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updated 12/1/2011 11:46:06 AM ET 2011-12-01T16:46:06

Guests: Ed Rendell, Hampton Pearson, David Corn, Jonathan Martin, Nia-Malika Henderson, Cynthia Tucker, Bob Casey, Barney Frank

CHRIS MATTHEWS, HOST: Herman squirmin`.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews up in Boston. Leading off tonight:
Staying alive. Herman Cain is brushing off calls from his own party to get
out of the presidential race. Cain`s still reassessing his campaign, but
late today he talked about Ginger White, the woman who says she had a 13-
year affair with him, and said people put her up to it. And he blamed
distortions by the media, the establishment, and said the charges are all
part of a Democratic strategy to make Newt Gingrich the nominee. Wow!

Plus, Mitt Romney`s feeling the heat as Newt Gingrich does rise in the
polls. He got a tad testy in an interview with Fox.

(BEGIN VIDEO CLIP)

BRET BAIER, HOST, FOX NEWS "SPECIAL REPORT": Climate change,
abortion, immigration, gay rights -- how can voters trust what they hear
from you today is what you will believe if you win the White House?

MITT ROMNEY (R-MA), FMR. GOV., PRESIDENTIAL CANDIDATE: Well, Bret,
your list is just not accurate. So one, we`re going to have to be better
informed about my views on issues.

(END VIDEO CLIP)

MATTHEWS: Wow. Anyway, Romney probably figured he`d get a much
easier ride from the folks at Fox. But that`s just it. After five years
of campaigning, Mitt Romney still can`t seal the deal with conservative
Republicans, and it must unsettle him a tad to see Newt doing so well.

And President Obama campaigns for white working-class voters. He`s in
Scranton, Pennsylvania, today, Hillary country, pushing Congress to extend
the payroll tax cut. But will those voters from Scranton, Pennsylvania, to
Oshkosh, Wisconsin, go with the president next November?

And he`s been one of the smartest members of Congress for three
decades, and he`s leaving office after this term. Barney Frank comes to
HARDBALL tonight for his official exit interview.

And "Let Me Finish" tonight with how heroism like John Kennedy`s is
just what America needs today.

We begin with Herman Cain. Jonathan Martin is with Politico and Nia-
Malika Henderson is with "The Washington Post."

We watched that thing late this afternoon. I have never seen so many
charges coming to defend a guy who seems guilty but yet believes everybody
else in the country, from -- let`s get it straight -- the media, the people
who put her up to it, as he puts it -- this is classic Anita Hill stuff.
He says that the establishment`s after him. He said the Democrats are
secretly planning to get Newt Gingrich as the nominee and not him.

I want to go to Nia-Malika on this. This is -- this does remind me of
the right-wing attack on Anita Hill during the Clarence Thomas hearings.

NIA-MALIKA HENDERSON, "WASHINGTON POST": Yes, I mean, except at this
point, he has himself stopped playing the race card and stopped invoking
Clarence Thomas. And as well, he`s lost a lot of support of people who
were also playing that race card for him and comparing this to Clarence
Thomas.

I think you`re exactly right, though. In Herman Cain`s mind -- and it
seems to be only his mind -- there is this vast conspiracy against him,
this plot to bring him down, which, you know, in order to believe him, we
would have to believe that all of these women are reading from the same
script. They, of course, don`t know each other. There`s no evidence that
someone else put them up to this. What would the motivation be for all of
these women to come out?

And you know, in this interview, he is saying that it was just a
friendly relationship that he had with this woman, that he`s just very
generous. And I think what`s also interesting about what Herman Cain has
been saying all along -- it`s that there could be more people that come
out. He said this from his first interview, that there could be more women
to come out...

MATTHEWS: Yes.

HENDERSON: ... because he`s just so generous. So it`s like he`s been
preparing us that...

MATTHEWS: OK...

HENDERSON: ... there are more shoes to drop on this thing.

MATTHEWS: Yes, he`s preparing us for that. Jonathan, respond to
this. Here Cain is late today saying there`s an effort out there to
assassinate his character. He lists a lot of villains here. Let`s watch.

(BEGIN VIDEO CLIP)

HERMAN CAIN (R-GA), PRESIDENTIAL CANDIDATE: This is a character
assassination on me. Why? Because I was doing so well. There`s no other
reason to basically explain it. Secondly, this Ginger White was having
financial problems, and I was trying to help her. And then, boom, out of
nowhere, she decides that she`s going to go public, you know, with this
information.

(END VIDEO CLIP)

MATTHEWS: Boy, you know, sometimes he sounds like Trent Lott. This
is very ironic, but the same accent. Anyway, your thoughts, J-Mar. This
guy has gone through so many villains. You wonder whether he believes any
of the things of what he`s saying or it`s just ego talking and self-
defense.

JONATHAN MARTIN, POLITICO.COM: Yes. The challenge for the claim that
people are trying to hurt him because he was doing well politically is
undercut, Chris, somewhat by the fact that the three women who have made
public claims are not terribly political. You`ve got a career employee.
You`ve got a marketing rep in Chicago. And now you`ve got a -- a lady in
Atlanta who doesn`t seem to have any real political ties. So I don`t know
how he really makes that case.

As for Democrats wanting to face Herman Cain in the general election -
- I`m sorry, as for Democrats being scared of Herman Cain in the general
election, you would think that the DNC or President Obama`s campaign would
have been highlighting the stories against him for the past month. In
fact, they have not sent out one single press release in the course of a
month. So I`m not sure how he can make the case that the Democrats are
scared of him next year.

