'Hardball with Chris Matthews' for Friday, August 24th, 2012

HARDBALL
August 24, 2012

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

Guests: Ta-Nehisi Coates, John Cassidy, Deborah Solomon, Jim Burn, Judith Browne-Dianis

EZRA KLEIN, GUEST HOST: Tonight, a conversation about race, President
Obama, and birtherism -- frankly, a conversation that I`m a little nervous
about having on national television.

Let`s play HARDBALL.

Good evening. I`m Ezra Klein, in for Chris Matthews.

And leading off tonight: You remember this?

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I, Barack Hussein
Obama, do solemnly swear --

(END VIDEO CLIP)

KLEIN: That was Barack Obama`s inauguration. It was less than four
years ago now, and it seemed for a shining moment like America had opened a
new chapter in its difficult and frequently shameful history with race.

But it wasn`t true. Even as Obama took that oath, researchers were
going back through the 2008 election, running through the numbers, running
through the polls and finding that far from being a post-racial election,
it was actually an unusually racialized election.

Seth Stephens-Davidowitz, an economics researcher at Harvard, tested
this in a really interesting way. First he ranked areas of the country
based on how often they entered racist search terms into Google. Then
compared Obama`s share of the vote in those areas with John Kerry`s share
of the vote in those areas from the `04 election, just an election cycle
ago.

The result, he found that Obama had lost 3 percent to 5 percent of the
popular vote compared to what you would have expected from Kerry`s results.
Or as he put it, Obama`s race, quote, "gave his opponent the equivalent of
a home-state advantage country-wide."

The racialization of politics continued after the election, too.
Political scientists Michael Tesler and David Sears looked at how racial
attitudes affected Obama`s approval ratings. They Found that to a degree
that was completely unprecedented among recent president`s, approval of
Obama was driven by the individual`s attitudes on race.

This right here is a set of graphs they published in their book,
"Obama`s Race: The 2008 Election and the Dream of a Post-Racial America."

What you`re seeing here is presidential approval broken down by racial
attitudes. So here`s approval for Reagan. Not a straight line, but you`re
not seeing a huge difference. Here`s approval for George H.W. Bush --
looks a lot like Reagan. Here`s disapproval for Bill Clinton. Here is
approval for George W. Bush -- again, no straight lines exactly. There`s
some evidence that more conservative opinions on race line up with support
for Republican presidents and disapproval of Democratic presidents.

But it`s not a huge gap until you get to Obama. That -- that is a
huge gap. And it doesn`t look like any other graph for any other
president.

Tesler and Sears found something else worth remarking on. Quote,
"President Obama continued to be evaluated not just as an African-American
but as someone who is distinctly," quote, "other."

Which brings us to today.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R-MA), FMR. GOV., PRESIDENTIAL CANDIDATE: Now, I love
being home in this place where Ann and I were raised, where both of us were
born. Ann was born at Henry Ford Hospital, I was born at Harper Hospital.

(CHEERS AND APPLAUSE)

ROMNEY: No one`s ever asked to see my birth certificate! They know
that this is the place that we were born and raised!

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

KLEIN: Now, I want to stop here for a moment. This is tough to talk
about. This is dangerous, frankly, to talk about. And I`m honestly a bit
nervous to be on national television talking about it at all.

Race is a hard subject, particularly when it intersects with politics,
and it needs to be handled with some care. So I want to say this as
clearly as I can. I don`t think Mitt Romney`s racist and I`m not accusing
him of being racist, not even a little bit. Romney said he believes, by
the way, that Obama was born in the United States, so I`m not saying he`s a
birther, either. He`s not.

What Romney has done, though, is indulged birther sentiments
throughout the campaign. For instance, he`s embraced Donald Trump even as
Trump has become the nation`s most prominent birther.

And then there`s the joke that he told today. Now, the point of that
joke really wasn`t -- as I read it, anyway -- that Obama was born somewhere
else, in reality. It`s that Mitt Romney wasn`t. It`s that Romney gets to
go through this campaign and go through public life without anyone raising
questions as to whether he`s really American.

That is not racism on his part, but it is privilege, at least a kind
of privilege. And it is not a privilege Romney has used very responsibly.

Compare him to John McCain in 2008, who stepped on a stage and
specifically attacked those who wanted to paint Obama as something other.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I have read about him and he`s not -- he`s not -
- he`s a -- he`s an Arab. He is not --

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: No, ma`am. No,
ma`am.

UNIDENTIFIED FEMALE: No?

MCCAIN: No, ma`am. No, ma`am. He`s a -- he`s a -- he`s a decent
family man citizen that I just happen to have disagreements with on
fundamental issues. And that`s what this campaign is all about.

(END VIDEO CLIP)

KLEIN: This was an option open to Romney, too, an option open even
today. He could`ve come back out and said, Look, I was making a joke. I
think the birther controversy is ridiculous and I think it`s funny and it
deserves to be joked about. But if there is any doubt at all, let me
dispel it. I believe President Obama was born in this country. I believe
he`s a loyal and good and decent American who loves his country. We have
deep and real policy disagreements, but that is it.

That`s not really what Romney has done, though. Romney has fed this
kind of thing, even as he himself has said he doesn`t personally believe
it. That is not racist, but it`s not admirable.

