>> this is "the chris matthews show." >> ask not what yourcc1: countrn do for you. >> tear down this wall. >> i can hear you. >> the time for change has come! chris: loss of money, loss of faith. huge drop on wall street signals a new fear about america's leadership. debt1: icians saw thecc crisis coming but refused to get serious, and that scares people. taken. the ransom obama paid to cut the spendings and cutcc1: jobs when the middle class needs a reason to believe. mitt romney and rest are looking at a golden opportunity next year. they can promise jobs even as he this dare the democratic president to try creating them. finally, the fire next time.

the crazy right and fired-up left are already trying to deep six the next compromise when the super committee tries to come up with the next big debt deal. the cheering sections right and left are cheering for what, another fight? hi, i'm chris matthews. welcome to the show. dancc1: oday, hd-net's borger and s gloriacc1: cnbc's andrew sorkin. first up, a week1: ago the worl was miss fayed by the dysfunction in washington. once the debt deal got down,cc1 wall street and the world's market lost faith completely. our debt compined with the financial confusion led to a huge drop. friday's strong jobs reports cc helped but just a bit. half the country has a stakes in stocks thanks to 401cc1: k's an already the president looks like a weak leader. the adding pain for the middle class will not help him. party, the birthdaycc1: president tried to rekindle the old hope theme. >> i know wecc1: can't be stopp!

and i know we will bring about the change that all of us believe in! chris: but he's notcc1: exactly feeling the pain out there. is it too late for obama to be more like bill clinton? that middleoduct ofcc1: class, and when i am president, you will be forgotten no more! >> well, he is, of course, another man from hope, he hopes. how does he vet that hope? how does he bring us back from what looks to be an abyss? >> go back to what harry truman did, take on congress fourcc1: square, full. for him it's go big or go home. if he's got fight in him, this is the time he's asked to do it. face the congress down. say we're going to have a major jobs program. take it to the people. debt is a problem but debt reduction is not nearly as important as job creation. he and his administration have been talking about job creation since they came in but they

haven't done it.cc1: >> the jobs report was ok but not as bad as it was. still above 9%. he will not get re-elected above 9%. doesn't he have to do something to deal with that? >> i think he does and that's a conversation going on in the white house right now. don't forget, the president is walking a fine line. he opted for fiscal restraint on the whole debt ceiling compromise. on the other hand, he is somebody who has spoke in a state of the union speech, remember that? winning the future, spending money on innovation, on education. can he get payroll tax cutcc1: holiday, extended unemployment insurance. but that's just working around edges. maybe the infrastructure -- more than a wall street reset or wall street correction. you have 11% or 12% drop during this week. an awesome cut in people's confidence level. does he have to do something bigger than just quibble over the debt? >> the question is how do you reframe the debate1: around growth? that is a bipartisan issue. if you can grow your way out of it, you have a chance. >> how does he do that?

>> the problem is spending money to do it. >> exactly. >> stimulus has become a dirty word in part because it was oversold to the american public the first time chris: come up with acc1: bette word. >> the question is can you do infrastructure? by the way, you won't see the results for it any of it quick enough to win the election next year if you're playing election politics. >> and doescc1: infrastructure neutral?enuecccc1: can you talk about the private sector as part of this infrastructure thing to get republicans on board? chris: ron, the whole question here about this other recession, are we into a second recession? can he now take emergency steps to deal with that? >> i think we have a one and three chance of going into another recession. thinking of the private sector, unfortunately they're setting on $2.35 trillion worth of cashing they're not releasing, which is the problem. it does have to be about jobs. stagnating.ass iscc1: that is the cause of the problem, not the symptom. have you got 95% of the population that does 71% of spending and they have no wherein in their pockets. chris: you read a piece this week in times about how1: this