MATTHEWS: Yes. I don`t think anybody`s scared of him.

MARTIN: But Chris, this is the paradox, though, of Mr. Cain`s
campaign, is that he recognizes that he`s got to be more disciplined, I
think, to a certain degree. But yet every time he gets in a new spot of
trouble, he can`t help himself from going on TV, and he goes on TV, and you
know, makes some accusations that then spawn more stories. And the sort of
pattern keeps repeating itself here.

MATTHEWS: Yes. Well, Jon, I think he`s deluded. I know you`re being
very fair here and very straight, but I think he`s deluded into thinking
he`s still a hot contender for the Republican nomination. Here he is...

MARTIN: Well, Chris...

MATTHEWS: Let`s see -- here he is now blaming the Democrats again for
what`s behind all this. Let`s watch right now, his latest set of
accusations.

(BEGIN VIDEO CLIP)

CAIN: The Democrats want Newt Gingrich to win the nomination so they
can then go after his personal life. But they need to knock me out now.
My star was shining and rising too fast.

(END VIDEO CLIP)

MARTIN: Well, again, Democrats...

MATTHEWS: Well, Nia, that`s...

MARTIN: Yes.

MATTHEWS: That`s astounding. That`s -- that`s -- Nia -- I`ve got to
go to her on this. Nia, this is astounding because he`s suggesting a
brilliant strategic mindset on the part of the Democratic Party, which
imagines saving Newt for the last, getting rid of Cain so that they can get
to Newt and his three marriages as -- because it`s so appetizing to run
against.

Maybe he`s right in terms of ideal opponent, but I don`t think they`re
that smart to figure this one out.

HENDERSON: Well, yes, and sometimes it`s hard to keep track of this
whole conspiracy that he is -- is weaving there. But I also think that the
Democrats would love to face Herman Cain in the general, given what he --
the material that they have so far, given his lack of experience in foreign
policy, given some of the gaffes he`s made and given all of the baggage
that he`s collected over these last weeks and explaining this and not doing
so well.

So this idea that he is the Democrats` worst nightmare, as he said it,
also just doesn`t hold up to scrutiny.

MARTIN: Hey, Chris, the point...

MATTHEWS: Jonathan, respond -- Jonathan, I want you -- we have to get
through this -- Jon, we have to get through a couple points here. Respond
to this. Here he is, almost Houdini-like, responding to the 61 text
messages between him, Cain, and Ginger White over the several-month period
here, as early as 4:25 in the morning when these calls -- these texts have
been sent out. Let`s listen to how he handles it, and then you jump in
here.

(BEGIN VIDEO CLIP)

CAIN: That by itself doesn`t tell you the whole story. If she were
texting me at 4:00 or 5:00 in the morning wanting to know if I can help her
with her rent or help her with her car note, that doesn`t mean that I was
calling her.

The other thing about those phone calls, which we have requested that
we be given access to them, my attorney and I -- is what really was the
pattern of those? All it says was 61 calls. I talk to a lot of people 61
times. We don`t even know over what period of time.

(END VIDEO CLIP)

MARTIN: Right.

MATTHEWS: Well, apparently, Jonathan, that`s four or five months.
But go ahead.

MARTIN: Yes, that`s the challenge that -- that he has here. Every
time he goes on TV, Mr. Cain damages his campaign more. Saying that you
text and call a lot of people 61 times is a sound bite that you`re going to
hear again and again because for a lot of voters out there, when they hear
a married man is texting and calling over a period of four months a woman
who`s not his wife 61 times, that tends to raise suspicion.

But Chris, there`s an important point here to consider. Mr. Cain said
that he`s going to take several days to reassess whether or not he`s going
to stay in this campaign. You know how politics works, Chris. That is
going to be the only story line that is dominating his campaign for those
period of days.

And so what`s going to happen is voters are not going to do anything
but flee from a candidate who has said that they are reassessing whether or
not to stay in the campaign. He is effectively torpedoing his own campaign
by saying he`s going to string out a decision whether or not to stay in the
race or not. I mean, his poll numbers as a response to that statement are
really going to take a hit.

MATTHEWS: Well, Cain was asked to respond to Ginger White`s assertion
this morning, actually, that she thought he wasn`t fit to be president.
Let`s watch his response to that charge.

(BEGIN VIDEO CLIP)

NEIL CAVUTO, FOX NEWS: On Ginger White, why would she say -- she`s
known you 13 years, and you say a non-amorous relationship. Why would she
say out of the blue, He`s not fit to be president?

CAIN: Neil, I have no idea unless the people who I believe are
putting her up to this -- maybe that was one of the lines that she was
supposed to use. Neil, I have no idea. I honestly don`t.

CAVUTO: Who do you think`s putting her up to it?

CAIN: We don`t know. We have no idea who it is.

(END VIDEO CLIP)

MATTHEWS: So Nia, do you follow that logic? We don`t know who it is,
but we know that there`s a he or a she or somebody, probably a he, who put
her up to this. There`s an assumption there that`s -- I don`t know what
you call it except somehow condescending. It can`t possibly have been an
autonomous decision by another individual and a professional woman. It has
to be a group behind her, probably white guys or whatever.

I don`t know what these -- you know, it`s the usual suspects kind of
thing here. You know what I`m talking about, the establishment.

HENDERSON: Yes, I mean, I don`t know if they`re white guys or black
guys or guys at all. I have no idea. And again, it`s just hard to follow
this logic. It`s the same logic -- conspiracy theory is really what it is
-- that he was using to explain...

