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updated 7/30/2012 10:49:36 AM ET 2012-07-30T14:49:36

Guests: Simon Marks, Chris Ship, Scott Helman, C. Welton Gaddy, Michelle Goldberg

CHRIS MATTHEWS, HOST: London bridge is falling down.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews up in New York.

"Let Me Start" tonight with the latest Romney gaffe. Did you hear the
one about the big-shot American who visits other countries and gets
everybody mad, about the guy who complains about the French waiters, who
says it smells in Venice? I could go on.

But what about that guy who just told the British people that the
London Olympics look a bit dodgy, who got everybody over there so angry at
him and us that they`re more united than ever as a country?

Who is this clod, you must be asking. Well, his name is Mitt Romney,
and he has gotten the worse press in London since George W. The screeching
from Fleet Street tells it all. "Mitt the twit" heckled "The Sun." "Who
invited party-pooper Romney?" asked "The Daily Mail."

So how should we react to this kerfuffle? It seems this man who has
trouble speaking earthling here at home, who talks of flying on an
aircraft, of marvelous budgets, of being a severe conservative can be just
as awkward when acting the diplomat abroad.

Here`s a question. If a gentleman is someone who doesn`t insult
someone unintentionally, then Mitt Romney, with all his posh schooling, has
not been very much of a gentleman this week. And if this insult of the
London Olympics, calling the preparations "disconcerting," was intentional,
what`s this guy up to? I thought he wanted to improve Anglo-American
relations, not trash them.

Well, let`s hear from two British reporters who are covering this
story, Simon Marks of Feature Story News and Chris Ship of ITV.

Let me go to Simon. I just want -- just tell me what is going on
here. Why are the American people and their special relations with the
Brits, the British, causing trouble? And why are the British just jumping
on this guy? I don`t know how to describe it. How do you describe it?

SIMON MARKS, FEATURE STORY NEWS: Well, Chris, there`s no question
that there is no -- nothing the British press corps enjoys more than having
some fresh meat to savage, particularly if that fresh meat happens to be a
presidential candidate from the United States.

I think Mitt Romney, and equally his team, misread some of the very
British tea leaves that existed going into this trip to London. There had
been an enormous amount of moaning and whining about the Olympics by
ordinary Brits over the course of the last several weeks. But the mayor of
London, Boris Johnson, himself a conservative, said to everybody about a
week ago, It`s time to put a sock in it.

MATTHEWS: I love that!

MARKS: Largely, Brits listened to that. But Mitt did not.

MATTHEWS: Well, we love Boris Johnson over here. I think I look like
the guy anyway, so we like him a lot. But let me ask you, Chris, what do
you think`s going on here? Is it just you`re allowed to dump on your
country or its problems at home, but don`t come in from somewhere else and
start doing it?

CHRIS SHIP, ITV NEWS: I think that`s exactly right, Chris. You know,
us British, we`re not very good at positivity. We`ve been whingeing -- as
you say, whining -- about the Olympics for several weeks now. You`ve heard
about the problems with the security. The taxi drivers, the cab drivers
have been moaning about the Olympic route network. You get them in every
Olympics, of course.

But there`s nothing quite like somebody coming from overseas, telling
us that we`re not behind our Olympics, for Brits to really get behind it.
And I think since Mitt Romney rocked (ph) up a couple of days ago, you can
almost see the Brits put their arms around the Olympic stadium and say, You
know what? We are behind this.

And I`ve just been watching some of the opening ceremonies secretly,
of course, here, because you can`t see it for a couple of hours yet. And
you know, everyone is behind the games, and it`s looking good.

MATTHEWS: Well, he still looks stiff as hell walking around number 10
there. It`s a strange way the guy walks. But I want to know the politics
of this. Simon, we`ll get to the pictures and all the quotes in a second.
But here`s the point. I thought Cameron would like him. Aren`t they
fellow Tories?

MARKS: I think that is exactly the point. There`s been a tremendous
strain in the relationship between Britain`s Conservative Party and the
Republican Party here in the United States going back over the last 10
years, since George W. Bush forged a very close relationship with former
British prime minister Tony Blair, with whom he was not an ideological
soulmate.

Here was an opportunity for Mitt Romney and David Cameron, peas in a
pod politically, both conservatives, to try and establish some kind of
alliance that could take them both forward. And instead, Mitt Romney has
found himself causing David Cameron to come out and push back on this issue
of the Olympics because, as Chris Ship knows better, I think, than any of
us, David Cameron`s own credibility is at stake over the success or failure
of these Olympic games.

MATTHEWS: Well, let`s look at Romney trying to clean up the mess.
But I do want to remind our viewers here in the States of what David
Cameron did to take a shot at him in the morning. Let`s take a look at
this morning today on the "TODAY" show, our big morning show here.

Mitt Romney tried to end the static he had stirred up with a "NIGHTLY
NEWS" interview he`d done with Brian Williams. He did it by complimenting
now -- he`s changed his tune -- he has switched, by the way, in the past on
just about everything.

Here he is switching on the British Olympics. Here he is, Mitt
Romney, this morning.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R-MA), FMR. GOV., PRESIDENTIAL CANDIDATE: After being
here a couple of days, it looks to me like London is ready. And of course,
it is hard to put on games in a major metropolitan area.

(END VIDEO CLIP)

MATTHEWS: And here he is with his original comment about trying to --
well, causing trouble. Here he is the first time out. Let`s listen.

(BEGIN VIDEO CLIP)

BRIAN WILLIAMS, ANCHOR, "NBC NIGHTLY NEWS": In the short time you`ve
been here in London, do they look ready to your experienced eye?

