>> this is "the chris matthews show" >> ask not what your country can do for you. >> tear down this wall. >> i can hear you. >> a time for change has come! chris: oh, lucky man. obama is facing a republican frontrunner unable to clinch victory and a republican party with allies like rush limbaugh. the economy showing real signs of recovery. is barack obama one of those guys who the world keeps turning up good? despite all of the good trends this interconnected world has lots of loose ends. things look good for obama now, but events could elect romney. obama is singing happy days, but it's america, is he too far

ahead of the parade to hear its music. finally, offshore warnings, could this war with iran change everything and could the killing of americans in afghanistan drive us to quit? could either of these crisis flare up and leave this white house burnt. hi, i'm chris matthews. welcome to the show. with us today, the "washington post" bob woodward, cnbc's becky quick, the "washington post" kathleen parker and the "national journal's" major garrett. while republicans are having to explain rush limbaugh's hatefulness this week, barack obama is radiating optimism these days. the president is channeling that old ronald reagan morning in america. here he was on tuesday. >> i'm not going to settle for a country where a few do really well and everybody else is struggling to get by. i promise you this. as long as you got an ounce of fight left in you, i'll have a ton of fight left in me. chris: a new poll has obama losing to mitt romney by four points believe it or not, even with all of the damage that romney sustained lately.

other polls have obama winning or tied. those are snapshots. obama knows history. he knows that the trend in a president's job approval is the key. this chart shows his approval and disapproval since inauguration. right now his approval is going up decidedly, this is going down. reagan and bill clinton were other firm termers with rising in the spring of their election years. jimmy carter and george bush 41, that's the first george bush had trend lines going down during this period in the last year of their first term. there are eight months to go. three things have the white house worried, though. the jobs recovery could stall or even reverse. gas prices could spike higher and iran could spike it even higher still and europe's debt crisis could blow up and blow things up here. bob, a big question to you. george will has a column coming out this weekend, your colleague at the "post" on the op-ed page. he is talking about the republicans choking this year. a great year to win and they are going to lose by barry goldwater dimensions, a wipeout. is this rush limbaugh the kind

of thing giving them a sense of forbidding in a year they should be winning? >> we just don't know if you go back to other presidential contests, events could occur, and this is the thinking in the white house on the economy, not just iran on the international front. iraq is not settled, afghanistan is not settled. there are still worries about north korea and worries about al qaeda. they're worried about the seismic event that will be there and be the hinge of history and you just can't predict. chris: what is this republican forbidding, the sense you sense out there the smart people like will and haley barber and jeb bush, they're holding back it seems from this thing. >> they don't like the way the contest has been framed. we were talking about this earlier. all of those votes for santorum in michigan are actually going to be romney votes if romney

gets the nomination. so it's not over as obama likes to say, it's a jump ball. chris: let's see would change the whole thing and could be a jump ball. this unemployment rate is down to 8.3 now. there is a lot of talk, what about going up to 9 by election day? >> the participation rate has dropped pretty substantially. you used to have over 68% of the nation participating. right now it's at 67% and change as the jobs come back, those people come back in the marketplace. a poll is looking for the unemployment rate to jump to 8 to 8.8% by next week. by election day, there could be a higher number there are plenty of people looking at 8 1/2 to 9% by election day. chris: romney is the frontrunner going into super tuesday, romney has to look at this two ways. he has to get under the hood and fix the car. does he have to worry a little bit about the economy staying strong and this recovery really having a lot of burst to it?