MATTHEWS: OK...

HENDERSON: ... Sharon Bialek coming out, essentially, that somebody
was putting her up to it...

MATTHEWS: OK...

HENDERSON: ... that these women didn`t have their own agency, which
again, like you said, I think is very condescending.

MATTHEWS: Exactly. It`s Anita Hill stuff. I remember it well, and
not happily. Anyway, thank you, Jonathan Martin.

MARTIN: Thanks, Chris.

MATTHEWS: And thank you, Nia-Malika Henderson.

Coming up: Mitt Romney can`t be thrilled to see Newt Gingrich rising
in the polls, and he showed it in an interview -- he just gave this
interview to Fox. Wow, he is really sweating. Is the Republican race
boiling down to these two candidates? Mitt versus Newt, what a choice!
That`s ahead.

You`re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: I`m in Boston today, where later tonight, I`ll be speaking
about my book, "Jack Kennedy: Elusive Hero," at the John F. Kennedy
presidential library. Thursday, I`ll be addressing a public forum out at
Springfield, Massachusetts. On Friday, I`ll be in Portsmouth, New
Hampshire, speaking at Writers on the New England Stage. And then on
Saturday, I`ll be in Rhody, Rhode Island, at Barrington Books. If you`re
in any of those areas, come out and help celebrate our heroic 35th
president.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. In a testy interview last night
with Fox News`s Bret Baier, Mitt Romney took an opportunity to go after his
number one challenger, Newt Gingrich. Let`s listen.

(BEGIN VIDEO CLIP)

ROMNEY: Speaker Gingrich is a good man. He and I have very different
backgrounds. He spent his last 30 or 40 years in Washington. I spent my
career in the private sector.

I think to get President Obama out of office, you`re going to have to
bring something to the race that`s different than what he brings. He`s a
lifelong politician.

(END VIDEO CLIP)

MATTHEWS: Well, in response, Gingrich told "The Washington Post,"
quote, "You`re talking to a guy who was dead in June. I`m now being
attacked by the former front-runner." Wow. Well, what`s less appealing
here, do you think, a sweaty Romney or a triumphant Newt?

David Corn is Washington bureau chief for "Mother Jones" and an MSNBC
political analyst, and Cynthia Tucker`s Pulitzer Prize-winning columnist
and a visiting professor at the University of Georgia.

I want you both to take a crack at what`s going on right now, just the
setting right now. For the first time, it looks like we have two fairly
equally matched candidates, Mitt Romney, the sort of establishment guy
that`s sort of a class act, and the somewhat mad dog Newt Gingrich, at each
other`s throats right now. Let`s watch in a minute, but I want your
reactions right now.

Do you sense that Mitt Romney`s getting rattled? Do you sense that
Newt`s getting to be arrogant as hell again, neither picture being that
attractive? You first, David.

DAVID CORN, "MOTHER JONES," MSNBC POLITICAL ANALYST: Well, the way I
look at this, Chris, is that life doesn`t get much beyond high school. And
you have the big man on campus, the student body president who looks good,
Mitt Romney, may not be liked by everyone as much as he thinks he`s liked
by them. And then you have the head of the AV club, Newt Gingrich, the
snarky, nerdy guy who knows how to get under the other fellow`s skin.

You know, if this -- if the race stays this way -- and remember, Newt
has yet to go through the full scrutiny that everyone else has gone through
in these flavor-of-the-nanosecond episodes we`ve seen. But if he stays at
this level, the two of them could have a real death spiral between each
other.

The personalities don`t mesh, and they`re going to be at each other`s
throat, as you said. And it`s going to be either fun or not so pretty to
watch, depending on your perspective.

MATTHEWS: You mean there`s evil beneath the evil of Newt Gingrich...

(LAUGHTER)

MATTHEWS: ... beneath the obvious evil? You mean, there`s something
below we haven`t seen? Let`s go right now to...

(CROSSTALK)

CORN: I was just going to say there`s a lot of acting out yet to
come.

MATTHEWS: OK. Cynthia, your view of this matchup right now. It
looks to be the matchup that`s going to go all the way down South in the
early months of next year.

CYNTHIA TUCKER, UNIV. OF GEORGIA: Absolutely. I mean, unbelievably,
incredibly, polls are showing Newt rising everywhere, overtaking Mitt
Romney in some places, surpassing him in others. Some polls show Newt
comfortably out in front, for example, in South Carolina.

David said this will either be fun or ugly to watch, depending on your
perspective. I think it might be ugly to watch for establishment
Republicans. It`ll be a great deal of fun for journalists.

You know, Mitt Romney has had the luxury of not having to respond to
any of his rivals so far, Chris, because none of them came up to Mitt. He
could stay comfortably above the fray and just attack Barack Obama. As the
-- he was trying to portray himself as the inevitable nominee.

But the simple fact of the matter is Newt is not as smart as he thinks
he is, but he`s smart enough to engage in a rhetorical battle with Mitt
Romney. And so we`re going to see a lot of snarkiness going forth.

MATTHEWS: Well, here`s some of it now. I`m beginning to see right
now, thanks to Bret Baier, who`s done a very good interview here for Fox --
I see Mitt Romney starting to get tagged as he`s never been tagged before,
and he`s starting to sweat a little. Watch his leg crossing, which he
never does. It`s an odd bit of secondary characteristic. But this guy
never moves when he`s being interviewed. Here he is, readjusting his
presentation in the middle of an interview. Mitt Romney was pretty much --
avoided so far one-on-one interviews this political election, but perhaps
now we know why.