ROMNEY: You know, it`s hard to know just how well it will turn out --
will turn out. There are a few things that were disconcerting.

(END VIDEO CLIP)

MATTHEWS: You know -- you know, I have to tell you, Chris, that this
is wonderful Romneyism because, you know, it`s taken us a while to build up
this wonderful catalog of switcheroos by the guy. Here he is doing it in
about 24 hours, going from one side to the other -- "disconcerting" to, It
looks like it`s got it together here.

SHIP: Yes, I think it`s a big switcheroo. And it was huge story for
the British press. They had a lot of fun with it. You`ve just been
running some of the headlines, "Mitt the twit" or "Mr. Nowhere" -- that
apparent reference to him being in charge of the Salt Lake City games in
2002.

Now, that was quite a mild rebuke, I think, from the prime minister,
David Cameron, when he mentioned that. I saw the response last night from
Salt Lake City. They weren`t particularly very complimentary about Mr.
Cameron. And they said, Look, if he wants a map of where the middle of
nowhere is, well, he can come and get one from us.

But really, this was a bit of a faux pas or political difficulty for
him because at the end of the day, these two men should get on very well.

MATTHEWS: Yes, well, not so far.

SHIP: As you just mentioned, David Cameron is a Conservative prime
minister, and yet the European brand of conservatism is a lot more liberal
than the one you`ve got here.

MATTHEWS: Well, we`re eating it up here at home, as well. Here`s
British prime minister Cameron putting in the shiv here. He made clear he
took issue with Romney`s original uncertainty that London could handle the
games. Let`s listen.

(BEGIN VIDEO CLIP)

DAVID CAMERON, BRITISH PRIME MINISTER: I think we`ll show the whole
world not just that we come together as the United Kingdom, but also, we`re
extremely good at welcoming people from across the world. So I`ll
obviously make those points to Mitt Romney.

We are holding an Olympic games in one of the busiest, most active,
bustling cities anywhere in the world. And of course, it`s easier if you
hold an Olympic games in the middle of nowhere.

(END VIDEO CLIP)

MATTHEWS: I just love that tape, the way he lowered his voice -- "Of
course, it`s easy" when you`re handling them in the middle of nowhere, Salt
Lake City.

By the way, here`s the great Boris Johnson piling on. Let`s listen.
He is the mayor of London, of course.

(BEGIN VIDEO CLIP)

BORIS JOHNSON, LONDON MAYOR: I hear there`s a guy -- there`s a guy
called Mitt Romney who wants to know whether we`re ready. He wants to know
whether we`re ready. Are we ready?

(CHEERS)

JOHNSON: Are we ready? Yes, we are!

(END VIDEO CLIP)

MATTHEWS: Well, as I said, the British tabloids, of course, pounced
on, from Fleet Street. MSNBC`s Willie Geist, who`s+ in London for the
Olympic coverage, has the best of them. Let`s listen to Willie.

(BEGIN VIDEO CLIP)

WILLIE GEIST, CO-HOST, "MORNING JOE": The covers are all, of course,
about the opening ceremony. But inside "The Daily Mail" -- "Who invited
party-pooper Romney?"

UNIDENTIFIED FEMALE: Oh, no!

(LAUGHTER)

GEIST: That`s the -- that`s the headline there. Then another of the
newspapers, "The London Times," says "Nowhere man Romney loses his way with
gaffe about the games."

(END VIDEO CLIP)

MATTHEWS: Let`s start over here again, Simon, and talk about the
special relationship. I know that somebody way back when, in the Obama
administration, unfortunately, said, What special relationship? I`ve
always treasured -- I`m a Churchill nut. We like Churchill more than you
do over there.

This relationship -- I`ve always liked it whenever the Brits --
British people like an American movie, for example. You know, I saw the
"Blades of Glory" over there a couple years ago with my daughter, and I
loved laughing with the Brits at an American movie, something ludicrous
with Will Ferrell.

What is our relationship? Would you start with this, Simon? Here`s a
tricky one. What is the relationship between the old country and the new
world right now?

MARKS: Well, look, it`s absolutely clear, Chris, that there is a
special relationship. It`s a special relationship that was forged back in
1939 with the alliance during the Second World War. It`s a special
relationship that has thrived in recent times, even when you have had
political leaders who do not see eye to eye ideologically, like George W.
Bush and Tony Blair.

And it`s a special relationship that David Cameron and Barack Obama --
again, not ideological soulmates -- have managed to continue taking to a
fresh level.

What is so troubling about the events of the last couple of days is
that Mitt Romney, the man who hopes to be president, hopes to be doing
business with David Cameron, perhaps even with Boris Johnson, a man who has
national political ambitions in the U.K. -- this has put a strain in that
relationship and made it difficult, on the basis of what we`ve seen, to
imagine how they can go forward and establish a productive working
relationship unless there`s some kind of do-over further down the line.

MATTHEWS: You know, Chris, Churchill, again, my hero, said that we
are two peoples divided by a common language. In the case -- in the case
of Mitt Romney, no one speaks the language he speaks! So how do we explain
this?

You know, we`ve been covering his strange use of the language for
months now, saying, I read the newspaper when I was on the aircraft, and
everybody in America says "on the plane." We don`t talk like that. It`s
like -- it`s Conehead, in a way.

What do you make of his opening remarks over there and the way he
talks? "Disconcerting."

SHIP: Well, you know, I think there is something about the language
barrier. I mean, I find that when I`m here, I have to change my vocabulary
when I`m talking to Americans. And actually, there was a very interesting
thing that Obama (SIC) said in Downing Street yesterday, when he was
standing outside the door of number 10. He said, It`s great to be here in
the backside of Downing Street.

