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updated 7/25/2012 9:55:56 AM ET 2012-07-25T13:55:56

Guests: Joe Conason, Major Garrett, Erin McPike

CHRIS MATTHEWS, HOST: Bugle boy.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews in Washington.

"Let Me Start" with "General Mitt Romney." I use that term
sarcastically, of course, because general in this case is an armchair
general. The man who spoke today to the Veterans of Foreign Wars could not
be more foreign to foreign wars. His saber-rattling diatribe on
Afghanistan, Iran, Russia, China, even Venezuela, had no match in his
resume, only in his plans.

How many countries does he want to fight in the next four years? Does
he want to outdo Bush 1 with one war or Bush 2 with his two?

But there he was today, reading a speech banged out by the same neo-
cons who took us into Iraq and always seem to have the next war on their
agenda. Does this guy have any idea that the words of war have meaning and
(ph) the dead and the wounded, no meaning in the stupidity and deceit we
went through under Bush and Cheney?

And how does he, Mitt Romney, backed up by Cheney in this election,
speak of leaks, national security leaks, as if we`d never heard of what the
W. crowd, led by Cheney and his loyal fall guy, Scooter Libby, did when
they had their hands in there?

Michael Steele was chairman of Republican National Committee and MSNBC
political analyst today. And Joe Conason`s editor-in-chief of the
NationalMemo.com.

Let`s take a look at Romney`s speech before the VFW members today. It
was blatantly jingoistic. Let`s listen.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R-MA), FMR. GOV., PRESIDENTIAL CANDIDATE: I am an
unapologetic believer in the greatness of America!

(CHEERS AND APPLAUSE)

ROMNEY: I am not ashamed of American power! And I`m guided by one
overwhelming conviction and passion. This century must be an American
century!

(END VIDEO CLIP)

MATTHEWS: But who does Romney think he`s contrasting himself with?
President Obama made no bones about his belief in American greatness as
recently as yesterday. Let`s listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If anyone tries to tell
you that our greatness has passed, that America is in decline, you tell
them this. Just like the 20th century, the 21th century is going to be
another great American century.

(END VIDEO CLIP)

MATTHEWS: So who`s ashamed of American power, Michael? Who`s this
guy that he`s attacking in his speech today before all the guys who did
serve in war?

MICHAEL STEELE, FMR. RNC CHAIR, MSNBC POLITICAL ANALYST: Well, I
think -- I think it`s a matter of laying out very clearly -- and I thought
he did an excellent job of sort of setting up the contrast. You know,
there are a lot of similarities in Obama`s policies with the Bush
administration. There`s no doubt about that, with respect to the war on
terror, for example.

But I think when it comes to specifics with respect to Israel and the
Middle East and certainly our position in the world, the president has come
off, in the view of many Americans, and certainly the Romney team, as
apologetic. And so he wanted to draw...

MATTHEWS: Well...

(CROSSTALK)

MATTHEWS: No, you have to do this. You`re an analyst, Michael, and
you know that team.

STEELE: Right.

MATTHEWS: So tell me, where in the other team was there apology?
Just give me an example. One would be enough.

(CROSSTALK)

MATTHEWS: When has Obama apologized for America`s strength?

STEELE: Pardon me? I don`t understand what -- I didn`t hear what
your question is. What do you want to know?

MATTHEWS: Has -- give me an example of when President Obama
apologized for America`s strength.

STEELE: I mean, I think -- it`s not a question of a specific example
of when he apologized for the strength. I think it`s the over -- what he
was speaking to was the overall emphasis that this administration has
placed on foreign policy and the lack of focus in the sense that, you know,
we go to the U.N., we go to foreign soil.

And the president has a tone that is less than strong, in the view of
a lot of folks. And so I think that that`s the contrast that he was
setting up and trying to draw out today.

MATTHEWS: Oh!

STEELE: I mean, that`s clearly it, so...

MATTHEWS: In terms (ph) of a foundation for his argument is pretty
weak. Here`s Mitt Romney, by the way, to intimate -- for him to intimate
that Barack Obama is weak on foreign policy, or anything, for that matter,
is especially ironic, given Romney`s -- the way he`s buckled to just about
every right-wing constituency group there is. He bowed to the religious
right at CPAC this year with this famous line.

(BEGIN VIDEO CLIP)

ROMNEY: I was a severely Republican governor!

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

MATTHEWS: Romney bowed to Grover Norquist when he signed his tax
pledge, he signed and (ph) the other guy, which Norquist trumpeted on his
Web site. And on foreign policy, Romney`s buckled to the neocons. David
Sanger writes in "The New York Times," "Mr. Romney`s public comments have
usually rejected mainstream Republican orthodoxy. They sound more like the
talking points of the neo-conservatives, the Bolton faction, as insiders
call this group."

So I don`t know -- I know what you know, Joe, and it`s the same thing
I know. This guy has fallen into the hands of the grips of the neocons,
the same guys that took us into Iraq and now want to go into Iran. He`s
reading the script with all this talk about apology for our strength, it`s
like Marty Peretz talking about "muscular foreign policy," the metaphor of
war.

JOE CONASON, NATIONALMEMO.COM: This is someone who has no strong
convictions of his own, Chris, no experience in foreign policy. He is, you
know, going to the basket with the same move that Republicans have used for
the last 10 years or more -- Democrats are supposedly weak.

The president has a very easy response to that, which is, Tell it to
Osama bin Laden. You know, for that matter, tell it to Moammar Gadhafi.
You know, there`s no -- there`s no question that the president is willing
to use American power when that`s appropriate.

However, he is judicious in this, not sort of a crazy warmonger, not
somebody who thinks that everybody is a nail because he has a hammer.

And I think your point is very well taken. This is somebody with no
real experience in these matters and who`s...

MATTHEWS: Yes, but...

CONASON: ... entrusted himself to a group of people who were proven
wrong.

MATTHEWS: Right. Michael, how can you say, We went into Afghanistan,
then we went into Iraq again a second time under a second Bush. Now he`s
talking -- he`s trumpeting like a bugle boy, going into war with Iran.