Take a look at some of the more awkward moments, as I said, in this
interview on Fox with Bret Baier. It`s yesterday. Let`s watch.

(BEGIN VIDEO CLIP)

BAIER: Climate change, abortion, immigration, gay rights -- how can
voters trust what they hear from you today is what you will believe if you
win the White House?

ROMNEY: Well, Bret, your list is just not accurate. So one, we`re
going to have to be better informed about my views on issues.

BAIER: But I`m sure you`ve seen these ads, using videotape of you in
previous years speaking on various issues. And it seems like it`s in
direct contrast to positions you take now.

ROMNEY: Well, I -- I`m glad that the Democratic ads are breaking
through, and you got to Fox...

BAIER: Do you think a mandate -- mandating people to buy insurance is
the right tool?

ROMNEY: Bret, I don`t know how many hundred times I have said this,
too. This is an unusual interview.

(LAUGHTER)

ROMNEY: All right. Let`s do it again.

BAIER: You did say on camera and other places that, at times, you
thought it would be a model for the nation.

ROMNEY: You`re wrong, Bret.

BAIER: No, no. I mean, there`s tape out there.

ROMNEY: Yes. No, Bret, Bret, no, the tape out there -- keep --
continue to read the tape.

(END VIDEO CLIP)

MATTHEWS: Well, David, it looks like he flip-flopped with his legs
there, because...

(LAUGHTER)

MATTHEWS: ... finally, the guy who is a human statue finally actually
crossed his legs, like, give me a break here.

CORN: Yes. Yes.

MATTHEWS: I don`t know what the body language people are saying about
that particular gesture, but he didn`t like that interview one bit.

CORN: No. I think it seems like Mitt Romney is running not for
president, but he`s running for bishop. And these questions have come up
in the debate.

MATTHEWS: I think he already is a bishop, actually.

CORN: Yes. Well, maybe he is.

(LAUGHTER)

CORN: These questions have come up in the debate about his flip-
flops, and there have been some ads taken out.

But, you know, all the debate opponents who have raised this matter
have done it very inartfully. When you see Bret Baier do it or when maybe
Newt Gingrich starts to do it, these are going to be very tight corners
from which Mitt Romney will have a hard time escaping.

Now, we know -- we have talked about this. Newt Gingrich has as many
flip-flops and gyrations as Mitt does. And so he`s going to be a poor
person to make this case, but I think the Obama people are just laying in
wait. They`re just -- I mean, Mitt Romney, it all goes to the overall
narrative that there`s not a lot inside Mitt Romney.

And he, in that interview, really, in a friendly environment with Bret
Baier and FOX News, completely flubbed it. It doesn`t bode well for how he
is going to deal with this major campaign vulnerability.

MATTHEWS: We only have a couple more seconds before we go to Newt
here, but I want to ask you about Mitt.

Cynthia, it seems you can`t go hah, hah, hah every time somebody
caught with in a double-cross on an issue.

(LAUGHTER)

MATTHEWS: Every time the guy nailed him, he goes, hah, hah, hah, hah.

(LAUGHTER)

MATTHEWS: Some -- some commentator like me is going to say I don`t
know what hah, hah, hah means when I catch you double-crossing another
issue.

TUCKER: Well, he was very condescending and very uncomfortable.

But, you know, it reminds me that throughout the campaign season and
throughout these debates, commentators have talked about how polished Mitt
Romney was, how disciplined and how well he`s done in the debates. The
fact of the matter was he didn`t have any rivals who were anywhere near his
level.

MATTHEWS: Yes. Good point.

TUCKER: Once you have somebody lobbing tough questions at Mitt
Romney, he begins to sweat. He gets snarky. He doesn`t have any good
answers.

So I`m not sure he was quite the polished debater so many people said.
He just didn`t have anybody who was prepared to throw real questions at
him.

MATTHEWS: So he lobs, but he doesn`t lobby, right, just to be clear
on that.

(LAUGHTER)

MATTHEWS: OK. Let`s go to the guy who -- just accused of being a
lobby -- a lobber, not a lobbyist, Newt Gingrich.

Yesterday, he denied being a lobbyist, instead saying he was a
celebrity. This guy`s ego.

(LAUGHTER)

MATTHEWS: He`s a celebrity who made enough in speeches, $60,000 a
pop, not to have to lobby, just to lob.

Let`s listen to Newt describing how great he is.

TUCKER: And lecture.

MATTHEWS: Yes.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: I did no lobbying of any
kind, period, for a practical reason. I`m going to be really direct, OK?
I was charging $60,000 a speech. And the number of speeches was going up,
not down. Normally, celebrities leave and they gradually sell fewer
speeches every year. We were selling more.

(END VIDEO CLIP)

(LAUGHTER)

MATTHEWS: Let me ask you, David, is his head a balloon that he`s
pumping air into all the time?

(LAUGHTER)

MATTHEWS: I mean, it seems to get big and bigger the more the B.S.
comes out of his mouth.

CORN: Yes.

MATTHEWS: He`s unbelievable. He -- nobody says, I`m -- Angelina
Jolie doesn`t say, I`m a celebrity. Nobody says that.

CORN: I know, I know, and "we were selling speeches," you know, the
royal "we" being used.

MATTHEWS: Yes.

CORN: I mean, Newt has always had a -- you know, a slight to
gargantuan ego problem. I think this rush of moving to the front-runner
status has -- has gone further to his head.

You know, he said at the very beginning of this race, the key question
here is whether he can be disciplined and focused enough, and the answer we
see over and over again is, no, he can`t be. But yet Mitt Romney is so
unpopular, he`s going to do well.