But this isn`t just about Romney. It`s not even primarily about
Romney, the broader question of race here. This would all be happening no
matter who the Republican nominee for president was, and it was happening
before the campaign.

Beyond Romney, the fact is that while there`s nothing about birtherism
that is necessarily about race -- you can think another politician was born
in Canada -- there is at this point an enormous amount of evidence that
some of what is going on in the reaction both positive and negative to
Obama`s presidency is, in fact, about race.

And yet this is the one topic that Obama, frankly, can`t talk about
anymore. He talked about race in the `08 campaign when he had to, when he
was forced to by the Jeremiah Wright scandal. But since then, not so much.

Daniel Gillian (ph), a political scientist at the University of
Pennsylvania, looked at nearly all public presidential remarks for recent
presidents and found that in his first two years as president, Obama talked
less about race than any other Democratic president since 1961.

In this month`s issue of "The Atlantic," Ta-Nehisi Coates has a really
remarkable and brave piece on race in the age of Obama. It`s a big piece.
It contains a lot. And it was written long before Romney`s comments. In
fact, it`s really not about Romney or the Republicans and how they talked
about race at all. It`s about President Obama and how he doesn`t.

"The truth," Coates writes, "is that even if Obama would prefer to
ignore race, it won`t ignore him." Quote, "Race is not simply a portion of
the Obama story, it is the lens through which many Americans view all of
his politics."

Joining me now is Ta-Nehisi Coates, author of "Fear of a Black
President" in this month`s "Atlantic" and one of my favorite writers. Ta-
Nehisi, it is really a pleasure to have you here today.

TA-NEHISI COATES, "THE ATLANTIC": Thank you so much, Ezra.

KLEIN: So I`m -- I have to be honest. Like, I`m, like, somewhat
petrified about this whole segment. I`m worried about saying the wrong
thing either on or off-prompter.

COATES: Don`t be scared. It`s OK. It`s all right.

KLEIN: And if it`s -- for me, I can`t imagine what it`s like for
politicians and particularly for President Obama who, as you write in this
piece, has to walk this very delicate line between, you know, what needs to
be said and what is safe to say.

COATES: Yes, I think that`s a big problem, and I think it`s something
that he had to be thinking about when he decided he was going to run for
president.

Early in the piece, I quote one of his pollsters, basically, you know,
out and out admitting it in an interview with Gwen Ifill, saying that the
fact of the matter is, a black man cannot be president of the United
States, given the racial politics and the history of this country. But a
young man who happens to be intelligent, who happens to be smart, nice-
looking, reasonably, quote, unquote, "articulate," who just so happens to
be black can be.

And I think that`s exactly how candidate Barack Obama tried to pitch
himself and how President Barack Obama has tried to present himself to the
country.

KLEIN: So you have a really remarkable section in the piece where you
sort of run through both the sort of explicitly, and in some ways more
importantly, some of the implicitly racialized controversies of the last
couple of years.

And I really hadn`t thought about it as coherently, certainly, until I
read your piece, when you put it all together. And it really was -- I
don`t know, it was kind of surprising to back up. And in that section, you
go through a sort of a back context of birtherism and the role it`s
traditionally played, that things like that have played in American
politics. Walk me through that a bit.

COATES: Well, I think the interesting thing -- you take on Mitt
Romney`s quote, unquote, "joke" today -- I`m sure it was a joke, as you,
you know, said at the outside. I`m sure he meant no, necessarily, you
know, any racial animus or anything.

But the fact of the matter is, the core of the birther critique is a
questioning of African-American -- is a questioning of citizenship. And
the questioning of African-American citizenship is a long, old and deeply
disgraceful and often violent tradition that stretches back literally from
the beginning of this country.

You could take it from 1790, when Congress first defines what
citizenship is and strictly, and you know, right out says that it`s only
for white people, stretches up to the end of the Civil War, when Andrew
Johnson, after the tragic death of President Lincoln, out and out says that
there`s no way that, you know, a country can be based on the African-
American franchise.

It runs into the mid-20th century, where you see future senator Robert
Byrd objecting to serving in the military because it might mean that he
would have to serve next to African-Americans, William F. Buckley arguing
that African-Americans in the South don`t even want to vote, much less
should be granted the vote.

So that`s a very, very long tradition of questioning African-American
citizenship. The highest right of any citizen, be he or she white or black
or yellow, red, whatever, is to serve as president. President is a
different sort of a power. When you`re president, you`re head of the
American military. You`re head of enforcement in this country. It`s the
highest aspect.

And the notion that, given our particular history, that we would have
a black president and there would be no blowback, that we would just sort
of take this in stride, that it would end in 2008, is a little ludicrous.
And frankly, I didn`t realize how ludicrous myself until I got into the
piece.

KLEIN: Right. And yet -- and people wished for it so hard, right? I
mean, I feel like --

COATES: Yes, I wished for it. We all wished for it.

KLEIN: Right. And we all wished for it. And I feel like that`s been
one of the blockages, that every time sort of people bring up race, it`s
almost treated in the political discussion like a betrayal, like a betrayal
of the last election.

And so one of the things that you`ve thought about -- and you don`t
quite get up to -- get -- say explicitly in the piece, but the question you
sort of raise is Obama arguably needed to say more, or at least more --
there was more to say. But politically, it was probably a good idea not to
take race on more directly after being elected president.

