updated 9/15/2010 5:46:51 PM ET 2010-09-15T21:46:51

Guests: Brooke Brower, Jonathan Martin, David Corn, Steve Kornacki

CHRIS MATTHEWS, HOST:  A wild finish.  Let‘s play HARDBALL.

Good evening, I‘m Chris Matthews in Washington.  Leading off tonight, thunder on the right, rebellion.  Well, you could get mad, you can deny it, do what gets you through the night, but get this too: voters aren‘t saying, keep up the good work out there, they‘re saying, off with their heads.

And like the scared, frustrated, angry anchorman in the movie “Network,” people are mad as hell and aren‘t going to take it anymore. 

For months their targets have been Republican insiders, power types, men with overdue sell-by dates, men like Specter and Bennett and Castle.  How can anyone, liberal, progressive, moderate, or conservative Democrat deny this spells historic trouble for the party that now awaits the terrible anger we have seen unleashed on the right?

Whatever else voters were doing today in Delaware, in New Hampshire, and New York, they were not blowing kisses at Barack Obama.  Of all of the surprises in all of the primary elections this anti-incumbent season, nothing tops what happened tonight. 

This, the last major primary night, has produced the most stunning upset of the year.  What happened tonight were the loudest examples yet of the anti-Washington, anti-establishment fever that has gripped much of the country, and in particular, the Republican Party. 

In the state of Delaware, Christine O‘Donnell, who just a week ago was considered no more than an obscure tea party also-ran, shocked the Republican political establishment by defeating Congressman Mike Castle.  With 100 percent of Delaware‘s precincts reporting, O‘Donnell won 53 percent of the vote to Castle‘s 47 percent. 

Until perhaps a day or two ago, Republicans had every reason to assume that Castle would win the nomination and cruise to victory in the general election against Democrat Chris Coons.  That would have given the GOP a pickup of the seat recently held by Joe Biden.  Now all bets are off. 

In New Hampshire, the other big tea party candidate, Ovide Lamontagne, is leading former state Attorney General Kelly Ayotte in a race that has been getting closer by the minute tonight.  With 35 percent of the precincts reporting now, Lamontagne has 40 percent to 38 percent for Ayotte, the front-runner before tonight. 

In New Hampshire, as in Delaware, the establishment candidate, in this case Ayotte, is battling an insurgent outsider candidate.  If Ayotte loses, that would mean that nine establishment Republicans have either been defeated or forced out of the GOP in top Senate races by the party‘s extreme right. 

Two more races of note tonight.  Wow, in New York State, Buffalo businessman Carl Paladino, a perennial fringe candidate, has won the Republican nomination for governor. 

With 75 percent of precincts reporting, Paladino had 65 percent to 36 percent for favorite Rick Lazio, who lost New York‘s race just a couple years ago to Hillary Clinton in that Senate race.  Paladino begins this race as a big underdog, of course, to Democrat Andrew Cuomo. 

And in New York City, battled Charles Rangel, the former chairman of the House Ways and Means Committee, has survived the toughest race of his life, beating a large field of Democratic candidates.  Rangel should be a November shoo-in in this heavily Democratic district. 

Well, tonight‘s Senate results may have profound implications for whether Republicans can win the Senate.  Nate Silver, who runs the political Web site 538.com, says wins by the two tea party candidates would cut the Republicans‘ chances of taking the Senate roughly in half.  We will see about that. 

Joining me now, Politico‘s Jonathan Martin and HARDBALL producer and Delaware Brooke Brower. 

First, Jonathan, I am stunned.  All day today we heard Castle has got it.  The establishment circling the wagons.  They know she is trouble.  They have been running negative ads against her for a couple of days.  They thought they had killed her in her crib.  Instead she has won big tonight. 

JONATHAN MARTIN, POLITICO:  They is something profound going on, I think, you know, in American politics right now.  And this is the most vivid example yet.  A political pillar like Mike Castle, a serious person, respected in that state.

MATTHEWS:  Governor, congressman, everything.

MARTIN:  Governor, incumbent congressman, loses it to somebody who was a virtual unknown.  And obviously very controversial as well. 

So talking to, you know, the folks tonight, Chris, in the GOP, they‘re very, very concerned about what this means obviously for taking back the Senate. 

MATTHEWS:  But isn‘t this good.


MARTIN:  . a lot harder.  But.

MATTHEWS:  Doesn‘t this show the anger is out there that‘s going to help them in November? 

MARTIN:  But the silver lining, though, talking to folks tonight in the GOP, is this, the energy that they are now sort of facing, that they are feeling themselves is going to be turned on the Dems here in two months. 

MATTHEWS:  That anger, I think I said it in the opening, the anger we‘re seeing intramural—in these intramural fights.

MARTIN:  That‘s the hope among Republicans.

MATTHEWS:  . is going to be unleashed in two months on the party they really hate and the president they hate. 


MATTHEWS:  Brooke Brower, you and I talk politics every day of our lives around here, trying to get this show together.  Here you are on air, you‘re a Delaware guy, you know that state.  What happened to make this the biggest surprise of the entire season? 

BROOKE BROWER, HARDBALL PRODUCER:  Delaware Republicans have been voting for Mike Castle statewide for 30 years, 30 years.

MATTHEWS:  Without a hitch.

BROWER:  Without a hitch.  He wins 65 percent, 60 percent, in the 50s, governor, Congress.  This—shock.  Shock is the word I have heard so many times today and even leading into today. 

MATTHEWS:  Are there any hidden local factors that could have lead us to this we didn‘t see coming in from the outside? 

BROWER:  It looks like there was a broader anti-establishment movement that affected the race to replace him in the House also.  There was an establishment candidate, Michele Rollins versus another—Gary (sic) Urquhart, a developer. 

It looks like he is going to pull it out and defeat Rollins too.  And he was running against her as the establishment.  So there may have been, in effect, a double-team against the establishment at the top of the ticket.

MATTHEWS:  Well, here is Christine O‘Donnell.  Make your own—she seems very young, very new to politics, but, wow, a lot of enthusiasm.  Here is Christine O‘Donnell, who does remind me of—sort of the East Coast version Sarah Palin.  Here she is in her victory speech night.  Make your own judgment. 