STEELE: No, he`s not! Look...

MATTHEWS: What -- is this -- this is like a Pez dispenser!

STEELE: Look Chris...

(CROSSTALK)

MATTHEWS: Every time we elect a Republican...

STEELE: Oh, please!

MATTHEWS: ... he`s got a war in mind?

STEELE: No! Chris, stop it!

MATTHEWS: Why does he have wars in mind?

STEELE: Stop it. Stop it.

MATTHEWS: No, I`m not going to stop it...

(CROSSTALK)

STEELE: He`s not pushing war. You`re being absolutely...

MATTHEWS: He`s not?

STEELE: You`re being ridiculous right now.

MATTHEWS: Tell me what he`s talking about...

STEELE: And the fact -- the fact...

MATTHEWS: ... if it`s not war?

STEELE: ... of the matter is he`s laying out a very -- he`s laying
out a very strong view for himself and for others that this is the new
reality, that we`ve got to deal with it. As president of the United
States, he`s prepared -- yes, you know, the peace through strength. We can
sit down at the table.

But he`s also prepared to make sure that our allies know we stand
firmly with them, Israel, and that our enemies knows that we`re not going
to sit down and just, you know, have a face-to-face and do Kumbaya. And I
think that that`s at this stage very, very important for him to do.

To the point that was just made about experience...

MATTHEWS: OK.

STEELE: ... he has as much experience going into this as Barack Obama
had coming into the White House in 2009!

CONASON: But Barack Obama...

(CROSSTALK)

MATTHEWS: You`ve just ripped the scab off it, Michael. So if Israel
wants to go to war with Iran, we should go along with them.

STEELE: No, it`s not -- it`s not...

MATTHEWS: We should go along with...

STEELE: Chris...

MATTHEWS: Anybody who wants to start a war, we should be with them.

STEELE: No! Why are you making that leap, Chris?

MATTHEWS: Because that`s what he`s saying!

STEELE: No one`s talking about going to war! It`s -- just because I
sit down and set out a strong foreign policy doesn`t mean my next move is
war.

What I`m trying to do, and I think what the Romney people are saying
I`m trying to do is to lay out exactly where we stand on some of these
issues and contrast this administration and contrast to some of the
approaches that they`ve taken. That -- I think that`s only fair. And the
policies that he espouses will bear that out one way or the other.

MATTHEWS: Well, I just think...

CONASON: Actually...

MATTHEWS: Joe, I think the only thing...

CONASON: ... he`s laid out...

MATTHEWS: ... to the right of this president on foreign policy is a
war with Iran because he`s been upping the sanctions as tough as you can
get. If there`s some other step beyond the sanctions, I think it`s war.

CONASON: Well, somebody...

MATTHEWS: I think when you start talking about, We`re going to make
sure this doesn`t happen, we`re going to guarantee this...

STEELE: So Chris, would you stand by Israel?

(CROSSTALK)

CONASON: Somebody needs to...

(CROSSTALK)

MATTHEWS: You want to play politics, fine. I can play politics with
you, Michael.

CONASON: The truth is...

MATTHEWS: We will do what`s in our country`s best interests at all
times. Next. Go ahead, Joe.

CONASON: Yes, well, the truth is that he laid out nothing in terms of
a real policy. He laid out a lot of, you know, heavy rhetoric about how
much he loves America, which is great, and you know, how he`s going to be
super-strong, which is great, and he won`t cut the defense budget, no
matter how much waste there is in it, which isn`t so great.

But these are all the same old talking points that Karl Rove used, as
you can probably remember, Chris, in the 2002 mid-term, when they accused
the Democrats of wanting to, you know, send social workers to deal with al
Qaeda.

Well, you know, I think the president at this point has made it very
clear that is not the kind of president he is. And Romney is going to have
trouble showing that he has anything to offer in terms of foreign policy
that is stronger, or you know, more knowledgeable or useful than what this
president and his secretary of state have done. They`re as tough as
anybody around Mitt Romney.

MATTHEWS: That`s what I think. Let`s take a look at -- here`s Romney
went off script today, perhaps accidentally -- I think so accidentally --
in today`s speech. Pay close attention to the next to last word in this
sound bite. Let`s listen.

(BEGIN VIDEO CLIP)

ROMNEY: When growth is missing, government revenues fall, social
spending rises, and many in Washington look to cut defense spending as the
easy way out. That includes our (INAUDIBLE) president.

(END VIDEO CLIP)

MATTHEWS: Well, at least one major newspaper, "The Los Angeles Sun,"
is now reporting Romney called Barack Obama "our corrupt president." I
thought he said that. I don`t think he said it on purpose, but he did say
it. We could play this over and over again. I heard the word "corrupt."
I think sound experts will find that. What happened there, Michael, do you
think?

STEELE: I don`t know. I mean, at first, until you said corrupt, it
sounded like "current" to me. But I couldn`t -- I couldn`t really tell. I
mean, I don`t think that that`s something that Romney, obviously, would
intend to say and...

MATTHEWS: Well, let`s listen to it again.

(CROSSTALK)

MATTHEWS: Let`s listen to just the last part.

STEELE: Yes, let`s listen to it again because...

MATTHEWS: Everybody hears this -- different things.

(BEGIN VIDEO CLIP)

ROMNEY: When growth is missing, government revenues fall, social
spending rises, and many in Washington look to cut defense spending as the
easy way out. That includes our (INAUDIBLE) president.

(END VIDEO CLIP)

MATTHEWS: What did you hear then, Michael?

STEELE: Yes, it sounded a little bit more like corrupt. OK, so I
think...

MATTHEWS: What do you think he was up to?

STEELE: You know, I don`t -- I don`t really know. I wasn`t in the
man`s mind, so it`s hard to say. I don`t know if it was a slip. I don`t
know if he was thinking, you know, maybe, you know, some of the hot
rhetoric that`s been coming out lately about Solyndra and all of the
sweetheart deals that the administration made on the defense side...

