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updated 9/9/2011 10:37:15 AM ET 2011-09-09T14:37:15

Guests: Scott Wapner, Howard Fineman, Ron Reagan, Steny Hoyer, Nia-Malika Henderson, Steve McMahon, Todd
Harris, Todd Harris, Steve McMahon, Michael Lofgren, Michael Tomasky

CHRIS MATTHEWS, HOST: Obama to the Republicans -- Let`s create some
jobs.

And tonight, let`s play HARDBALL.

Good evening. I`m Chris Matthews back in Washington. Leading off
tonight: The president`s speech. In just two hours, President Obama will
make his way into the chamber of the House of Representatives to tell
Congress and the country how he will create jobs. The president`s plan has
a big name, the American Jobs Act. But will it be big enough, bold enough
to turn around the economy, and with it his presidency?

On this first night of the new NFL season, by the way, will the
president throw the long ball or keep it tucked and go for three yards in a
cloud of dust? Thus, and plus -- the one thing everyone seems to agree on
about last night`s debate, it`s now a two-man race, Perry versus Romney.
"The Washington Post`s" Ezra Klein breaks it down like this. "Mitt Romney
looked like he had already won the Republican nomination. Rick Perry
looked like he will win the Republican nomination. Michele Bachmann looked
like she was beginning to realize she definitely would not win the
Republican nomination."

But the surprise of the night, Rick Perry`s doubling down on Social
Security as a "Ponzi scheme" and a "monstrous lie." It may win him some
Tea Party support, but can you win an election trashing the most popular
government program ever? The HARDBALL strategists tackle that one tonight.

Plus, suspicions confirmed department. We`re going to talk to a long-
time Republican staffer on Capitol Hill who says the Republican Party
really does only care about the rich, and what`s worse, is mounting a
campaign of, quote, "political terrorism" in an effort to discredit
government. An insider speaks.

And "Let Me Finish" tonight with why I`ve begun to betting -- or
actually, have begun to bet now it`s going to be Rick Perry as the
Republican nominee against President Obama.

We begin tonight here at HARDBALL with the president`s address to the
Congress tonight on jobs. We`re joined by author and political commentator
Ron Reagan.

Ron, I know you`ve got a real passion for politics and for belief
about our country and where it should be heading. Will this president --
well, will he throw the long ball tonight, go for broke, say it big, do it
big? Or will he tuck it under his arm, that football, and go for three
yards and a cloud of dust playing it safe?

RON REAGAN, POLITICAL COMMENTATOR: Well, Chris, he has to propose
something that actually has a chance of working, and that means going big.
He should not worry about what the Republicans are going to say about that
-- the Republicans in Congress are going to say about whatever he proposes.
We already know what they`re going to say. No. They`re not going to do
anything.

The tough thing, the tricky thing, it seems to me, for the president,
is because he`s got not just an economic problem here but a political
problem, as well. And in the setting in which he is speaking, you`re not
supposed to give political partisan sorts speeches.

But at some point, perhaps immediately after the speech, he has to
make it clear to the American people that there is one party now that does
not want jobs -- that doesn`t want jobs coming back, does not want the
economy to recover until after the election. They explicitly want to keep
us in the dumper until they can get back into the White House. And that`s
a tricky message for tonight, maybe not so tricky for tomorrow or the next
day and the days following.

MATTHEWS: You know, Ron, the old Machiavellian rule was, It`s better
to be feared than to be loved. And the trouble is, if you`re not feared a
bit, and not feared when you should be feared, people stop loving you as
leader. Is that president`s problem?

I wonder if Eric Cantor ever stays awake at night -- and he`s the
Republican hotshot on the Hill now -- worrying what about Obama`s going to
do to him in Richmond, how he`s going to bring some fire to his butt and
challenge him at home? Does this president have enough fire to launch an
attack on any Republican -- Boehner, Cantor, McCarthy, oh, these guys like
Allen West and Joe Walsh, the ones who just stick it to him every day of
the week? Does he have enough fear?

REAGAN: Well, we`re going to find out. I mean, we may not find out
tonight. Again, it`s a tricky setting to do that sort of a thing. But
we`re going to need to find out in the next few days here.

You know, the president -- again, it`s always a Catch-22 for any
president. You`ve got people pecking at you all the time, but you can`t
get down in the gutter with them. You have to maintain the prestige of the
office. And so when you respond to people like that, it has to be in a
very pointed, very specific way. You`ve got to pick your moment and you`ve
got to do it right. The president needs to do that, though.

MATTHEWS: OK.

REAGAN: I think.

MATTHEWS: You`re putting a very fine point on your pen tonight. Let
me just ask you this, Ron. I`m surprised at your carefulness. Do you
think there are a lot of Republicans, without naming them all, on Capitol
Hill and in the back rooms up there who wouldn`t like us to have a second
dip economically, to suffer a second recession in recent history and have
President Obama pay the price for it? Would they like to see things to go
really bad?

REAGAN: Yes. Yes. Let me dull my tip a little bit here and paint a
broader-brushed picture here. Mitch McConnell was very clear about what
the priorities for the Republican Party are, getting rid of Obama.

MATTHEWS: That`s what I think.

REAGAN: Wasn`t protecting the country, wasn`t improving the economy,
jobs, any of that -- Get rid of Obama. He knows that the easiest way to
get rid of any incumbent president is have the economy tanking. Why would
the Republicans want the economy sow start recovering in such a way that it
would help President Obama? They don`t. They`re rooting for failure.

MATTHEWS: Yes, I think a lot of them are. Here`s the backdrop to the
speech tonight. According to "The New York Times," many economists believe
the country could very likely be facing a double dip right now, a double
dip recession. Quote, "If history`s a guide, the odds that American
economy is falling into a double-dip recession have risen sharply in recent
weeks and may even have reached 50/50 -- 50 percent. Most ominously, job
growth has slowed to a pace that typically signals the end of a recession"
-- the end of a recession -- the start of recession -- I misspoke there.