So where do you come down? What do you think -- what do you think
could have been done in recent years that would have been constructive? Or
do you just think that this is kind of a Gordian knot, that we can`t --
that we can`t come to a constructive place here at the moment?

COATES: Well, I think two things. I mean, the first is, obviously, I
would like the president to say more about race or be more explicit. And
particularly, I think if you`re going to go before black audiences and talk
about personal responsibility, which, you know, I think any person would
endorse talk about good parenting, which any person endorses -- and that`s
a very explicit message that Obama makes before the African-American
community. He doesn`t go before other communities and generally say that.

Then I think you have an obligation then to talk about the other side
of the equation, too. So I, you know, personally would prefer him to do
either one or not at all.

At the same time, though, I think it`s wrong to put this entirely on
the president. There`s a reason why President Obama doesn`t talk about
race. In a democracy, as, you know, the great quote goes, you get the
government you deserve.

When you have an opposition party in which half of the entire party
believes the president of the United States was not born in America and
that half just so happens not to be too fond of blacks, not to be too fond
of people who weren`t born here, I`m not sure how much you can ask from
him. A president represents the people.

Mitt Romney, you know, by the same token, as a presidential candidate,
represents a group of people. So the real question is, why do so many
Americans believe this? Why are we still having this discussion with such
a broad swathe of our country?

KLEIN: Ta-Nehisi Coates, thank you very much. I cannot recommend
enough that people read your piece in the latest edition of "The Atlantic."
You`ll find it on newsstands and on the "Interweb." Thank you very much
for being here today.

COATES: Thank you so much, Ezra.

KLEIN: Here is what happens when you run on your business record and
financial success but refuse to release your tax returns. Gawker kind of
does it for you. So what did we learn?

Also, pot meet kettle. Republicans in Pennsylvania accuse the Justice
Department of politicizing the fight over ballot access, this after they
voted to limit access to hundreds of thousands of voters, most of them
Democrats.

Plus, Democrats have often accused Republicans of offering a vision
from the 1950s, and now the Republicans are talking about reinstituting
some version of the gold standard. Forget the 1950s. How about the 19th
century?

And who are these kids talking about?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You`re the most vile, vile --

UNIDENTIFIED MALE: -- despicable --

UNIDENTIFIED FEMALE: -- member of the --

UNIDENTIFIED MALE: -- communist --

UNIDENTIFIED MALE: -- communist --

UNIDENTIFIED FEMALE: -- communist party.

UNIDENTIFIED MALE: Get the beep out of the United States!

(END VIDEO CLIP)

KLEIN (on-camera): That is a new Democratic ad targeting and quoting
Florida Republican Allen West. Check it out in the "Sideshow."

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

KLEIN: We are expecting Missouri Senate candidate Todd Akin to hold a
news conference in just a few minutes. Akin has been under intense
pressure to drop out of the race after his remarks about abortion and,
quote, "legitimate rape." When Akin speaks, we`ll bring that to you live.

Back after this.

(COMMERCIAL BREAK)

KLEIN: Welcome back to HARDBALL. Yesterday, not for the first time,
I found myself clicking around on Gawker. Now, usually, my bosses aren`t
super-happy to see me doing that. A lot of Gawker headlines are like this
one from today, quote, "Tom Cruise`s child support to Katie Holmes is
barely enough to cover Suri`s handbags." To which I say, Oh, really? Tell
me more.

But yesterday, I was there for work. Gawker got its hands on almost a
thousand pages of documents, internal audits, financial statements and
private investor letters for 21 Bain vehicles that Romney was invested in.
Together, Gawker wrote, "they reveal the mind-numbing, maze-like and deeply
opaque complexity with which Romney has handled his wealth."

That includes the use of the very shady tax trick known as an equity
swap, which often is used to help offshore clients dodge payments of
certain kinds of taxes. It also includes the use of, quote, "blocker
corporations," which typically set up in tax havens like the Cayman
Islands.

Of course, it isn`t exactly news that Mitt Romney holds investments in
tax havens like the Caymans. "Vanity Fair" looked into his Cayman activity
this summer. The Associated Press reported that Romney has between $7
million and $32 million offshore investments.

Now, Romney`s folks say, in effect, Look, you can`t learn anything
here from this Gawker document dump because these files are incomplete.
It`s like looking through a fogged window and trying to say what`s written
inside every book on Romney`s book shelf.

But the latest episode illustrates what happens when a candidate for
president from a major party says over and over again that if we want to
know about his financial history, we`re just going to have to trust him
because he will not hand over more than two years of tax returns.

Well, it turns out when you do that, journalists go on the hunt, and
they`re going to keep hunting for information until they find something.
And it also turns out that the American people doesn`t like it when you do
that. It`s clear from the latest NBC/"Wall Street Journal" poll. When
asked whether news about Romney`s tax returns have colored their views of
the candidate, 36 percent of voters said it made them view him more
negatively.

For more on the Bain document dump, Romney`s tax dodges and what it
all means for the election, we`re joined by Deborah Solomon, a reporter for
Bloomberg (INAUDIBLE) Bloomberg View, and John Cassidy, a writer for "The
New Yorker."