CHRISTINE O‘DONNELL (R-DE), SENATE CANDIDATE:  A lot of people have already said that we can‘t win the general election. 


O‘DONNELL:  I know.  It is those same—yes, we can! 

CROWD:  Yes, we can!  Yes, we can!

O‘DONNELL:  That‘s right!

CROWD:  Yes, we will!  Yes, we will!

O‘DONNELL:  Yes, we will!  I like that!  Yes, we will.

O‘DONNELL:  It is those same so-called experts who said we had no chance of winning the primary.  It will be hard work, but we can win.  And if those same people who fought against me work just as hard for me, we will win. 



MATTHEWS:  You know, it‘s a—Jonathan, you are talking about the pattern across the country.  You can criticize a candidate like that as being new to the game, young, maybe too enthusiastic, I think very attractive obviously in her personality, likability, no problem with her.  We will have to see how people respond to her and to Coons, who is a—

Coons is a major figure in Delaware, right?

MARTIN:  He is the chief executive of New Castle County.

MATTHEWS:  Which means he basically is the—he is like the Bloomberg of Delaware. 

MARTIN:  He runs the biggest and most populous part of the state. 

And, Chris, let‘s not forget, too, we get so caught up in primaries, there is a big difference between primaries and a general election.  This was a closed primary tonight in Delaware, meaning only Republicans can vote. 

This fall you‘re going to have Democrats, Republicans, independents, all voting.  It‘s a very different scenario. 


MATTHEWS:  Yes, Jonathan, I know that.  But isn‘t it possible that what we are seeing is an energy level on the right that will not be matched on the left? 

MARTIN:  Yes. 

MATTHEWS:  Because the Democrats, we all know anecdotally, a lot of them are frustrated that things haven‘t turned out golden for Barack Obama.  That there has been a lot of failure to get what they want done.  They may sit on their hands and the Republicans will run the general election. 

MARTIN:  And that is going to win a lot of states.  But the question now is, is that going to mean eight states or is it going to mean 10 states?  And I think after tonight, it could be a heck of a lot tougher.

MATTHEWS:  OK.  Let me talk—Brooke, you and I (INAUDIBLE).  Right now, you know that the fight in the country really has now gotten down to, sure the state of Delaware it is going to be close.  California is going to be close for Barbara Boxer, first race of her career like this.  Patty Murray is in trouble in Washington State.  Russ Feingold is in trouble, Mr.  Perfect, in Wisconsin.  And you‘ve got the Senate leader, can‘t shake Sharron Angle.  I can see all of those races lost.

Pennsylvania, 7 points behind, Sestak.

BROWER:  Ohio.

MATTHEWS:  What‘s his name?  Rand Paul is up by 7.  Roy Blunt is up by 7 in Missouri.  All of those states, they‘re breaking into a lead. 

BROWER:  That is the other “E” word.  We‘ve heard all night, the “E” word is establishment, the other “E” word is enthusiasm.  The people in Delaware thought that turnout tonight would be 30,000, maybe a little more.  They had almost 60,000 people vote in this primary. 

And so Christine O‘Donnell certainly benefited by a level of enthusiasm that the Castle people never saw coming.  And you can‘t emphasize enough that this is a rejection in this Republican primary of a guy they know.  This isn‘t some candidate.


MATTHEWS:  OK.  Let‘s talk about the fact we know a bunch of people, Robert Bennett in Utah, thrown out the door.  Charlie Crist rejected by his own party, has to run as an independent. 

BROWER:  Murkowski. 

MATTHEWS:  Arlen Specter had to leave his party, go to the Democratic Party, right next door.  You know, the media market, Philadelphia is the Delaware media market.  Arlen Specter was beaten in his own party, then beaten in the Democratic Party.  Two parties rejected the establishment candidate.

BROWER:  And when Arlen Specter switched parties, he told us what he was doing.  He said he didn‘t want his record judged by Republican primary voters.  And look what happened.  And look what happened.

MATTHEWS:  After 30 years.

BROWERS:  After 30 years, and that is what Mike Castle had happen to him as well. 


MATTHEWS:  Thirty years of public service is defeated in the end, not by the people of Delaware, but by the small—well, 60,000 voters in the Republican Party. 

BROWER:  Castle woke up to Specter‘s nightmare in a Republican primary.

MATTHEWS:  So Arlen is probably saying—well, he lost anyway.  There is no victory for this.  We‘re going to get to this in a second.  But this is no country for old men.  It just seems a lot of this we‘re looking at is sell-by date.  These candidates, like Castle, Specter, Bob Bennett, maybe Barbara Boxer, have been around a while. 

How can you, in a bad time, say you have been around 30 years, and you are going to change something tomorrow?  They already know you‘re not going to change anything.  So they might as well take a chance on the new kid. 

I mean, if you are a voter in Delaware, Brooke, you know this state pretty well, and you want change, why would you vote for Mike Castle, he has been there 30 years? 

BROWER:  Well, what he experienced was a smaller pool of Republicans, relatively speaking, too.  It‘s a state that‘s.

MATTHEWS:  Well, could he argue himself as the change candidate or just as a steward of the way things are? 

MARTIN:  Well, and the problem is that all of the old appeals that go with being sort of.

MATTHEWS:  Credentials.

MARTIN:  Yes, the credentials.

MATTHEWS:  Don‘t mean anything. 

MARTIN:  You know, I can bring home the bacon.  I can do more for you.  That is always sort of one of those things you hear, I can do more for fill-in-the-blank state.  It doesn‘t mean anything anymore. 

MATTHEWS:  People don‘t want to hear about seniority. 

MARTIN:  You know, Specter, Chris, in Pennsylvania, and Bennett in Utah, they were touting their seniority on appropriations.  People were saying no, that is the problem.  We know that.  We don‘t like that. 

MATTHEWS:  And you can‘t tell how many bills you passed either.  They don‘t like bills.

MARTIN:  Don‘t want to hear about it. 

MATTHEWS:  They don‘t want to hear about the usual things that got—it used to be members of Congress would come home during a break and pull out a card.  And they would show on the card all of the bills that the Congress passed that year.  I bet they don‘t show that card anymore.