You know, Ron, it seems to me that you have to ask this question and
put a sharp point here. Do you think that when they got the news in the
last unemployment number that there`s been no job growth, which is the
beginning of a recession, that some of those Republicans on Capitol Hill
got up and heard that news on the radio in the morning going to work and
were thrilled?

REAGAN: Yes. Yes. Absolutely. I`m sure there was fist-pumping in
the back of limousines as they headed off to work.

MATTHEWS: Well, at least car pools.

REAGAN: Again, they want this president to fail, and that means the
economy has to continue to fail for another year.

MATTHEWS: Well -- OK, the president speaks tonight. Let`s talk about
-- we don`t know the subject -- we know the subject is creating jobs. We
don`t know what`s going to come of it. Do you think he`s going long
tonight or going short?

REAGAN: From what I`ve been hearing -- and you`re right, we don`t
know exactly what he`s going to propose. From what I`m hearing, it`s
sounds kind of medium long.

(LAUGHTER)

MATTHEWS: OK.

REAGAN: You know, it`s not hugely long. It`s not a big, dramatic,
let`s say, overhaul of the tax code that would lower rates but increase
revenue by making the wealthy people actually pay their taxes. I don`t
know that he`s going to specifically go after corporations who`ve been
offshoring...

MATTHEWS: OK.

REAGAN: ... and things like that. But we`ll find out. But he needs
to go long.

MATTHEWS: OK.

REAGAN: He can`t do small ball any more, and the American people are
ready for that.

MATTHEWS: Great having you always, Ron Reagan. Thank you for joining
us.

REAGAN: Good to be here.

MATTHEWS: Now with me is the Democratic leader, a real leader on the
Hill, Steny Hoyer, the House Democratic leader. Mr. Hoyer, I`ve known you
forever. You are a meat-and-potatoes Democrat. I consider you a moderate
Democrat, a classic Hubert Humphrey regular Democrat, down the middle most
of the time.

And I have to ask you this question. Do you think the president has
it in him to go after the bad guys tonight, to go after the Eric Cantors
and the people who are rooting for his failure?

REP. STENY HOYER (D-MD), MINORITY WHIP: I think the president has it
in him to put forth a program that he thinks is going to help. And if Mr.
Cantor or somebody else opposes it, I think he`s going to be very strong in
his proposing a solution to jobs and the deficit. Those are the two
messages we heard.

People are very afraid. They`re fearful that this double dip
recession you were just talking about with Ron Reagan about might occur in
their own lives. They`re in a depression if they don`t have a job, if
their house is underwater or if they`ve lost their house. They`re in a
depression. They know that something`s got to be done.

Now, the issue is here, they also know we got to deal with deficits,
but they -- jobs is their number one priority, and I expect the president
to talk -- and I think Ron`s probably right -- medium-long, not necessarily
long, but medium-long in terms of trying to create jobs, get people back to
work, put them in a position where they can make it in America.

As you know, that`s our -- that`s our agenda...

MATTHEWS: OK.

HOYER: ... in the Congress for the House Democrats, make it in
America, manufacture it in America, grow it in America, sell it around the
world, reinvigorate our manufacturing sector.

But we need to put people back to work both in the public and the
private sector, particularly in the private sector. But what we see is the
jobs that are being created in the private sector are being offset by the
jobs being lost in the public sector -- teachers, police, fire. We can`t
allow that to happen. And I think the president...

MATTHEWS: Suppose there were no opposition...

HOYER: The president`s going to speak to that.

MATTHEWS: Mr. Hoyer, suppose your party completely dominated up there
and were completely loyal to this president. Just imagine halcyon days
ahead the next couple months. What would the president do on the economy?
Having all the meetings you`ve had with him, what have you been able to
figure out he deeply believes should be done to create jobs? If he had
nobody standing in his way, what would he do? Because we need to know
this.

HOYER: Well, I`m not sure exactly what he would do. Clearly, what he
would do, I think, in terms of general, is he would invest the kinds of
sums which both commissions -- you know, we had these two deficit reduction
commissions. Debt and deficit are real challenge confronting our country.
But what both of them said was, in a bipartisan way, You`ve got to get the
economy moving first. Why? Because as the economy tanks, revenues tank
and the deficits go up.

So you can`t do one without the other. And I think in an ideal world,
the president would invest those kinds of sums in those areas where he
believes...

MATTHEWS: OK.

HOYER: ... will bring the economy back.

MATTHEWS: Let`s listen to your opposite numbers now. Here`s Speaker
Boehner and also Majority Leader Eric Cantor today striking a very nice
tone, if you will, toward the president that they`ve very tough on in the
past. Let`s listen to the opposition here, Republicans.

(BEGIN VIDEO CLIP)

REP. ERIC CANTOR (R-VA), MAJORITY LEADER: We know that Republicans
and Democrats are not going to agree on everything. But I do think that
the people of my district and this country expect the fact that we`re not
going to let those differences get in the way of coming together for
common-sense solutions.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I`ve encouraged my
colleagues to come tonight and to listen to the president. He is the
president of the United States, and I believe that all members ought to be
here.

(END VIDEO CLIP)

MATTHEWS: Well, what`s behind this change of tone? According to
Politico, one GOP leadership aide put it quite bluntly. "The guy`s already
sinking. We don`t need to throw him an anvil."

That`s pretty tough, Mr. Hoyer, that the Republicans are being nice to
the president because they think they`ve got him on the run. Is that an
accurate portrait of what you think they`re up to in being nice, or have
they just simply returned to civility?

HOYER: I think they know the American people want action and they
want people working together to get people back to work. They don`t think
the Republican policy, certainly the first nine months of this year, has
done anything to get people back to work. We haven`t had a jobs bill to
speak of on the floor of the House.

And therefore, I think what they`re saying is, Look, we understand
when people talk about the president`s failure, now, what that really means
is the economy of the country is going down. Jobs are not being created.
Now, they may perceive it politically as the president`s failure. But I
will tell you, all the people I represent and the people I talk to around
the country, if they don`t have a job, they see it as a failure of
government generally and their own personal failure.