This guy is -- I think it seems as if the gas is building and building
and building, and eventually it`s going to have to blow.

MATTHEWS: Well, I would hate to be the Republican -- a Republican...

(CROSSTALK)

MATTHEWS: I`m sorry. I have got to end this.

I would hate to be the Republican Archie Andrews trying to decide
between this Betty and Veronica act.

(LAUGHTER)

MATTHEWS: Because imagine choosing now between these two guys, Mitt
and Newt.

Anyway, thank you, Cynthia. Thank you, David.

Up next: Cain`s loss may be Newt`s gain, but Jon Stewart has an
interesting take on that phenomenon, and that`s ahead in the "Sideshow."

You`re watching it, HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Back to HARDBALL. Now for the "Sideshow."

First up: With Herman Cain`s campaign reassessing his prospects in
the 2012 race, a lot of people are asking, which of the other candidates
will his supporters turn to? Could it really be Newt Gingrich?

Jon Stewart captured the irony of that news on "The Daily Show" last
night. Let`s watch.

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

JON STEWART, HOST, "THE DAILY SHOW WITH JON STEWART": The scandal has
taken its toll on the Cain campaign. Reports are now emerging that he
might be considering withdrawing from the race, which I strongly discourage
him from doing.

(LAUGHTER)

STEWART: I have already lost Trump. I can`t lose you, too.

(LAUGHTER)

STEWART: But if these allegations of sexual impropriety derail Cain,
who will benefit?

GEORGE STEPHANOPOULOS, ABC NEWS: Herman Cain was already losing
altitude in this race. Where do his votes go?

UNIDENTIFIED MALE: They go to Newt Gingrich, I think.

STEWART: What?

(LAUGHTER)

STEWART: So, voters leave Cain because they don`t like that he had an
affair and go to the guy who had two of them.

(LAUGHTER)

STEWART: I guess Newt Gingrich becomes the candidate for people who
like Herman Cain, but think he was too monogamous.

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS: Well, look, the only candidate saddened by Cain`s downfall
-- besides Cain -- is Mitt Romney.

Here`s Jon Huntsman speaking for the happy survivors -- quote -- "We
have got real issues to talk about, not the latest bimbo eruption."

Well, this whole shebang has been like the old Agatha Christie
mystery, you know the one where one by one people stuck in a house together
for the weekend are getting knocked off Well, the mystery is of course now
who is going to be the last Republican standing?

After -- or, actually, speaking of that, fresh from his most recent
flub, not knowing the legal voting age, Rick Perry has issued a warning to
some federal workers out there, should he end up in the White House. At a
New Hampshire town hall yesterday, Perry answered questions about the role
of the federal government.

So what`s Perry`s plan of action if he thinks federal employees are
not exactly acting in line with his vision for where things should be
headed?

Well, listen to this.

(BEGIN VIDEO CLIP)

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: You have Health and
Human Service bureaucrats that try to block our being able to block grant
dollars back to the states, so you all can decide how best to deliver
health care in New Hampshire. I don`t think you can fire federal
bureaucrats, but you can reassign them, but you can reassign.

So reassign them to some really god-awful place.

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS: Well, I think those government employees out there just got
a whole bunch more job security. As they say in Texas, Governor Rick Perry
of Texas is staying put in Texas.

Up next: The president`s trip to Scranton today is all about winning
over those white working-class voters, and there are a lot of them in
Northeastern Pennsylvania. Will they be with the president next November?

You`re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

HAMPTON PEARSON, CNBC CORRESPONDENT: I`m Hampton Pearson with your
CNBC "Market Wrap."

Christmas came early for the bulls today, the Dow Jones industrials
soaring 490 points. It`s the biggest gain since March of 2009. The S&P
500 surging 51, the Nasdaq jumping 104 points.

International banks agreed on a coordinated plan to lubricate the
global financial system with U.S. dollars, in hopes of avoiding any Lehman
Brothers-like collapse in Europe. But that wasn`t the only thing moving
the markets. Private sector job growth is picking up, with employers
adding 206,000 jobs in November.

The Fed`s Beige Book report showed slow to moderate economic growth in
most parts of the U.S., with the Midwest enjoying a recent surge in factory
orders. Pending home sales jumped more than expected in October, with the
biggest gains appearing in the Midwest and Northeast. And a surprise move
from China, looking to boost its slowing economy with its first reduction
in bank reserve requirements.

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

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Are you willing to
fight as hard for middle-class families as you do for those who are most
fortunate? What`s it going to be?

That`s the choice in front of Congress. What does it say about our
priorities when we would rather protect a few really well-to-do people than
fight for the jobs of teachers and firefighters? What does it say...

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

MATTHEWS: Welcome back to HARDBALL.

Well, today, President Obama visited Scranton, Pennsylvania, to make
his case for an extension of the payroll tax holiday. It`s no coincidence,
however, the president chose Scranton. It`s a town considered by many to
be ground zero for the kind of blue-collar white voters Obama will need to
win in that crucial state of Pennsylvania in what I call the Oshkosh-to-
Scranton arc, those blue-collar white voters that President Obama has
traditionally had trouble winning over, I must say.

Well, President -- actually, Senator Robert Casey of Pennsylvania -- I
called you president there for a minute -- is the sponsor of that payroll
tax holiday legislation.

Senator Casey, you`re extremely connected up there. This is not
shining you up. Everybody in Pennsylvania knows you`re a connected
regular, Democratic, middle-of-the-road Democrat type. How does the
president join new in well-positioned Democratic wing of the Democratic
Party vote with white guys, to be blunt about it, and white women, not just
minority voters?

