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updated 8/2/2012 1:41:21 PM ET 2012-08-02T17:41:21


Guests: Nia-Malika Henderson, Debbie Wasserman Schultz, Joe Moreno, R.
Clarke Cooper, Susan Milligan, Joe Conason


CHRIS MATTHEWS, HOST: Fury on the right.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews down in Washington.

"Let Me Start" tonight with this. Huey Long once said that fascism,
when it comes to America, will call itself anti-fascism. So what do we
call this hard lurch to the right that`s happening in the country as I
speak? I don`t mean conservative. The conservatives are the ones getting
hit by this new hard rightward swing in Republican politics.

Last night in Texas, a cheered-on hero of the Tea Party right beat
Governor Perry`s candidate, and now can`t be stopped. Suddenly,
conservativism isn`t good enough. You`ve got to be on the far-out fringe,
where people don`t believe in science, think the government should arrest
people for abortion, or same-sex marriage is the work of the devil, where
government is bad, where nothing is better than another war in the Mideast,
yet another neocon race toward Armageddon.

What happened to the party of Lincoln? Of Ike? Of Reagan, who put
his whole heart into eliminating nuclear weapons, who thought the key to
politics was tough negotiation across the aisle, not this crazed gang of
the right who want nothing more than for government to fail so they can
climb up onto the Capitol dome, pound their chests and lead the charge for
the all-out victory over the remaining Democratic opposition.

Well, to help me confront this right-wing onslaught are the great
"Game Changer" himself, John Heilemann, and "The Washington Post`s" rising
star -- in fact, already star -- Nia-Malika Henderson.

I want you to look right now at Sarah Palin. Tea Party candidate Ted
Cruz in Texas went from 2 percent in early polling to trouncing Texas
lieutenant governor David Dewhurst last night by 13 points in the race to
take on a Democrat for the U.S. Senate seat, a (INAUDIBLE) he is sure to
win.

And it was a victory for the right wing against whatever`s left of the
Republican establishment. Sarah Palin took to the airwaves to cheer on her
winning candidate. Let`s watch.

(BEGIN VIDEO CLIP)

SARAH PALIN (R-AK), FMR. GOV., FOX CONTRIBUTOR: It`s a victory for
Tea Party patriots who just want to get our country back on the right track
and defend our republic. The Tea Party patriots who came from all over the
country, recognizing that Ted Cruz is the man to not just embrace status
quo in Washington but will engage in the sudden and relentless reform of
our big, centralized federal government, trying to shrink that government
and allow more states` rights and allow individual rights and
opportunities, they recognized Ted Cruz was the man.

(END VIDEO CLIP)

MATTHEWS: Wow. Republicans across the country who have been called
"not right-wing enough" have fallen victims to the Tea Party. Here are
just a few examples. Former six-term congressman Bob Inglis of South
Carolina, Senator Mike Castle fell to Christine O`Donnell in Delaware,
Senator Bob Bennett was taken down in Utah. Senator Dick Lugar in Indiana
just a few months ago. And of course, yesterday`s loss by David Dewhurst
in Texas.

And then there`s two famous Republicans who went running for the Tea
Party before they suffered losses from Tea Party primary challengers,
longtime Pennsylvania senator Arlen Specter, who went to the Democratic
Party, and Florida governor Charlie Crist, who turned independent.

Well, there you have it. I want to start with John Heilemann, who
watches (ph) it (ph). You talk about a game change. I`m watching people
like -- the language of "save our republic," you know, the language almost
sounds like "Seven Days in May," like a military coup. This is different
than just conservative.

JOHN HEILEMANN, "NEW YORK" MAGAZINE, MSNBC POLITICAL ANALYST: Yes.
And I like that sound effect best of all, the little dropping in the water
thing.

You know, you think about the irony. If you had said four or five
years ago that -- or even two years ago, that the endorsed, blessed
candidate of Rick Perry, the governor of Texas, and as right as you can
imagine in American politics, would be dismissed in a...

MATTHEWS: Out-flanked on the right.

HEILEMANN: ... would be dismissed as too liberal by a primary -- a
GOP primary electorate, you would have thought, you know, you were nuts.
People would have thought you were crazy. This -- this party, it`s like
there`s now a rule in Republican politics, which is basically that if you
have a candidate who`s not actually certifiable, and as long as they have a
little bit -- enough money, the candidate who`s the furthest to the right
wins.

MATTHEWS: Always.

HEILEMANN: And that -- always. It`s, like, now a golden rule.

MATTHEWS: Or unless, Nia -- you cover these -- people like John
McCain go down, basically, H.D. (SIC) -- or what`s his name, H.D. Hayworth
-- it was like -- J.D. Hayworth...

NIA-MALIKA HENDERSON, MSNBC POLITICAL ANALYST: Right.

MATTHEWS: ... they will pretend they`re one of them, or Chuck
Grassley in Iowa now, are going so far right just to hope they`re not
picked off next time.

HENDERSON: That`s right. And you had McCain, you know, (INAUDIBLE)
over there when he was running against J.D. Hayworth.

I think there`s appetite among Republicans for something new and
something fresh in the way that Obama represented something new and
something fresh...

MATTHEWS: Oh!

HENDERSON: ... in 2008. And I also think there is a sense among
Republicans that they want an ideological counterweight to Obama. They see
in Obama a big-spending liberal. They want someone who is equally on the
far right. And that`s why...

MATTHEWS: When we watch this election -- and you guys are all
covering this every day, like we are here. You watched Romney, who is the
spear carrier, the champion of this rightward-leaning Republican Party, and
we`re hearing from people, like, from Freedom Fest (SIC) or whatever it`s
called, Freedom Works, they`re all basically, as of this night -- I just
heard a few minutes ago before we went on the air -- they`re talking about
making sure Romney does what he`s told.

So basically, you`ve got a well-trained, you know, canine kind of
performance here by Romney. He has to do what this right wing shift is
demanding of him.

HEILEMANN: Well, yes.

MATTHEWS: Right?