Deborah, let me ask -- let me begin with you here. Why does it
matter? Why should we care what`s in the Bain documents, what`s in
Romney`s tax returns? I mean, at this point, they say, We`ve, you know,
given you two years. Isn`t that -- isn`t that sufficient? Why should we
be trying to piece it together?

DEBORAH SOLOMON, BLOOMBERG: Well, I think it matters for a few
reasons.

First of all, he`s running on his record at Bain. He had an op-ed in
"The Wall Street Journal" basically saying that Bain is the reason he would
be a great commander in chief. And what these documents make clear is
that, yes, he`s made a lot of money, he`s been a successful businessman,
but he`s also invested in these pirate equity funds that are not open to
ordinary investors, to ordinary Americans.

And he`s used -- these funds have used some pretty shady tax-dodging
schemes to avoid paying income taxes. One of the funds said specifically
the reason it was set up was to avoid paying income taxes in the U.S. and
that just flies from the face of what he has said previously when he said
why these things were set up.

(CROSSTALK)

KLEIN: Excuse me. I`m sorry.

U.S. Congressman Todd Akin, who is running for Senate in Missouri, is
about to hold his first news conference since his remarks about abortion,
pregnancy, and -- quote -- "legitimate rape."

We`re going to go to this live and listen to the congressman.

(BEGIN LIVE COVERAGE OF SPEECH -- JOINED IN PROGRESS)

REP. TODD AKIN (R), MISSOURI: Well, good afternoon, and thank you all
for coming out.

Apparently, there are some people who are having trouble understanding
our message. I would like to be clear on that today and that we`re going
to be here through the November election, and we`re going to be here to
win.

Now, there may be some negotiations, but they don`t include me. We
have essentially before us a choice of two Americas. The America that I
represent is an is an America that has more freedom and more jobs, an
America with less bureaucracy, big government, and less taxes, and a bright
hope for the future.

The America that Claire McCaskill has given us is an America that has
less freedom, less jobs, more big government, more taxes, and the same
stalled economy that we have observed for the last three-plus years.

Thank you all so very much.

(END LIVE COVERAGE OF SPEECH

KLEIN: That is Missouri Senate candidate Todd Akin telling us that
nothing has changed, he`s staying in the race, and he would like more
people to listen to his political message.

As that is not brand-new news, we`re not going to continue covering
it.

And, instead, we`re going to go to the brilliant John Cassidy of "The
New Yorker," who is going to tell me what at this point given the release
of the Bain documents we actually know about Mitt Romney`s finances, about
his taxes.

What is the overall picture that has emerged in the aggregate, even if
we can`t fill in every detail?

JOHN CASSIDY, "THE NEW YORKER": Well, what we know is that when he
left Bain, he got a very complicated retirement package which allows him to
invest in Bain Capital funds.

Now, Bain Capital, like many other hedge fund and private equity
firms, organizes a lot of its funds through the Cayman Islands. So,
Gawker, the Web site, got ahold of 21 of these funds documents, put them
online, and we can see how a lot of Bain`s investments and therefore
Romney`s investments -- because that`s where he gets a lot of his money --
are channeled through the Cayman Islands.

Now, is that illegal? No. Is it necessarily tax evasion? No either.
Romney says that the reason they channel things through the Cayman Islands
is to allow foreign investors, not American investors, to dodge taxes or
not pay taxes that they otherwise would have to pay.

But if you look closely at some of these documents, you find that
there are various sort of complicated financial machinations and tax dodges
which are used to shelter U.S. income as well.

So, it`s embarrassing for Bain. There`s nothing criminal here. But
given that Romney doesn`t want us to know very much about his finances,
it`s just another embarrassment on the eve of the convention.

KLEIN: Deborah, Romney made a comment the other night. I was
actually surprised to hear he said big business is doing fine.

It was an unusual echo of comments that President Obama got in trouble
for making. But it`s also quite true, actually. Big business has been
very healthy hiring in recent years, or relatively healthy hiring anyway,
and their profits have been near record levels.

Now, he sort of said, and you need lower taxes and small businesses
need lower taxes and smaller regulations. But every time I look at the
evidence on the small businesses, like the surveys done by the NFIB, they
say the problem is sales.

And that suggests that we need to boost demand, we need to get more
money in the pockets of people who would spend it. It seemed like an
economic case at odds frankly with Mitt Romney`s economic platform.

SOLOMON: Right. Well, you`re right.

Small business continues to say that it`s demand that`s the problem.
It`s not that they, you know, need more tax cuts. If you ask NFIB, they
will say we don`t need more tax cuts, we need more customers. If he -- his
whole platform is that he`s going to grow the economy by cutting taxes for
businesses. But it`s not actually what is going to help.

KLEIN: Yes. I think that`s right.

Deborah Solomon, thank you very much.

John Cassidy in New York, thank you so much for being here.

CASSIDY: Thank you.

KLEIN: Up next: Kids say the darndest things, particularly when
Allen West said them first. Stick around for the "Sideshow."

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

KLEIN: Back to HARDBALL. And this is the "Sideshow."

First off, Florida Republican Congressman Allen West has drawn
backlash on more than one occasion for blasting his rivals with over-the-
top remarks. Any of these ring a bell, calling the DNC chairperson, Debbie
Wasserman Schultz, vile and despicable, saying Obama supporters are --
quote -- "a threat to the gene pool"?

Well, what if you heard all that and more straight from the mouths of
kids on a playground?