MARTIN:  Or the pork, right?  A bridge.  A dam.  A turnpike.  What have you.

MATTHEWS:  By the way, here is O‘Donnell thanking Sarah Palin, who endorsed her.  By the way, let‘s not forget, Sarah Palin may not have a golden touch, but, boy, she gave this candidate a big touch that got her over the top.  Here is the candidate who won tonight thanking the one who endorsed her.  Let‘s watch.


O‘DONNELL:  So, again, you betcha! 


O‘DONNELL:  There is another woman I‘ve got to thank, you betcha! 

Thank you, Governor Palin, for your endorsement.  Because she got behind.




MATTHEWS:  Well, she reminds me more of Katie Couric actually than Sarah Palin. 

MARTIN:  It‘s a mix.  It‘s a mix, yes. 


MATTHEWS:  . physically, but obviously she‘s a very attractive person. 

But this idea of “you betcha,” making these allusions about the common speech, it has become so common now, you can say “you betcha,” and you know you are talking about Sarah Palin. 

MARTIN:  Chris, you are a student of history.  1980, it seems very, very familiar, right?  A lot of sort of anger in the country and sort of anti-Carter feel. 

MATTHEWS:  You‘re teeing me up.  You‘re teeing me up.

MARTIN:  No, Paula Hawkins, right? 

MATTHEWS:  I saw a guy vote one time in 1980.  He went racing into the voting booth.  He raced in there.  He raced past all of the people holding placards and holding leaflets and pamphlets.  He didn‘t want to hear anything.  He knew what he was going to do.  He was so angry he just wanted to pull the fricking lever down and jam it against the Democrats in power. 

MARTIN:  That‘s right.

MATTHEWS:  I think you‘re right.  I think you cued me.  I think the anger out there is so visceral and gut. 

MARTIN:  And seniority.

MATTHEWS:  They can‘t wait to get there. 

MARTIN:  . meant nothing.

MATTHEWS:  You know who is happy today?  The people who are miserable and know they‘ve got something to do about it. 

MARTIN:  Right.  And seniority them meant nothing.  Warren Magnuson, chairman of Aprops, it meant nothing.  Same deal now: Bennett, Specter, Murkowski, they‘re all.


MATTHEWS:  We don‘t need no stinking badges. 

MARTIN:  Or pork.

MATTHEWS:  Right.  Thank you, Jonathan Martin.  Thank you, Brooke Brower, as always, this guy is my brain most of the day.  There you get to see him.

Coming up.

BROWER:  Son of “The First State” right here.

MATTHEWS:  I‘ve got to hide you. 

Anyway, coming up, the far right is on the rise, and when a candidate like Mike Castle loses in a state like Delaware—it can‘t be done, it happened.  We want to know just is what is going with the Republican Party these days.  Have the Republican leaders lost control of their troops? 

And for the Democrats, could tonight‘s results be a case of “be careful what you wish for”?  You may want these fringies to win, but they may well be the senators within a couple of months. 

You are watching HARDBALL, only on MSNBC.  By the way, the person who wins, I‘m told, doesn‘t have to wait.


MATTHEWS:  We‘ve been talking about little old Delaware tonight, it is a big spotlight.  But now look at what is going on in another Senate race in another Northeastern state, Connecticut.  Republican Linda McMahon is now just 6 points, a half a dozen points shy of Democrat Richard Blumenthal in the latest Quinnipiac poll.  And that is a first rate poll.  Look at that, 51-45.  It is getting real close. 

She has got the money.  She may get the women vote.  That‘s it.  This could be a real big surprise.  He had that problem with his war record.  He got that wrong.  Let‘s get this: four in 10 people who support McMahon say they‘re doing so mainly because they are against Blumenthal.  I think it has to do with his talking about his war record inaccurately.  It‘s a big hurdle for Blumenthal to overcome.  They don‘t trust him. 

If I were him, I would straighten things out as fast as possible.  Say you didn‘t serve in Vietnam, you were wrong to suggest to anybody that you did.  It was a dishonor to the people who served to even suggest you did.  Just fix it, Mr. Blumenthal.  That is what I would do.  HARDBALL returns after this. 



REP. MIKE CASTLE (R-DE), SENATE CANDIDATE:  We had a long discussion about whether I should run for the Senate or not.  And we finally decided together that I should.  We will have a long discussion tonight about whether that was a good discussion or not. 


CASTLE:  That‘s a whole different story. 

I would like to thank the Republican Party for its support. 


MATTHEWS:  Wow.  Welcome back to HARDBALL.  That is Mike Castle conceding defeat tonight to tea party candidate Christine O‘Donnell in the state of Delaware. 

Now we have new numbers from New Hampshire, Republican Senate primary number: with 43 percent reporting, Ovide Lamontagne holds a 1-point lead over establishment candidate Kelly Ayotte, 39 to 38.  She keeps making up ground.  She may overtake him tonight. 

Tea party candidates once considered far to the right, Christine O‘Donnell, Sharron Angle of Nevada, Rand Paul of Kentucky, Ken Buck of Colorado, and Joe Miller of Alaska are now seriously challenging Democrats for Senate seats this November. 

Is this a case being careful what you wish for?  The old Chinese curse?  Joining me right now is David Corn who writes for Mother Jones Politics Daily; and Steve Kornacki of salon.com. 

David first, then Steve.  You know, I said this earlier tonight, one of the oldest liberal sort of misconceptions or self-delusions is, oh, if they run a real crazy against us, we are going to beat them. 

DAVID CORN, MOTHER JONES:  I‘m not sure that it is a liberal delusion.  It seems to be a Democratic establishment delusion.  I mean, they are really—you know, people are now saying that the Delaware seat is a safe pickup for the Democrats.  They are celebrating this. 

And, you know, by all appearances, that is probably the case.  The early reporting is that the Republicans are not going to give money.  But I think you do have to be careful what you wish for. 

We see in Kentucky, Rand Paul, who would have been put in this category not too long ago, is actually leading despite all his gaffes and extremism. 

MATTHEWS:  Up by 7. 