HEILEMANN: Look, for Romney to -- in order to -- for Romney to win in
November, he`s got to -- he must drive conservative turnout. He`s got to
have enthusiasm in the Republican base. If he doesn`t have that, he`s not
going to be able to win.

MATTHEWS: Is this "Invasion of the Body Snatchers"?

HEILEMANN: Well, look, I think, you know, one of the great questions
about Romney -- and I think, you know, he -- he`s run much further -- he
governed further to the left in Massachusetts than he actually is. I think
he`s now running further to the right than he actually is. But that`s part
of the problem is there`s not -- there`s no fixed point...

MATTHEWS: Hey, wait a minute...

HEILEMANN: We don`t know...

MATTHEWS: How do you know he ain`t going to stay stuck on the right?

HEILEMANN: Well, that`s...

MATTHEWS: He`s promised he will.

HEILEMANN: I think -- I think the thing is -- I think the bigger
issue, the question that arises, is whether -- because he seems kind of
uncertain and coreless, we don`t really know that he has firm beliefs...

MATTHEWS: Oh!

HEILEMANN: ... about a lot of things -- is that his policy agenda --
if you want to be fearful of him, is that his policy agenda will be driven
in just the way you`re suggesting, by an increasingly right-wing...

MATTHEWS: OK, let me tell you something...

HEILEMANN: ... Republican Party in Congress.

MATTHEWS: You guys know what this...

(CROSSTALK)

MATTHEWS: You know especially, and you`re learning this. Politicians
make these campaign promises -- I`m going to be 100 percent against taxes.
I`m going to be 100 percent with the hawks on foreign policy. I`m going to
be with the religious right, put the gown (ph) on. I`m with you at Liberty
University.

They`re afraid to switch once they get in because they saw what
happened to George Bush the first. They saw he switched, and they killed
him for it.

HENDERSON: That`s right. That`s right, with flip-flopping on taxes.
But I think Romney is, in some ways, running as a vague candidate because
he knows that if he is tied...

MATTHEWS: Ain`t we taking notes?

HENDERSON: ... to closely...

MATTHEWS: And you`re taking notes...

HENDERSON: What he...

MATTHEWS: The right wing is.

HENDERSON: No, no, no. He knows that swing voters see some daylight
between him and the Republican Party.

MATTHEWS: Well, I know, but...

HENDERSON: That`s in some ways...

MATTHEWS: ... that`s the illusion.

HENDERSON: ... why he`s being elusive (ph).

MATTHEWS: I`m not sure. But anyway, let`s take a look at this.
Here`s Ted Cruz. He found support -- this is the guy that just won the
Texas primary for the United States Senate. He got some support from Sarah
Palin, the awful Glenn Beck, the desperate Rick Santorum, but also with
powerful and well-financed groups like the Club for Growth.

Here`s an ad the Club for Growth put out early this year attacking
Cruz`s opponent, Lieutenant Governor David Dewhurst, the candidate of Rick
Perry. Here`s the charge against him. Wait for this. It`s really a dirty
word. They said he`s a moderate.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: "The Dallas Morning News" says Dewhurst has served
as a moderate Republican.

UNIDENTIFIED FEMALE: "The Houston Chronicle" says Dewhurst is
generally considered a moderate.

UNIDENTIFIED MALE: "A moderate at heart," says "The Texas Observer."

UNIDENTIFIED FEMALE: And "The Wall Street Journal" says Dewhurst
supported an income tax for Texas!

UNIDENTIFIED MALE: Moderate tax-raising David Dewhurst, wrong for
Texas.

(END VIDEO CLIP)

(LAUGHTER)

MATTHEWS: "Moderate" is a curse word!

HEILEMANN: Yes, moderate...

(CROSSTALK)

MATTHEWS: ... a four-letter word! It`s unbelievable!

HEILEMANN: No, no, it`s even worse (INAUDIBLE) That`s worse than a
four-letter word. It`s an eight-letter word, like a four-letter word times
two.

MATTHEWS: I never heard this before in politics.

HEILEMANN: And again -- you know, again on the policies, they`re
actually not very far apart.

HENDERSON: That`s right.

HEILEMANN: Cruz is only mostly stylistically further to the right.
Dewhurst is a very conservative guy.

But you know, the interesting thing about Cruz is that he does combine
this very, very far right, very purist ideological agenda, with a very
attractive, modern face. He`s a young guy. He`s 42...

MATTHEWS: He`s...

(CROSSTALK)

HEILEMANN: He`s a Harvard law school graduate.

HENDERSON: He`s Latino.

HEILEMANN: He`s argued before the Supreme Court...

(CROSSTALK)

HEILEMANN: And he`s Hispanic...

HENDERSON: Right, which is very, very important.

HEILEMANN: ... which is hugely important for...

HENDERSON: Right.

HEILEMANN: ... for the Republican Party...

MATTHEWS: Will you answer me an ethnic question? I don`t know if
either of you know the question. Do Mexican-Americans, who are huge in
this country -- we used to call them Chicanos -- Latinos is the current
word of choice -- but they`re all over the place. They`re a huge part of
the immigrant population in this country now, and they vote. Most of them
vote.

HENDERSON: Yes.

MATTHEWS: And you have the Cubans down there in Florida. You have
Puerto Ricans mainly in New York and in Florida. They tend to be
Democrats. Cubans tend to be Republicans. Mexican-Americans are somewhat
split, but about 2 to 1 roughly Democrat, but they`re in play.

Will the Mexican-Americans who are in play -- will they vote for a guy
because he`s from a Spanish background, a Cuban?

HENDERSON: I think in Texas, for instance, it`s -- you know, 75
percent of those Latinos, 30 percent, 40 percent all Latinos, are
Democrats. I don`t think there`s not -- there`s necessarily going to be a
transfer of Hispanic love...

MATTHEWS: Are they attracted to a guy because he has a Hispanic name
like Cruz?

HENDERSON: I don`t -- I`m not sure. I don`t think so. I don`t think
there`s a lot of...

MATTHEWS: Because I think they`re still playing...