We`re going to run the new ad from West`s Democratic challenger,
Patrick Murphy.

(BEGIN VIDEO CLIP)

UNIDENTIFIED CHILD: You are not a lady.

UNIDENTIFIED CHILD: You are the most vile.

UNIDENTIFIED CHILD: Vile.

UNIDENTIFIED CHILD: Despicable.

UNIDENTIFIED CHILD: Member of the Communist --

UNIDENTIFIED CHILD: Communist.

UNIDENTIFIED CHILD: Communist.

UNIDENTIFIED CHILD: Party.

UNIDENTIFIED CHILD: Get the beep out of the United States.

UNIDENTIFIED CHILDREN: You`re a threat to the gene pool!

PATRICK MURPHY (D), FORMER U.S. CONGRESSMAN: Allen West said all
these things and worse, but bullying and name calling has no place in the
playground or in Congress.

UNIDENTIFIED CHILD: You need a time-out.

(END VIDEO CLIP)

KLEIN: Kind of along the lines of the old saying of don`t say
anything you wouldn`t want your grandmother to hear.

Next, the latest from Congressman Steve King. Recently, the Iowa
Republican has raised eyebrows for things like defending the legality of
dogfighting and saying that it`s not against the law to impregnate a 13-
year-old girl and then kidnap her across state borders to have an abortion.

The latest, Steve King takes on the TSA. Take a look.

(BEGIN VIDEO CLIP)

REP. STEVE KING (R), IOWA: As America, we decided we`re going to
process everybody the same. So, that means the 75-year-old grandmother
gets the spread-eagle search.

And while that happens, maybe the 20-year-old Middle Eastern male
waltzes through with a smirk on his face. I`m not making that up. I have
seen that. That image will not ever leave my mind.

We`re so squeamish about making judgment calls that we put everybody
through a formula and a process so that everybody gets searched. And I
don`t know if we will ever get away from it.

(END VIDEO CLIP)

KLEIN: Steve King is the Sheriff Joe of airport security, I guess.
Stop to question anyone who looks like they don`t belong?

Finally, for the next week or so, at least, when you think Tampa, you
will think Republican, right? Well, a pro-choice group in Florida
sponsored this billboard as a reminder to the incoming GOPers. "Welcome to
Tampa, where the mayor and all city council members are Democrats. Enjoy
your visit."

They can`t be entirely unwelcome, though. "The Wall Street Journal"
reports that the RNC is expected to flood $175 million into the city`s
economy. Not bad.

Up next: After making it tougher for hundreds of thousands of voters,
Republicans in Pennsylvania are accusing the Justice Department of
politicizing the fight over voting rights. That is ahead.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

SUE HERERA, CNBC CORRESPONDENT: I`m Sue Herera with your CNBC "Market
Wrap."

Modest gains, but not enough to keep a six-week winning going on Wall
Street. The Dow finished up 100 points at the close, the S&P up nine, and
the Nasdaq gained 16.

Why the boost? Well, in part because Fed Chairman Ben Bernanke set
the record straight, saying despite conflicting rumors, it is possible he
will take further action to spur the economy. Meantime, Apple edged lower
amid a ruling that the Samsung Galaxy phone may look like an iPhone, but it
doesn`t violate the design.

And that`s it from CNBC. We are first in business worldwide -- and
now back to HARDBALL.

KLEIN: When Pennsylvania Governor Tom Corbett introduced the state`s
new photo voter I.D. law, his office said that 99 percent of eligible
voters already had an accessible form of I.D.

But a comparison between the state`s list of registered voters and
those holding Pennsylvania driver`s licenses, the most common form of I.D.
now required to vote, showed a significantly wider gap, just above 9
percent of the electorate. That is over 750,000 don`t have the I.D.

It`s a widespread problem, but not an evenly spread problem. The vast
majority of people affected live in Philadelphia County to the east and
Allegheny County -- that`s Pittsburgh -- to the west. And the funny thing
about those two counties is they proved to be Democratic strongholds in the
`08 election.

So if your goal was to limit Democratic voter turnout this election,
how would you go about it? Well, you could pass a law making it harder for
these people to vote if they don`t have I.D.

So let`s hear what happened from Pennsylvania`s own House majority
leader, Mike Turzai.

(BEGIN VIDEO CLIP)

MIKE TURZAI (R), PENNSYLVANIA STATEHOUSE MAJORITY LEADER: We are
focused on making sure that we meet our obligations that we have talked
about for years, pro-Second Amendment, the Castle Doctrine is done. First
pro-life legislation, abortion facility regulations in 22 years, done.

Voter I.D., which is going to allow Governor Romney to win the state
of Pennsylvania, done.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

KLEIN: You`re supposed to say that last part to yourself.

The law`s under fire from voters rights groups like the ACLU and The
Advancement Project. They filed a lawsuit. But a commonwealth judge last
week ruled against them, refusing to halt the implementation of the law.
The plaintiffs appealed to the state Supreme Court, which agreed yesterday
to expedite the case, set a new date for September 13.

Meanwhile, the Department of Justice is taking a hard look at the
law`s constitutionality. And just this week, Governor Corbett`s
administration blasted the DOJ for prying where they say it has no
business.