CORN:  He is up by 7 points against the attorney general, who is a statewide elected Democrat. 


MATTHEWS:  Conway.  He is a very attractive candidate too.  He knows his stuff.

CORN:  Jack Conway, a good candidate. 

MATTHEWS:  He knows his stuff.

CORN:  In Alaska, Joe Miller is, you know, seen as the—far and away the favorite. 

MATTHEWS:  I thought Pat Toomey in Pennsylvania, growing up, Steve, was so far out from the mainstream that he could never win a general election.  I was thinking a lot about that, in fact, once.  Seriously thinking this guy can‘t win a general.  If you can get in a race with him, you‘ve got it made. 

And now Sestak is struggling against him.  So the idea that a Club for Growth conservative, far-right conservative, or a tea party is unelectable?  In these times, could anybody who‘s angry win?

KORNACKI:  Well, I think it depends.  And I think you have to sort of separate some of these tea party candidates, you know, sort of among themselves.  I mean, you look at a guy like Toomey, and what I see in Pat Toomey is Rick Santorum from 1994.  Probably the only year when Rick Santorum, very, very conservative guy, could have gotten elected in Pennsylvania was the “Republican revolution” of 1994.  You saw what happened to Rick Santorum when he ran in a bad year for Republicans in 2006.  He got beat by 20 points, wasn‘t even close.

So I look at a guy like Pat Toomey, I see he‘s basically a doctrinaire, you know, sort of tea party conservative ideologically, but sort of—he‘s also sort of a solid guy.  If you contrast that with Christine O‘Donnell in Delaware, she carries an enormous amount of personal baggage into this general election campaign.  She‘s going to be very easy to caricature as sort of a flaky, you know, sort of kooky character.

And I think that‘s where things start to get different.  To me, what I‘m looking for when I look at these tea party candidates—I agree with you, a lot of them are going to end up winning even in states where you ordinarily wouldn‘t think they‘d win.  But what I‘m looking for is which ones are Oliver Norths.  If you think of 1994...

MATTHEWS:  Yes, I get you.  I get you.

KORNACKI:  ... Oliver North lost the un-losable election.  I look at Christine O‘Donnell, I see Oliver North.  I look at Sharron Angle, I think I see an Oliver North.  And depending on what happens...

MATTHEWS:  Be careful.


MATTHEWS:  Be careful because Harry hasn‘t been able to shake her...

KORNACKI:  Agreed.

MATTHEWS:  ... weeks and weeks and weeks of her getting pilloried by third parties out there, whacked and whacked again.  With all the evidence of her fringeness, and she‘s still exactly even with Harry...


KORNACKI:  But to me—to me, that‘s—that‘s—that‘s almost a triumph at this point for Reid, not that he‘s ahead by 15, that he‘s even, because he should be losing by 15 or 20.  You know, you bring up a guy like Rand Paul, you know, (INAUDIBLE) ahead by 7 points.  And yes, I agree Rand Paul is probably going to win in Kentucky.  But that‘s a race that ordinarily in this climate the Republicans should be wining by 20.  So you know, if Rand Paul...

MATTHEWS:  OK, let me ask...


MATTHEWS:  Let me get—before we get to the question of what they‘re going to be like in the Senate (INAUDIBLE) it‘s about who can actually get 50.  After all is said and done and they both shoot everything they got against each other, who has the better chance of getting 50 percent and winning the thing?  Is Harry Reid capable of getting up to 50 at a time when people want to throw the bums out?  Is anybody running as a Democrat capable of getting 50 in these times, in these tough races?  That‘s the tough question.

CORN:  Well, that‘s the question.  Right now, we‘ve seen—we‘ve been living inside the Republican bubble, which has been dominated, infested, whatever you want to say, by the tea party.  It‘s not the GOP now, it‘s the GOTP.  That‘s quite clear.  Now, the question is whether that anger spreads to independent voters or even to some—a few Democrats, who are then going to...

MATTHEWS:  Well, I mean, we look at our polling...

CORN:  ... who are going to...

MATTHEWS:  You know, guys, our polling‘s been pretty damn good this year.  Polling about enthusiasm, Steve, is awful good.  It‘s been telling us consistently—Christine was ahead in the polls a couple of days ago, 24 hours ago.  The polls did get it right, even (INAUDIBLE) a couple robocall polls.  They weren‘t really...


CORN:  These are polls in Republican races.

CORN:  Right. When we get to Republicans versus Democrats, we‘re going to see how far that anger spreads.  But I‘m with you.  I‘m worried about Harry Reid‘s seat.  I don‘t think it‘s good news that that lead that he has over Sharron Angle is as small as it is.  If there is a lot of anger amongst independents and low enthusiasm with Democrats, he could be in a lot of trouble.

MATTHEWS:  You know, we saw, Steve, back in 1968 -- historically, you guys saw it, too—the fact that you had a challenge by Gene McCarthy against then President Johnson.  And even though he didn‘t beat him in New Hampshire, he certainly sent a signal.  And by Wisconsin, Johnson went out of the race and Bobby Kennedy was in the race.

I see a lot of evidence of people wanting to buck the establishment pretty much all across the country.

KORNACKI:  Well, sure.  I think—I see 1994 all over again.  Like I said, I see one exception from 1994.  The big difference is, in ‘94, the Republican Party began the year and spent the entire year on the same team.  You know, there was—there was no real difference within the Republican Party between the establishment and the party base.

MADDOW:  Right.

KORNACKI:  The assumption of the party base was, If we elect a Republican, any Republican, it‘s going to be good.  This is the year when the party base, I think, kind of got wise to the establishment‘s tricks.  So you‘re seeing the same level of anger within the Republican Party toward the Democratic Party, the same sort of resentment toward a Democratic president.  The difference is it‘s also directed at the Republican establishment, you know, for sort of always putting up these candidates who talk like conservatives, who talk like tea partiers...


KORNACKI:  ... then get to office and vote like, you know, a Mike Castle.

MATTHEWS:  Do you actually think some Republican incumbents are going to lose this year in the general, Steve?

KORNACKI:  I have a hard time seeing where.  I mean...

MATTHEWS:  I don‘t know where they are!