(CROSSTALK)

MATTHEWS: ... with Rubio in their heads.

HENDERSON: Right.

HEILEMANN: I think, you know, there`s not a lot of evidence that --
that -- part of the reason people have argued that Rubio would not actually
appeal to most of those Hispanic voters.

HENDERSON: Right.

HEILEMANN: But it is more an ideological thing than it is an ethnic
thing. And you know, you look at the other really big news in that front
this week is the choice of Julian Cruz -- (SIC)

HENDERSON: That`s right.

HEILEMANN: ... the incredibly impressive Democratic Hispanic mayor of
San Antonio, who`s going to...

MATTHEWS: His name`s Castro.

HEILEMANN: Castro. I`m sorry. I said Cruz, I meant Castro, Julian
Castro -- an incredibly impressive guy...

MATTHEWS: I wouldn`t know it except somebody just told me in my
ear...

(LAUGHTER)

MATTHEWS: I`m not smarter than you.

HEILEMANN: ... who`s going to do the -- I met the guy. He`s
incredibly...

(CROSSTALK)

MATTHEWS: OK, let`s take a look at this...

HEILEMANN: ... the Hispanic Obama.

MATTHEWS: This is what I want, this latest number (ph). Is this hard
right shift, the Republican Party, "lurch," I called it -- is it going to
hurt the party? Look at this. This is under (ph) upside-down polling
right now when you look at this right now.

Look at the Republican Party now, 34 percent positive rate. And
that`s one third of the country says, yes, they`re pretty good, 43
percent`s, No, they`re not really any good.

On the Democratic side, it`s a call -- it`s a pick, 40-40 positive-
negative. Now, that`s not great. Neither party`s at -- nobody`s in love
with anybody here.

HENDERSON: Right.

MATTHEWS: But what do you think of Republican -- is this right-wing
lurch, with all these Tea Party people like that woman, the witch, she was
called, and Sarah and Bachmann calling for McCarthyism and all this -- is
this wacky stuff hurting the party`s brand?

HEILEMANN: Well...

MATTHEWS: The old party brand.

HEILEMANN: I think that what`s hurting the party brand most is that
it`s affiliated with Congress right now. And the institution of Congress
is in such bad -- bad state...

HENDERSON: That`s right.

HEILEMANN: ... in terms of American public opinion...

MATTHEWS: So they think...

(CROSSTALK)

HEILEMANN: ... Republican Party is the congressional party, the
congressional party such.

(CROSSTALK)

HENDERSON: ... you see Obama trying to tie Romney to Boehner to
Ryan...

MATTHEWS: What do these people get paid for on the Hill? What are
they -- what are (ph) Republican members of Congress, who don`t really want
to legislate, who don`t really want to create, they just want to sit there
-- do you actually make 170 (ph) a year for just going in and saying no all
day?

HEILEMANN: It`s a good gig, if you can get it.

(LAUGHTER)

(CROSSTALK)

MATTHEWS: Thank you. I think it is on Broadway (INAUDIBLE) Matthew
Broderick and Kelly O`Hara (ph) in "It`s a Good Gig If You Can Get It."
John Heilemann, thank you, sir. And thank you, Nia-Malika Henderson.

Coming up: Polls in three big swing states seem to be swinging, right
now at least, to President Obama`s direction. Could it be that Bain --
there`s a great word! -- and Romney`s silence on his tax returns, hiding
them to himself, is finally hurting him where it matters most, in the
states that have to be carried (INAUDIBLE)

And by the way, playing chicken. The head of the Chicken Filet (SIC)
chain opposes gay marriage. Well, that`s his position. The left is
boycotting the right in (ph) celebrating (ph) this whole question. Is this
good for anybody, this kind of fight? And we`re going to debate that
issue. Should they be fighting over this?

Dick Cheney, by the way, says Sarah Palin was a mistake. Palin says
Cheney has been influenced by -- well, she`s an original -- the "lamestream
media." By the way, the lamestream media, by the way, was influenced by
Cheney in the last war we got into. Judy Miller, you listening? A food
fight now between two Republicans whose best days are behind them.

Finally, up in the air. Which mayor of one of the world`s greatest
cities got himself stuck in a zipline? Hint. There will be no Olympic
medals for this event.

This is HARDBALL, place for politics.

(COMMERCIAL BREAK)

MATTHEWS: So where`s President Obama the strongest right now?
According to Gallup, 13 states and the District of Columbia give him
approval ratings over 50 percent. The highest, D.C., with 83 percent
approval for the president, followed by his home state of Hawaii, 63
percent, with Rhode Island, Vermont and New York rounding it in the top
five.

As for the states where the president is least popular, no surprise
there. Utah takes the top spot at 26 percent, and that`s where President
Obama has his lowest approval in the country, followed by Cheney country,
Wyoming, in third it`s Alaska, followed by Idaho and West Virginia. By the
way, most of those states are barely populated.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Back to HARDBALL. For Mitt Romney, the last week has been
full of troubles at home and abroad, of course. He returned to the United
States just yesterday after a trip overshadowed by a series of embarrassing
campaign gaffes.

And here`s the news he woke up to this morning, signs of trouble for
him in this presidential race, a new poll from "The New York Times," CBS
and Quinnipiac in three key states gives President Obama a very comfortable
lead. In Florida, Obama`s up by 6. In Ohio, Obama`s also up by 6. In
Pennsylvania, the president leads by 11.

Some say that that state can be longer -- no longer be even be called
a tossup since it leans so far for Obama. I`m still worried about the
voter photo requirement there that`s just come in.

On the question of personal favorability, the president dominates, up
9 in Florida, up 11 in Ohio, up a whopping 14 points in Pennsylvania. In
other words, it`s not just the rest of the world who aren`t falling for
Romney, and it looks like he`s got problems here.

Debbie Wasserman Schultz is Democratic congresswoman from Florida, of
course, and chair of the Democratic National Committee, and Eugene
Robinson`s a columnist of Pulitzer Prize rank with "The Washington Post"
and an MSNBC political analyst .