Pennsylvania`s general counsel wrote -- quote -- "In light of the
absence of authority for your request for information, I question whether
your inquiry is truly motivated by desire to assess compliance with federal
voting rights laws or rather is fueled by political motivation."

Political motivation, huh? Pot, meet kettle.

Joining me now is Judith Browne-Dianis, co-director of The Advancement
Project, and Jim Burn, chair of the Pennsylvania Democratic Party.

Thank you, both.

JUDITH BROWNE-DIANIS, CO-DIRECTOR, ADVANCEMENT PROJECT: Thank you.

JIM BURN, CHAIRMAN, PENNSYLVANIA DEMOCRATIC PARTY: Thank you.

KLEIN: So, Judith, the words in the statement from Corbett`s general
counsel that stood out to me were absence what authority.

What authority does the DOJ have here, or is Pennsylvania right and
they don`t, it`s not their jurisdiction?

BROWNE-DIANIS: Right.

Well, clearly, I mean, the state of Pennsylvania has a lot of nerve
talking about partisan politics behind the motivation. Actually, the
Department of Justice has the authority under the Voting Rights Act of
1965. They are on the side of voters trying to make sure that
Pennsylvania`s law, which is a clear partisan manipulation of our voting
laws, does not stand in the way of the right to vote for African-Americans,
Latinos, elderly voters, and veterans, who are the hardest-hit by this law.

KLEIN: Now, Jim, let`s say the legal challenges don`t work. What
sort of preparations has your organization made to, for one thing, make
sure people know about it? I assume almost everybody watches HARDBALL, but
there might be some who have actually slipped through our cracks.

It`s possible. And in the event someone has missed your program, we
have been working for months on the ground.

KLEIN: Unlikely.

BURN: We have been working for months on the ground to recruit,
identify, and outreach those who may be affected.

There are many folks in Pennsylvania who, A., don`t know about this
law, and, B., if they do, they`re making an assumption that they have
proper I.D. So as we`re going door to door with a variety of groups on the
ground to have the same interests we do, to ensure that Pennsylvanians can
exercise their constitutional right to vote, we`re not assuming and taking
their word at face value, even if they genuinely think they have what they
need.

We will ask to see it. And if it is not in conformity, we will make
sure that we get them squared away so they can vote this fall.

KLEIN: Judith, the Supreme Court, the Pennsylvania State Supreme
Court, will hear the case on September 13, which is 64 days before the
election.

If they rule against your organization and your co-plaintiffs, right,
is there any further recourse? Or is that the end of the line?

BROWNE-DIANIS: Right.

So, Advancement Project, we are the attorneys in that case. And if we
lose, at that point, the law will be implemented. And, unfortunately,
what`s at stake is hundreds of thousands of votes of people, voters who
want to participate because, you know, this is an important election.

And, clearly, the state GOP knew what it was doing when they put in
place this law that would hit Democratic strongholds. They knew that they
were suppressing the vote. I mean, this -- our case shows there`s evidence
of voter suppression, but there was no evidence of fraud. And we know that
the state is not ready to put an I.D. in the hands of the 760,000
registered voters that don`t have the I.D.

KLEIN: We played a clip, Jim, from the Pennsylvania House majority
leader saying, really unusually explicitly, that this voter I.D. law is
there to help Mitt Romney win.

Now, I -- I have to assume that his answer for that is that he`s
saying that, if that wasn`t there, then there would be so much voter fraud,
despite the fact that there`s no evidence of this kind of in-person voter
fraud being a factor. But has that statement captured on video, has it been
much of an earthquake in Pennsylvania? Or has it mainly been written off?
Every time I`ve seen it, I`ve seen it a number of times. I`m kind of
shocked.

BURN: It has had an effect. Mr. Turzai has been known for his off-the-
cuff remarks and his inappropriate statements. This time, we appreciate
the appropriateness of it through his party. But it is, in fact, the
truth. It is unprofessional and ridiculous and hypocritical for the
Corbett administration to say and write what they did to the Department of
Justice about politics.

I mean, look at what Mr. Turzai said. Governor Corbett as an
attorney general, prosecuted zero cases, the numbers as you indicated were
more like three quarters of a million, and they hired a Mitt Romney
fundraiser, Chris Bravacos, to do the P.R. here in Pennsylvania. So like
you said, pot, meet kettle.

And Tom Corbett was attorney general, what would he have said? How
would he have reacted to that type of response to one of his requests for
information? It ups the hypocrisy.

KLEIN: Judith Browne-Dianis and Jim Burn, thank you both for being
here.

JUDITH BROWNE-DIANIS: Thank you.

KLEIN: Coming up, Republicans, Paul Ryan among them, want to return
America to some version of the gold standard, and that is not a very good
idea. We`ll get into it, next.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

KLEIN: New poll in some key Senate races around the country. And
for that, we check the HARDBALL score board.

In Virginia, a new poll from Public Policy Polling finds a dead heat
between former Governor Tim Kaine and former Senator George Allen, 46
percent to 46 percent.

In Ohio, the CBS/"New York Times"/Quinnipiac has incumbent Democratic
Senator Sherrod Brown up by seven points over Republican challenger Josh
Mandel.

In Florida, the same poll has Senator Bill nelson with a nine-point
lead over Republican challenger Connie Mack.

And in Wisconsin, former HHS Secretary Tommy Thompson, former
governor of the state has a six-point lead over Democrat Tammy Baldwin.