debt was cut, bipartisan deal, cut middle class jobs? >> absolutely, you have no tax hikes for the rich but poor and middle class taking it in thecc ack with public sector jobcc1: going down and at the same time private sector not creating any jobs. >> the sad part is the reason companies are not spending money is they're worried there still isn't demand. companies and banks will only hand you an umbrella on a sunny day. that's the problem. it's raining or about to rain again. we have to do something on the demand side to actually get them spend. by the way, spending money here in this country where they think there will be growth, all of the growth coming, these great profits you hear from companies today, it's all coming from overseas. as a big problem. chris: dan, it seems we're in a vicious cycle of low employment, high unemployment, companies not spending money, no demand. doesn't the government have to take a dramatic step? by the way, if we're facing a second recession, maybe they have a justification for a dramatic step, like you said? >> absolutely. perception is everything, not

just politically but this president, he's perceived as being such good friends with corporations, big corporations, wall street and bankers. and has greeted this recession particularly with the middle class and the poor that we now have a government of corporations, by corporations, for corporations -- he has to break through that perception. chris: you think he's taking the hit for not just big government but big corporate power? >> if anything, has the bigger hit. >> and they're timid. the democrats actually are timid and they're kind of stuck. they're stuck on medicare, medicare, titlements, entitlements, we're not going to cut back your entitlements. when you're only stuck on, that you don't allow yourself to do anything else. they kind of need a new mantra here. chris: what do we do with the fact -- this sounds very left wing but sometimes governments have to correct reality.cc1: right now we have 1% of the country owning 21% of the

wealth, a dramatic bunching of c at the very top. is this an opportunity for this president to takecc1: timid and do something dramatic because the times call for drama? >> the question is how do you do it in this environment? the left believes he's too close, as you said, to wall street. on the right they think he's not doing enough for business to actually create that certainty, to create that growth. so he is stick in the middle. chris: what do they want? taxes.cc1:y and less >> certainty, they haven't been creating jobs since the '80's. we had certainty. chris: the smart business leader now sits on cash, plays it safe. when he does or she does make a decision, they hire overseas. they go to part time, they go to overtime. last thing they want is hire a full-time american -- >> absolutely. chris: let's talk about the american people now. they're going through a tough weekend. they're going through oh, my god, market is down. wealth is down. middle class people have all of their savings in their hourks

down in value, or 401 k, down in value. everything they have in terms of middle class money has diminished and is now shrunken. they look at the president of the united states. he's looking pretty good. but they're saying wait a minute, as a person, family, but as leader of the economy, he's not looking good. what do they want him to do? >> everybody wants him to create not want ey also docc1: him to spend. that's the pickle he's in. >> that's not everybody though. go to big rebuilding of infrastructure that.s0 will be done in this country. creates jobs for engineers, other at the top level, laborers at the bottom level. he's got to be bold and move big. if he doesn't, he's in trouble. chris: he's got to be bold and create jobs. you say that's the great irony. >> here's the problem. people don't trust governmentcco create the jobs. chris: let's look at the 2012 pictures, politics. we put it to gloria on the list. could this president be the bigger champion of the middle class than his republican opponent. friends say he can -- key word, can and only doubters -- couple

doubters but gloria, can but will he? if he's frozen in this straight jacket of i don't want to be anything more than timid because it might offend some conservatives or they're going to jump on me, what does he do? >> go back to the old argument about entitlements that they started using on medicare with the paul ryan budget saying republicans, i want -- i don't want to extend the bush tax cuts for the healthy. they want to cut entitlements for the middle class. can he go back to the democratic argument. it's starting to wore for them. tried and true. somehow play for the white house finance he can win the election, then he's got four years to do all of the things we're talking about here. chris: let's go around -- one last vote. same key question, how does he become the champion of the middle zphrass >> big infrastructure rebuilding, take on congress, be a fighting president. be seen as taking on congress. maybe the argument, listen, we've got a minority, well

disciplined, dedicated minority take of the government and i, president of the united states, is going to take back what i can and take on congress full and swear. democrats are necessary. fight them. and stand him in good stead for the election and my own personal opinion, be good for the country. chris: give him hell, barry. >> i like it. >> he's got a tie sfoneding. it. te sector is not doingcc1: is only one that can. people don't like government but when you break it down, they like government programs. reframe the debate. to staycc1: in the center. >> i think he threads needle, spends but finds a way to cut in the right places. >> the only problem with staying in the middle soften set in politics, go the middle road. but look at the highway, all you see are yellow stripes and dead armadillos and this may be the case with barack obama. it's an old texascc1: saying. tryingthe case with him,cc1: so hard to be in the middle, may ost him the election andcc1: country a lot between now and