Congresswoman, I want to talk you about this race. It is very tricky.
It`s very bumpy. I don`t know how to read it. I read numbers on here
every night, and I wonder if there`s any continuing theory to them.

Your job, which you`ve accepted, is to win for the party. Now, here`s
the question. Are these numbers indicative of where this election`s headed
or are they short-term?

REP. DEBBIE WASSERMAN-SCHULTZ (D-FL), DNC CHAIR: Well, I think, look,
it`s still, you know, just the beginning of August. So we have 97 days
until the election. So I know the Obama campaign certainly isn`t counting
their chickens you know, or you know, ready to throw the victory party.
We`re working very hard.

But I think those numbers in the battleground states are reflective of
two things. One is that we are, you know, running a very effective,
significant grass roots campaign. And I think the numbers are also
reflective of the fact that President Obama has laid out one vision and one
path, and Mitt Romney -- and this is what I think is starting to sink in
and why the battleground states numbers are showing the way they are.

Look at the report that came out today. The nonpartisan Tax Policy
Center came out with a report that showed that Mitt Romney`s tax plan would
actually cost the average middle class family another -- with children --
another $2,000 in additional taxes.

And that`s because they`re not going to be able to take a mortgage
interest deduction. They would not be able to get the credit on their
health care premiums any longer, or charitable donations. and the average
millionaire in Mitt Romney`s tax plan, according to this nonpartisan study,
would actually get an $87,000 tax break. So I think that that is starting
to sink in.

MATTHEWS: Well, that`s smart...

(CROSSTALK)

MATTHEWS: ... politics because instead of complaining about the rich
being rich, you`re complaining about how it makes the poor poorer, the
middle class poorer.

Let me go to Gene Robinson on this. (INAUDIBLE) win for Obama -- or
lose for Obama and win for Romney, of course, is the economy. The numbers
we got show he hasn`t closed the deal with the likely voters. That`s
Romney. In Florida, Romney leads Obama on the question of who would do a
better job handling the economy, but only by 2 points. In Ohio, Obama`s up
by a point. And in Pennsylvania, the president actually leads.

So given this kind of the depressing -- not depressing, frustrating
state of the economy -- it isn`t booming, the stock market is, but
unemployment is still in the low 8s -- he`s still doing OK. If he gets a
break and it drops below 8 percent before November, it looks like he can
win this thing on the economy, if it happens.

EUGENE ROBINSON, "WASHINGTON POST," MSNBC POLITICAL ANALYST: Yes. I
mean, you extrapolate, you could say, if it drops below 8, maybe the
election wouldn`t even be that close.

But you know, what I think these numbers are telling us are not just
that Romney`s economic message hasn`t penetrated, but that the Obama
campaign`s message, which has been to define Mitt Romney as this -- this
unattractive...

MATTHEWS: OK, what hurts him worse...

ROBINSON: ... selfish, rich guy...

MATTHEWS: ... that he`s a selfish rich guy or that he`s very
secretive about his tax returns, which (INAUDIBLE) it`s not the crime, it`s
the cover-up, that old argument?

ROBINSON: It`s all part of -- it`s all kind of part of a piece
that...

MATTHEWS: Let me go to Debbie on that. Congresswoman, you know, this
thing about not releasing his tax returns -- I always argue if it`s better
than it looks, they`ll tell you. Any politician, left, right or center, if
their PR is bad but they got a better truth out there, they`ll tell you the
truth.

Romney`s hanging fire on this damn thing. Everybody knows he seems to
be hiding something. If he`s hiding one year of not paying taxes, that`s
one thing. How bad does it have to be to really sting him if he does show
his taxes?

WASSERMAN SCHULTZ: Boy, it has to be pretty bad.

To not release your tax returns after you`re getting being pounded by
regular folks, by the average working family that simply believes
rightfully so that if you`re running for president of the United States,
you should release your tax returns, because we need to get a good look,
just like Mitt Romney`s father said when he ran for president, that one
year of tax returns for a presidential candidate isn`t enough because, you
know, it might just be for show.

He released 12 years. It`s got to be pretty bad. And we have gotten
a glimpse. We know he has a Swiss bank account. Why does he have one?
Most American businessmen don`t have Swiss bank accounts, unless they`re
trying to avoid taxes in the United States.

(CROSSTALK)

MATTHEWS: I love the way you get that in, Madam Chairman.

WASSERMAN SCHULTZ: Well...

MATTHEWS: I love the way you just put...

(CROSSTALK)

WASSERMAN SCHULTZ: I`m not saying he does, but we don`t know.

(CROSSTALK)

MATTHEWS: But we know he has a Swiss bank account.

Anyway, Romney campaign is out with a new Web ad. Here`s one you will
love knocking President Obama on a topic that you might find surprising,
the president`s auto bailout, which is killing Romney I would think in
Ohio, and Indiana and all the Midwestern industrial states. But for some
reason he`s returning to the scene of the crime, Romney is. Take a look.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Grew up here in Lyndhurst, started 1972, selling
cars.

NARRATOR: In 2009, under the Obama administration`s bailout of
General Motors, Ohio dealerships were forced to close.

UNIDENTIFIED MALE: I received a letter from General Motors. They
were suspending my credit line. We have 30-some employees that were out of
work. My wife and I were the last ones there. It was like the dream that
we worked for and that we worked so hard for was gone.

(END VIDEO CLIP)

MATTHEWS: Well, Romney blamed the president for auto industry-related
job losses. According to the Treasury Department, the bailout created
115,000 jobs. That`s over 100,000 jobs, according to Treasury.

Well, regardless, the ad is only the latest in a very convoluted
series of messages coming from Romney over the years when it comes to the
auto bailout. He`s been very unclear on this. In 2008 he wrote an
editorial for "The New York Times" under the headline "Let Detroit Go
Bankrupt."

Romney wrote then, "If General Motors, Ford, and Chrysler get the
bailout that their chief executives asked for yesterday, you can kiss the
American automotive industry goodbye. It won`t go overnight, but its
demise will be virtually guaranteed."