MATTHEWS: OK, I opened your door for you there, sir. I gave you the
door. You walked right through it.

(CROSSTALK)

MATTHEWS: What did you hear there, Joe?

CONASON: Yes, I mean, I -- there was no context for him to use the
word "corrupt" in that phrase unless he was going to talk about corrupt
defense contractors, of whom there have been plenty. But that`s not where
he was going.

MATTHEWS: Everybody`s got a door open on this baby! So everybody
goes through the door on this one.

Here`s what I think. I read prompter a lot, and I`m about to do it
again, Michael, even though I know you very well. I`m going to read the
word "Michael Steele." Now, sometimes when you see the form of the word
"corrupt" and "current," they do look a lot sort of visually alike. I can
see where he made the mistake.

I hold nothing against him. I`m sure he`ll correct himself in the
days ahead. Anyway, thank you very much, Michael Steele. You`re dead
wrong on the big stuff, but on the little stuff, you`re really good.

(LAUGHTER)

MATTHEWS: Joe Conason, thank you.

CONASON: Thanks, Chris.

MATTHEWS: Coming up: The presidential race. President Obama remains
in the lead, but there are results in our new, brand-new today, NBC
News/"Wall Street Journal" poll that will keep both campaigns on their toes
and perhaps up at night.

Also, the Republican solution in search of a problem, voter photo ID
laws. Why did Pennsylvania Republicans pass a voter ID law when they can`t
cite a single case of voter fraud in the commonwealth? We`re going to see
if they can answer that.

Michael -- by the way, Michele Bachmann finally has company, if you`d
(ph) want it, Newt Gingrich rushes to defend her and her charge that
radical Muslims may have infiltrated the United States government.

Finally, did Mitt Romney really say this to Olympic athletes in 2002?

(BEGIN VIDEO CLIP)

ROMNEY: You Olympians, however, know that you didn`t get here solely
on your own power.

(END VIDEO CLIP)

MATTHEWS: Does Romney`s Olympic speech sound something like something
we`ve heard recently from President Obama? I`ll say it does. How to turn
a positive statement you yourself, Governor, said before into a dishonest
attack line. That`s coming up in the "Sideshow."

This is HARDBALL, place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Well, despite what you heard from the right, President
Obama`s health care overhaul will actually lower the country`s deficit.
That`s the word out today from the nonpartisan Congressional Budget Office.

Mitt Romney and the Republicans have insisted that health care reform
would raise the deficit by trillions, but the CBO says otherwise and that
Republican legislation to repeal health care would actually increase the
deficit by $109 billion.

Wow, what a bit of news that is. We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. We`ve got a new NBC News/"Wall
Street Journal" poll, and one of the headlines tonight is that the negative
campaigning by both sides is tarnishing the image of both President Obama
and Mitt Romney. So now the president is going positive, a least
temporarily. He`s making a new direct appeal to voters in an ad set to air
in nine swing states.

Chuck Todd is NBC`s chief White House correspondent and political
director, and Major Garrett is White House correspondent for "The National
Journal."

Gentlemen, let`s take a look at it. Let`s look at this new ad with
the president`s on camera appeal to voters. Let`s take a look.

(BEGIN VIDEO CLIP)

OBAMA: Over the next four months, you have a choice to make, not just
between two political parties or even two people. It`s a choice between
two very different plans for our country.

Governor Romney`s plan would cut taxes for the folks at the very top,
roll back regulations on big banks. And he says that if we do, our economy
will grow and everyone will benefit.

But you know what? We tried that top-down approach. It`s what caused
the mess in the first place. I believe the only way to create an economy
built to last is to strengthen the middle class, asking the wealthy to pay
a little more so we can pay down our debt in a balanced way, so that we can
afford to invest in education, manufacturing and home-grown American energy
for good middle class jobs.

Sometimes politics can seem very small. But the choice you face, it
couldn`t be bigger.

(END VIDEO CLIP)

MATTHEWS: Well, there`s the president, very positive. This is after
week after week of pounding Romney for all his problems with Bain Capital
and not releasing his tax returns. Why the soft sell?

CHUCK TODD, NBC WHITE HOUSE CORRESPONDENT/POLITICAL DIR.: And oh, by
the way, sometimes politics can seem small? We just had a campaign, your
campaign is -- is...

MATTHEWS: Well, is this good cop following the bad cop?

TODD: Absolutely. Look at our new poll. We have these issues of --
if you heard -- the information you`ve been hearing from the campaigns, has
it made you more favorable toward the candidates or less favorable...

(CROSSTALK)

MATTHEWS: ... the numbers. Here they are. Here they are...

TODD: Unbelievable!

MATTHEWS: ... 43 percent in a new poll, registered voters said that -
- what -- what -- it asked you, What have you heard lately or read in the
past weeks about Mitt Romney and what -- has it given you a less favorable
opinion or a better one? Well, 28 percent say it`s given them a more
favorable opinion of Mitt Romney. When asked -- and 44 percent -- is it --
43 percent...

(CROSSTALK)

MATTHEWS: And Obama`s basically the same thing, 27 percent favorable,
44 percent less favorable. So why is it even now? Why are we seeing an
indication Obama is doing a little better?

TODD: Because, well, we`re seeing -- first of all, obviously, this
has been a relentless negative attack on the Obama campaign on Romney.
They`ve been hitting and hitting him hard. It`s taken a toll on Romney.

But for the first time in our poll, what we`re seeing is it is taking
a toll on the president. His unfavorables have gone up to as high as we`ve
ever recorded them in our poll. And you`re seeing it in this. And you get
the feeling that they`ve seen the same numbers. They`ve been concerned
about it. And that ad to me seems an absolute response to...

MATTHEWS: Major Garrett...

(CROSSTALK)

MATTHEWS: Major, can an ad like that, which is very positive -- what
I wish most politicians do all the time, talk to us about what they`re
going to do and what the issues are.

