --
MATTHEWS: So, what does a voter do when they say they have a
president they don`t think that has met up to their expect aces and they
say they are scared of the other day? What do they do? They don`t vote?
MCMAHON: Vote for the president.
HARRIS: Usually in that case, either they`re not going to vote or
vote for the devil that you know as opposed to the devil you don`t.
MATTHEWS: You think Democrats would be smart to run a real red dog
campaign.
HARRIS: That`s what I`d do.
MATTHEWS: You guys, what a problem, you two guys.
(CROSSTALK)
MATTHEWS: Why don`t you sit down with President Obama now and really
try to think through some novel, imaginative ways to put people back to
work ask because they don`t have the answers right now.
MCMAHON: He`s doing that. He`s got a lot of people over there doing
that. What Todd and I do was a little bit different.
MATTHEWS: You guys, you put the lipstick on the pig is what you guys
do.
(CROSSTALK)
HARRIS: Steve has a job. I`ll always have a job.
MATTHEWS: I mean, you guys are absolutely.
MCMAHON: And you have to define what the choice is. That`s what the
president would be doing.
MATTHEWS: You know, I think that`s what President Carter tried to do
with President Reagan and people said, you know what? We`re going to take
a chance with the other guy. Because you ain`t working.
MCMAHON: That sometimes happen. That sometimes happen.
MATTHEWS: Anyway, thank you. The American people are an optimistic
breed and they tend to look for the optimistic option. And they`re never
going to pick the pessimistic one and say this is as good as it gets.
Obama has got to have a good year next year or he`s going to lose. But I
hope he has a good year.
Steve McMahon?
MCMAHON: Americans still like President Obama.
MATTHEWS: I think they do.
(CROSSTALK)
MATTHEWS: Look -- the unemployment rate is terrible.
MCMAHON: It is.
MATTHEWS: And it`s worse than it looks. It`s up about 16.
Anyway, if you`re a minority, it`s worse.
Todd Harris, you had a good night, but it was an easy one.
(LAUGHTER)
MATTHEWS: Up next -- see you. Up next, does the deal end a partial
shutdown on the FAA where Republicans put some 70,000 workers out of work
by holding up funding -- this is a weird side show but it`s real for those
union guys who didn`t get the right to strike or to unionize even.
We`re going to get to the secretary of transportation here in a minute
himself, Ray LaHood, to sort it out.
This is HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: Treasury Secretary Tim Geithner is expected to stay on the
job after all. A month ago, Geithner hinted he`d leave his post after the
White House and Congress reach this deal on the debt ceiling. But "The New
York Times" reports today that President Obama and chief of staff Bill
Daley have been pressuring Geithner to stay through the Obama full first
term. They would have maintained continuity during a weak economy,
obviously, and avoid a contentious confirmation battle for a successor,
which may not succeed.
We`ll be right back.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is a
lose/lose/lose situation that can be easily solved if Congress gets back
into town and does its job. The House and Senate through a procedural
agreement basically do this through unanimous consent and they can have the
fights that they want to have when they get back.
(END VIDEO CLIP)
MATTHEWS: We`re back.
That was President Obama yesterday calling for Congress to take action
on the FAA shutdown before the end of the week, and it looks like it
worked. Senate Majority Leader Harry Reid now says there`s a deal to end
the partial shutdown of the FAA that put more than 70,000 workers off the
job.
For more on the deal, let`s bring in Secretary of Transportation Ray
LaHood who joins us right now live.
Secretary, Mr. Secretary, thanks for joining us.
RAY LAHOOD, TRANSPORTATION SECRETARY: Thank you, Chris.
MATTHEWS: OK. The thing`s over. What was it all about? Why were we
having trouble with our airline situation?
LAHOOD: Well, Chris, first of all, let me just say a special thanks
to Senator Reid, Senator Kay Bailey Hutchison, Senator Jay Rockefeller and
Senator Max Baucus and the president.
We had meetings at the White House every day. The president was
eminently involved. He cared a lot about these unemployed construction
workers and FAA workers. He instructed me and he instructed his staff,
stay on this every day until you get it solved, until these people get back
to work.
And so, the president and Senator Reid, Senator Rockefeller, Senator
Kay Bailey Hutchinson and Senator Max Baucus really stepped here and there
is an agreement so these people can go back to work on Monday, or as soon
as the president signs the bill. They can have their construction jobs.
FAA workers will go back to work.
And it really was more about some members of Congress letting their
own agendas and their own egos get in way of hard-working people right
smack dab in the middle of the construction season. This is not the time
to be laying people off.
Chris, you`ve heard the speeches. So have I. Jobs, jobs, jobs.
Well, people give a lot of good speeches. The way to create jobs is
not to have legislation that lays off 70,000 workers.
Now, because of extraordinary leadership from the president and four
senators, folks are going to go back to work and are going to get paid.
MATTHEWS: Was there a piece of this dealing with labor, organized
labor?
LAHOOD: Not really, Chris. It was -- it was being talked about. It
was more about essential air service.