Well, that`s really future-telling there. That was wrong of course.
And earlier this year he had a very different response. He took credit for
the auto bailout. Let`s watch Romney this time.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: My own view, by the way, was
that the auto companies needed to go through bankruptcy before government
help. And frankly that`s finally what the president did.

I pushed the idea of a managed bankruptcy. And finally when that was
done and help was given, the companies got back on their feet. So I will
take a lot of credit for the fact that this industry`s come back.

(END VIDEO CLIP)

MATTHEWS: Can you translate that into English?

ROBINSON: No. But it`s not true. It`s not true that the president
did what he said to do.

MATTHEWS: Managed bankruptcy.

ROBINSON: He wrote -- he didn`t just say. He wrote let Detroit go
bankrupt. The president did not. The president invested our money in
General Motors and it paid off. It saved the auto industry.

We`re going to make money on the deal. It`s -- look, if I were Mitt
Romney`s campaign, I would never utter the words auto bailout again.

(CROSSTALK)

MATTHEWS: Gene, you`re so right.

This is worth arguing about, Congresswoman, because it`s not just
points scoring by one part or the other. The Democratic Party largely
believes in industrial policy. When you can do something to help the
market do the right thing, you try to do something actively. You don`t
just sit back and believe in laissez-faire. Let the chips fall.

Romney is a "let the chips fall" kind of guy. He`s a real
conservative on business. And letting the chips falls would have meant the
loss of our auto industry, potentially, in this case.

WASSERMAN SCHULTZ: Well, letting the chips fall, also known as just
leaving people out in the cold.

But that Web ad, let`s take a closer look at it. There are actually -
- it doesn`t pass the straight face test on any level. The ad focuses on a
dealership in Ohio. There are actually 2,200 more jobs in auto dealerships
in Ohio now than there were when President Obama took office.

So to suggest that the auto bailout actually caused the demise of jobs
in auto dealerships is completely wrong, absolutely not true. And we have
got -- we`re talking about a state where one in eight jobs are associated
with the auto industry. In 80 of 88 counties, there is an automobile
facility, an automobile-related facility, in 80 of 88 counties in Ohio.

So the reason the Ohio employment rate is below the national average
is because Barack Obama had the courage to rescue the automobile industry
and that`s why they have had a resurgence in their economy. They have got
a long way to go like the rest of the country.

But if left to Mitt Romney, we would have lost 1.4 million jobs in the
automobile industry, including those in the supply chain, many of which
would have been in Ohio. And Ohio`s economy would have been decimated.
Those are the facts.

MATTHEWS: OK. It`s so great to have you. It`s so great to have you.

See you in Charlotte pretty soon. It`s coming on.

WASSERMAN SCHULTZ: Yes, a few weeks.

MATTHEWS: Anyway, thank you, chairwoman of the Democratic Party,
Debbie Wasserman Schultz of Florida.

Eugene Robinson, all you have is Pulitzer Prizes. She`s got a
convention coming up.

(LAUGHTER)

MATTHEWS: Up next: The birthers just won`t quit. Wait until you
hear Republican Congressman Steve King dismiss the evidence he himself
found that President Obama was born here. These people are nuts, nuts.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Give it up for all of
our outstanding American athletes who are competing in London right now.

(CHEERING AND APPLAUSE)

OBAMA: When I`m watching -- you know, when people run track, you
know, I understand that I know how to run. They`re just much faster.

These gymnastics folks, I don`t understand. How do you not bust your
head every time you`re on that little balance beam? I couldn`t walk across
that balance beam.

(END VIDEO CLIP)

MATTHEWS: Well, that`s President Obama giving a shout-out to the U.S.
Olympic team at an event in Ohio today.

The president also made some calls to U.S. athletes, like Michael
Phelps, the great swimmer, and the women`s gymnastics team, to congratulate
them on their big wins. I love it when they win.

As for Stephen Colbert, well, he just can`t get enough of Olympic
dressage or horse ballet, as it`s sometimes called. As you probably know
by now, Mitt Romney`s family horse, Rafalca, is competing in dressage over
in London.

And here`s Colbert relishing all things Rafalca.

(BEGIN VIDEO CLIP, "THE COLBERT REPORT")

STEPHEN COLBERT, HOST, "THE COLBERT REPORT": Mitt isn`t the only
Romney wowing them on the international stage this week.

So is Rafalca, the Romney family horse, who is at the London Olympics
competing in dressage...

(LAUGHTER)

COLBERT: ... the sport of the summer for those who use summer as a
verb.

(LAUGHTER)

COLBERT: Rafalca is poised not only to take the gold. She could have
a major impact on the U.S. presidential election.

There will be no V.P. announcement until after Rafalca is done
competing. Dressage is full of normal folk, like Prince Abdullah al Saud
of Saudi Arabia, Princess Nathalie Zu Sayn-Wittgenstein of Denmark, and
Zara Phillips, granddaughter of Queen Elizabeth II.

(singing): These are the people in your neighborhood, in your
neighborhood.

(END VIDEO CLIP)

(LAUGHTER)

MATTHEWS: Well, it`s been widely suspect that no V.P. announcement
will be made until Ann Romney returns from London, after Rafalca`s dressage
events are completed.

Also, last week, London`s Mayor Boris Johnson, who looks like me, made
headlines after mocking Mitt Romney for suggesting that London might not be
fully prepared for the Games. Earlier today, though, Johnson was careening
across a zip line -- there he is -- at a local park attempting to above the
crowd. The only problem, he was left hanging before reaching the other
side.

(BEGIN VIDEO CLIP)

BORIS JOHNSON, MAYOR OF LONDON: Can you get me a rope? Get me a
rope, OK? I think they needed to test this on somebody going a bit faster.
Get me a ladder.

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS: His crowd wasn`t fully prepared.

Anyway, Johnson was eventually pulled to safer ground. Later on, he
reflected on the experience.

(BEGIN VIDEO CLIP)

JOHNSON: And I thoroughly recommend it. I wouldn`t want to be up
there all afternoon, but I think loads of people are going to enjoy it. It
was wonderful. And I thoroughly recommend it. I hope you`re going to do
it later on.