MAJOR GARRET, "NATIONAL JOURNAL": What your choice is -- the
president believes and the campaign believes his likability is a huge
asset. And for the last month-and-a-half, as I wrote in the magazine last
week, the president`s been trading down his likability as if it were an
inexhaustible commodity. This is a sign that the White House and the
campaign believe it may not be inexhaustible and they better...

(CROSSTALK)

MATTHEWS: ... any time you trash your opponent, you hurt yourself a
little.

GARRETT: Yes, you hurt yourself a little bit. Now, there`s not a
great statistical difference in how much this is hurting both. It is
hurting them both, and that is obvious, if you look at those numbers. Not
like the president`s gaining a lot.

But Romney has less likability to begin with than the president does,
so it hurts him more. And listen to that ad -- big banks, big choices,
helping the wealthy. Those are key phraseologies that the focus groups...

MATTHEWS: OK...

GARRETT: ... tells the Obama campaign...

TODD: Right.

GARRETT: ... works in swing states...

TODD: Absolutely.

GARRETT: ... and works with the remaining few undecided.

MATTHEWS: It seems -- let me suggest an idea. It`s the president`s
tactics, what he`s done very effectively, nail Romney, point out who he is,
remind everybody of Bain, Bain, Bain, against the encroaching reality of
the bad economy.

TODD: No, and when you think about it, it`s stunning, right? We show
some -- we have these other numbers and I know we`re going to pop up -- and
I don`t mean to preview them, but the fact is, people are more pessimistic
about what the economy...

MATTHEWS: Well, let`s take...

(CROSSTALK)

MATTHEWS: This is the trouble. Let`s preview it. Let`s do it right
now. There could be trouble for the president when you see the bleak
outlook in our poll for the economy. Over the next 12 months -- look at
this -- just 27 percent of the people -- look at it up there -- think the
economy will improve over the next 12 months. That`s down from 37 -- 35
percent just last month. So look at that, an 8-point decline in our
optimism.

The number who think the economy will get worse is on the rise from
June (ph). It stands now at 25 percent. I feel this! I think it`s
because we`ve seen so many months this spring of the same unemployment
number...

TODD: Right.

MATTHEWS: ... or slightly lower.

(CROSSTALK)

TODD: Well, there`s that, but the president is defying gravity.

These numbers should be dragging him down, and they are not. Right?
Romney`s numbers are the ones either stagnant or going down. The president
is sort of holding steady. In our poll, he picked up a little bit. But
it`s -- so it just shows you that tactically the Obama campaign has
basically won the first half of the general election.

MATTHEWS: Yes.

TODD: These last 60 days have been about who was going to control the
biography of Mitt Romney. And guess what? The Obama campaign has
controlled it. Romney lost control of it and it has hurt.

MATTHEWS: But in the end -- Major, in the end, will the voter decide
they like or dislike this president`s performance or vote on Mitt Romney?

GARRETT: The Obama campaign wants to impeach the witness, meaning
Romney, before the convention and before the three debates. So whatever he
says that he can positively do to switch the economy around, people either
doubt or fundamentally disbelieve. This is all about planting doubt.

MATTHEWS: But won`t the debate performance by Romney, if you trash
him until then, offset it if he has a good night?

GARRETT: If he has a good night and if the numbers like these
continue. We have had three false optimistic springs in a row. I think
that is what really pulls at the sense of American optimism.

(CROSSTALK)

MATTHEWS: I think it`s the word disappointment.

(CROSSTALK)

MATTHEWS: It looked like we were pulling ourselves out of this thing.

(CROSSTALK)

GARRETT: Three different springs.

TODD: Right.

GARRETT: And people have now begun to internalize, either is this the
new normal, or really is this more the president`s fault and must we
change...

(CROSSTALK)

TODD: Tactically, the fact is can Romney afford to wait to the
debates to sort of pull even? John Kerry basically had to wait until the
debates to pull even, to fix his biography. OK. It got him even, but it
didn`t get him over the finish line.

TODD: And that`s the danger zone of Romney. This economy is much
worse than 2004.

(CROSSTALK)

MATTHEWS: So let`s take a look at this trouble for Romney in this new
NBC/"Wall Street Journal" poll.

(CROSSTALK)

MATTHEWS: When you look at views voters have of him, that`s the man
there, Romney, 35 percent hold a favorable view compared to 40 percent who
say no.

What`s wrong with Romney that leads to this? I have attitudes about
him, obviously, but what are the voters out there saying they don`t like
about him?

(CROSSTALK)

TODD: I don`t think they know him. I think he`s still a two-
dimensional figure.

(CROSSTALK)

TODD: I have gone through this. He`s got a...

(CROSSTALK)

TODD: No, I think that he`s been guarded about his story, he`s been
afraid to talk about Bain because it`s been -- it`s gotten turned into a
negative. He`s afraid to talk about the Massachusetts record because the
health care causes some potential problems with the base.

And...

(CROSSTALK)

MATTHEWS: He won`t show us his tax returns.

TODD: He doesn`t talk about his own faith, which is something that I
think personally is the most grounding value that he has and he`s afraid to
talk about it because he`s not sure how well Mormonism plays.

So I think you take all three of these stories that he could be
telling, as sort of a positive, the way any presidential candidate would
take any one of those three biographies...

(CROSSTALK)

MATTHEWS: It`s like a job application.

TODD: ... And instead he`s guarded about it. I think it`s turned him
into a two-dimensional figure and he`s let Obama campaign define him.

MATTHEWS: In other words, he doesn`t -- he can`t sell religion. We
stay out of that in this department, obviously. He has a pretty family.

(CROSSTALK)

GARRETT: And most voters tells pollsters they are not all that
curious about it.

(CROSSTALK)

MATTHEWS: His family looks pretty much immaculate. We don`t have to
talk about that. His business career, we have been talking about it. He
doesn`t want to talk about Massachusetts. When is he going to spring the
Olympics and make that his big selling card?

GARRETT: Well, that will be part of the trip to London. That will be
-- there will be an Olympic resonance there that he`s going to try to play
off when he goes overseas.

MATTHEWS: Is that big enough for the presidency?