So I would hope and I think the president would hope -- and I think
that the rhetoric that was used by Mr. Boehner and Mr. Cantor was positive.
I hope we stay positive.

Very frankly, Chris, let me remind you, when President Bush came to
the Congress in September of `08 and said, We have a crisis confronting the
country, we have a crisis that may lead to a depression and deep pain for
the American people what did Democrats do? They responded in a positive
way and supported President Bush`s program. It was a tough vote for the
Democrats.

Frankly, the Republicans didn`t take it with their own president. And
as Speaker Boehner said, this is our president, all of our presidents,
Republicans and Democrats.

MATTHEWS: OK.

HOYER: And we`re in this together. The president`s success will,
much more importantly, be the American people`s success as we create jobs.

MATTHEWS: Well, let`s see if the Republicans respond in the same
manner, in avoiding a second -- a second recession, a second dip, if you
will. Thank you, U.S. congressman and Democratic leader Steny Hoyer of
Maryland.

Joining me right now -- in fact, joining me at 7:00 Eastern for a
special edition of HARDBALL coming up at the 7:00 o`clock Eastern hour, as
we await the president`s address, which comes on about 7:15, by the way.

Coming up: After last night`s pivotal debate on the Republican side,
where does the race for the Republican nomination go from here? I am
really convinced they`re at a real point now. We can see where this is
heading. Can Rick Perry unite the Tea Party and the establishment, the
Eastern and Western conferences, if you will, of the party? Or can Mitt
Romney make the case that he`s the only guy, of those two especially, who
can actually defeat President Obama because of what may well be the already
spoken excesses of Mr. Perry?

You`re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: House speaker John Boehner announced he`s going to host
more than a dozen business leaders tonight in the speaker`s box during the
president`s address. And they all have one thing in common, these business
leaders. They say federal regs are keeping them from hiring workers.

Well, among them is the head of Gibson Guitars. Gibson`s become a
cause celebre for conservatives lately. The Gibson factory down in
Tennessee was raided last month, and the company`s under investigation by
the Justice Department for using wood that`s banned in this country. And
the company CEO says that investigation may force American workers to lose
their jobs. So there you have it.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Back to HARDBALL. Going forward, the Republican contest
looks like a two-man race right now. Mitt Romney and Rick Perry dominated
last night`s debate. So what do their performances tell us now about their
candidacies? And what can they -- well, what can we take away from the
other candidates, like Michele Bachmann, who now may be fighting to stay
even relevant in this fight?

Howard Fineman`s editorial director of the Huffington Post Media Group
and an MSNBC political analyst, and Nia-Malika Henderson is a political
reporter for "The Washington Post."

Thank you both. I still treasure that company. Let`s go to the...

HOWARD FINEMAN, HUFFINGTONPOST.COM, MSNBC POLITICAL ANALYST: Don`t we
all.

MATTHEWS: ... the big story. Let`s take a look at this little
interplay last night involving John Harris of Politico and Governor Perry.
Let`s watch this because this is -- everybody`s talking about this. It`s
him doubting the scientific evidence of global warming in last night`s
debate. Let`s listen to the governor and to John Harris.

(BEGIN VIDEO CLIP)

JOHN HARRIS, POLITICO.COM, MODERATOR: Just recently in New Hampshire,
you said that "Weekly or even daily, scientists are coming forward to
question idea that human activity is behind climate change." Which
scientists have you found most credible on this subject?

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: Well, I do agree that
there is -- the science is not settled on this. The idea that we would put
Americans` economy at jeopardy based on scientific theory that`s not
settled yet to me is just -- is nonsense. I mean, it -- I mean -- and I
tell somebody, I said, Just because you have a group of scientists that
have stood up and said, Here is the fact -- Galileo got outvoted for a
spell.

(END VIDEO CLIP)

MATTHEWS: Well, you know, he reminds me of the kid in school that
didn`t do the reading assignment and is come in and, basically, BS-ed,
going off -- reaching off to Galileo. I mean, the question is, after all
these years of studying man`s impact on climate in this country, you`ve got
to reach some kind of conclusion...

FINEMAN: Well...

MATTHEWS: ... if you`re in public life, and he refuses to reach that
conclusion.

FINEMAN: Well, look, you and I were out there last night, Chris, and
what we saw was a war of the worlds between science and faith, OK?

MATTHEWS: Yes.

FINEMAN: And he`s not just the kid who didn`t read the assignment,
he`s questioning the right of the teacher to make the assignment in the
first place. It`s an article of faith with the Tea Party people -- and
Perry is going right at every Tea Party voter he can -- that climate change
is a hoax. It`s part of their new Ten Commandments. And one of them is
that climate change is a hoax. Get the EPA off their backs.

MATTHEWS: Why is it -- why is it so theocratic? Why is it so close
to their religious beliefs?

(CROSSTALK)

FINEMAN: Well, it`s -- well, partly because, if you want to get
technical about it in terms of God and creation, that`s part of it.

But it`s just a questioning of the scientific elite. Many times,
what, at least two times last night, Rick Perry waved away an issue to say,
well, that`s something for intellectuals. We can have an intellectual
discussion about that at some point.

MATTHEWS: Yes.

FINEMAN: It`s anti-elitist thing that takes on any power in society
that is purporting to dictate to the lives of people that he claims to
represent, including the scientific community.

MATTHEWS: Nia, this is interesting, because this isn`t a debate over
left and right. It`s a debate over, did you do your homework at school and
is that homework valid?

It`s almost like -- well, you -- your take.

NIA-MALIKA HENDERSON, NATIONAL POLITICAL REPORTER, "THE WASHINGTON
POST": Yes.

No, I think, when the Tea Party, when folks from the right hear
climate change, they actually hear climate tax. And so one of the things
they do is they just try to undermine the science of it. So that`s what
you saw him doing last night.

But I think this puts him obviously in the mainstream of the Tea
Party. And I think a lot of Americans, quite frankly, doubt some of this
climate change science. You know, there were some reports out...

(CROSSTALK)

MATTHEWS: They don`t want to learn it. They don`t want to know it.