MATTHEWS:  I mean, I would think if you‘re an incumbent Republican, you got it made.  If you‘re an incumbent Democrat, no matter where you are, maybe in some big urban areas, you might be OK.  But if you‘re out in the burbs anywhere, if you‘re in rural areas anywhere, you are exposed to defeat and you could end up just like Mike Castle did, with all your credentials and all your resume stuff, and people are going to say, That‘s what we don‘t like.

KORNACKI:  You know—you know what Republican incumbent‘s going to lose this year?

MATTHEWS:  I mean, Ike Skelton‘s got a tough race.  People like—when I see Barbara Boxer running even with somebody who‘s pro-life in California, where you cannot be elected if you‘re pro-life...

CORN:  Who shipped jobs overseas!


MATTHEWS:  ... bounced out of HP.

CORN:  Yes.

MATTHEWS:  I don‘t get it.  I mean, these—I mean, anybody who wants to whistle past the graveyard, you‘re welcome to it if it keeps you alive.

CORN:  But the problem...

MATTHEWS:  But I‘ll tell you, anybody doesn‘t see the shock value of what happened in Delaware tonight is not paying attention.  This is shocking, rebellious politics by the grass roots, picking somebody who may not be qualified to be a senator.  But she has one thing going for her.  She doesn‘t have a job!


MATTHEWS:  David Corn, Steve Kornacki.

Up next: We know Republicans love to demonize Nancy Pelosi, but a new ad from her opponent in San Francisco may go too far.  He‘s got her as the Wicked Witch of the West in “The Wizard of Oz.”  The “Sideshow” is next.

You‘re watching HARDBALL on MSNBC.



First: making a splash.  Nancy Pelosi‘s Republican challenger, such as he is, John Dennis, is all but assured losing this November.  But that doesn‘t mean he isn‘t willing to get down in the mud.  Check out his new Web ad. 


UNIDENTIFIED FEMALE:  Hello, my pretty.  I will save you from those evil Republicans.  And here are my monkeys to make you pay for it all. 

UNIDENTIFIED MALE:  Get back, everyone.


UNIDENTIFIED FEMALE:  Thank you for saving us.  Who are you? 

JOHN DENNIS ®, CALIFORNIA CONGRESSIONAL CANDIDATE:  I‘m John Dennis.  I‘m running for Congress.  I believe in following the Constitution and I believe in reducing debt.  And I believe it‘s time to throw a little water on politicians who say one thing and do another, like Nancy Pelosi.

UNIDENTIFIED FEMALE:  We‘re home, Toto.  We‘re home. 



Well, Dennis says to look out for more parodies from him like that.  “A Few Good Men” is one of them and “James Bond” in the coming months, whatever those are going to be like.

By the way, Pelosi‘s last Republican opponent won a grand total of 10 percent of the vote. 

Next: back-to-school politics.  Remember when Florida Republican Chairman Jim Greer whacked at President Obama for giving a speech to Texas schoolkids?  He accused the president of—quote—“using taxpayer dollars to indoctrinate America‘s children to his socialist agenda.”

Well, one year later, it appears Mr. Greer has had an epiphany. 

Here‘s what he put out ahead of the president‘s today to a Philadelphia school—quote—“In the year since I issued a prepared statement regarding President Obama speaking to the nation‘s schoolchildren, I have learned a great deal about the party I so deeply loved and served.  Unfortunately, I found that many within the GOP have racist views, and I apologize to the president for my opposition to his speech last year and my efforts to placate the extremists who dominate our party today.”

Well, Greer‘s break with Republicans may have been helped by the fact he‘s facing charges of fraud and money-laundering from his tenure as state Republican chairman down in Florida. 

Well, finally, you think Rahm Emanuel‘s a shoo-in for the mayor of Chicago?  Well, think again.  While Rahm has yet to announce formally, former Illinois Senator Carol Moseley Braun is set next week to announce officially that she‘s running.  This can‘t-be-missed reelection fight, this is going to be one heck of a fight in Chicago set for February 22.

Up next:  Who wins the big political battle over taxes?  I think taxes is going to be knocking at the door of voters as they go in that booth.  Democrats say Republicans are holding the middle class hostage, so rich people can get tax cuts.  Republicans say the Democrats are waging class warfare.  They‘re probably both right. 

The debate is straight ahead.  You‘re watching HARDBALL, only on



BRIAN SHACTMAN, CNBC CORRESPONDENT:  I‘m Brian Shactman with your CNBC “Market Wrap.”

Stocks finishing little changed, as pockets of strength offset by pockets of weakness, the Dow Jones industrial average slipping 17 points, the S&P 500 down just a fraction, and the Nasdaq, though, with a four-point game. 

Shares in major retailers spiking today on steadily rebounding sales.  August sales rose four-tenths-of-a-percent.  That was more than expected and the biggest increase in five months.  Best Buy was a standout today, surging 6 percent on better-than-expected profits and an improved outlook. 

Cisco shares also finishing higher after announcing it will begin paying a dividend of between 1 percent and 2 percent.  That will start in 2011.  But industrials were under some pressure today on slowing demand for steel and a sector downgrade from Goldman Sachs.

Boeing took a hit on a report that the WTO will rule that it received about $24 billion in illegal tax breaks from the U.S. government. 

That‘s it from CNBC, first in business worldwide—now back to HARDBALL and that sharp tie with Mr. Matthews. 

MATTHEWS:  Welcome back to HARDBALL. 


MCCONNELL:  I‘m not going to answer all these hypotheticals.  I‘m going to tell you what I think we ought to be fighting for in the Senate is a permanent extension of the current tax rates. 


MATTHEWS:  Welcome back to HARDBALL.  That was Senate Republican Leader Mitch McConnell earlier today on morning rundown—“DAILY RUNDOWN.”  I love that show, by the way.  I was on my track today, actually my run—my—what do you call that thing?



MATTHEWS:  My—my—the thing you run on.


PALMIERI:  A treadmill? 


MATTHEWS:  My treadmill.

On the tax fight, all or nothing or something in between, and which side has more to gain and more to lose before the midterm?  This is exciting because it affects everybody watching right now who is working, your taxes. 