(CROSSTALK)

GARRETT: It`s not nothing, but it`s not big enough.

And I agree with Chuck in this sense. It`s not that there`s a nullity
behind the Mitt Romney narrative. It`s just that he lacks a sense of sort
of internal positivism about it. He`s not nearly as positive and not
nearly as persuasive about his story and his approach to the presidency as
his surrogates are.

I wrote in "National Journal" months ago the fundamental flaw or one
of the fundamental flaws I saw in the Romney campaign is his surrogates
were better advocates than he was.

MATTHEWS: OK. Can he confect a personality?

I saw his VFW speech today? I thought it was a good, tough foreign
policy speech.

GARRETT: It was.

(CROSSTALK)

MATTHEWS: It was very jingoistic, very neocon, don`t apologize, very
hard-line. But he didn`t write that speech. He didn`t write that speech.

(CROSSTALK)

TODD: I don`t know what the policy was. I don`t know what the policy
was.

MATTHEWS: But can he read the words his advisers give to him and
convince the people he does have a personality, a political identity that
he hasn`t been able to sell in the debates?

TODD: Well, look, I think he has to. I think that ultimately that
the fundamentals of this election should be playing in his favor.

I actually think you look at these numbers on the economy and I wonder
how is the president leading? Romney should be ahead by now. To me, the
challenger should be ahead under these economic circumstances, and they are
not. And it`s because there`s something stopping the voter on Romney, a
values connection, something.

And I think it`s -- look, I think it all go to the hits he`s been
taking on his wealth. OK? Sometimes it`s tax return, sometimes it`s Bain.
But it`s painted him as out of touch with the middle class.

(CROSSTALK)

MATTHEWS: You sound like me 12 years ago talking about Al Gore.
There was something about Al Gore that was a wall, that people said...

TODD: It just feels like a wall.

(CROSSTALK)

MATTHEWS: ... I don`t go for that guy.

GARRETT: But the different economy in 2000, different economy in
2004. The metaphor that Chuck has is sort of like there`s a cork in the
bottle that`s keeping Romney from rising.

MATTHEWS: Yes.

GARRETT: The pressure inside that bottle is either going to be
Romney, he`s going to turn that around, or it`s going to the economy that
will blow the lid and it won`t matter what Romney is.

If he`s acceptable, he will get elected.

MATTHEWS: We have got to find the right metaphor around here.

(LAUGHTER)

TODD: I think we`re all coming up with you.

MATTHEWS: I think we`re in search of one.

(CROSSTALK)

MATTHEWS: We got to get a metaphor for Romney. He`s a hard one to
match up with.

(LAUGHTER)

MATTHEWS: Anyway, thank you, Chuck Todd. Thank you, Major Garrett,
the two best.

Up next: the making of a misleading campaign ad -- how Mitt Romney
twisted President Obama`s words and how the Obama campaign could easily do
the same thing with something Romney himself once said.

And this is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Back to HARDBALL. This is the "Sideshow" and a special
one, the making of a misleading campaign ad.

Team Romney has been taking heat for twisting a piece of President
Obama`s speech in Virginia into a negative campaign ad. Here is what the
president actually said in that speech.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If you have been
successful, you didn`t get there on your own.

(CHEERING AND APPLAUSE)

OBAMA: You didn`t get there on your own. I`m always struck by people
who think, well, it must be because I was just so smart.

There are a lot of smart people out there. It must be because I
worked harder than everybody else. Let me tell you something, there are a
whole bunch of hardworking people out there.

(CHEERING AND APPLAUSE)

OBAMA: If you were successful, somebody along the line gave you some
help.

(CHEERING AND APPLAUSE)

OBAMA: There was a great teacher somewhere in your life.

(CHEERING AND APPLAUSE)

OBAMA: Somebody helped to create this unbelievable American system
that we have that allowed you to thrive. Somebody invested in roads and
bridges. If you have got a business, that -- you didn`t build that.
Somebody else made that happen.

The Internet didn`t get invented on its own. Government research
created the Internet, so then all the companies could make money off the
Internet.

(CHEERING AND APPLAUSE)

OBAMA: The point is, is that, when we succeed, we succeed because of
our individual initiative, but also because we do things together.

(END VIDEO CLIP)

MATTHEWS: So roads and bridges help business survive. Well, that
became this:

(BEGIN VIDEO CLIP, ROMNEY CAMPAIGN AD)

OBAMA: If you have been successful, you didn`t get there on your
own. If you have got a business, that -- you didn`t build that. Somebody
else made that happen.

JACK GILCHRIST, OWNER, GILCHRIST METAL FABRICATING COMPANY: My
father`s hands didn`t build this company? My hands didn`t build this
company? Through hard work and a little bit of luck, we built this
business. Why are you demonizing us for it?

It`s time we had somebody who believes in us, someone who believes
achievement should be rewarded, not punished.

(END VIDEO CLIP)

MATTHEWS: So, there the president was saying in that speech in
Virginia that you need to have things like roads and bridges to make some
money, to even organize a business, to have sewers. You need it all,
water. Somebody has got to put that in for you to open up a business.

But the Republican trash talkers said he was trashing them. Anyway,
there you have it.

But get this. It turns out we can craft something similar with Mitt
Romney as our leading man. Let`s rewind to a speech from Mitt Romney
during the 2002 Winter Olympics` open ceremonies.

(BEGIN VIDEO CLIP, 2002)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: You Olympians, however, know
that you didn`t get here solely on your own power. For most of you, loving
parents, sisters or brothers encouraged your hopes, coaches guided,
communities built venues and organized competitions.

All Olympians stand on the shoulders of those who lifted them. We
have already cheered the Olympians. Let`s also cheer the parents, coaches
and communities.

(CHEERING AND APPLAUSE)

ROMNEY: All right!

(END VIDEO CLIP)

MATTHEWS: So, how could someone turn Mitt Romney`s inspirational call
to recognize the people who have helped those athletes on the path to
success into an attack on him for refusing to give credit to the individual
competitors? Roll the tape.