Now, I don`t know how much you know about how we refer to backside,
but it`s not the sort of rear entrance, if you like, as you would call it,
and obviously what he was referring to.

MATTHEWS: Yes, I think we use "fanny" differently, too, as well.

(CROSSTALK)

MATTHEWS: ... amazing. So bottom line, is there going to be a
lasting impact of the kerfuffle we`ve just described? Simon, you first,
then Chris. Will this thing be something that you people remember in
Britain, in the pride you have for your Olympic games in the next couple of
weeks? Will it be recalled at the end of them, and in the weeks ahead and
months ahead, that the American presidential candidate Mitt Romney came
there and caused trouble?

MARKS: I think the lasting impact can be characterized slightly
differently, Chris. This has set the stage for the way in which the
British press is now going to cover Mitt Romney going forward, through into
the convention and towards the election.

And remember that the British press is not an island. "Mitt the twit"
was the headline published by "The Sun," owned by Rupert Murdoch. Same
with "Nowhere man" in "The Times" of London. Those are Murdoch
publications.

So again, people on this side of the Atlantic may well say, Well, does
that raise ongoing questions about where conservatives stand vis-a-vis Mitt
Romney`s leadership?

MATTHEWS: Well, you`ve raised the question for me, I can tell you
that. Chris, your view of lasting impact here.

SHIP: You know, Chris, I think, you know, he was always going to have
a difficult time in Europe because we see things differently on the other
side of the Atlantic. Europe is still very much Obama`s territory. We
still think he`s pretty good, he`s the world`s statesman. He did a lot
better things than the guy that came before him.

So I think Mitt Romney, apart from the fact that no one really knows
who he is, was always going to have a tough time. He`s just made it worse
by coming along and saying, You guys, you`re not ready for the Olympics.

But as I think we mentioned before, the Brits aren`t very good at
looking forward to something, and it takes someone from outside to remind
them, you know, this Olympics is a good thing and we`re all behind it. And
they certainly are tonight.

MATTHEWS: Well, we still remember this scene, and we`ll play it again
probably tonight again from "Love Actually," where the British prime
minister, played by Hugh Grant, stands up for the country against the
gauche combination of a couple of American presidents, the worst possible
combination of Yank was displayed in that movie, and the best possible
British prime minister.

Thank you so much for joining us, gentlemen, Simon Marks and Chris
Ship.

Coming up: This isn`t the first time we`ve seen Mitt Romney insult his
host. Remember those cookies in Pennsylvania? What is it with Romney?

Plus, a minority of Americans, less than half now, take Obama at his
word that he`s a Christian. And maybe this is consistent with Michele
Bachmann`s pushing this craziness about Muslims infiltrating the U.S.
government. I mean by that the Muslim Brotherhood.

And for the second time in as many weeks, the Romney campaign has
grossly distorted President Obama`s words in a new campaign ad. We`ve the
misleading ad and what the president actually said, all coming up.

And Will Ferrell on what Romney should have said about the Olympics.
That`s in the "Sideshow." By the way, he`s coming on this show next week
with Zach Galifianakis. That`s Tuesday next week.

This is HARDBALL, place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Eight years ago, the presidential race came down to Ohio,
and it may well be the same story this year. We`ve got a new poll out of
Ohio, and for that, we check the HARDBALL "Scoreboard."

Here it is. According to a new We Ask America poll, President Obama
holds an 8-point lead over Mitt Romney in the Buckeye state, pretty
comfortable, 48 to 40. That may well be good evidence that the Obama
attacks on Romney`s record at Bain Capital may be working among Ohio`s
working people.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Back to HARDBALL. Mitt Romney`s trip to London has been
overwhelmed by his comment on Wednesday that London may not have been 100
percent prepared to host the games, but it`s not the first time Romney has
made an awkward comment that offended people and left others cringing.

Last year when he met with a group of unemployed Floridians in a
coffee shop, his effort to empathize was a little tone deaf. Let`s listen.

(BEGIN VIDEO CLIP)

ROMNEY: I should also tell my story. I`m also unemployed!

(LAUGHTER)

UNIDENTIFIED MALE: Are you on LinkedIn?

ROMNEY: Yes, actually. And I`m networking.

(LAUGHTER)

UNIDENTIFIED FEMALE: A lot better than what we`ve got.

(END VIDEO CLIP)

MATTHEWS: So here he is yucking it up with people who are out of
work, and he`s worth well over a quarter billion dollars.

Well, back in April, when Romney visited a small town in Pennsylvania,
he was less than thrilled with the cookies he was served. Believe it or
not, cookies, didn`t like them. Let`s listen.

(BEGIN VIDEO CLIP)

ROMNEY: I`m not sure about these cookies. They don`t look like you
made them. Did you make those cookies? You didn`t, did you? No. No.
They came from the local...

UNIDENTIFIED FEMALE: Bakery.

ROMNEY: ... 7-Eleven, bakery or whatever.

(END VIDEO CLIP)

MATTHEWS: Or wherever. Well, it turns out those cookies were the
homemade pride of the local bakery. So why does Romney keep saying things
like this?

Scott Helman is co-author of "The Real Romney" and Jonathan Alter`s a
Bloomberg View columnist and an MSNBC political analyst.

I want to start with Scott on this. I don`t think these are
ultimately the most important things in the world except it goes on and on.
A guy`s from another planet, he will have these problems. But this guy`s
running for president here and talks like he is from another planet.
That`s odd.