And our whole point was, pass a bill and can you get back to the table
and fix the labor issue, the essential air service issue and some of these
other issues. That should not stand in the way of 70,000 construction
workers right smack dab in the middle of the construction season. This is
their bread and butter season. This is when they make their money.
And to have a few little items like this stand in the way of all these
people, hard-working people, who have to make a mortgage payment, a car
payment, their kids are about ready to go back it school and all of the
goals with that. So, boy, Senator Reid really got it done. The president
really stepped up here, and the other senators that I mentioned.
On behalf of hard-working people, I`m grateful that this agreement has
been reached.
MATTHEWS: When are we going to have airports that look as nice as the
ones like Cape Town or Joburg or around the world? We have the L.A.
Airport. LAX is a dump.
I mean, when are we going to have good-looking -- it is almost as bad
as Penn Station in New York, which is a rat house? Why do we have such
terrible infrastructure, even in the airline industry, where airlines are
sort of state of the art?
LAHOOD: It`s very simple, Chris, because we have not had a
transportation bill for two years.
MATTHEWS: Yes.
LAHOOD: We`re on the two-year extension right now. We need people in
Congress who think big, who want to do big things, who want to do creative
things. And want to put the money behind it. That`s what we need.
If you look at the president`s vision on transportation, $550 billion
over six years, that`s more money than has ever been proposed by a
president. The president has got a big view on transportation. Let`s do
big things.
And you know what, Chris, if the Congress were to president pass a
transportation bill, that equates to a jobs bill.
MATTHEWS: I know. I`m with you.
LAHOOD: A transportation bill puts people to work and does it in
projects where people can really think big.
MATTHEWS: I think you`re right in New York City, down at the bottom
of Penn Station, it`s a rat hole. You should arrive like a prince. It
should be our great central city. New York, a great empire city. And you
go there and you get to the Big Apple and it`s a dump down there.
And you look at -- it used to be a beautiful building. We got to put
up that Moynihan station tomorrow morning up there.
LAX is just so out of it, so yesterday, so smelly and old. I can`t
believe these airports.
Pittsburgh -- there`s a great airport.
Anyway, thank you, Secretary Ray LaHood. I`m beating your drum, sir.
LAHOOD: Thank you, Chris.
MATTHEWS: When we return, "Let Me Finish" with the biggest problem
facing President Obama right now. Fear, no jobs.
You`re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: "Let Me Finish" tonight with a reality check. The reality
we`re getting from Wall Street today is as clear as the closing bell.
People are scared. Scared enough to be pulling their money out, to be
stacking up their dollars where they can see them and nobody can get at
them.
Fear -- that`s the reality out there today. And the question before
the president is, what`s he going to do about it? It`s time to recognize,
I think, isn`t it, that he should recognize this. That we are in a period
of recession.
Corporate America isn`t hiring. It`s finding every way it can not to
hire people. So, even a modest pickup in the economy doesn`t mean there`s
going to be a pickup in job creation.
Want on to the bet on something?
Bet on the jobless numbers staying high up there in the 9 category.
Bet on this country`s corporations to continue finding any way they
can to make money without hiring full-time employees, the kind who want a
good income, and health care and a retirement plan.
Bet on corporate to keep going with overtime, part-time, temporary,
overseas, whatever it takes to avoid hiring Americans.
This is what the president has been up against and this is the back
story to the current loss of faith.
Why would anyone have faith in the jobs market today? Give me a
reason growth is stymied. We can be headed toward a second dip. And even
if we head toward upward a bit, the people making hiring decisions are
finding ways not to hire.
You know why we don`t have inflation? Because there aren`t any
shortages to drive up the prices. No labor shortages either. We`ve got
factories with unused capacity. We`ve got a workforce almost 20 percent
operating at either under employment or downright unemployment.
It`s the way it is. And it`s not a condition that makes for stout
hearts or shopping sprees. People are sitting on their money and thinking
how they can find a deeper hole, a stronger safe to lock it into.
So, it`s up to the president to lead us out of this. If he is
counting on corporate America to do, to be the United States cavalry and
come to the rescue, he`s been looking at his hope poster too long.
If he is counting on the board room to make it easier for him stay in
the Oval Office, he`s completely diluted. Republicans don`t think
Democrats belong in the White House. And most business people are
Republicans.
So, today is a good day, Mr. President, to get your people thinking
about what the government can do to put people to work. Public service
jobs, public works jobs. It`s time to pass up the shovel to get people to
work.
The deficit is high. It will get higher if these jobless rates keep
going higher. Your only choice is whether you want the deficit to rise
from people being thrown out of work or for people being put to work. I
recommend the latter. Seeing people being thrown out of work spreads
dread. Seeing people being put to work spreads confidence.
That`s HARDBALL for now. Thanks for being with us.
More politics ahead with Al Sharpton.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY
BE UPDATED.
END
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'Hardball with Chris Matthews' for Thursday, August 4th, 2011
Read the transcript to the Thursday show