SEN. BOB CASEY (D), PENNSYLVANIA: Well, Chris, I think when you look
at Scranton, my hometown -- and you have spent a lot of time there --
Lackawanna County in Northeastern Pennsylvania, we`re suffering through the
aftermath of a horrific recession.

There`s still almost 10,000 people out of work just in the county.
But I think what -- what -- what they expect of us, whether it`s me or
whether it`s the president or any elected official, is they want you to
answer one question. What are you doing today and what have you been doing
about creating jobs?

This payroll tax cut is a really good idea, not just because it`s my
bill, because it will be a direct benefit to workers and to businesses.
That`s why it`s a -- it`s an expansion of what we did last year. This is
for the employee and the employer.

It will put a lot of people to work. It`s a great jump-starter of the
economy. It will put about 1,500 bucks in the pockets of the average
worker. So what he`s doing today is in furtherance I think of that goal of
not just making a connection when it comes to the struggle and the
sacrifice that people are living through, but in a very tangible way.

This will work. It`s not theory. It`s not untested. This will work,
and I think we need to pass the bill.

MATTHEWS: Well, among all Pennsylvania voters, Senator -- here`s some
numbers you`re familiar with -- President Obama`s favorable number is 47,
his unfavorable number 49. Not bad. It`s a gap within the margin of
error. And these are tough times.

But among white voters, it`s just 41 percent favorable, 54 percent
unfavorable. Now, let me give you another cut line. Let`s drill that down
into the number among white voters. With a college education, Obama is
favorable and unfavorable numbers are tied at 48 percent. But among white
Pennsylvania voters without a college education -- these are an important
group -- there`s a lot more of them, by the way, those people without
college educations in Pennsylvania -- the split is large.

Look, 38 percent favorable of the president, and unfavorable, 57
percent. That`s almost 60/40, and maybe it`s worse than that. It`s
roughly 60/40 against the president.

Do you feel that when you go across the state, Senator?

CASEY: I do, Chris. And it`s -- it`s a very tough time for people,
and especially folks that have lesser education. They tend to be the ones
that are most adversely impacted by this economy.

That`s another reason why passing this payroll tax cut is really
important, because what it -- what we`re saying is that the cut from last
year from 6.2 down to 4, we`re going to take that even lower to -- so, in
other words, you`re cutting the payroll tax in half for workers and for
businesses.

This will directly and disproportionately, in a very positive way,
impact lower-income folks, lower-middle income workers and their families.
So I think the president is on the right track. I just hope that we can
get a few Republican senators to join us in the Senate to get more than 60
votes, so we can do this in a bipartisan way. We did it last year on a tax
bill. I think we can do it again.

MATTHEWS: OK.

Senator Robert Casey, thank you so much for joining us from Scranton,
Pennsylvania, your hometown.

CASEY: Thank you.

MATTHEWS: Actually, you`re in Washington, but you`re from Scranton.
You had to vote today.

Now MSNBC political analyst and former Pennsylvania Governor Ed
Rendell joins us.

Governor Rendell, you`re from the southeastern part of the state. And
I`m just thinking about this very simple thing, connection. Hillary
Clinton could do it. Bill Clinton could do it. They seemed to come from
middle-class backgrounds, especially the former president. He never seemed
like an elitist. He never seemed like an Ivy League guy, even though he`s
a Rhodes Scholar.

How do you get that from this president, that connection?

ED RENDELL (D), FORMER PENNSYLVANIA GOVERNOR: Well, I`m not sure you
necessarily have to do that. FDR certainly came from a white-laced
background and he connected.

So I think the president can, and I think he`s started the road back
with these voters by what he`s doing on the jobs bill. For instance, in
Scranton, Chris, there are a lot of unemployed or guys who are working
halftime construction workers. They are those white blue collar voters
you`re talking about. Barack Obama wants to put them to work with almost
$100 billion of new infrastructure money. The Republicans don`t.

So, I think he`s got to keep pushing the message of jobs. He`s got
to keep pushing the message of income inequality and how he wants to make
it fairer, so that 38 percent of our corporations that aren`t paying
federal income tax start paying them to help ease the burden on working
people, things like that. So, I think he`s got a very strong populist
message.

Now, is he Hillary Clinton or Bill Clinton or Bob Casey in delivering
that message? No, not yet, but I think he`s getting better.

And I think by the time next November rolls around, remember, it
won`t be just favorable or unfavorable Barack Obama. It will be Barack
Obama versus someone. And who does that person -- who is that?

MATTHEWS: Let`s talk about that.

RENDELL: Sure.

MATTHEWS: As governor, (AUDIO BREAK), as good at this as anybody.
Suppose he runs against the guy who looks like a stiff, like Romney, who
just looks like an elite guy, never has much hair, or a guy who looks like
an SOB, Newt -- I mean, a guy doesn`t look like a good guy. I know what
I`m talking about --

RENDELL: No, I think you`re absolutely guy.

MATTHEWS: One guy is too stiff , the other guy is too mean.

RENDELL: I think you`re absolutely right.

MATTHEWS: He doesn`t look like he`s running -- he`s not running
against Bill Clinton next November, lucky for him.

RENDELL: You`re absolutely right.

MATTHEWS: So, what does he do? Who is the best opponent in
Pennsylvania for him to run against? Can you call that one?

RENDELL: Well, Michele Bachmann, but you`re not talking about
Michele.

MATTHEWS: Come on, Ed.