Let‘s bring in Democratic strategist Jennifer Palmieri, who is with the Center For American Progress, and Republican strategist Ron Christie, who worked for the Bush administration.

Let me ask you both, doesn‘t everybody want a tax cut? 

PALMIERI:  Is this to me?


MATTHEWS:  Doesn‘t everybody want a tax cut?  You don‘t want to answer this question. 


PALMIERI:  No, I do. 


MATTHEWS:  I mean, personally, personally want a tax cut.

PALMIERI:  The polling actually is interesting on this in that a majority of people don‘t support extending the Bush tax cuts. 

MATTHEWS:  But for themselves, they do.

PALMIERI:  No, they don‘t.  When you say should we extend the Bush tax cuts, 52 percent of Americans say no.  I think it‘s because that they think those tax cuts all go to rich people. 

But then when you say should you extend them for rich people or should you extend them for only the middle class, they pick only the middle class.  And I think what‘s great about what John Boehner has done is, he has clarified the difference between the Democrats... 

MATTHEWS:  By saying he would sign that bill.



MATTHEWS:  Let me just try something by you.  I tried it by Ron before we went on the air. 

If nothing happens, we all know everybody‘s taxes go up in January, right?  Who wins then?  If we go to the voting booth and everybody walks in the voting booth and nothing has been happening, and therefore everybody‘s taxes who is watching now are going up in January because they couldn‘t get bill passed, who wins in that case?  Who wins then, Democrats or Republicans?


PALMIERI:  It‘s not going to happen in a vacuum.  There will be a floor fight.  There will be a debate.  And I think if they can‘t get a bill passed, what the Democrats will say is, this is what the election is about.  It‘s about making this decision.

MATTHEWS:  But won‘t people blame the Democrats because they‘re in power? 

PALMIERI:  I think if you—if you—and, again, Mr. Boehner helped us make this case.  If you‘re able to say, I wanted to vote for tax cuts, to extend tax cuts for the middle class, they wanted to give $700 billion in more tax cuts to rich people, and I wanted to stop that, and we‘re going to come back and fix it next year. 

MATTHEWS:  Well, that‘s the polling.  Democratic polling under Stan Greenberg is making her case.  It does say that people are willing to fight this fight that the rich shouldn‘t get the tax cut.

The Democrats believe this.  I hear Nancy Pelosi believes it in her gut and she‘s going to fight like heck on this.  You say?

CHRISTIE:  It‘s a mistake. 

To answer your first question, I can‘t think of anybody across this country who wouldn‘t want a tax cut.  People who are working very hard, people who have very limited resources, people want a tax cut.


CHRISTIE:  But the class warfare distinction, I think the Democrats are making a mistake.  If the Democrats do absolutely nothing between now and the November election, and everybody‘s taxes go up, the Republicans do well.  The Republicans can go back and say, see, we told you. 


MATTHEWS:  I would say most Americans, like 90 percent or 95 percent, don‘t know anybody, never shaken hands with, never talked to anybody who makes over a quarter-million a year. 

CHRISTIE:  Oh, I believe that. 


MATTHEWS:  There are counties in Pennsylvania that don‘t -- $100,000 is almost—maybe one person makes that kind of money. 

CHRISTIE:  This is politics, rather than it is sound economic policy. 

The problem is we have had an administration that has spent almost a trillion dollars on a stimulus bill saying, we‘re going to get out of the ditch by using Keynesian economics to try to perpetuate the government... 


MATTHEWS:  OK.  Let‘s not get into that Keynesian economics.

Let‘s talk taxes here.  If the bill gets passed, and the tax cut goes through, and the middle class, the $250,000 people and below get their tax cut, who wins?  No, and I want an honest answer.



MATTHEWS:  Dems or Republicans, if they get the tax cut through, if they keep the tax cut for the middle class.

CHRISTIE:  If it‘s $250,000 and below, I think the Democrats win, because the Democrats can say, we are fighting for working families... 


MATTHEWS:  If the tax cut—let me give you another one. 

I think you agree on that, right? 

PALMIERI:  I do, actually.

MATTHEWS:  Clearly, if the Democrats—suppose it goes out somewhere in the middle and ends up the only bill they can get passed is a one- or two-year extension of tax cuts for everybody.  Who wins then, politically? 

CHRISTIE:  I think the Democrats win that.  I think the Democrats can say, see, President Obama‘s trying to meet the Republicans halfway. You know, we can‘t raise taxes in a bad economic time.  I think it makes it a lot easier for them.

MATTHEWS:  So, if anything passes, the Democrat wins.  If nothing passes, the Republicans win.

CHRISTIE:  I think that‘s it.


MATTHEWS:  Do you agree with that?

PALMIERI:  Yes, I do.  I do.  I do agree with that.

MATTHEW:  So, now, we know the game.  The Republicans will do everything they can to delay this and prevent to vote.

PALMIERI:  The bill had a two-year extension or permanent extension, or something like that.

CHRISTIE:  That‘s right.

MATTHEWS:  But they‘re willing to take the loss because if nothing gets passed, they win.

PALMIERI:  They think that they win.  But I think that the one thing




MATTHEWS:  You think they win if nothing gets passed?

PALMIERI:  Because we‘re going to have a fight about it.  And the thing is—

MATTHEWS:  OK.  Here‘s the president.  Let‘s listen to President Obama on this issue because I think it‘s tricky, but most people follow common sense.  If Democrats are in power and they don‘t get their tax cut, they blame Democrats.  If Democrats are in power and they do get their tax cut, they thank Democrats a little bit.

Let‘s listen to the president.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  We could get that done this week.  But we‘re still in this wrestling match with John Boehner and Mitch McConnell about the last 2 percent to 3 percent where we‘d be giving $100,000 for people making $1 million or more.


MATTHEWS:  Can the president of the United States turn these guys into target practice?


MATTHEWS:  Can he make John Boehner and Mitch McConnell the ugliest men in America?  Can he do this?

CHRISTIE:  No, look—


PALMIERI:  You‘ve got to define—

CHRISTIE:  Let me phrase it this way: John Boehner‘s a friend of mine.  I love the guy.  I‘m positive that most people in this country don‘t know who John Boehner is.