(END VIDEO CLIP)

MATTHEWS: Great-looking guy, anyway, brushing it off like a pro.

Next, could it be -- well, could it be another birther theory?
Apparently so. Republican Congressman Steve King participated in a tele-
town hall meeting last week, and one caller started with the birther
nonsense. At first, it sounded as if King was finally putting the issue to
rest.

(BEGIN VIDEO CLIP)

REP. STEVE KING (R), IOWA: We went down into the Library of Congress
and we found the microfiche there of two newspapers, only two newspapers in
Hawaii. Each of them had published the birth of Barack Obama. It would
have been awfully hard to fraudulently file the birth notice of Barack
Obama being born in Hawaii and get that into our public libraries.

(END VIDEO CLIP)

MATTHEWS: Well, so far so good. Then he kept talking.

(BEGIN VIDEO CLIP)

KING: But that doesn`t mean that there aren`t some other explanations
on how they might have announced that by telegram from Kenya. The list
goes on.

(END VIDEO CLIP)

MATTHEWS: Insanity right there in the United States Congress.

So President Obama`s young mother telegrammed her son`s birth
announcement from Kenya to the local newspapers in Hawaii, just on the off-
chance that he would make a bid for the presidency some day, the name
Barack Hussein Obama of course being hand-selected as the perfect name for
a presidential candidate.

The more likely scenario, U.S. Congressman King realized halfway
through his answer that he better not disappoint those crazy fellow
birthers whose votes, frighteningly enough, he`s counting on.

Geez, what a country this has become.

Up next: a game of chicken. The head of the Chick-fil-A, of the
Chick-fil-A company opposes gay marriage. And the left is boycotting the
chain.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

VERONICA DE LA CRUZ, MSNBC CORRESPONDENT: Hey there. I`m Veronica De
La Cruz. And here`s what`s happening.

San Antonio International Airport was evacuated earlier following a
phoned-in bomb threat. No suspicious devices were found.

More than half of all U.S. counties are being classified as disaster
areas because of the drought. Corn and soybean crops have been severely
affected.

And stocks slipped after the Federal Reserve left monetary policy
unchanged. The Dow fell 32, closing below 13000. The S&P lost four. And
the Nasdaq was lower by 19.

I`m Veronica De La Cruz -- now back to HARDBALL.

MATTHEWS: Welcome back to HARDBALL.

Chicken sandwiches and waffle fries might seem like an unlikely source
of controversy. But the executive behind the fast food chain Chick-fil-A
launched a firestorm last month when he said he was -- quote -- "guilty as
charged" when it came to supporting a traditional family and marriage
between a man and a woman.

Dan Cathy told The Baptist Press -- quote -- "We are very much
supportive of the family, the biblical definition of the family unit.
We`re a family-owned business, a family-led business and we are married to
our first wives. We give God thanks for that. We know that it might not
be popular with everyone, but thank the lord we live in a country where we
can share our values and operate on biblical principles."

Well, supporters of gay rights have since called for bans, boycotts,
and protests, where conservatives like Mike Huckabee rallied behind the
chain and declared today Chick-fil-A appreciation day. So everybody is in
this now.

With me is Chicago Alderman Joe Moreno and R. Clarke Cooper, who has
been on so many times. He leads up the Log Cabin Republican, who are gay
Republicans, who are also very important, committed businesspeople as well.

Thank you for joining, Clarke, as always. You can smile.

R. CLARKE COOPER, EXECUTIVE DIRECTOR, LOG CABIN REPUBLICANS: All
right.

MATTHEWS: Thank you for here being with me.

COOPER: Thank you, Chris.

MATTHEWS: I don`t know about you, Alderman. I just don`t know about
you.

Are you using aldermanic privilege or -- to decide who does business
in your aldermanic district? I mean, that`s a legal action by you. Do you
think that`s appropriate, when you just don`t agree with somebody`s
politics or even sexual politics?

JOE MORENO (D), CHICAGO ALDERMAN: Absolutely not, and that`s not what
I`m doing. And that`s not what the community is doing.

It`s not whether a CEO believes or says certain things. It`s whether
that CEO`s actions translate into their policies. I have been working with
Chick-fil-A, Chris, for eight or nine months trying to clarify if they have
anti-discriminatory policies.

MATTHEWS: Do they?

MORENO: And until their put their Facebook page post up about a week
or so ago, I didn`t have clarity.

That post helped in our discussions in moving forward. And I will
remind your viewers that Dan Cathy also was asked if he would hire a gay
individual. He paused for a long while and then said, well, it depends on
the circumstances.

I want clarity. Are those circumstance if that gay individual walks
in holding hands with his partner? Are those circumstance if that gay
individual walks in and is proud of being gay? Those are -- those are
against the law in Illinois. And I need a clarification that the policies
of the company...

MATTHEWS: What would be your standard on whether to use your
councilor or aldermanic privilege to stop the construction or business of a
Chick-fil-A?

(CROSSTALK)

MATTHEWS: What`s your standard?

MORENO: It`s my responsibility as a community representative to have
responsible businesses.

And part of the business` responsibility is to not have discriminatory
policies. So if the company...

MATTHEWS: So what`s your definition of discriminatory policy? Just
help us out on the facts here, because this is what this is about.

(CROSSTALK)

MORENO: Well, for instance, for instance, prior to their Facebook
posting, I did not have a commitment from the company that they were open
to not only hiring, but also serving those of different sexual
orientations.

MATTHEWS: Did you have any complaints that they were not?

MORENO: We have had 19 -- they have been sued 19 times. And a woman
right now is suing the company.

MATTHEWS: Nineteen times for sexual discrimination, sexual
orientation discrimination, or what?

MORENO: For discrimination against a minority group. And that was
from -- that was from 2009. So I`m sure it`s happened more. Currently,
there`s a case on the books where a woman has sued the company because the
manager told her she was fired because she should stay home and cook and
not cook at Chick-fil-A.

This thing are disturbing, Chris.