RENDELL: She`s my choice. She`s my choice.

MATTHEWS: OK. We don`t want to take a chance on the other two.

RENDELL: I`d rather run against Newt than Mitt Romney, because Mitt
Romney does exude an air of competence, he`s run things well, like the
Olympics, et cetera, and I think that`s the issue. And he`s got a business
background. If Mitt Romney can sell the American people his initial
message, Barack Obama is a nice guy, he has the right ideas, he just can`t
make it work, that`s Mitt Romney`s best pitch. And that --

MATTHEWS: OK, let`s go with that. Let`s go with that because you`ve
-- just one second here. If you were president, is there any way you could
sell the idea of putting people to work like Roosevelt did? These times
are stuck at 9 percent.

RENDELL: Sure.

MATTHEWS: You and I know we`re probably not even getting to 8
percent next November or next five years. We`re stuck up around 10 percent
maybe. It may bubble up again.

Don`t we need aggressive, what you might call radical action, to put
the working guy and working woman to work?

RENDELL: There`s no question. And, Chris, I think we do it without
make work. We do it by repairing the American infrastructure, going in a
five or 10-year program, taking returning vets, taking unemployed people,
training them to be laborers, et cetera, getting people back to work -- a
massive infrastructure repair program which the country needs anyway for
its competiveness.

MATTHEWS: I agree.

RENDELL: For its safety. That`s the way to do it.

MATTHEWS: That`s right. I`m so with you. Thank you, Senator -- I
mean, thank you, Governor Rendell for coming on.

Up again, Barney Frank is ending his career in Congress. We`re going
to have kind of an exit interview with him. We`re going to ask him what he
wants to get off his chest because he does want to say something, I think.

I want to hear him say it. He`s not running for re-election. No
worries about the voters now. We want to hear from Barney Frank from his
heart.

This is HARDBALL, coming up on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: The tea is going cold. More Americans now say they
disagree with the Tea Party. And even those who live in congressional
districts represented by Tea Party members, they`re split over the
movement.

A new Pew poll found that 27 percent of Americans don`t agree with
the Tea Party versus just 20 percent who agree with it. Last year those
numbers were reversed.

And get this -- in the 60 districts represented by members of the
congressional Tea Party caucus, it`s a split decision: 23 against and 25
for, a statistical tie.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: We`re back.

After serving nearly 32 years in the House of Representatives,
Congressman Barney Frank announced earlier this week that he won`t seek re-
election next November. He`s been one of the most articulate spokesmen on
Capitol Hill for the liberal and progressive causes over the years. He`s a
great liberal, one of the great liberal lions, I`d say, and he joins us
right now from what we might call is HARDBALL exit interview.

Congressman Frank, I`ve liked you forever. I always think you`re a
great guy. You`re probably more important to history than Newt Gingrich or
someone like that will ever be.

So, here`s my chance. I want to know if you`ve got something you
want to get off your chest about politics, about serving in Congress, the
stuff that the average good person out there needs to hear.

REP. BARNEY FRANK (D), MASSACHUSETTS: Well, I guess I really have
tried to say these things all along, but I would make this point:
criticisms of the Congress are often legitimate but incomplete, because
they act as if there was some autonomous entity here called the Congress
into which people somehow parachuted and were inflicting these terrible
pains on the rest of the country.

The fact is -- as your former boss, my great idol, Tip O`Neill, used
to say -- nobody serves in the House of Representatives who didn`t win an
election. There`s no appointment. There`s no way you get to the House of
Representatives unless you won an election. Everybody is there because he
or she got more votes than anybody else in the last election.

In other words, as the public is critical of Congress, they got to
include some self-criticism because they are the reason we are here.

You know, if you moved into a hotel and -- and the guy banged up your
car when he parked it and the bellhop lost your luggage and the clerk
couldn`t find your reservation, and the laundry wasn`t done when you got to
the room, you wouldn`t say, my, what a strange collection of incompetent
people. You`d say who is running this place? Who hired these people?

Well, in the Congress the "who" who hired these people is the
electorate. And let me extend that to some people that I agree with on
some of the substance, the occupy people. I am sure that there are people
who didn`t vote in the last congressional elections, and I am not happy
when people who didn`t vote blame me for the consequences of people winning
elections because they didn`t vote.

MATTHEWS: You know, when people go to vote, are they trying to get a
good deal? Are they trying to get some government benefits they don`t
really want to pay for in taxes, some national defense they don`t want to
pay for? Are they -- are they trying to do what we all do when we strike a
bargain, trying to get something out of it that may not deserve? Is that
what happens, why we keep getting a Congress that won`t go balance the
budget, for example?

FRANK: It`s a mix. As far as balancing the budget, by the way, it
doesn`t make economic sense to balance the budget every year. But, yes,
there is this problem that the public wants to consume more in services
than is prepared to support in revenue.

Now, part of that is that they are misled by people who say, oh,
there`s so much waste and fraud, we can cut that out.

MATTHEWS: Yes.

FRANK: The fact is -- and, of course, there is waste and fraud in
any complex human activity. But, you know, we use the wrong metaphor.
People say we are going to cut out the fat as if the fat was made on the
side. Yes, there`s fat, but it`s marbles. There`s inefficiency in any
human activity --

MATTHEWS: Yes.

FRANK: -- and it`s hard to get rid of it.