then. chris: that's where the fight is, we heard it here this analysis. before we break, middle class is squeezed and so is the president. will ferrell got a bunch of "saturday night live" veterans together to spoof how thecc1: ex-presidents might give barack obama a pep talk. i love this one. >> i'm just tired of getting my butt kicked from both sides on this. >> go to bed, sweetheart. toccheart will tell you what do. >> boo! i'm the ghost of dick cheney. >> relax, it's just us!cc1: >> man michelle's got some legs on her. >> how did you do get in here? >> the security code is just 1, 2, 3, 4 from when i was prez. only took me five times to remember it. >> we hear you tossing and turning. >> so we're here to give you some advice. >> yeah, well, if you listened to me, it would have raised taxes. >> then i would have had one term. >> yeah and that second term of

yours was a real victory lapper, wasn't it wers? listen boy -- >> barack. >> you have to listen -- >> i know a thing or two about ing what's right and beingcc1: unpopular. >> oh, great if it isn't mr. cc started. the party1: a bag1:you say we open upcc of malaise potato chips! >> there you go again skwlm again! >> this can't be! you're dead! i saw them lower your coffin in the ground! >> well, i am dead, but i've come back as a squirrel. to help mr. reach across the aisles here grow a pair! >> what you're saying is i should clean up this mess that you all created? >> as george washington once said to john adams, tag, you're it! chris: love it. when we come back, coming fight

in the meeting universe over the super debt tradition. and tax increases. some on the left are firing things up over medicare cuts. cc: :

chris: welcome back. the tea party is generally credited with playing the best hardball on the debt standoff but not to rest on their laurels, they're ready to deep six the next stage, the super committee that will have to report by thanksgiving. listen to rush and ann coulter this week. >> everybody's crowing about how this deal doesn't include any tax increases.cc1: in the commission, this super-select commission, will demand that the bush tax cuts are matched dollar for dollar by

tax increases. >> this is the single most cc important thing tea partiers can do right now. partiers on that joint committee. one republican has to agree to taxes to go up or1: under this bill. chris: that call to action is matched on the left. from s the callcc1: moveon.org -- quote, we are angry, we are motivated and we will not sit and watch. gloria, both sides at their battle stations right now. >> default. they're going to their default positions. chris: what's going to happen? >> i think it's up to this commission. it depends. we will know the minute -- the minute we see who's appointed to this committee, we're going to know whether it's going to come up with a deal that includes some kind of tax reform -- chris: mcconnell said he won't name anybody open to tax increases? >> tax reform is different from tax increases. chris: we're talking about revenue increases. >> then i think you get to the trigger. and when you get to the trigger, nobody's going to be happy. at a certain point -- look at the tea party polls. the tea party has gone down

tremendously in its popularity after this whole debt ceiling debacle. chris: true. >> so i think that's one thing republicans will have to keep in mind. chris: but they're still listening to the tax argument on the right. >> absolutely. chris: dan, looks like on fox next minute, you can predict what will come on that network, anti-tax switches, the way of middle ccople selling class they're in this together and win that argument. >> they win that argument. look, washington is dysfunctional. i don't see much help for thanksgiving day going into christmas with commissions. when is the last time a commission got anything done? i'm an optimist by experience and by nature. it's pretty hard to be short-term optimistic about this situation. chris: ron, on the left -- what you call the left in america,cc liberal progressive wing of this country, they're out there playing defense on entitlement programs rather than talking growth or anything like that. >> absolutely. i think what you have seen is everybody going to the most jihadi positions. republicans no tax increases.