MATTHEWS:  But we know he smokes.

CHRISTIE:  Who cares?  Who cares?  Look, the important thing here is that this doesn‘t look presidential.  You have the president of the United States out there saying John Boehner and McConnell.  You are the president of the United States.  You have the bully platform.  You have the pulpit.


MATTHEWS:  You make your point well.  Isn‘t that the problem for the president of the United States, who is the president, that don‘t blame me, I‘m running the country.


MATTHEWS:  I‘ve got a Democratic Party running the Congress.  Blame this guy from Ohio that smokes and plays golf.

PALMIERI:  Right.  But first of all, it happens to be true, that they are the ones that are standing in the way of him doing what he wants.

CHRISTIE:  No, it‘s not.


MATTHEWS:  But he said he‘ll vote for it.  He said on Sunday that he‘ll vote for the bill if that was the only choice.

PALMIERI:  His problem with the midterms for the Democrats have been that it is just a referendum on the economy and what the White House is trying to do and I think it‘s smart to do, is to make it a choice.  It is not—because that is what voters make it.  They are making a choice between Obama‘s direction or John Boehner‘s and the Republican‘s direction.  And I think what they‘re doing is the only way you can say—


MATTHEWS:  OK.  Let me ask you about (INAUDIBLE).  The Tea Party throughout there, it‘s been almost an insurrection now for a year and it‘s been very effective.  They‘ve won we talked about throughout the program tonight, they‘ve won seven big races, knocking out establishment figures.  People that could be beaten, Specter, Charlie Crist, Bob Bennett—

CHRISTIE:  Jane Norton.

MATTHEWS:  -- Murkowski, incumbents and challengers—knocked them all out.  Their focus is against government, against taxes.  Are they going drive the Republican thinking on this to the point where it‘s the number one issue, we‘ve got to get tax cuts?

CHRISTIE:  Yes, absolutely.  Look, Republicans got fired because we spent too much, we forgot what we came from.  We became just like Democrats.  The Tea Party from around this country are sick and tired of the conventional wisdom that Washington knows best.  We‘re going to tell you what money you can keep and what not.  And this is, we‘re looking at an insurrection.

MATTHEWS:  OK.  Thank you.  Jennifer Palmieri, thank you.  And, Ron Christie, always the hot hand.

Up next: what Senator Harry Reid doing with the military‘s “don‘t ask, don‘t tell” policy?  Well, he wants a vote.  But can he get 60?  That‘s what it takes to get—to knock the filibuster.

And what happens inside the military if it does—if they do get rid of “don‘t ask, don‘t tell”?  We‘re going to talk about those questions.  The politics and reality of getting rid of “don‘t ask, don‘t tell” and having open service for people regardless of their sexual orientation in the military—which looks to be the future.  The question is when is it coming and how are people going to handle it?

This is HARDBALL, only on MSNBC.


MATTHEWS:  Hot news just in.  Yesterday, we told you about how Republican candidate for governor, California Meg Whitman ripped a scab off of a fight between Jerry Brown and Bill Clinton going back to 1992.  Well, today, former President Bill Clinton endorsed Jerry Brown.  It‘s a big thing to do that in the race, saying they put their fight behind them years ago.  For his part, Brown called Clinton‘s endorsement and his presidency accomplishment-rich.

We‘ll be right back.


MATTHEWS:  Welcome back to HARDBALL.

It is an awful week, we can get by Lady Gaga—Senator Harry Reid tweets a military policy into one second, but tonight, we can, Lady Gaga who dominated this year‘s Video Music Awards sent this tweet and photo.  It reads, “Gay veterans were my VMA dates.  Repeal ‘don‘t ask, don‘t tell.‘  Call Harry Reid to schedule vote.”

Well, Senator Reid scheduled a vote.  He‘s bringing the matter to

the floor as part of Defense Authorization Bill and re-tweeted this today

in reply to Lady Gaga.  “There is a vote on DADT—that‘s ‘don‘t ask,

don‘t tell‘ -- next week.  Anyone qualified to serve this country should be allowed to do.”

Katherine Miller decided to leave West Point because she no longer wanted to serve under “don‘t ask, don‘t tell.”  She was one of Lady Gaga‘s dates, if you will, to the music awards.

Matthew Alexander served 18 years in the Air Force as an adviser—he‘s an adviser on O.T. votevets.org.  And he‘s the author of “How to Break a Terrorist.”

Let me ask you both—Katherine first—let‘s assume that this is going to come to a vote.  It may not get the 60 this time.  It may get—the courts may rule on this.  It may take a year.  It may take a little longer than that.

What do you think will be the difference when we have open service?  What would be different?  How would it be different, Katherine, do you believe?

KATHERINE MILLER, FMR. WEST POINT CADET:  Actually, I think we‘re overestimating the differences that repealing “don ask, don‘t tell” is going to entail.  I think it‘s going to be a smooth transition.  The military‘s more than prepared to make this transition, and I‘ve been exceedingly proud of them.  You know, for being able to make a difference, desegregation and the integration of women.  So, really, I think we‘re overestimating the differences it‘s going to take.

MATTHEWS:  Well, let me ask—let me ask—who‘s our other guest? 

I‘m sorry.  Matthew Alexander.

Matthew, what do you think will be the difference?

MATTHEW ALEXANDER, FMR. SENIOR MILITARY INTERROGATOR:  I think moral will actually improve because we have members serving in the military today who aren‘t allowed to disclose their sexuality.  I have a good friend, won a Silver Star in Afghanistan, and he got out of the military because of this policy—not even because he was forced out, but because he felt it created an atmosphere that wasn‘t conducive to him continuing to serve.  And so, we lose good people because of it and we‘re all the worse for that.

MATTHEWS:  Well, but you‘re all for it, but let me get back to Katherine.

Why are people against open service?  Why are people in the military resisting?  Why is it going to be so hard for Harry Reid to get 60 votes this week to stop a filibuster?  Who‘s resisting this because the public seems to be for it?  Who‘s fighting it?