(CROSSTALK)

HENDERSON: And maybe a lot of Americans don`t necessarily do their
homework, but I don`t think...

(CROSSTALK)

FINEMAN: Chris, the additional -- the additional irony is that Rick
Perry in an earlier lifetime was a supporter of Al Gore.

HENDERSON: Yes.

MATTHEWS: Yes. OK.

Well, let`s take at another guy, Romney, who made some news last
night. Here he is denying -- or actually declining to say he`s actually a
member of the Tea Party. I thought that was very important. Let`s listen.

(BEGIN VIDEO CLIP)

BRIAN WILLIAMS, HOST, "NBC NIGHTLY NEWS": Starting with you, Governor
Romney, are you a member of the Tea Party?

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I don`t think you carry
cards in the Tea Party.

I believe in a lot of what the Tea Party believes in. The Tea Party
believes that government`s too big, taxing too much, and that we ought to
get -- get to the work of getting Americans to work.

So I put together a plan with a whole series of points of how we can
get America`s economy going again. Tea Party people like that. So if the
Tea Party is for keeping government small and spending down, and helping us
create jobs, then, hey, I`m for the Tea Party.

(END VIDEO CLIP)

MATTHEWS: Boy, there`s a guy who made a clear answer, no matter how
long it took him to say it. He`s not a Tea Partier.

(LAUGHTER)

FINEMAN: Right. He`s not a Tea Partier.

MATTHEWS: I`m not running in that conference.

FINEMAN: No. He`s not in that conference. He`s in the other
conference from Rick Perry.

MATTHEWS: Yes.

FINEMAN: But I thought the important thing is for the horse race is
that Romney did it in a very well-thought-out, politically well-thought-out
way.

I thought this was his best performance in terms of thinking out the
politics of it in the way he could state...

(CROSSTALK)

MATTHEWS: You know what? Howard, you and I have been in this
business so long.

FINEMAN: Yes.

MATTHEWS: But there`s one issue where you grab an issue and love it
and answer a question with gut and feeling. And the other one is you
brilliantly handle the issue. He handled the issue.

(CROSSTALK)

FINEMAN: All I`m saying is he handled it better than he used to.

MATTHEWS: They see a guy out there who is handling an issue. And
they say he`s not my guy or my woman because...

FINEMAN: Of course. Of course.

MATTHEWS: ... he`s playing a game here. He should have said, I`m in
the Tea Party and proud of it, because I know they don`t have cards,
membership cards. What a Mickey Mouse comment that was.

It`s not Captain Midnight`s club. You don`t have to have a card.

(LAUGHTER)

MATTHEWS: It`s a question of whether you want to embrace -- are you
part of those people out there yelling or aren`t you?

HENDERSON: Right.

MATTHEWS: And he said I`m not one of them, although I embrace some of
their views.

HENDERSON: Yes, this is a time-tested line from the stump. He`s been
saying this...

(CROSSTALK)

MATTHEWS: Well, why did he say it?

HENDERSON: Well, because he knows that embracing the Tea Party is
trouble for him in the general election. He is very much a candidate now
is running in the general.

(CROSSTALK)

MATTHEWS: So, Ezra Klein is right. He already thinks he`s won this
thing. And something`s going to happen, vaguely something`s going to
happen to Rick Perry that blows him out of the race.

HENDERSON: Yes.

FINEMAN: Also, it is naive. It is naive, because whatever happens,
and whoever the Republican nominee is, David Axelrod and the Democrats will
spend all their time pinning him to the Tea Party and all his supporters
and so on.

MATTHEWS: OK.

Speaking of surprises, Michele Bachmann didn`t stand out in last
night`s debate at all as she has in the past, and here she is missing an
opportunity to hit Mitt Romney.

One of the moderators -- I forget which one -- we will see -- offered
her a chance to slap this guy and she didn`t do it. She just ignored it.
Here`s the answer. Let`s listen.

(BEGIN VIDEO CLIP)

JOHN HARRIS, POLITICO: Is Governor Romney`s support of an individual
mandate in Massachusetts, is that disqualifying from the point of
conservative voters?

REP. MICHELE BACHMANN (R-MN), PRESIDENTIAL CANDIDATE: Well, what I
want to say is that Obamacare took over one-sixth of the American economy.

And with all due respect to the governors, issuing an executive order
will not overturn this massive law. This will take a very strong, bold
leader in the presidency who will lead that effort.

(END VIDEO CLIP)

MATTHEWS: That`s the hypnotic Michele Bachmann, when she simply
answers a question based on like a -- like almost like Angela Lansbury in
that movie, where you flash a card.

HENDERSON: I don`t know this movie.

(CROSSTALK)

(LAUGHTER)

MATTHEWS: Just seriously, that wasn`t a response to the question of
John Harris from Politico. He gave her a direct chance to go after Mitt
Romney and say you`re part of the problem. You did a health care plan.
And it was like she was zoned into this answer.

HENDERSON: Yes. And we have seen that from her before. She sort of
answers the question she wishes that search had gotten, rather than the
question she actually gets.

MATTHEWS: Yes.

(CROSSTALK)

MATTHEWS: What is it, the queen of spades? You flash the card?

FINEMAN: No, no. What she wanted to do there is get to her talking
point.

HENDERSON: Which is that she has this excellent...

(CROSSTALK)

FINEMAN: That she knows how to get things done in Washington, that
she has a titanium spine. I`m surprised she didn`t mention her titanium
spine there.

(CROSSTALK)

MATTHEWS: OK. Why didn`t she go after Perry? Or was there no chance
to hit Perry on that one?

FINEMAN: No. But -- why didn`t she go after Romney, you mean?

MATTHEWS: Either one.

FINEMAN: Well, she didn`t want to go after Romney probably because
she realizes that she`s got to get somebody to slow down Rick Perry. And
there`s no percentage in her attacking...

(CROSSTALK)

MATTHEWS: This wasn`t an interleague game.

FINEMAN: Huh? Well...

MATTHEWS: This wasn`t an interleague game.