dems, no entitlementcc1: reform. i don't think you will see progress on the commission but the good news is the future can wrangle over it. sides equalizecc1: it. nothing gets done. sit around the night before thanksgiving. nothing gets done. triggers get triggered, we go to cutting defense.cc1: >> and nobody's happy. and we haven't dealt with the way, frankly, cc1: nobody was happy what the debt ceiling deal was and i think we will be in the same place all over again. chris: what will the market do? >> the market already baked it : into the cake. their expectation about washington, especially after the past week, is there's no way a deal gets done. >> i'm going to inject acc1: sl note -- >> of optimism? >> of optimism here, even though i believe a trigger is more likely. i think that this issuecc1: of reform is a way if you lower rates and you close some loopholes and then the bush tax cuts on the healthy expire because the president already said he would veto any chance not to do that. so i think there is a slight

chance that something can happen because this sword is hanging over their head. >> there's a way to make tax reform feel fair without raising revenue. that may be a win for the democrats. chris: i get the feeling the people in the white house are mentally exhausted. people on the right just trying to get rid of this guy. people on the right just trying to get rid[ man ] i got this new citi thankyou card and started earning loads of points. you got a weather balloon with points? yes i did. [ man ] points i could use for just about anything. ♪ ♪ there it is. [ man ] so i used mine to get a whole new perspective. ♪ [ male announcer ] the new citi thankyou premier card gives you more ways to earn points. what's your story? citi can help you write it.

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chris: welcome back. dan, tell me something i don't know. >> things are actually, believe it or not, getting at least somewhat better in afghanistan. a really good job being done by general caldwell. in retraining a real police force and a real army, cautionary note, the basic problems remain, a corrupt and inefficient government, central government, and the opium prayers go unchallenged. but there are rays of hope in afghanistan, particularly when it comes to the battlefield and training of afghanistan forces. chris: you have a big hd-net special coming up on that. >> we will have it in septemberc >> things are getting worse in afghanistan and searia. we forgot about that part of the world with the debt news but with ramadan, this is for people to come out and public gathering, you will see more violence. in a worse case scenario, you can possibly see assad trying to redirect attention by arming hezbollah, creating more squirmishes in the middle east.

chris: are we better off with him or without him? >> with him at the moment. i think it would go into complete chaos. chris: gloria? >> at the risk of going back to the deficit committee, one name i'm hearing a lot is rob portman, senator rob portman of ohio, former o.m.b. director, somebody actually the democrats like and i get gets -- chris: too modern to get on that committee? >> i don't know. i'm hearing his name a lot. people are talking about it. they're lobbying for him to be on that committee. whether mitch mcconnell will pick him, not sure. chris: interesting. >> all of the carnage in the markets this week are going to exacerbate a on wall street this falls. if the public wanted wall street to have comeuppance, you're going to see layoffs en masse this fall. while it may not be good for the economy, it may make some people happy. chris: are we going to be reading of a comeback next week in "the new york times" under your byline? >> a comeback for? >> chris: wall street. >> i don't think wall street is get ago comeback any time soon

sadly. chris: when we come back w. mitt romney beating barack obama in tes, is he the inevitable republican nominee? cc1:cc1:cc1:: :

chris: welcome back. mitt romney continues to lead the republican attack and new matchup poll in a number of states show him beating obama. let's look at the states here -- tied in florida. up by two points in pennsylvania. and down just one to obama in nevada. all states obama carried in 2008, which brings us this this week's huge question -- should the republicans nominate romney? dan rather, is he their best bet? >> at this moment probably. he's probably the best bet. he's not the inevitable candidate but he's certainly in the best position right now. if i were a betting man, which i am not, i would say dead even, slight edge to him, not just for the nomination but also in the election. >> i agree. he can be whatever they want him

to be. i wish it was huntsman, frankly. only one who showed any compromise around debt but i think it will be romney. >> republicans want somebody electable. right now it looks like mitt romney is the most electable. but i remember when hillary clinton was inevitable, so -- are chris: we're not ask that. we're asking the bet best. >> right now he looks like it. >> the man by default. wall street and business likes him. chris: i think he's a good bet because he can be what he has to be, as you said. he can adapt to circumstances better than any politician i have ever seen. we don't know what the circumstances will be next year. thanks for a great round table. dan rather, andrew russ sorkin. that's the show. see you back here next week. ♪ ♪ [ female announcer ] because you never stop improving your recipe... we never stop improving ours. we've added a touch of philly cream cheese

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