>> of course, he does. and the republicans are well aware that if the economy is doing well and if obama can demonstrate improvement in the economy and the aftertax money in people's pockets and if the unemployment rate is down, i think obama is going to get re-elected. i think he also is at an advantage should things spiral out of control in the middle east because it's just true that americans don't really want to change horses in the middle of an international crisis. and obama has, republicans don't want to hear this, but obama has established himself as an effective commander in chief. chris: everything, everything we talk about, gas prices, rush limbaugh, all this crazy talk about women and the negative attitude towards women you're hearing with the republican party. all of this comes down many ways to the economy, too. the decision voters tend to make, come election day, has this guy got a grip on things, obama, or doesn't he? the white house, are they worried about the unemployment

thing spiking as becky said back up to nine where it is out of control. >> the perception is the economy is going well which is lifting the president's approval numbers a little bit, making things look more stable and possibly beneficial. they're also legitimately concerned that there could be this springtime, summer time economic reversal that they have had to live through twice before. they don't want a cycle in the summertime where the republicans say, see, this is what obama gives you, an economy that looks good for a while but it doesn't last. it's not lasting recovery, it's haphazard recovery. we'll give you solid recovery. republicans have not felt on offense since august. think about it. since the debt crisis, they have not been offense. and now they are visibly on defense on contraception and their ability to talk to and just communicate rationally to american women voters. secondly, the trend is in obama's favor, remember, he is not being challenged internally.

george herbert walker bush challenged by buchanan, carter by ted kennedy. you have a higher probability of losing. not challenged, a higher probability of winning. chris: let's talk about foreign policy. the president is worried about europe. he has to worry about right away is gas prices. if we see a number like $6 for regular, that is going to be something that the republicans can hang around his neck. drivers drive more in the summer. prices go up because of demand. we got fears of what is going to happen in the middle east. >> prices go out matcally this time of year. you're watching it this year. you got $5, and people are absolutely falling out of anything to do with this. at $5, it used to be $4. you can go above $4. where gas prices are or where oil prices were yesterday and today when you start looking at this into next week, get up to $110 a barrel. that's a big change for the entire election. you are talking about going right through $4 to $4.50. >> it's more tangible to

everyday americans at the gas pump and 8.3% unemployment. chris: bob. >> just a second. i mean, those numbers are out there and those are important, but there is this, the psycho dynamics of it for the average voter and that is has obama stabilized or fixed the economy. and if you go back to bush sr.'s race against clinton, actually the economy was getting better, but the perception was that bush hadn't done enough and was out of touch. and so i liked all of these numbers and you got to watch them, but how does the average voter feel when you look at all of the polls and it shows people are concerned about the economy. that means, translate, they're concerned about how obama is trying to manage or fix or stabilize the economy. >> he hasn't answered that question yet. >> republicans gas prices work if they're part of a larger

constellation of grievances against obama. the government getting involved where it ought not to. green jobs are a dead end. they put a lot of taxpayer money. that's a waste. he didn't do the keystone excel pipeline, he is against a canadian ally a friend of ours. he doesn't want to make american jobs. against him for the environment over jobs and energy production. if they can construct it in a larger narrative against obama, i'm not saying they will, but they're certainly looking at gas prices as a hook into that. the president is being very pre-emptive as saying there is no quick fix, no silver bullet. don't let these guys convince you about something that isn't true on energy prices. chris: unemployment goes up, it goes up because gas prices are putting a damper on the recovery. it could go up because of the iranian crisis. we'll talk about that later. what about the european thing with greece? >> i'm surprised that the market hasn't reacted more strongly to some of the problems that we have seen cropping up. we spoke with warren buffett this week, i thought he would

say things improved quite a bit, he said it's still out there. and another guest we spoke to said this is the second inning of that crisis. too many nations who have to go and keep this together and too many places that could go wrong. it could pop up again at any point. >> chris: what will happen to our economy? >> the biggest problem is what happens to the export situation. it's been fine to this point. if you see a drop off in that, it could show up very quickly. chris: in the obama-romney sports face-off this week, it is getting a little silly. romney looked a little too sport at the nascar daytona 500. he doesn't follow nascar but knows a lot of team owners. obama used an espn interview to advantage for him and give him a chance of hosting nba all-stars like chris paul at the white house. >> for my 49th birthday, i had my own little all-star game here. >> i heard about that. i wasn't invited. >> you weren't, maybe next time. chris was one of the guys who played.