But you also, you have a mix. You have some people who don`t like
government. What`s most frustrating to me today is, he`s a problem -- I`ve
heard you say it. Somebody say it the other day that the Democrats are
correctly seen as the party of government in that unlike our Republican
colleagues, we do believe that the private sector is the engine of wealth
creation but also that there are some things that are important for the
quality of our lives that we can only do if we pull our resources and make
some rules. And that`s what the government is for.

You can be the richest person in the world but you can`t put out a
fire. You can`t pave a highway. You can`t fix a bridge all by yourself.
You need to come together with your fellow citizens to do it.

What happens, though, is that when there are things going wrong --
and this is the most frustrating thing -- even when problems are the result
of Republican policies, Democrats get blamed for the consequences. It was
the policies of non-regulation, a little bit of the Clinton administration
but mostly the Bush administration, this violent opposition to any
regulation, the appointment of people who didn`t believe in regulation,
that`s what brought us the financial crisis.

And then the Democrats get blamed for it. So, yes, we need to do a
better job of explaining to the people that -- I`ll give you an example.
You know, I`ve had people say, well, why did you not fix Fannie Mae and
Freddie Mac during all those years?

From 1995 to 2006, the Republicans controlled the Congress. Newt
Gingrich was first a speaker and then he was a highly paid historian for
Freddie Mac. You had all of the Republicans in power.

In 2007, interestingly, when we became the chairs, Chris Dodd and I
and the Democrats others took over, that`s the first time that Fannie Mae
and Freddie Mac were controlled and reined in. But I still have people who
believe this -- that, "Well, you`re the Democrats. There were errors in
government, it must have been your fault," when, in fact, they were done
under Republican control.

MATTHEWS: Let me ask you about good and evil. Do you believe in it?
Do you believe that --

FRANK: Sure.

MATTHEWS: -- we`re all a mixed bag? Or do you believe that there`s
some people like Newt Gingrich that personify one side of this Manichean
struggle in our life?

FRANK: Well, I -- I must say I dislike Gingrich and disapprove of
him. He`s been a terrible (INAUDIBLE) -- I wouldn`t call him evil. I
would -- I talk about evil, Hitler was evil. Saddam Hussein was evil.
Stalin, and many of his successors. Mugabe.

I would put people who do serious physical harm to their fellow human
beings. Beyond that, yes, we are all a mixed of good and bad.

In Gingrich`s case, there is usually a heavy preponderance, I think,
of the bad qualities. It`s interesting, he and Romney, if this is the
Republican nomination battle now, it does not speak well for being a man of
principle. Between the two of them, they have changed positions more often
than a lot of people change shirts, and they each accuse the other of doing
that.

MATTHEWS: Yes.

FRANK: The difference is this: Gingrich throughout his career,
particularly as he was here, added to that a willingness to sabotage other
people. He got tattered reputations behind.

He got Tip O`Neill furious because he used to stand, as you know, at
the House at the time when the TV cameras only showed the speaker and
didn`t show that there was anybody there and he would say to empty seats, I
see your Democrats are traitors and if you don`t agree with me, stand up
and say so. Have the courage to say so. He was saying that to empty
chairs.

That made Tip change the way the whole way that the cameras were
there.

I know of another instance where he was just willing to attack
individuals in a way that, yes, that makes him pretty bad.

MATTHEWS: OK. Barney Frank, I hope you stick around in public life.
It`s good to hear from you. We`d love to have you on.

FRANK: Yes, you said my exit interview, Chris. Does that mean I
can`t come back anymore?

MATTHEWS: No, just your official exit interview.

FRANK: OK. Thank you. I`ll be back.

MATTHEWS: Mr. Frank, I`ve been with you at human rights campaign
events. You`re an inspiring leader. It is great to have you on the show
anytime. I mean it.

FRANK: Thank you, Chris.

MATTHEWS: I like you. I don`t mind admitting it. You like to be
grumbly and angry with everybody, but I admit sometimes I like certain
people. You know, I`m all for you. Anyway, thank you, Barney.

I don`t want to embarrass you. But thank you very much. You`re
great.

FRANK: Thank you.

MATTHEWS: Ha! I don`t think so.

When we return, "Let Me Finish" with a story of courage and
leadership. I`m going to tell them tonight at the John F. Kennedy Library,
if you`re up in Boston. What an honor it`s going to be to be up there.

You`re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: "Let Me Finish" with this:

I`m up in Boston, tonight, and I have the honor to address the John
F. Kennedy Library about the life the 35th president.

It is, of course, a story of courage in the South Pacific, of a young
man who came home with a goal of preventing another world war, one he knew
would be far more horrible. It`s how he taught himself the unforgiving
profession of politics, how to inspire people, but also how to move other
politicians through charm and sometime tough leadership.

But the most powerful story is the harrowing set of events that were
the Cuban missile crisis, where a young president led his country in
averting a nuclear war. It`s a tale of true grace under pressure.

I`ve enjoyed traveling the country telling this story, getting people
to pick it up and read it. I want to remind people who lived through those
days that they were real, that the heroism they saw was genuine, and to
help them tell their children what they missed, and what young people today
need to demand of their leaders, true courage, true leadership through
troubled times.

Christmas is coming and time to recharge this country spiritually. I
truly believe that the story of Jack Kennedy is just the right one for this
winner of our country`s discontent. It`s time to know especially and good
to know now that we once had a hero for a president, a liberal Democratic
president who led us bravely and successfully. He thought us courage,
saved us from harm, backed civil rights and people around the world like me
in the Peace Corps and, yes, took us to the moon.

It will be a great honor to speak tonight at the John F. Kennedy
Library here in Boston and to bring it all back.

That`s HARDBALL for now. Thanks for being with us.

"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.
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