SCOTT HELMAN, CO-AUTHOR, "THE REAL ROMNEY": This has been going on
for years. I mean, when you were playing the cookie clip, I was reminded
of 2002, when Rudy Giuliani was campaigning for him in Boston`s North End,
and some guy offers them a cannoli. And Romney says, you know, No, thanks,
I don`t want that. And Rudy, you know, being the smart politician that he
is, picks it up and eats it because he knew that when you`re offered a
cannoli, you take it.

MATTHEWS: Yes.

HELMAN: I mean, this has never been Mitt Romney`s strength going back
to his first race in 1994. He`s -- and you know, in his defense, he`s
never sold himself as that guy. But as we see with these comments you just
played in London, it continues to get him into trouble.

MATTHEWS: Wasn`t it Clemenza (ph) that remembered the cannoli? I`m
just trying to remember, Jon, and you know all this stuff.

Jonathan, this is a serious problem for this guy because he seems to
be heading into three major televised debates, an hour-and-a-half each, and
he can script himself or be scripted for a while. But at some point, he
switches to Romney.

I mean, it seems like he has a good line here and there, and the
minute he`s caught with an unusual question -- Brian asked him about the
Olympics, Are you prepared? And he makes a shot at the Londoners he`s
trying to woo. The first thing he says is something offensive. It seems
like without a script prepared for him by his rather bright team, I must
say, he`s lost.

JONATHAN ALTER, AUTHOR, "THE PROMISE," MSNBC POLITICAL ANALYST: Well,
you know...

MATTHEWS: In space.

ALTER: ... he can perform well in debates. So I wouldn`t count him
out. And also, the lower he sinks, if he makes a comeback and performs
well, he`ll get extra credit for that.

But he obviously has a gaffe problem and has for some years. And to
be a sort of a dime store shrink for a second, Chris, you know, I attribute
it all to the most famous gaffe of modern American politics, which was in
1967, by George Romney, when he said in a local Detroit television
interview that he had been "brainwashed" in Vietnam.

So if you`re George Romney`s son, and you revere your father, the one
thing you don`t want to do is make a career-ending gaffe. So he is in a
situation now where it`s like, don`t make a gaffe, don`t make a gaffe,
don`t make a gaffe.

And that`s like, don`t think of an elephant, don`t think of an
elephant, don`t think of an elephant.

MATTHEWS: Yes.

ALTER: You think of the elephant. You make the gaffe. And you do
exactly what you`re trying so hard to avoid doing.

MATTHEWS: That`s the line actually in the -- I can`t stop movie
references -- "Anatomy of a Murder," when the jury is told -- when they`re
told to ignore some testimony. They said it`s like saying don`t think of a
blue cow. All you can think of is a blue cow.

ALTER: Yes.

MATTHEWS: Anyway, conservative columnist Charles Krauthammer was left
nearly speechless -- and he is rarely speechless -- by Romney`s comment
that he found some things about London`s preparation for the Games
disconcerting.

Here is Charles, a usual friend on the right. Let`s listen.

(BEGIN VIDEO CLIP)

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: What Romney answered in
that question is unbelievable. It`s beyond human understanding. It`s
incomprehensible. I`m out of adjectives.

(LAUGHTER)

KRAUTHAMMER: All the man has to do is say nothing.

(END VIDEO CLIP)

(LAUGHTER)

MATTHEWS: Scott, he didn`t say nothing.

HELMAN: Yes.

MATTHEWS: Well, here it is, a question. Now, put it all together.
He doesn`t like the local cookies. What else? He thinks he is unemployed,
even though he is worth well over a quarter billion dollars. He thinks
that`s a cool thing to say to people who are suffering the -- oftentimes
the humiliation, as well as the injury of being unemployed.

People feel that in their souls when they`re out of work and they`re
trying to get a job. And here he is chuckling over the fact that he, a
multi-multi-multi-millionaire is in the same straits as them, when it`s so
obvious to all at the table he is not in the same situation. It isn`t
funny.

HELMAN: No.

And I think one of the most ironic things about it is here is somebody
who often gets knocked for trying to please everybody, for trying to say,
you know, whatever his audience wants to hear. So you would assume
somebody like that would be really good and really smooth, almost sort of
too smooth.

But it`s like that part of it is fundamentally missing with him. He
doesn`t know how to operate when it is just off the cuff. And we have seen
it over and over. You could play a dozen clips that relate to his wealth
alone over the last six months in which he has come across just looking
stiff and aloof and out of touch.

And, you know, the bigger question is, does any of this matter? And,
again, this is not something he is trying to run as. He is trying to run
as the competent, maybe even boring technocrat who can fix the economy. So
it may not matter in the end. But it certainly has hurt him at every step
along the way in his political career.

MATTHEWS: Jon, you and I talk about these things. We think about
them all the time.

The difference between in this case a successful businessman, meaning
a guy who has made a lot of money -- that`s a successful businessman -- and
a successful political or national leader, I think we`re learning the
difference here. Learning how to deal with national sensitivities on the
other side, recognizing that every country has a sense of patriotism, not
just the United States, unless they have some terrible tyranny going on,
and even then they`re proud of their country.

ALTER: Right.

MATTHEWS: Not knowing that you`re stepping on the toes of millions of
Brits when you say something like this, you mock their best efforts,and
you`re coming in from outside to do it, that is the difference between a
successful business -- a successful business guy can do that and still be
rich. A politician can`t do that very long.

ALTER: Yes, there is really not much of a connection between success
in business and success in politics. We have seen that over and over again
where very successful businessmen who have gone into the Cabinet. Remember
Don Regan...

MATTHEWS: Oh, he was a sharpie.

ALTER: ... who had to leave in disgrace. He had been head of Merrill
Lynch.