You like this...

(CROSSTALK)

MATTHEWS: ... talk here?

HENDERSON: Yes.

(CROSSTALK)

MATTHEWS: We`re talking about sports guys. It`s our way of
understanding these issues.

(CROSSTALK)

MATTHEWS: I do believe -- guys, quickly, I think that there`s two
fights going on here. Who`s going to be the establishment, regular
Republican candidate? It looks like Mitt Romney has got that.

And who is going to be the wilder, more dramatic, more ideological
right-winger, if you will? And that`s Rick Perry, and they both seem to be
winning their conferences. That`s my thought. Am I right?

(CROSSTALK)

HENDERSON: No, I think you`re perfectly right.

MATTHEWS: OK. Thank you. That`s why you`re here.

(LAUGHTER)

MATTHEWS: I`m just kidding. You don`t have to be like Michele
Bachmann.

(CROSSTALK)

(LAUGHTER)

MATTHEWS: Anyway, thank you, Howard Fineman and Nia-Malika Henderson
of "The Washington Post."

Up next, so what was Rick Perry talking about when he brought up
Galileo last night? You know, boy, that was a reach-out. Well, I guess
it`s to show he`s sophisticated. We will try to figure that out next in
the "Sideshow." He ain`t no Galileo.

You`re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Back to HARDBALL. Let`s get to the "Sideshow."

First up, leaving it open on interpretation. Let`s hear again how
Rick Perry responded to a question on climate change during last night`s
Republican debate and his somewhat inscrutable reference to Galileo.

(BEGIN VIDEO CLIP)

PERRY: The science is -- is not settled on this. The idea that we
would put Americans` economy at -- at -- at jeopardy based on scientific
theory that`s not settled yet, to me, is just -- is nonsense. I mean, it -
- I mean -- and I tell somebody, I said, just because you have a group of
scientists that have stood up and said here is the fact, Galileo got
outvoted for a spell.

(END VIDEO CLIP)

MATTHEWS: Yes, that`s a "Saturday Night Live" takeoff, I think.

Anyway, it seems like Dan Quayle there working. Anyway, bringing
Galileo into the defense against climate change, what could he possibly
have been getting at here?

Well, was Perry comparing himself or today`s climate change skeptics
to Galileo? Was the candidate comparing himself to Galileo? Did Perry
make a history gaffe here and confuse Galileo, however, with Galileo`s
predecessor, Copernicus? Was Perry saying that, like Copernicus, today`s
supporters of climate change need more evidence before they can be taken
seriously?

Well, he should have the facts here. We know Galileo. He was a man
of science. Galileo was a hero. Rick Perry is no Galileo.

And now for the next "Big Number." During last night`s debate at the
Reagan Library, the 2012 Republican candidates sparred on a lot of issues.
But one name kept popping up as an example they all strive to follow.

Let`s listen.

(BEGIN VIDEO CLIP)

RICK SANTORUM (R), PRESIDENTIAL CANDIDATE: Ronald Reagan was
committed to America being a force for good.

JON HUNTSMAN (R), PRESIDENTIAL CANDIDATE: Ronald Reagan flew this
plane.

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: I served during the Reagan
campaign.

REP. RON PAUL (R-TX), PRESIDENTIAL CANDIDATE: I strongly supported
Ronald Reagan.

The message of Ronald Reagan.

BACHMANN: Ronald Reagan made a deal.

ROMNEY: If President Reagan were here...

GINGRICH: ... referencing President Reagan.

SANTORUM: We`re in the Reagan Library.

GINGRICH: The Reagan Library. The Ronald Reagan technique.

HERMAN CAIN (R), PRESIDENTIAL CANDIDATE: President Reagan.

HUNTSMAN: President Reagan.

GINGRICH: President Reagan.

CAIN: Reagan.

GINGRICH: Ronald Reagan.

PERRY: Ronald Reagan.

BACHMANN: And that would be Ronald Reagan.

SANTORUM: The Reagan tradition.

GINGRICH: I`m with President Reagan.

(END VIDEO CLIP)

MATTHEWS: Wow. Well, that`s right. Ronald Reagan was a hot topic.
How many times was the former president mentioned by the candidates
throughout the evening? It seemed like more, but only 24 times.

The only candidate to refrain was actually Mitt Romney, with Newt
Gingrich taking the lead -- 24 times, that`s last night "Big Number." Lots
of respect for Ronald Reagan last night.

Up next, Rick Perry doubled down on his claim that Social Security is
a -- quote -- "Ponzi scheme." Is that going to help now, but hurt him
later? Our strategists join us. This is going to be the hot one. It
started last night. I tweeted on it last night the minute I heard it.
This was the newsmaker last night. Social Security is a Ponzi scheme.
Rick Perry said that last night.

You`re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

SCOTT WAPNER, CNBC CORRESPONDENT: I`m Scott Wapner with your CNBC
"Market Wrap."

Stocks slumping to a negative finish today, the Dow tumbling 119
points, the S&P giving up 12 and the Nasdaq fell 19. Kind of a slow-motion
retreat today, after Federal Reserve Chairman Ben Bernanke failed to
provide any new hints on policy at a speech in Minnesota.

The dollar climbed to a two-month high against the euro, after the
European Central Bank left interest rates unchanged following hikes in both
April and June.

FedEx and Boeing moved lower despite reports that FedEx may be looking
to upgrade its air fleet with Boeing jets. Google edged higher on word
it`s buying the 32-year-old restaurant ratings service Zagat.

Homebuilder Hovnanian slipped despite trimming its quarterly loss as
lower land-related charges helped offset a sharp drop in revenue. And
Yahoo! shares surged on reports co-founder and ex-CEO Jerry Yang is trying
to buy the company and a major shareholder called for an overhaul of the
board of directors.

That`s it from CNBC, first in business worldwide -- now back to Chris
and HARDBALL.

MATTHEWS: Welcome back to HARDBALL.

The hottest exchange in last night`s Republican debate was over Social
Security and whether it amounts to a Ponzi scheme or not. Let`s listen to
it.