MILLER:  You know, it‘s a really small minority.  I feel like this

minority though of, in my case, cadets, but soldiers at large and, you

know, some of our general officers, they are very vocal about their

homophobia and, you know, they are scared of making this transition.  And -



MATTHEWS:  Why are they scared?  Try to figure it out.

MILLER:  I mean, I think that‘s a difficult question.  Mainly because there‘s a big generational gap between, you know, the general officer corps and our young rising leaders, our second lieutenants, because homosexuality is something—is a fairly new concept to these people.  So, I think the generational gap is causing a lot of fear and discomfort at the higher levels.

MATTHEWS:  Matthew, why are people against it?  Why are we arguing this thing?  Because young people, I know that all the numbers, in fact, the country is pretty much overwhelmingly for open service now.  But yet, I predict they are not going to get 60 votes.

So, I‘m telling you why I‘m bringing this up, there is a cultural resistance.  Jim Webb, the senator from Virginia.  There are people in the Democratic Party.  Certainly, John McCain in the Republican Party, with a lot of military background, they don‘t want this.

ALEXANDER:  Well, it‘s a political issue it‘s why.  It‘s not reflected by the people in the military, especially the younger generations of people in the military and it‘s definitely not reflected by the public who acknowledges that we already have homosexuals serving in the military, who are performing admirably.  They are already serving side by side.  They are already sleeping in the same tents.

Logistics of it that people use as an excuse are not even valid because homosexuals are already serving in the military and we are already performing our missions without them being able to serve openly.  But allowing them to serve openly will give everybody equal chance to serve this country based on their competency, not based on their sexuality.

MATTHEWS:  Well, let me ask but a couple things that might trouble some people.  You can call it homophobia, but it‘s part of the debate there.  Some people argue that we separate the sexes in the barracks for good reason.  They go out on leave, whatever they mix among the genders and they have whatever sex they enjoy or whatever, they certainly have romance and attraction.  But the way they separate people who are attracted to each other is they put them in different barracks.

Do you have to make any kind of adjustments once you have open service for gay focus, gay people as well?

Your thoughts, Katherine.  Just leave the military conduct requirements exactly the way they are.

MILLER:  Oh, I mean, absolutely.  I think we have Uniform Code of Military Justice and we have regulations already in place to regulate conduct.  And if there‘s a problem, we‘re going to address it.  It‘s—under no circumstances is it OK for, you know, a senior to be in a relationship with a subordinate or, you know, two roommates.

MATTHEWS:  So, fraternization rules would just have to be strictly enforced, you‘re saying?  Like, for example, you have a drill instructor that they may obviously have an attraction to somebody in the ranks and that everybody knows about, that would cause a lot of problems, obviously.  But you say you can deal with that in terms of just discipline.  There‘s to be no camaraderie, no fraternization, period, between the ranks?

MILLER:  Right.  Adhere to existing military policy that we have, you know, already regulating these behaviors.  If it‘s unacceptable behavior for heterosexuals and it‘s also unacceptable for homosexuals.  We‘re not asking for special treatment.  We‘re asking for equality on this.


And, Matthew, you don‘t see any problem.  Because I hear these arguments made—I was an adviser to Peace Corps.  We didn‘t have these issues, obviously.  But the fact is, there are people who argue you can‘t have the same barracks, people who are attracted to each other.

Do you see any requirements for changing the rules to make that obviously a more disciplined situation than it has to be right now?

ALEXANDER:  No, I don‘t, Chris.  You know, I have been a criminal investigator for the military for almost eight years and we quit investigating homosexual conduct years ago because we realized it doesn‘t affect unit morale.  You know, it‘s based to on—we have a Uniform Code of Military Justice and our investigations and our corrective action should be based on conduct, misconduct, and not on someone‘s sexuality.

MATTHEWS:  OK.  Well, we are going to have this argument for a while because it looks like it‘s not going to pass right now.  The courts are getting into this.  I think it‘s getting close to an unstoppable force to bring an end to open service.

But thanks so much and congratulations, Katherine.  It‘s great to have you on the show.  It is an honor to have you on.  Well, you‘ve been through a lot and great spokesman for this issue.  Matthew Alexander as well.  Thank you both for coming on.

When we return, I‘m going to have some thoughts about why it‘s time to end “don‘t ask, don‘t tell.”

You‘re watching HARDBALL, only on MSNBC.


MATTHEWS:  Let me finish tonight with a question of open service in the U.S. military.

I think “don‘t ask, don‘t tell” was probably destined to be an intermediate solution in the debate between those who support it and those who opposed open service.  The premise was that a gay person would agree to a strange compact on joining the military services.  A gay person would be allowed to serve as other Americans do, but only if he or she didn‘t say they were gay—if they didn‘t declare their sexual orientation in some other direct way.

The problem, as has been explained on this show, is that this “don‘t ask, don‘t tell” rule didn‘t apply to straight soldiers.  They could come back from a weekend pass full of romantic exploits, sharing them for all to hear.  The gay soldier or sailor would have to keep quiet on what he or she did over the weekend.  To do otherwise would be to violate the compact, “don‘t tell” has meant just that, don‘t tell.

My hunch, having never served in the military myself, is that soldiers learn not to ask gay soldiers questions about their lives for the simple reason that it would require them to tell, which is grounds for discharge.  So the U.S. Senate‘s on the verge of dumping “don‘t ask, don‘t tell.”  Open service is very much in prospect, primarily because the American public has changed its mind on this matter.  Never has it changed its mind so quickly so dramatically.

The social acceptability of anti-gay bias is rapidly diminishing, just as it did in the years after World War II towards Catholics and also for Jewish people, and sadly, only gradually, for African-Americans.  Military service was one reason prejudice began to die.  It‘s hard to deny a person full acceptance when you know firsthand how they have given for our country.

Here today, we have a case of a group of Americans ready to fight for their country, openly and with full pride in who they are.  As I said, the American people have changed—have never changed their minds so quickly.  Perhaps the reasons are not so different from the reasons why war time in the 1940s saw such a shift in national attitudes.  Perhaps one powerful reason for the acceptance of gay fighting men and women is the obvious desire of so many gay people today wanting to serve their country in uniform at a time when such service is extremely perilous.

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





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