And then you have unsuccessful businesspeople like Harry Truman, whose
haberdashery went bankrupt, and he turned out to be a pretty damn good
president. So I think there is a connection in the minds of some people
between these two skills. And that might help Romney in this campaign.

And, by the way, when 130 million Americans are voting in November,
most of them won`t have paid any attention to his awkwardness in one-on-one
retail politics.

MATTHEWS: Yes.

ALTER: So it may be that it doesn`t end up mattering. But the thing
for voters to focus on is whether they should accept in an unthinking way
that somebody who has been successful in business will necessarily have the
right skills for the presidency.

MATTHEWS: I`m going to try to go on, on that point at the end of the
show tonight.

Anyway, thank you so much, Scott Helman, for joining us.

HELMAN: Thank you.

MATTHEWS: Thank you, Jonathan Alter.

ALTER: Thanks, Chris.

MATTHEWS: Up next: Will Ferrell on what Romney should have said in
London. Look at this guy. He is so funny. That`s in the "Sideshow"
coming, Will Ferrell.

By the way, he is coming on this show live next Tuesday.

And this is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Back to HARDBALL and to the "Sideshow."

First off, forward, it`s the Obama slogan this time around. It`s been
around for a couple of months, but so far it hasn`t caught on, not like
hope and change did in 2008.

Conan O`Brien came up with some ways to revamp the new phrase.

(BEGIN VIDEO CLIP, "CONAN")

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We are moving this
country forward.

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: Change only comes
through challenge.

B. OBAMA: No, you can`t. No, you shouldn`t. Don`t even try.

(LAUGHTER)

BIDEN: No, no, no, there`s no jobs for you, man.

(LAUGHTER)

B. OBAMA: The economy is bad. It`s all my fault. And I can`t fix
it.

(LAUGHTER)

BIDEN: We didn`t have enough money to pay the bank, honey. And we
have to move. We have to move.

(LAUGHTER)

B. OBAMA: You should vote for Mr. Romney.

(LAUGHTER)

BIDEN: Come on, man.

(LAUGHTER)

BIDEN: No, I`m serious. I`m serious.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

(LAUGHTER)

MATTHEWS: It`s amazing what you can do if you screw around with the
context.

Anyway, actor Will Ferrell, as I said, is as close to being on a
campaign blitz as he will ever get, a publicity tour for his new political
comedy "The Campaign."

Well, Ferrell was on this morning on "MORNING JOE," and kicked off his
interview with a nugget that could have helped Mitt Romney get off to a
better start over in London.

(BEGIN VIDEO CLIP, "MORNING JOE")

WILL FERRELL, ACTOR: Could I start by saying that I think the
Olympics are going to run perfectly, great?

(LAUGHTER)

FERRELL: The facilities, world-class.

(LAUGHTER)

FERRELL: I mean, I think it`s going to be the greatest Games of all
time.

UNIDENTIFIED MALE: You agree with Governor Romney.

(LAUGHTER)

FERRELL: Yes. Oh, I stand by my statements.

(END VIDEO CLIP)

MATTHEWS: The funniest guys are the guys that don`t laugh when they
tell the jokes, like in the old days of Chevy Chase. Anyway, there you
have, Will Ferrell and Zach Galifianakis, co-star of the movie, will be on
HARDBALL next week, on Tuesday, in fact. Don`t miss it.

But here is a pre-Olympics moment that is pretty deep into "Sideshow"
territory. The U.K.`s culture secretary participated in a bell-ringing
ceremony to commemorate the first day of the Games. And as you will see
now, after he weighed in on the potential for mishaps in the coming weeks,
the secretary tried to ring his Olympics bell.

(BEGIN VIDEO CLIP)

JEREMY HUNT, BRITISH CULTURE SECRETARY: I can`t say there won`t be
hitches, because this really is one of the biggest things you can do. And
when there are things that don`t go according to plan, London will cope in
the way it always has.

UNIDENTIFIED FEMALE: Can we get a ring of the bell?

HUNT: Yes, sure.

(RINGING)

HUNT: Oh!

Oh, my goodness. Are you all right? We are. This was a terrible
moment there. Disaster averted. Thank you.

(END VIDEO CLIP)

MATTHEWS: He is like "Fawlty Towers."

Anyway, the bell just flew off the handle there. Is that what Mitt
Romney meant when he said there may be some disconcerting mishaps in the
London Olympics run-up?

Well, finally to what these Games are really about, the athletes.
Right? First lady Michelle Obama spoke to the members of the USA team this
morning, attempting to put them at ease while still pressing them to bring
home some gold medals.

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, FIRST LADY: So, you all take advantage of everything.
Stop. Look around you. This only happens every few years. So try to have
fun. Try to breathe a little bit, but also win, right?

(LAUGHTER)

M. OBAMA: In the end, winning is good.

(END VIDEO CLIP)

MATTHEWS: Just remember, her brother is a basketball coach.

They`re in for a great couple of weeks, those athletes, and we are
too.

Up next: Wonder why Michele Bachmann is pushing her line about Muslim
Brotherhood infiltrating the government? It might have something to do
with the fact that less than half of Americans now trust President Obama
when he says he is a Christian. What is going on in this country on that
point, a very dangerous point?

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

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

A happy Friday, indeed, the Dow closing up a full percent, the S&P and
Nasdaq both up about 2 percent at the close. You can thank the Eurozone
for much of that bump. The ECB president reportedly in talks to help
refuel the euro.

At home, shoppers not in the mood to do their thing. Consumer
sentiment hit its lowest level this year. And Facebook spent the day
trying to dig itself out of a hole. Stock prices plummeting as questions
swirl about its virtual future.