(BEGIN VIDEO CLIP)

PERRY: It is a Ponzi scheme to tell our kids that are 25 or 30 years
old today, you`re paying into a program that`s going to be there. Anybody
that`s for the status quo with Social Security today is involved with a
monstrous lie to our kids, and it`s not right.

ROMNEY: Our nominee has to be someone who isn`t committed to
abolishing Social Security, but who is committed to saving Social Security.

We have always had, at the heart of our party, a recognition that we
want to care for those in need, and our seniors have the need of Social
Security.

PERRY: You cannot keep the status quo in place and not call it
anything other than a Ponzi scheme. It is. That is what it is. Americans
know that, and regardless of what anyone says, oh, it`s not -- and that`s
provocative language -- maybe it`s time to have some provocative language
in this country.

(END VIDEO CLIP)

MATTHEWS: Wow.

Anyway, Rick Perry is not backing away from that Ponzi scheme
characterization. And how will Republican race roll out if Social Security
is a major issue in the campaign? And how could that affect President
Obama`s 2012 strategy in facing the eventual nominee?

Todd Harris is a Republican strategist. Steve McMahon is a Democratic
strategist.

For the record book, for all those watching, especially those who
respect your thinking, Todd Harris, was that a mistake?

(LAUGHTER)

TODD HARRIS, REPUBLICAN STRATEGIST: Yes, he made a mistake.

MATTHEWS: OK.

HARRIS: It`s not -- it wasn`t a mistake in what he said. He made a
mistake with what he didn`t say.

If you`re going to use language like Ponzi scheme in describing Social
Security, you sure as hell better have a plan in place to actually save it.
The Republican base...

(CROSSTALK)

MATTHEWS: A Ponzi scheme, by the way, for most people to understand
it, is generally meant to be something like a chain letter. You basically
pay the next person off with the money you just got from somebody else, but
it`s not making any money.

HARRIS: And eventually someone ends up holding an empty bag.

MATTHEWS: Right.

HARRIS: If you`re going to talk about reforming Social Security,
which by the way both parties should be doing, because it`s going broke, if
you`re going to talk about it, you need to talk about reforming it in order
to save it.

The Republican base wants to hear candidates talk openly and honestly
about Social Security reform in order to save it. And I think that they
will reward you. Marco Rubio was elected in Florida talking about this,
but you have to talk about saving it.

(CROSSTALK)

MATTHEWS: It sounds like he hates the idea of taxing people...

HARRIS: That`s the problem.

MATTHEWS: ... basically while they`re in their working years to get
them benefits in their retiring years. He doesn`t like that idea.

STEVE MCMAHON, DEMOCRATIC STRATEGIST: He doesn`t like it.

He actually has suggested implicitly that that might even be
unconstitutional. And I don`t normally advise Republican candidates. But
here`s a piece of free advice for Rick Perry. If you`re going to get
involved in generational warfare, you want to stand with the generation
that votes, not with the generation that doesn`t vote.

MATTHEWS: The older people.

MCMAHON: And the older people who rely and depend on Social Security,
and the people who are coming up on Social Security, aren`t really that
interested in electing a president who thinks it`s a failure.

And that`s the bigger problem here.

MATTHEWS: Now, do you think this -- deep down -- I know you`re a
partisan. You`re both partisan. And everybody who sort of watches this
show is partisan. But do you really believe that he can`t fix this? Can
he fix it?

MCMAHON: Well, here`s what I think.

(CROSSTALK)

MCMAHON: He could probably fix the Ponzi scheme part, because the
Ponzi scheme is -- people probably, many people would agree with that.

The thing he can`t walk back is what Mitt Romney cleverly and smartly
latched on to, which is, in his book, he says, by any measure, Social
Security is failure. He`s not backing away from that. He`s not backing
away from Ponzi...

MATTHEWS: Yes, it`s such a -- it sounds like the raw Ronald Reagan,
the very early Reagan that railed against a lot of the New Deal -- well,
not the New Deal -- the Great Society, didn`t like Medicare, and then toned
it down.

HARRIS: Yes. And that`s when he won.

(LAUGHTER)

HARRIS: I think -- the other question -- for me, I think he can
recover from this certainly. There`s a long way to go, but if you`re going
to -- if you`re going to use incendiary language and you don`t have a plan
to actually save it, you`ve got to be very careful, because voters --

MATTHEWS: Let`s go back everybody -- half the people that watch this
show are in that age group and some are younger. But let`s go back to the
simple fact -- the genius of Franklin Roosevelt, who was a great president,
maybe one of the greatest two or three, I think, was that he figured out
that Social Security had to be for everybody, no; means test, you pay for
it while you work. When you retired and have no other form of income, this
will help you out. In fact, a lot were impoverished in the old days
without Social Security. It`s a great anti-poverty program.

Then people started to live past 65. Even the great Franklin
Roosevelt didn`t make it to 65. In those days, if you made it to 65, you
were lucky. You got a few bucks on Social Security.

Today, lots of people fortunately make it past 65. They live into
their 80s and 90s. They`re still getting checks.

HARRIS: OK.

MATTHEWS: The system doesn`t work that way anymore. It`s not as
healthy as it once was.

So, how`s the Republican deal with the fact it is a Ponzi scheme in
the sense that the money that`s paid out every day is coming from people
who have paid in that day. It`s not being made somewhere --

HARRIS: That`s absolutely right. And you will never get back the
amount of money that you paid into it under its current structures.

MATTHEWS: Certainly, poor people did pretty well. That`s the idea.

STEVE MCMAHON, DEMOCRATIC STRATEGIST: Many people actually get back
much more than they paid, which is one of the problems. And the other
problem is, that for a long period of time -- and you know this, Chris, you
worked on the Hill -- people paid into the Social Security Trust Fund and
it was set aside. Then the politicians decided, well, we`re going to get
that money, we`re going to use it to pay for other things, and will make it
up later. We borrowed against it.

MATTHEWS: Yes.