(BEGIN VIDEO CLIP)

ROMNEY: You Olympians, however, know that you didn`t get here solely
on your own power.

(END VIDEO CLIP)

MATTHEWS: Well, that`s how it`s done. Suddenly, it sounds like the
athletes owe part of the medals they are competing for to somebody else.

Up next: voting rights and wrongs. Republicans have been pushing
strict voting I.D. laws, and now the Department of Justice is investigating
whether Pennsylvania`s new voter I.D. law discriminates against minorities.
I think it does.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

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

Another triple-digit sell-off. The Dow loses 104, the S&P 500 is off
12, the Nasdaq lower by 27 points. Cisco shares were punished after the
company said it would cut about 1,300 jobs as economic uncertainty weighs
on its business. UPS was another loser today, after its earnings
disappointed, shares sliding more than 4 percent.

And a big miss for Apple. Revenue and earnings fell short of
estimates, sending shares lower in after-hours trading.

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

MATTHEWS: Welcome back to HARDBALL.

For months, Democrats have argued that Republican-inspired voter I.D.
laws are a solution in search of a problem, that there`s no voter fraud and
that the laws themselves are really designed to tamp down the Democratic
vote.

Now in Pennsylvania, the state of justice -- the Department of Justice
is launching an investigation into whether the state`s new law
discriminates against minorities. That`s the United States Justice
Department. It`s the first time the DOJ has publicly gotten involved with
a state whose voting rules are not covered by the 1965 Voting Rights Act.
That is a state with a history of disenfranchising minorities.

Well, tomorrow marks the first day of a separate state trial testing
the law`s legality under Pennsylvania`s Constitution.

With me now are MSNBC political analyst Ed Rendell, former governor of
Pennsylvania, and Eugene Robinson, Pulitzer Prize-winning columnist for
"The Washington Post."

Gentlemen, I want you to watch. A month ago, Pennsylvania House
Majority Leader -- and he`s a Republican -- Mike Turzai gave Democrats
their aha moment, their smoking gun, if you will.

While listing Republican accomplishments, listen to what he suggests
is the real purpose of the new voter I.D. law.

(BEGIN VIDEO CLIP)

MIKE TURZAI (R), PENNSYLVANIA STATEHOUSE MAJORITY LEADER: We are
focused on making sure that we meet our obligations that we have talked
about for years. Pro-Second Amendment, the Castle Doctrine, it is done.
First pro-life legislation, abortion facility regulations in 22 years,
done. Voter I.D., which is going to allow Governor Romney to win the state
of Pennsylvania, done.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

MATTHEWS: Well, there you have got it. I mean, it`s like one of
those "Perry Mason" moments, Governor, where the guy, I did it, I did it, I
can`t hold it back anymore.

(LAUGHTER)

MATTHEWS: They did this to screw the Democratic voter.

ED RENDELL, MSNBC POLITICAL ANALYST: Case closed. Any pretense that
they were doing this to prevent voter fraud went out the window.

There is no voter fraud. I was governor for eight years. We didn`t
have 10 cases of someone fraudulently voting using someone else`s identity,
less than two a year, less than two a year. The sole reason for this was
because the Democrats have carried Pennsylvania five straight presidential
elections in a row, because 9.2 percent -- according to Republican
secretary of state, 9.2 percent of Pennsylvanians don`t have photo I.D.

They are heavily minority and older. And they are heavily Democratic
voters in traditional Democratic areas. And if just one-tenth of those
voters don`t show up because -- or are disqualified from voting, that could
be, in a close election, dispositive.

MATTHEWS: Well, Gene, the governor of Pennsylvania, who is a
Republican, is behind a lot of this stuff. He said studies show that 99
percent of Pennsylvanians, eligible voters, already have acceptable photo
I.D.s.

And here come the facts, however.

EUGENE ROBINSON, MSNBC POLITICAL ANALYST: Right.

MATTHEWS: Well, 750,000 eligible voters in that state, Pennsylvania,
my old state, do not have state-issued I.D. cards. That`s 9 percent of the
electorate and 25 percent of the African-American vote, they figure.

ROBINSON: Yes. So, it`s not 99 percent.

And, in fact, this has a potential for disenfranchising hundreds of
thousands of voters. It can make the difference in Pennsylvania. And
there is no problem. There is no voter fraud.

MATTHEWS: I know. OK.

ROBINSON: The state admits there is no voter fraud.

MATTHEWS: OK.

I`m looking at where people don`t have the I.D. card because they
don`t drive cars because they are city people.

Governor Rendell, my friend, Ed Rendell, it`s exactly where you got
your majorities. It`s Pennsylvania -- it`s Philadelphia, it`s Pittsburgh,
it`s the urban areas...

RENDELL: Sure.

MATTHEWS: ... where the people who rely on public transportation --
you can see the map there, but it`s the blue, the Democratic areas, where
they rely on public transportation, they live in row houses, they don`t
have cars, they`re not a parking space to own cars.

And they are the people that don`t have driver`s licenses. Do you
think the guys in Pennsylvania, in Harrisburg, the Republicans, figured
this out?

RENDELL: Well, sure, it`s obvious.

And, also, we`re the third oldest state in the union, Chris. And that
means we have a lot of senior citizens who have never owned a car, never
driven a car, don`t fly, have no reason to have photo I.D. And it`s easy
to say, well, you can just go to a PennDOT motor vehicle office and get
your voter I.D.

In many cases those offices, they are by car 15 or 20 minutes away. Most
people don`t have a car, don`t have anybody to take them. By public
transportation might take an hour and a half in the heat in the summer to
get to those places.

And the worst thing is, I bet, Chris, 70 percent of people without
photo ID are not aware of this law. They are going to show up on Election
Day and be told they can`t vote.

CHRIS MATTHEWS, HOST: OK. Well, here`s a horror story, Gene, for
America, a horror story. Supposed we have an election that turns on
Pennsylvania. Pennsylvania is a conservative state on cultural issues.
They may well go the other way, they maybe surprisingly go Republican.