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

MATTHEWS: Welcome back to HARDBALL.

U.S. Congresswoman Michele Bachmann, who was invented here, I think,
calls to look into whether the Muslim Brotherhood is infiltrating our
government here. She has created a battle within the Republican Party,
those who think Bachmann`s accused, including top Hillary Clinton aide Huma
Abedin, are fair game and those who do not think this is fair at all.

Well, this fault line within the GOP comes in the face of new polling
showing that a majority of Americans are not willing to say President Obama
is a Christian. It is also a number that grows depending on your ideology.
No surprise there.

Reverend C. Welton Gaddy is president of the Interfaith Alliance, one
of more than 40 organizations who have written Bachmann and her allies to
protest their calls for such an investigation. And Michelle Goldberg is
senior contributing writer for "Newsweek" and for the Daily Beast.

Reverend Gaddy, I want to get to the heart of this thing.

Here you have Michele Bachmann, a member of the United States
Congress, a member of the House Intelligence Committee, zeroing in on one
of Hillary Clinton`s closest aides and saying that she ought to be
investigated because she has relatives that are questionable, and therefore
she is questionable.

A lot of good Republicans on this point, John McCain, John Boehner,
Lindsey Graham, Scott Brown, Marco Rubio, James Sensenbrenner, Ed Rollins,
have all said, this is bad, we shouldn`t be doing this McCarthyite stuff in
this country.

A number of bad politicians like Rush Limbaugh, Newt Gingrich, Eric
Cantor, and John Bolton, no surprise there, are all sort of defending this
sort of scurrilous attack on this woman who has worked for her country and
for Secretary Clinton.

What do you make of what is going on right now?

REV. C. WELTON GADDY, PRESIDENT, INTERFAITH ALLIANCE: Well, I think
you pegged it, Chris, the way you described it going into this segment.

We`re talking about politics. We`re not talking about religion.
We`re not talking about security. We`re talking about a very questionable
kind of patriotism that would risk scaring the people of the United States,
trying to undercut their confidence in the security provided by the United
States government in order to attract a few votes.

They also know that this figure that came out today about the number
of people who think that the president is Muslim, it is a way to play in
demonizing a religion to the extent that they think they can win an
election.

Everyone knows that, according to the Constitution`s religious freedom
provisions, it shouldn`t make any difference whether the candidate is a
Mormon, a Muslim, or a Christian. But they know -- because they have been
involved in financing a well-structured campaign to convince people that
the president is a Muslim, they know that, if they can get that belief,
then they can play on a prejudice. And it is nothing but a political
strategy.

MATTHEWS: OK. I agree with that, Michael, so I`m already spoken for
here, well spoken for by the reverend. I do believe the fact that less
than half the American people accept Obama at his word that he is a
Christian is a part of an overall strategy which is relentless, people like
Donald Trump over and over again raising the birther questions, question
this man`s word.

It`s gotten to the point where more people disbelieve him than believe
him, the president of the United States, on what he says. I have never
heard of a person say, I`m Jewish, and people, oh, no you`re not, or I`m
Catholic, say, oh, no, you`re not. You accept people in this country for
what they say they are.

MICHELLE GOLDBERG, CONTRIBUTOR, THE DAILY BEAST: Well, and I think
there are two different things going on here. Right?

On the one hand, there are probably Republicans for whom this is just
a partisan answer to say that they think Obama is a Muslim or they don`t
think he`s a Christian.

MATTHEWS: They say they think.

GOLDBERG: It`s a way for them to signal their contempt for him, their
general kind of refusal to take him at his word about anything that he
says.

MATTHEWS: See the numbers? Only 49 percent accept him at his word.
And some 17 percent actually call him a Muslim, but all the rest with this
cute "don`t know."

And we know darn well they know what they`re talking about. They just
want to stick it to him.

GOLDBERG: Well, I think some of them want to stick it to him. And
some probably just believe what a lot of their leaders are telling them.

If you have something like Michele Bachmann saying that the Obama
administration is complicit in a Muslim infiltration of our government, you
have the stuff on talk radio and you have...

(CROSSTALK)

MATTHEWS: Sharia law is in effect.

GOLDBERG: Sharia -- right, you have these books coming out.

And so, you know, I think we know well enough not to take Michele
Bachmann seriously, but she is a serious politician. She is the second
biggest fund-raiser in the House. She has a huge following. And we can`t
be surprised that people -- that there are people out there that take her
at her word.

MATTHEWS: OK, to make your point, back to you, Reverend.

Look at this. This really makes the point, I think. The percentage
of people who say President Obama is a Muslim rises as you move toward the
right on the political spectrum. Thirty percent of Republicans, 34 percent
of conservative Republicans believe he is a member of the Islamic faith.
Just 8 percent of Democrats do.

It really does move absolutely with correlation here. As you go from
left to right or center-left to right, it just goes higher and higher
percentages of people believe that he is a Muslim. If you went to Nazi, I
suppose, you would get 50 or more percent. It`s unbelievable.

GADDY: But, Chris --

MATTHEWS: Yes?

GADDY: But, Chris, these are people who are judging a man`s religion
who don`t know much about religion. And, in fact, what they know some
politician has told them.

I actually think that there is a bright spot in this whole thing with
what Ms. Bachmann has done. When Interfaith Alliance put out the word
about us getting together a letter protesting what had happened, if you
look at people on that letter, the National Council of Jewish Women, the
ACLU, the Interfaith Alliance, people all across the political spectrum as
well as the --

MATTHEWS: The National Council of Catholic Bishops --

GADDY: Yes, the National Council of Catholic Bishops. So you`ve got
diversity across the religious spectrum, and you`ve got diversity across
the political spectrum. And my hope is that there are a lot of people who
are saying Ms. Bachmann, enough of this. Let`s have an election on what
the election should be about and get politicians off of trying to do
political stump speeches that turn out to be sermons and not hide your
prejudice under a cloak of religion.