MCMAHON: So, one of the reason it`s become a Ponzi scheme, if that`s
what it is, a pejorative terms, it`s actually a criminal enterprise, is
because the people in Washington haven`t done what they were supposed to
do.

MATTHEWS: Let`s talk red meat. Why would a guy who seems to have
his head over his shoulders, I don`t agree with Perry, but he`s not crazy -
- by does he think this works to call it criminal -- to call it monstrous
lie. To use this infuriating language, and there are older people in south
Florida that go, wait a minute, I depend on that for my income and don`t
like being told I`m part of a Ponzi scheme? Why does he risk it?

HARRIS: Well, this is certainly the tone that he`s always used in
his campaigns in Texas. And it`s worked for him both in primary --

MATTHEWS: He`s beaten your candidate.

HARRIS: Handily, by 22 points. It`s worked in primaries, and it`s
worked for him in general elections.

MATTHEWS: Why do Texans like this language, Ponzi scheme language?

HARRIS: Yes, it`s aggressive. There`s a certain swagger to it.
It`s big.

MCMAHON: There`s coarseness to it.

MATTHEWS: Does he face a problem now if he buckles and begins to
say, you know, that was the wrong language, a big moderator, Brian
Williams, somebody who gets limb to say on a Sunday show, David Gregory,
oh, I should have used other words -- does that weaken him on the right?

HARRIS: No, no, because he can say, you know what? It is a Ponzi
scheme, but I want to talk about my plan to actually save it. In that way
--

MATTHEWS: You guys are not going to forget it.

MCMAHON: No, no, it`s on tape. And that`s going to be a problem
because he`s going to see that a lot.

But, listen, Rick Perry is an interesting candidate but he`s never
really run a general election. I don`t mean he hasn`t been in a general
election. I mean, in Texas, it`s really one-party state, bellicose
rhetoric wins Republican primaries, not a general election.

MATTHEWS: I still think he`s the favorite. Do you think he`s the
favorite or not?

HARRIS: I`m not sure.

MATTHEWS: You think he`s the favorite?

MCMAHON: I think he`s got a last straw (ph).

HARRIS: This is the danger that Perry presents, all of these issues,
these are all side issues. These are distractions. Republicans should be
talking about jobs in the economy. And if we`re talking about science,
Ponzi schemes, all of this, this is a distraction from what our message
should be.

MATTHEWS: Todd, he`s got our attention.

HARRIS: He certainly did.

(LAUGHTER)

MATTHEWS: We`re going to listen to this guy in the next couple of
weeks.

Todd Harris, thank you. Steve McMahon, you guys are right in
business. Great time have you.

Up next, the Republican staffer who spent years on Capitol Hill, like
28 years, says his party only cares about the rich. This is the inside
man. And, by the way, he says Republicans are engaged in what he calls
"political terrorism" to try to discredit the United States government.
He`s coming here next to talk about what he`s discovered as a longtime
Republican. I think he`ll disagree with Mr. Harris here.

This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Republican presidential candidate Jon Huntsman tried to
breakthrough at the debate last night, but he failed to convince one
crucial Republican player. South Carolina Governor Nikki Haley says she
won`t endorse the former Utah governor, saying she disagrees with him
philosophically. South Carolina scores the nominating contest after Iowa
and New Hampshire and Huntsman the state a key part of his strategy, along
with Florida and New Hampshire. We`ll see if he has to change that.

And we`ll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: You`re both right.

UNIDENTIFIED MALE: A little more right. You want me to take care of
your husband for you and get them to take care of Lula and maybe take care
of me, too. Then somebody else would have come along to take care for you.
That`s the way you operate, isn`t it, baby?

UNIDENTIFIED FEMALE: I suppose it is. It`s what you got cooked up
for tonight any better?

(END VIDEO CLIP)

MATTHEWS: Wow, that scene from the movie "Double Indemnity," the
ultimate film of war, illustrates according to a former Capitol Hill
staffer how both political parties work in Washington. But he saves his
harshest criticism for his own side, the Republicans, whom he says, are
everybody as bad as his worst Democratic critics fear they are.

Mike Lofgren worked for the GOP for 28 years. He retired in June,
safely, and recently wrote an explosive article, "Goodbye to All:
Reflections of a GOP Operative Who Left the Cult." Also with us is Mike
Tomasky of "The Daily Beast," and "Newsweek," a great reporter.

So, here you are, sir, still alive. Let`s ask this -- do they only
care about the rich?

MIKE LOFGREN, FMR. GOP CAPITOL HILL STAFFER: Pretty much so.
They`re entire tax policy is pretty much skewed to defending the interests
of the rich, and they use a lot of clever verbiage to disguise that fact.
We don`t want to raise taxes on anybody.

MATTHEWS: I know they do that.

LOFGREN: At the same time, they complain that the bottom 50 percent
aren`t paying in federal income tax.

MATTHEWS: Orrin Hatch loves that, baby. He loves to count on that.

But why -- most Americans are not rich. Most Republicans are not
rich. My family was Republican growing up, we`re called Cloth Coat
Republicans. Why do they look out for the rich when most of their own
members aren`t rich? Why are they in bed with the rich people as a
purpose?

LOFGREN: Because they provide us money, because our political system
is broken. Both parties are guilty.

MATTHEWS: They`re bought by the rich.

LOFGREN: They are bought by the rich.

MATTHEWS: Let`s take a look at political terrorism. In your piece,
you claimed that GOP is playing political terrorism, your term. You write,
quote, "I could see as early as last November that the Republican Party
would use the debt limit vote. An otherwise routine legislative procedure
that has been used 87 times since the end of World War II in order to
concoct an entirely artificial fiscal crisis. Then, they would use that
fiscal crisis to get what they wanted by literally holding the United
States and global economies as hostages."

So it was calculated from day one? The minute they won the House?

LOFGREN: Yes, it was.

MATTHEWS: Michael Tomasky, reporting on this. Where did you find
this guy?

MICHAEL TOMASKY, NEWSWEEK: Yes. Well, he came into my inbox somehow
or another over the weekend. I`m glad he did it. And I thought it was a
really fascinating piece and I wrote about it because I want to give

MATTHEWS: He`s the inside man. This is like the tobacco industry.