If that happens and we have an election that goes to, say, Romney,
because of Pennsylvania, and thousands of people, maybe tens of thousands,
maybe hundreds of thousands were stopped at the voting booth, they will get
the TV cameras there, a lot of them African-Americans, what kind of country
are we going to be in, because it takes seven days to turn a provisional
ballot, if you cast one, into a real one.

EUGENE ROBINSON, WASHINGTON POST: Well, it`s going to be a mess. I
mean, you know, as you mentioned, there`s a state lawsuit going on now.
The Justice Department is investigating. I hope that this gets resolved
and gets resolved in some acceptable way before the election, because if
that happens, we`re going to have a mess. We`re going to have an absolute
mess.

MATTHEWS: I think Florida is going to look neat.

Governor, let me ask you about the Pennsylvania mentality here. Do
you think the Republicans sat down and planned this, that this might give
them Pennsylvania?

RENDELL: Oh, absolutely. They had two efforts, Chris. This and
they were going to change the way we counted electoral votes by
congressional district. That never got off the drawing board in the
legislature. That failed.

So, this was the one that was going to give them the election. It`s
really at a time when we should be doing everything we can to increase
voter participation, this is embarrassing, it`s shameful.

MATTHEWS: Here is the facts now, just to nail this down here. This
is the stipulation agreement that was signed by both sides in this suit.
Here you`re going to see basically the people push this. Republicans say
they are trying to stop voter fraud. Even they admit they can`t identify
any.

According to this stipulation agreement, from both sides in this
suit, signed by both sides, the state of Pennsylvania and the plaintiff`s
lawyers in the ACLU suit, quote, "There have been no investigations or
prosecutions of in-person voting fraud in Pennsylvania." This is signed by
people pushing the law and going against it.

"Respondents," that is the state, "will not offer any evidence that
in-person voter fraud has occurred in Pennsylvania or that in-person voter
fraud is likely to occur in the November election."

Gene, it`s on paper here. They signed it up front. We can`t point
to a single case of voter fraud.

ROBINSON: Right. No investigations, no prosecutions, no indication
that it ever happened.

MATTHEWS: But we`re passing a law -- they passed the law.

ROBINSON: Well, they passed a law. You know, I wrote that it`s a
solution in search of a problem. But really the problem was that
Pennsylvania, as Governor Rendell said, has gone Democratic five times in a
row. That`s the problem and this is the solution.

MATTHEWS: Before the election, I recommend big street corner rallies
like you, Governor, used to do in west Philly, in north Philly, and all
these town neighborhoods, especially north Philly, a place where people
live in row houses, get out there, get a committeeman, get out there and
really spread the word.

If you`re watching the show, you should look and see do I have a
voter ID card made by the government or college or our military I can use
to vote with. If you don`t know if it`s good or not call your
committeeman, Democrat or Republican, and find out if it`s a good enough
document. You ought to vote if you`re watching this show. I want to you
vote.

Thank you, Governor Ed Rendell. And thank you, Eugene Robinson.

RENDELL: Thanks, Chris.

MATTHEWS: And up next: here is one Republican standing by Michele
Bachmann`s outrageous attack on Muslim Americans. Would you believe it?
Newt Gingrich. That`s ahead.

And this HARDBALL -- birds of a feather, you know what I mean?
Gingrich and Palin -- I`m sorry, and Bachmann.

This is HARDBALL, a place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Well, another milestone in her recovery of former U.S.
Congresswoman Gabrielle Giffords. Giffords is making her first overseas
trip since the shooting that nearly took her life. The former
congresswoman and her husband, astronaut Mark Kelly rode a cable car high
into the French Alps. Here they are.

Giffords resigned her seat in Congress early this year as she
continues to focus on her recovery.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: We`re back.

Add Newt Gingrich to the list of Republicans who want to find out if
the Muslim Brotherhood has influence over the U.S. government. In an
interview with Politico`s Jim Vandehei and Mike Allen today, he refused to
denounce U.S. Congresswoman Michele Bachmann`s call for such an
investigation or for her request to look at the top Hillary aide Huma
Abedin.

Here he is Newt.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Do you believe against -- do you agree with the
allegations Hillary Clinton`s top aide?

NEWT GINGRICH (R), FORMER PRESIDENTIAL CANDIDATE: They weren`t
allegations. It was a question.

UNIDENTIFIED MALE: A question, not a serious question.

UNIDENTIFIED MALE: Request for investigation.

GINGRICH: The question ought to be asked across the board, what`s
the role of the Muslim Brotherhood, what are its various networks and to
what degree does it now influence the government of the United States?

UNIDENTIFIED MALE: Do you think the Muslim Brotherhood has
infiltrated the U.S. government? I mean, that`s the core of their
allegation?

GINGRICH: I think it`s worth knowing.

UNIDENTIFIED MALE: Everything is worth knowing.

GINGRICH: Well, I think it tells you something about the level of
hysteria attacking these five members of Congress.

UNIDENTIFIED MALE: The attacks are coming from your own party.

GINGRICH: I think those folks are wrong. I think they will ask the
question what is it they are afraid of learning?

(END VIDEO CLIP)

GINGRICH: Anyway, it`s not just Gingrich. Rush Limbaugh is also
coming to Bachmann`s defense. Is there such a thing as too far right
these? I doubt it.

Ron Reagan is an MSNBC political analyst and author of "My Father at
100." And Erin McPike covers the campaign for "Real Clear Politics."

Let me start with you, Ron. It does seem to me when you begin a
McCarthy-ite investigation with the presumption they have something to
hide, have you to tear it out of them like being an agent of the Muslim
Brotherhood, and it`s a top aide to Hillary Clinton.

Look, you can argue about Hillary Clinton`s points of view but nobody
lacks confidence in her competence that should have somebody sitting right
next to her in every plane rides who`s working for the Arab evil ones and
someone influencing her, and she wouldn`t know about it.