MATTHEWS: And why don`t we take a look when people do join on the
opposite side, Michelle, and join in this witch-hunting of people like Huma
Abedin, and look at the witch hunters, who are the witch hunters -- Rush
Limbaugh, no surprise there. He makes money doing this. Newt Gingrich has
tried to stay in the game with the far right. Eric Cantor, he is the new
Nixon, by the way, he doesn`t believe a word of this, but he rides this
horse better than anybody.

MICHELLE GOLDBERG, THE DAILY BEAST: And he knows better than to
stand up to these people, right?

MATTHEWS: That`s right. He`s Nixon. Watch this guy (INAUDIBLE).

And John Bolton, who wants to be secretary of state. Imagine a
secretary of state of this country who engages in this kind of witch-
hunting.

GOLDBERG: I think somebody should ask Mitt Romney whether he agrees
with his foreign policy John Bolton, that these are legitimate questions.

You know, one of the things that was fascinating was there was this
moment when it seemed as if finally Michele Bachmann and her ilk were going
to be marginalized in the Republican Party. We had this very rare outbreak
of Republican decency. And there has been such a huge pushback. You know,
the Tea Part has come out in support of Michele Bachmann, the religious
right, the Family Research Council came out with a support -- came out with
a statement of support, talk radio has rallied around her.

And these are really important forces in the Republican Party. And
Eric Cantor knows that. So his statement of support for her today I think
is a sign that, you know, that unfortunately the John McCains and the Eric
Boehners who are trying to kind of marginalize this kind of thing are not
going to be successful.

MATTHEWS: You speak well and true. Thank you very much. I don`t
mind to be condescending. I agree with everything word. It rang with me.

Thank you so much, Reverend Welton Gaddy. And thank you, Michelle
Goldberg.

And up next -- oops, they did it again. The Romney campaign takes
more President Obama words mildly out of context, well, wildly I`d say, in
a new ad. We`ve got the ad, by the way. Watch and see how they lie here.
It`s really sad.

And this is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Mitt Romney and other Republicans have tried to downplay
President Obama`s role during the mission that killed Osama bin Laden, but
the admiral who oversaw the operation is telling a very different story.
Admiral Bill McRaven, head of the Joint Special Operations Command called
the president fantastic and said, quote, "At the end of the day, make no
mistake about it, it was the president of the United States who shouldered
the burden of this operation that made the hard decision."

Well, back in April, Mitt Romney belittled the decision to launch the
raid, calling it a no-brainer.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: We`re back.

Remember the Romney ad that twisted President Obama`s "you didn`t
build that" remark into a condemnation of small business owners? Well, the
Romney campaign is at it again. Let`s watch this web ad they just released
yesterday, hitting Obama on the economy.

(BEGIN VIDEO CLIP, POLITICAL AD)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We tried our plan, and
it worked. That`s the difference. That`s the choice in this election.
That`s why I`m running for a second term.

UNIDENTIFIED MALE: You know, I had to file my own personal
bankruptcy. I had to close my business.

UNIDENTIFIED FEMALE: I`ve been looking for a job for two years.

UNIDENTIFIED MALE: You know, it`s difficult to find employment.

UNIDENTIFIED FEMALE: A year ago, I was laid off from my job.

UNIDENTIFIED FEMALE: I have to work part-time in order to make ends
meet.

(END VIDEO CLIP)

MATTHEWS: Well, now let`s look at what Obama actually said. At a
campaign stop in Oakland, California, the original words.

(BEGIN VIDEO CLIP)

OBAMA: I`m also going to ask, anybody making over $250,000 a year to
go back to the tax rates they were paying under Bill Clinton, back when our
economy created 23 million new jobs, the biggest budget surplus in history,
and everybody did well.

Just like we`ve tried their plan, we`ve tried our plan, and it
worked. That`s the difference.

That`s the choice in this election. That`s why I`m running for a
second term.

(END VIDEO CLIP)

MATTHEWS: When you watch the whole thing, it`s very obvious that
President Obama was talking about the booming economy under President
Clinton, not today`s economic climate, as the Romney ad would have you
believe.

With me now is David Corn, MSNBC political analyst and author of
"Showdown"; and Ron Reagan, also an MSNBC analyst and author of "My Father
at 100."

You know, that`s pretty clear there. Is there any room for wiggle
there, David Corn? Is there any -- I was reading something today that said
there is a case you could find there that the Romney ad was true. I don`t
see it, because clearly, if you look at that paragraph.

DAVID CORN, MSNBC POLITICAL ANALYST: Right.

MATTHEWS: It`s about the Clinton experience with tax rates that they
just want to get back to.

CORN: There was a piece in the "Washington Post" that tried to make
a case. But I think that was a sense of someone bending backwards to be
overly fair to someone who is in the campaign that was ripping yet again a
single remark and single sentence out of context. You know, we spent last
week arguing about the "you didn`t build that" remark and how the Romney
campaign turned that into an ad.

If you go back to the first ad the Romney campaign put out for this
campaign, back last November, they had Barack Obama on video saying if we
talk about the economy, we`re going to lose. And they sliced out. That
was a 2008 speech, the sentence before that in which he said "John McCain
said if we talk about the economy we`re going to lose."

MATTHEWS: Yes.