TOMASKY: Yes.

MATTHEWS: He`s not Russell Crowe here.

TOMASKY: Exactly. This is not like me writing it. And I have
written these things for many years. You`ve been saying these things I
noticed on your air.

MATTHEWS: Well, because I think a lot of the cartoon notions about
each political party are accurate.

Now, let`s look at this thing about the GOP and this, I think, is
evil. This is the dumping on the very republican government, the
democratic form of government, democratic/republican form of government.
You claim Republicans all they`re planning is to discredit government
itself.

You write, a Republican staffer once said to you, a staffer once said
to you, "Should Republicans succeed in destructing the Senate from doing
its job, it would lower Congress` generic favorability rating among the
American people by sabotaging the reputation of the institution of
government, the party that is programmatic ally against the government
would come out the relative winner."

In other words, it`s horrible. It`s horrible. All we have in our
democracy is the way we govern ourselves, that`s it. That separates us
from barbarians.

LOFGREN: That is. And I`m a historian by training. I understand
that democratic institutions are inherently fragile. They operate on good
faith, trust, and the spirit of compromise. And once you go down the road
of never compromise, bring down the viability of institutions, you are on
the way to something very bad.

MATTHEWS: Now when I hear this, Bachmann, and I don`t dislike her
personally. I find her a likable person. She has all these foster kids,
good for her. I think she`s a good person in that regard.

But she says, I worked for the IRS so I can learn how the enemy
operated, as if the government itself is evil. She talks about the EPA,
the environment the party of Teddy Roosevelt, of conservation, is evil.

TOMASKY: As long ago as Teddy Roosevelt.

MATTHEWS: I know.

TOMASKY: It wouldn`t surprise if during the course of this campaign,
one of these people comes out, they have to keep topping each other to the
right, take a right wing position. It wouldn`t be surprising to me if one
of them says I`m going to eliminate the EPA. I mean, they really hate the
EPA. We`ve gotten almost to that point.

But yes --

MATTHEWS: Is it partisan victory talk or is it true hatred of
anything that`s public? That`s not a private club or a private business?

LOFGREN: I believe to some degree that`s true.

MATTHEWS: The public institutions.

LOFGREN: They denigrate the people who inspect the aircraft you fly
on, who inspect the food that you eat --

MATTHEWS: Well, I`m not going to say that too off then because I
don`t call the people on the right fascist very often. But why they only
like the military as a government institution? They only like people in
uniform with guns. That`s the only kind of government, they like some of
them.

LOFGREN: They worship at the altar of mars.

(LAUGHTER)

MATTHEWS: Anyway, well, you`re going to live long after this, you
are safely retired, Sir Mike. So you can now speak the truth.

Are there other people that think like you within the Republican
Party that are just keeping their mouths shut?

LOFGREN: Absolutely. People are more candid on a sub-rosa level.
But I think it`s sort of the herd mentality. It is not that people are
individually bad or anything like that. And this is not a grudge match or
any sort of score settling on my part.

MATTHEWS: Yes.

LOFGREN: This is because I grew to revere the institution and the
people who trash it. They are trashing Article I of the Constitution that
they claim to revere.

MATTHEWS: Wow. It`s great to have you on.

LOFGREN: Thank you.

MATTHEWS: Thanks for coming here, Mike Tomasky, great reporter.
Thank you very much, coming from "The Daily Beast" and from "Newsweek."
Thank you Michael Tomasky and Michael Lofgren.

Coming up: let me finish with why I think Rick Perry is going to be
the Obama challenger. We`ll see, anything can change. I think there`s
something about the gut on the right that this guy is into, that even a
smart guy like Romney can`t quite imitate.

HARDBALL coming back on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Let me finish to night with the reality of last night.

I know one thing from hard experience. If the American people want
change, if they`re not happy with the person in the White House, they will
find an alternative. We the people don`t accept failure.

So, the question is whether the Republican Party can do its job of
coming up with an acceptable alternative to President Obama. Last night,
they made a lot of progress toward making that decision. They moved the
process from the preliminaries to picking what now looks to be the final
bracket -- the western conference, that being the Tea Party, and eastern
conference, that being the establishment party.

For the western, Governor Rick Perry looks like the uncontested
winner. Congresswoman Bachmann is falling and Mitt Romney has said he`s
not even a member of the Tea Party.

For the eastern division, I say the same clarity, I see it. It looks
like Romney hasn`t won.

So, here we go -- already to the finals between now and the Iowa
caucuses, this is going to be a struggle over who speaks best to and for
the new Republican Party -- a GOP that has actually become the home of the
Tea Party.

I think, right now, it`s Rick Perry. With all its successes, he has
the gut of the Republican right. He has the anger, the contempt, the deep
feelings of animosity that`s out there in the country right now. You get
the sense he feels what he speaks, long before he speaks it. He is out
there on the stump seething with contempt for Washington.

Mitt Romney, on the other hand, comes across, even after 17 years of
running for office, as essentially a business guy -- he kind of fellow
moved by the latest news in "The Wall Street Journal" rather than the angry
rants on its editorial pages.

Rick Perry seems like the kind of fellow who reads "The Journal"
editorials and listens to Rush Limbaugh cheering deep down into his Texas
gut everything he hears. He`s not there auditioning for the job of
conservative voice, he is one. That voice you hear coming from Rick Perry,
I think, is Rick Perry.

With Romney you get the sense of hearing the latest line gathered up
by his staff and served to him for use that night.

Why would the Tea Party-driven Republican Party run someone who has
learned to talk like them when they can rally behind someone, Rick Perry,
who is one of them? Just a thought.

Until I get a better one, my bet`s on Perry.

And that`s HARDBALL for now. Thanks for being with us.

I`ll be back an hour from now with a special edition of HARDBALL
leading into President Obama`s big address to Congress tonight.

"POLITICS NATION" with Al Sharpton starts right now.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY
BE UPDATED.
END

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