RON REAGAN, MSNBC POLITICAL ANALYST: Newt Gingrich was being it was
a portrait of disingenuousness there. The idea that they were merely
asking a question about Huma Abedin? No, they weren`t. They gave this
connection, this sort of specious connection drawn back to her father and
her great uncle and her third cousin or somebody who supposedly was
connected to a group that might have been connected to another group and
all those kinds of things. They were making an accusation about Huma
Abedin.

You know, what is that about? If they weren`t making an accusation
about her, what was her name doing in that letter? How many thousands of
Muslims who worked in the U.S. government right now, what are they saying?

There`s a guy named Wes Anderson (ph) I believe it is. He`s out in
Arizona. I might have the name wrong. He`s the head of one of the Tea
Party groups out there.

He`s going after McCain now, wants to defeat McCain in the next
election or may even recall him. I`m not sure what his fantasy is.

But his point of view is that any Muslim, any Muslim anywhere in the
United States is an enemy of America, period.

(CROSSTALK)

REAGAN: Right. So, who is Michele Bachmann appealing to? Those
sorts of people and that is a big chunk of the Republican Party.

MATTHEW: The guy Wes Anderson is a movie director who`s really quite
--

(CROSSTALK)

REAGAN: My apologies to --

MATTHEWS: "Moonrise Kingdom," I love that movie.

Anyway, on his radio show yesterday, Rush Limbaugh came to Bachmann`s
defense. This is birds of a feather. Let`s listen.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: Bachmann`s inquiry is
justified. There`s no reason to tar and feather her. It is a legitimate
question to want to know if one of Hillary Clinton`s top aides poses a
national security threat because of her parents` close ties to Muslim
Brotherhood. That`s all they are asking and McCain and the Republican
establishment in the Senate went to the floor to trash Bachmann.

And one of the things -- I just add, I think that will is an effort
by the Republican establishment to take Bachmann out. They`re winding up
to campaign against her in a re-election effort. But that`s another
subject.

(END VIDEO CLIP)

MATTHEWS: Se the world we are living in here, Erin?

Rush Limbaugh is going after the Republican establishment as too far
left. So guys like John McCain and Lindsey Graham and people like that are
too far left. And to have to launch the inspector general investigation of
someone`s -- loyalty which is what they are talking about here -- loyalty
to this country, it`s just a casual open question, that`s all.

Would anybody I know like to be investigated by the United States
government for whether they are loyal or not? Go ahead. Your thoughts.
You are reporting on this thing.

ERIN MCPIKE, REAL CLEAR POLITICS: Yes. OK. First of all, as far as
Huma is concerned, she is Hillary Clinton`s deputy chief of staff. Now,
people don`t understand Washington parlance exactly, but she`s not making
policy. I mean, deputy chief of staff in Washington is a political --

(CROSSTALK)

MATTHEWS: What -- you think that she`s fair became now?

MCPIKE: No.

MATTHEWS: Or Bachmann`s latest event, she`s going to investigate
everybody?

MCPIKE: No, I don`t. That`s why this entire controversy is so
strange. Why go after somebody in this position that`s for closeness to
Clinton? It is a strange question.

MATTHEWS: Well, she is close to Clinton, very close. She goes on an
airplane and sitting next to each other. She is great. She`s been loyal
to her husband.

MCPIKE: That`s my point. She`s not making policy.

MATTHEWS: She`s a loyalist.

MCPIKE: She -- I agree that she`s loyal. What I`m saying is she`s
not making policy so it`s a very strange question to be asking in the first
place. And the whole -- what Rush Limbaugh is saying that the Republican
establishment is going after her because she`s diverting attention from the
primary agenda which is talking about President Obama and the economy.

MATTHEWS: You know what this reminds me of, Ron? It reminds me of
American history. The French and Indian war, very well-tailored and very
well-perfumed French officers will have to explain the behavior of their
allies, their crazy (INAUDIBLE) or whatever allies that are taking scalps
in where. These people are embarrassing the Republican Party. But they
want their votes.

Ron Reagan, thank you. Thank you, Erin.

REAGAN: Thank you.

MATTHEWS: And I do not offend Indians. I like American Indians.
They were here first. But these guys are the worst.

When we return, let me finish with why we shouldn`t fall for that old
neocon line we heard today from -- of all people -- Mitt Romney.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Let me finish mitt with this: Mitt Romney`s running for
president using the words and speeches of the same people who got us into
Iraq, the neocons.

You can hear them in Romney`s speech today. All this talk of not
apologizing for America`s power, they have a thing about that phrase. We
should never apologize for our power.

Of course, it`s all a straw man. No one apologizes for America`s
power. Yes, we rethink some of our actions like not getting into World War
II sooner, like escalating the American war in Vietnam, like the deceit and
conning and propaganda that took us into Iraq nine years ago.

Yes, we dare to rethink and learn from our experiences. Yes, we
wonder if the military solution was the right one. We, many of us believe,
mistakes were made that leaders told us untruths, we were sold a reality
that was not a reality.

Yes, all this is true. And the world outside of stupid politics,
it`s called growing up. I don`t know how someone like Mitt Romney who
didn`t serve in Vietnam doesn`t feel in his conscience the need to revisit
that war, to figure out what he thinks was done right, what was done wrong.

That`s not apologizing for America`s power. It`s understanding when
and where and how to use it.

Here`s what I think. I think the horror of war is so vital to
realize to take our own minds and hearts that we don`t send men and women
into battle until the leaders fully and fairly decide that it is the only
solution. I trust President Obama to make that decision.

Today`s words by Mitt Romney do not give me that confidence. The
fact they were transparently written by the same neocons who sold us the
war in Iraq makes me all the less certain of him.

Fool me once, shame on you. Fool me twice, shame on me.

Any American who bought the lies and corrupt thinking that took us
into Iraq must hear in Romney`s words today the worst memories of Iraq and
WMD and aluminum tubes and Niger yellow cake and Scooter Libby and all the
rest of this terrible dishonest history.

If anyone should apologize to America, it is the neocons who wrote
Romney`s speech.

And 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.
END

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