MATTHEWS: OK.

MORENO: I want a clarification from the company. I`m not saying that
the CEO has to believe something or state something that I believe in. Of
course not. I will protect that. Even if I disagree with him. That`s not
the debate.

(CROSSTALK)

MATTHEWS: Let`s stop there. I agree with you on that one.

What I don`t like is some people don`t like some of his political
views even on issue where I don`t agree with them on. And I see where
Christine Quinn, the speaker of the council in New York is doing this. Tom
Menino, up in Boston, I really like is doing this. Rahm Emanuel`s been in
this a lot.

They`re all putting their feet out there, and then pulling back and
saying I didn`t mean I was going to stop them. (INAUDIBLE) here. This is
a very tricky issue. The country`s divided on same sex marriage.

Every time we have an election, 32 states have voted on it and voted
it down. Yet when you ask people in the polls, it`s very even. I don`t
think he discriminated a guy because of what he thinks.

COOPER: That`s right. And you mentioned polling. It`s not just
marriage, it`s actually relationship recognition. And this is not just the
average voter, this includes conservative voters. If you break it down to
civil unions, legal status, more and more Americans, an overwhelm majority
are in favor, including self-identified voters.

MATTHEWS: There`s a lot of evolution going on.

COOPER: But this issue with Chick-fil-A, there are some
constitutional concerns, Chris, when you have municipal leaders in Chicago,
in Boston, New York, and Philadelphia even suggesting some kind of
Orwellian process of denying business or business access to the community -
- I imagine that in places like Chicago, you probably have local Chamber of
Commerce members saying, hey, are we next? Are our head next on the
chopping block?

And I can tell you, most members of Log Cabin Republicans, if they`re
not in the private sector, they are small business owners. So, while our
members may not be buying those Chick-fil-A waffle fries or (INAUDIBLE),
they don`t want their businesses to be threatened with a potential
government ban. There`s an impediment upon First Amendment rights when you
start picking and choosing businesses that can be --

(CROSSTALK)

MATTHEWS: I`m one of those guys. I`m one of those who believe you
should like Jane Fonda in the movies even if you don`t like her politics.

MORENO: I agree. We have never said, Chris, they`re
mischaracterizing the debate. I have never said anything about beliefs or
Orwellian, as your guest has said. What I`ve said is the civil rights
movement -- and you know this better than I do, Chris -- that you never led
from the front, you led from the back.

And what we`re saying is, clarify your position. From day one, I said
-- I`ve done this for eight or nine months without public fanfare. Clarify
your anti-discriminatory policies. Work with a local LBGT group --

MATTHEWS: Alderman, call me up when you have an example they rejected
a good job applicant looking for a job. And they say sorry we don`t like
that life. Then I`m with you.

MORENO: I`m trying to prevent that from happening. I`m trying to be
progressive instead of backing off. I`m not going to back down from this.

MATTHEWS: Just don`t start preemptive wars.

MORENO: I`m not going to back off.

MATTHEWS: I know what you`re doing and I guess I agree, but it has to
do with behavior, not thinking.

COOPER: Individual liberty here. Vote with your wallets. You don`t
have to go to a particular business. You can go to a particular business.
This is what we value as Americans. This is part of our American
exceptionalism. We have that freedom of speech --

(CROSSTALK)

MORENO: -- value the laws in Chicago and Illinois. I`m going to
protect those who are not in the minority classes, period.

MATTHEWS: Anybody who is prejudice against gay people is a fool, in
business terms, moral terms, whatever. You`re fool. God made those people
and they are customers.

Anyway, thank you, Joe Moreno.

And thank you, Clarke. I`m beginning to like you more, Clarke Cooper,
because you`re a man of the business center.

Anyway -- up next, Darth Vader versus the grizzly mom. Did you expect
Sarah Palin to stay quiet while Dick Cheney called her a mistake? Forget
about it. She`s back.

This is a great fight. Root for which one, I`m not sure. It`s a
tough one for me, Clarke.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: NBC News is now learned or actually confirmed a "Reuters"
report that President Obama has signed a so-called intelligence finding
authorizing covert aid on the Syrian rebels. This is big news. White
House and intelligence officials are declining comment on the report, but
the administration has been under constant criticism for months from
Senator John McCain and others who say the administration should be arming
the rebels.

We`ll be right back. Big story there.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DICK CHENEY, FORMER U.S. VICE PRESIDENT: I like Governor Palin. I`ve
met her. I know her. She`s an attractive candidate.

But based on her background, she`s only been governor for what? Two
years. I don`t think she passed that test.

REPORTER: Of being ready.

CHENEY: Of being ready to take over. And I think that was a mistake.

(END VIDEO CLIP)

MATTHEWS: Wow. Welcome back to HARDBALL.

Sarah Palin did not take kindly to those words from Dick Cheney. She
saw them as fighting words about his readiness for office.

And last night, Palin proved she can give as good as she gets. Let`s
watch.

(BEGIN VIDEO CLIP)

SARAH PALIN (R), FORMER ALASKA GOVERNOR: Well, seeing how Dick --
excuse me, Vice President Cheney never misfires, then evidently he`s quite
convinced what he had evidently read about me by the lame-stream media
having been written what I believe is a false narrative over the last four
years, evidently Dick Cheney believed that stuff.

(END VIDEO CLIP)

MATTHEWS: Joe Conason, of all the things to say of the lame-stream
media as if they`re leading Cheney around. As I recall, Cheney through the
good offices of his chief of staff, Scooter Libby, and Judie Miller were
leading "The New York Times" around.

So, the idea he got tricked into backing -- knocking Palin because of
"The Times" -- by the way, before you start. I`ve got to show you this.
This is the actual Cheney in real time back then talking about his support
and praising Palin in 2008. Let`s watch.

(BEGIN VIDEO CLIP)

CHENEY: I`m delighted to support John McCain and pleased that he`s
chosen a running mate with executive talent, toughness and common sense,
our next vice president, Sarah Palin.