We will be right back.

(COMMERCIAL BREAK)

KLEIN: Welcome back to HARDBALL.

In 1981, President Ronald Reagan created the gold commission. The
commission was there for one reason, to figure out if America should go
back to a gold standard in order to beat the dreaded inflation monster.
The conclusion of the commission, no, bad idea, do not do that thing.

And that was Ronald Reagan`s commission, the Gipper. And it came at
a time when inflation was really high. You couldn`t have picked a more
sympathetic president or more sympathetic moment to look at the gold
standard. And they still rejected it.

So, fast forward 30 years, we`re here in the present now, no
inflation problem, the head of the Federal Reserve was originally appointed
by George W. Bush and credited with having headed off a potential Great
Depression with creative monetary policy in `08.

And so, what does the Republican Party want to do? Well, according
to a draft of the party`s platform, they want another gold commission to
study whether or not we should go back to gold.

Now, you might dismiss this as meaningless capitulation to the Ron
Paul`s delegates, but that is not what Representative Marcia Blackburn,
Tennessee Republican who co-chairs the GOP`s party platform committee says.
She says, "These were adopted because they are things that Republicans
agree on. The House recently passed a bill on this and this is something
that we think needs to be done."

One of those House Republicans who helped pass that bill is Paul
Ryan. To my knowledge Ryan has not, in fact, endorsed an actual gold
standard. He`s frankly too smart for that. Instead, he endorsed something
that sounds better than a gold standard but is basically the same and
perhaps even a little bit worse. He wants to tie the dollar to, quote, "a
basket of commodities."

And nothing gets the ratings up like a basket of commodities, but we
do need to explain this for a second because it`s very important. A gold
standard means it`s dollars backed by gold. The problems with the gold
standard are legion, but the most obviously is that our currency would
fluctuate with the global price of gold as opposed to the needs of our
economy. So, South Africa finds a new gold mine, currency`s all different.

Pegging the dollar to a basket of commodities works the exact same
way. Now, the currency fluctuates alongside gold, soybeans, oil, and
whatever else we choose to put in the basket. And like with a gold
standard, those commodities don`t care about the needs of the American
economy.

As "Slate`s" Matt Yglesias writes, it means, quote, "If a drought
devastates a corn crop or war disrupts Persian Gulf oil supplies, we
automatically respond with tight money and demand-induced recession.
Alternatively if someone discovers a cheap pollution free method of
generating unlimited electricity in which yay, we`d end up with a ton of
inflation."

The other weird thing about this is that in 1981, the country really
was facing an inflation problem. It made sense that people would be
looking for radical alternatives that would help control inflation. Today,
inflation is about as low as it`s ever been and we`ve just come through a
financial crisis in which the entire global economy might well have
collapsed if the Federal Reserve hadn`t stepped in as a lender of last
resort after the credit markets froze.

Across the sea, we`ve been watching as the eurozone dissolves amidst
fears that the European central bank won`t act as a lender of last resort
over there. As the economist Barry Eichengreen writes and he`s really the
expert on this kind of thing, a gold standard could mean, quote, "The kind
of liquidity injections that made -- the Federal Reserve made to prevent
the financial system from collapsing in the autumn of `08 would become
impossible."

So, unlike in `81 when the gold standard made a kind of superficial
sense in response to our problems, 2012 is a moment when a gold standard
would clearly have worsened our problems dramatically, hugely, made them
super bad. As Eichengreen says, the ideas proponents, quote, "paint the
gold standard as a guarantee of financial stability. In practice, it would
be precisely the opposite."

And yet exactly what some Republicans say they want to do.

Joining me now Jared Bernstein, is a senior fellow at Center on
Budget on Policy Priorities and an MSNBC contributor and he was former
chief economic policy adviser to Vice President Joe Biden. And David
Weigel is a political reporter for "Slate" and an MSNBC contributor.

David, I`m actually going to start with you on this.

Why does gold have this alluring idea on the Republican side? Milton
Friedman, who is President Ronald Reagan`s chief economist for a period,
one of the most legendary conservative economist, he hated the gold
standard. He said that was really government intervention because he`d had
the government setting the price of gold. But that hasn`t seemed to really
take and conservatives seem to be gold bugs again.

DAVID WEIGEL, MSNBC CONTRIBUTOR: Well, I guess the simplest
explanation is one that Lewis Lehrman, who was of the guys on that gold
commission, one of the minority members of Ron Paul who said we should
return to it, he wrote about this in 2007 and said basically, if you
brought the government back to a gold standard, he was kind of writing this
as an endorsement of Paul Ryan, commodities idea, to bring the government
back to a gold standard, it doesn`t have the ability to inflate. And thus
wouldn`t have the ability to spend.

And -- I mean, this I think when you hear Rick Perry talk about it,
when you hear -- Republicans who are not Ron Paul talk about it, it comes
back to that. They look at what the government has been able to do during
this recession, the way it hasn`t had to cut back dramatically. They said
for openly and for a long time, they want to liquidate, they want to
(INAUDIBLE) approach, right, because the Fed can create money, then they
don`t have to cut back. I think that`s the heart of their newfound love
for the gold standard.