CORN: So again and again and again they do creative editing. And,
you know, you`ve been in this business a long time, Ron has watched this
for a long time, there`s a certain amount of spin and interpretation that
you can get away with, but I think these guys are really far over the line.
And there`s no referee to call them out.

MATTHEWS: Here`s the problem, Ron. I was just thinking of this.
We`re not aiming these ads on the left center and the left or the 47
percent on the right. We`re naming it at the 6 percent in the middle.

And those 6 percent I will argue until doomsday are inattentive.
They haven`t made up their minds because they haven`t watched enough.
Therefore, they will fall for this stuff.

RON REAGAN, MSNBC POLITICAL ANALYST: That is quite possible. I was
reading in the "Washington Post" online today, I don`t know if it`s the
same article that David was referencing, but here`s how this could work for
Romney.

Ironically the article was about how this could work for Romney and
inadvertently, I suppose, the author made his own point for himself by
demonstrating how it would work. Not once in the article did the author do
what you did, Chris, which is call this what it is -- a lie. He did not
explain the context of Barack Obama`s remarks. He said only that critics
would allege that Mitt Romney was twisting Barack Obama`s.

But it`s not -- critics will allege that because that`s true. You
know, we will have to see whether Mitt Romney will be able to get away with
it -- as you put it very aptly -- lying about what Barack Obama says.

MATTHEWS: I think a normal conversation, you wouldn`t get along with
a person, or hang around them much longer, if every time you said something
to them, they took two sentences and dumped them and put the first and
fourth sentences together to make a point you never maid, you never listen,
you never deal with a person like that.

But, again, I go back to this -- they`re going for the fresh meat out
there. They`re going for the voter who hasn`t paid attention and is
willing to buy the worst about the other guy because they`re down on
politicians, aren`t they, the middle -- the undecided?

CORN: Well, yes. They`re trying to get people. You know, the
economy is bad. People in the middle and both sides may be disappointed
that Barack Obama hasn`t done more to make the economy better. You know,
some can argue that he saved us from a depression, but it`s still not where
we want to be. So, ads that take these lines out of context, you didn`t
build that, private sector`s fine and all this stuff plays on that.

And Ron is exactly right. The real problem here is that you can get
away with this because there`s nobody who`s going to say -- a lot of people
won`t say in the major media that you`re lying, this is wrong, this is
unfair and we`re going to treat you as we would a child who lies in this
way.

MATTHEWS: Yes.

CORN: And send you to your room and not pay attention to you
seriously.

And so, if those voices don`t counteract this, the campaigns do this
again and again and again, and they don`t really care about the fact
checkers that may or may not blow a whistle.

MATTHEWS: It`s like the old joke about the older woman who says I`m
not voting for Goldwater because he`s doing to take away my TV, I hear.
And the commentary said, no, actually, he`s just going to read of the
Tennessee Valley, I thought, or the TVA. She just said, I`m not taking any
chances.

Anyway, Mitt Romney sat down with NBC`s Matt Lauer today in London
where Lauer questioned him about the negative turn this has taken,
especially by him, I think. Let`s watch.

(BEGIN VIDEO CLIP)

MATT LAUER, NBC NEWS: It seems like one wave of negative ads after
another. Are you proud of the campaign you`re running so far? Is this the
campaign you`d like to run?

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I`m proud of the fact my
campaign is focused on the economy. What we`re focused on is not personal
attacks, but instead we`re focusing on policy differences and where we
think the president may have gone wrong and where we think we could do
better.

(END VIDEO CLIP)

MATTHEWS: Yes, Ron, except he`s got a lot of people calling this guy
an Islamic terrorist basically. He doesn`t have to do the dirty work.

REAGAN: And that was another perfect example of the mainstream media
doing that fair and balanced thing. You know, it`s everybody. Everybody`s
doing it. Everybody`s running negative ads.

I don`t remember Barack Obama running an ad about Mitt Romney where
he actually lied about something Mitt Romney said. Maybe I`ve just missed
it, but, you know, I haven`t seen that yet.

MATTHEWS: You`re a good man, so you didn`t miss it. You`re a good
man.

(CROSSTALK)

MATTHEWS: David, we got to go.

REAGAN: OK.

MATTHEWS: It`s Friday night. We can take a break for two days.

Thank you, David Corn. Thank you, Ron Reagan.

When we return, let me finish with the debacle of Mitt Romney`s trip
to London.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Let me finish tonight with this. Remember all those
conversations we had about the difference between a businessman and a
successful politician? You know, how one person has to focus on making
profits, the other on leading lots of people. The idea was that the two
jobs are very different, calling for different kinds of competence, one
person has to be good at numbers, the other at all kinds of people. One
has to be sensitive to market movements and other is sensitive to national
moods and sensitivities.

Well, we`re now hearing the werewolves (ph) and shouts of indignation
from the corners in London, exposing the differences between a good
businessman and a good political leader for all to see. I don`t know why
Mitt Romney told Brian Williams he saw the British preparations in London
as disconcerting. I don`t know who he was speaking there. Was he talking
to the British hosts who might be sensitive to an outsider`s criticism?
Was he talking to the Americans back home? Even the people of Utah who
might feel satisfaction that their guy is saying the Brits aren`t quite up
to what he, Mitt Romney, helped get done back home.

Anyway, this may just be what we`ve been talking about all year. The
difference between a guy that can make a lot of money and a kind of person
who can lead a patriotic country, a superpower, and one of other patriotic
people as well. No big harm done. You can say that.

You can also say we witnessed a nice, little harmless example, the
difference between a leader in the money business and a leader in the
people business.

And that`s HARDBALL for now. Thanks for being with us. See you
again Monday at 7:00 Eastern. And have a great weekend.

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

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