(APPLAUSE)

(END VIDEO CLIP)

MATTHEWS: So welcome to our say hello to our Republican Party 2012,
Cheney and Palin duking it out. The extreme right taking control.

Joe, what do you think of that? You`re editor-in-chief of
nationalmemo.com.

By the way, Susan Milligan joins us. She writes for "U.S. News &
World Report".

Joe, this is so ludicrous.

JOE CONASON, NATIONALMEMO.COM: Yes.

MATTHEWS: He`s dumping on her, and he`s the guy she accuses now of
being manipulated by the lame-stream media.

CONASON: Yes. Well, I`m afraid she doesn`t see the humor in that,
for whatever reason. But what it shows to me is that the difficulties in
the Republican Party now, because this is sort of the hard right versus the
kooky right.

MATTHEWS: Yes.

CONASON: In the present moment, it shows the difficulty that Mitt
Romney faces in choosing a vice presidential candidate simply because he
has to both fire up the base, the Tea Party, which wants somebody like
Sarah Palin, that extreme. And yet, you know, the rest of the country
wants somebody who is qualified to be president.

At least notionally, and that`s, I think, what Cheney was talking
about. He`s right now, he was wrong back then. He`s right now.

But then you also have to put that in context because of the Cheney`s
solution to the problem in 2000 was to pick himself. And we know how that
worked out. So --

MATTHEWS: Yes, that got us into war.

Let me ask you, Susan, this craziness. A lot of people, women
especially, root for her, Palin, despite her right wing ideology. They
think she`s getting beat up by the lame-stream media. But you know what I
noticed? She`s fighting for a slot at the convention in Tampa. What`s
Romney going to do?

SUSAN MILLIGAN, U.S. NEWS & WORLD REPORT: It puts him in an awkward
position. Not only does she are a hold over a part of the party on a
national level, but you got all these Senate candidates that could make a
difference of whether the Republicans take control of the Senate, Murdoch
and now Cruz and Deb Fischer. So --

MATTHEWS: What happens if she gets a primetime slot down in Tampa?

Let`s take a look. Here`s how she`s handling this like a great
fisherman, by the way. Let`s take a look right now at what she said.

(BEGIN VIDEO CLIP)

PALIN: We`ve left it in their hands about a week ago, we were
approached, asking if we were interested, if I was interested in attending.
Of course, there`s some interest there, but we kind of want to know more
details, what they have in mind. We haven`t heard back.

(END VIDEO CLIP)

MATTHEWS: Do you like the way she gets almost cuddly. There`s some
interest, meaning I`m interested, meaning -- but we want to know if we`re
going to speak at 4:00 in the afternoon, or we`re going to talk at 9:15 at
night, or we`re going to get in nights that NBC is covering full coverage.
She`s angling here.

MILLIGAN: She is. She wants to be king maker and I guess Cheney
wants to be queen killer or something.

MATTHEWS: He`s going fishing, by the way -- talking about the angler.

Joe, he`s hiding, he knows one thing, people don`t like him.

CONASON: Well, he knows people don`t like him and he knows the base
of the party doesn`t really like him. They don`t love him. He`s concerned
about what level of enthusiasm he`s going to generate from the real hard
core in the party by November. And she will fire them up if he can entice
her into his camp without getting bitten by the mama grizzly, which is a
big risk. So --

MATTHEWS: Don`t you like it he`s such a partisan, yet he acts like
he`s some sort of judge. You know, let me see, Jeff. You have to look
back. Was she a good pick or not?

He always steps back to that role of his, which he`s above it all.
He`s the meanest insider there`s ever been. Look at him there.

He still has to answer for -- Joe, he still has to answer for Scooter
Libby who got him disbarred, convicted of five felonies or four felonies.
He never came forward and defended the guy. He tried to get him a pardon
at the end, but never explained what he told him to do in the first place.

And now, he comes back as the big adviser to America.

CONASON: Right. He lets Scooter Libby swing for his misdeeds,
indeed. It`s ironic because Cheney, you think of all that now because
Romney and the Republicans are talking about leaks from the White House.
You know what they leaked from the Bush White House was the identity of CIA
operatives working on weapon of mass destruction --

(CROSSTALK)

MATTHEWS: He`s talking about leaks today.

CONASON: -- we care about.

MATTHEWS: He got us in that war with leaks that were wrong.

Anyway, thank you, Joe Conason, as always. And thank you, Susan
Milligan, of course.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Let me finish tonight with this. This weekend, I saw for
the third time the best play about politics, today`s politics, ever
written. It`s called "The Best Man". It`s about a candidate for president
who has to choose between his ambition and his principles. His opponent is
about to dump a bad story on him that he had a nervous breakdown years ago.
He knows the story will destroy him as a candidate, especially right there
at the opening of his party`s national convention.

An aide comes to the rescue. He`s dug up a witness who said his rival
engaged in a gay relationship back during World War II. It`s murky and may
well not be true. But our hero knows it`s good enough to do considerable
on this rival. He knows it could stop him in his tracks.

And there`s the dilemma. Does someone who wants to be president get
down on the mud and play dirt against dirt politics? Does the end justify
the means? Does doing something nasty just come with the business of
running for high office? Does it?

I just saw the play and it`s production with John Larroquette and
James Earl Jones as the stars. Larroquette`s performance reminded me why I
was drawn to politics as a teenager. His is the noble politician we all
like to have leading our country, the person who does the right thing when
nobody is watching.

I just learned today that the playwright who created "The Best Man"
has died. I met Gore Vidal back in my college days. He`d come to Holy
Cross to give one of those mid-week lectures we used to have.

Well, if Vidal was known for one thing, let it be "The Best Man" -- a
play that reminds us, even now up on Broadway, of a kind of person we`d
like in the public life, someone not willing to eat the crap politics urges
you to eat, all the while saying, don`t worry, you`re not what you eat.

Well, I`ve noticed that you are. And nothing benefits a great country
like ours than reminding ourselves every so often what the gold standard in
this play called "The Best Man," and it means just about everything to
those of us who love politics, great politics.

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

"THE ED SHOW" 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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