KLEIN: And yet, Jared, at the beginning of the recession,
Republicans had stimulus proposals. John McCain wanted to deficit spend a
bunch, to do a big tax cut, so does Mitch McConnell, Jim DeMint had a
bigger permanent tax cut. Would -- I mean, a gold standard in theory if
you weren`t able to expand the currency to do that kind of thing, you
wouldn`t be able to do that kind of thing.

JARED BERNSTEIN, MSNBC CONTRIBUTOR: I mean, you quoted Barry
Eichengreen, and that kind of gets to the heart of this. I mean, if you
think about the financial collapse, the housing bubble when it burst, you
really had a financial sector that desperately needed liquidity injections.
Meaning, the Federal Reserve had to get to work and inject money into the
system.

Under a gold standard, that would have been impossible. And what
that means quite literally is that the credit system wouldn`t have just
kind of need a reflation, it would have shut down. And recession would
have morphed into great depression. No question about it.

KLEIN: Dave, Paul Ryan said that when he begins thinking about
monetary policy, he literally begins by going back to the work of Ayn Rand
--

WEIGEL: Right.

KLEIN: -- which surprised to me because I didn`t know she had a lot
of monetary policy in her books, but I guess she does. You`ve written a
bit on this.

So, what does he mean by that?

WEIGEL: Well, he said this in a speech in 2005 and he specifically
says, he goes back to Francisco d`Anconia who gives a speech about money.
One of the points --

KLEIN: In?

WEIGEL: In "Atlas Shrugged."

KLEIN: In "Atlas Shrugged," right.

WEIGEL: In "Atlas Shrugged," that`s one of the most allegorically
powerful, it`s one he goes back -- Republicans go back to. What he said
was that basically -- I`m going back to the quote. The problem with paper
money is it`s counterfeit. And the problem with using that instead of gold
is it killed all objective standards. It`s meant to be arbitrary power of
trade, instead of a commodity you can trust, it allows people to make money
out of nothing.

You hear that phrase counterfeit, I`m not saying Rand Paul took
everything from that novel, he says he didn`t. But you hear that phrase
counterfeit very often and I think when Ryan describes his problems to the
system, it`s that, is that you can`t trust bureaucrats in the Federal
Reserve to make these monetary decisions. You should trust gold miners.
You should commodities, yes.

KLEIN: And Jared, this goes to something that I think is important,
which is this feeling that fiat currency, currency not back by a metal or
something, just confuses people. I want you to explain it to me as soon as
we come back.

BERNSTEIN: OK.

(COMMERCIAL BREAK)

KLEIN: Welcome back to HARDBALL.

We`re back with Jared Bernstein and Dave Weigel. I have a question
for you, Jared Bernstein and that is this.

People get I think freaked out by the idea that a bunch of bankers,
someone in the Federal Reserve, are controlling our money. So, they like
the idea of gold.

Under gold, who controls our money?

BERNSTEIN: Under gold, the supply of gold controls our money and the
Federal Reserve basically is out of picture. So, let me explain what that
means. You lose monetary policy if you move to a gold standard.

Again what does that mean? It means you no longer control your
interest rates. You can`t raise interest rates if inflation is a threat.
You can`t bring interest rates down if you need to boost the economy.

And here`s an historical fact that have always guided economists
thinking about this. At the end of the Great Recession, when so many
economy are so contracting and still weighted to the gold standard, it
turns out that there`s a very strong correlation between when companies got
off the gold standard and when they recovered.

KLEIN: Right.

BERNSTEIN: And the reason is exactly what I`m saying here, they had
the freedom then to use interest rate policy as the Federal Reserve does
today to boost growth. The countries that stayed on the gold standard
stayed in recession.

KLEIN: And quickly, Dave, what is the politics behind this? Does
this placate the Ron Paul folks? Is this -- why is this in the Republican
Party platform?

WEIGEL: I mean, it`s widespread now. Paul Ryan, a couple of years
ago, voted to get rid of the Federal Reserve`s mandate to decrease
unemployment, right? It has two mandates. It has the currency mandate.
It has the employment mandate.

He wants to get rid of that. That all comes from the belief that the
Federal Reserve should not be intervening in markets that way. It
shouldn`t be intervening in the employment market that way.

That has gone far beyond Ron Paul. I think Ron Paul`s particular
reasons for wanting this are kind of at a molecular level have gotten to
the rest of the Republican Party. But when you hear Rick Perry say
something like Ben Bernanke should be lynched if he comes to Texas, the
reason he was against that was he felt like Bernanke was creating money
that was going to inflate -- maybe create inflation down the lines but to
create jobs that would help Barack Obama.

This is what Republicans want to get rid of. No more Federal Reserve
creation of jobs. Get back to exactly what the people in the economy are
creating.

KLEIN: The Federal Reserve are doing its job. It`s not to fire Ben
Bernanke.

Jared Bernstein, Dave Weigel, thank you guys so much.

BERNSTEIN: Thank you.

KLEIN: I`m Ezra Klein, sitting in for Chris Matthews. He`ll be back
Monday, live from the Republican Convention in Tampa, Florida.

You can read more of my work at "The Washington Post`s" Wonk blog at
Wonkblog.com. follow me on Twitter at Twitter.com/EzraKlein or the
Facebook at Facebook.com/EzraKlein.

That is HARDBALL for now. Thank you for being with us.

"POLITICS NATION" with Al Sharpton begins right now.


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