i did a little crossover on him. he claims that he could have stolen the ball. everybody who was there knows that's not true. chris: so obama won the sports face-off, but then there are the late night shows, those appearances are designed to make serious guys seem normal, even funny. but are tough to do well, of course. four years ago obama tried his hand at david letterman's top 10. >> number eight. >> appoint mitt romney as secretary of looking good. >> yes, sir. wow. chris: then a year ago it was mitt romney's turn and it was this funny coincidence. >> i'm the guy in the photo that comes with your picture frame. >> that's right. that's where i have seen you. chris: it was on his wall at the time. here are a few more side besides from those two appearances. >> number five. >> i'll rename the 10th month of

the year barachtober, how about that. >> number six. >> do i smell as good as i look? no. >> number four. >> i won't let apple release the new and improved ipod the day after you bought the previous model. >> number two. >> i have absolutely no idea where my birth certificate is. >> that's right and the number one barack obama campaign promise. >> three words, vice president oprah! >> the number one thing you don't know about mitt romney. >> oprah is my half-sister. >> yeah, there you go. chris: well, guys, those two guys back to back right next to each other in presidential debate for an hour and a half three times, we'll get a really good look at them. will this change everything? >> those are the really important moments and we forget in all of the soup of this

discussion of the daily event or the daily number, romney had some things going for him. he was a governor. look at the last three presidents of the united states who had two terms, reagan, bush, george w bush, and clinton, all governors. chris: i'm listening. when we come back, can president obama avoid a third middle east war in a dozen years and "scoops and predictions" from these top reporters. be right back.

chris: welcome back, a "washington post/abc" poll gives president obama big marks over mitt romney on handling foreign policy. he gets 55% to romney's 38%. what could upset that lead? well war with iran and afghanistan, will the killing of americans over there over the

koran burning ignite a faster pullout. bob, two big questions. let's start with the first one, this whole question of iran. the whole week the president is talking about it. netanyahu is coming here, apac meeting and all that. he said to the atlantic magazine. i'm going to tell him, netanyahu, he shouldn't bomb. we'll take care of this if we have to. >> that's a very important interview that jeffrey goldberg did with obama, 45 minutes, what are you doing? goldberg is up to speed on this as much as anyone and what struck me in that interview is where the president said i don't bluff. now, have you ever been in negotiation? the smartest lawyer, negotiator i know in washington says that the skill you need, in fact, 75% of the game is bluffing. you got to be able to bluff. so the president, of course, is bluffing to a certain extent because -- and underneath this,

they are skillfully handling the hottest of hot potatoes. this is a really, really tough case. chris: romney is out there very strongly saying if obama is president again for a second term, iran will have a nuclear weapon, just to get to the bottom line here. if i'm president, mitt romney, they won't. boy, is that an ultimatum statement. is the president joining them in that statement? >> when somebody says i don't bluff, probably he is bluffing. i'm sure that the romney -- chris: ladies and gentlemen, this is washington. only in this city do people understand this kind of bluffing. >> no means yes and yes means no. >> right, and romney, look, president romney is looking to be presidential and he is not going to say rash things in the course of the campaign with his contemporaries perhaps he will be more bold. but when it comes to the real deal, he is not going to say anything particularly provocative, i don't think, on the campaign trail.

>> the president says i don't bluff. he says i got your back, israel, that's a direct quote from the interview. he said two other very important things. can you read this interview and say he is being hawkish. you can read the interview and say he is not being hawkish. look, it's in everyone's best interest not to try to contain a nuclear iran. to look at iran and say they have a bomb, everyone else around is going to bomb. the problem with india and pakistan, multiply by a factor of four or five. for nonproliferation which is a huge agenda item for this president since he came into office, this is a disaster. he is focused on that, doesn't want it to happen but also says the most durable way historically to change an access decision on nuclear weapons is to do it voluntarily. that's how it lasts and works. he is trying to push the europeans and everyone else to get iran to come to a different set of conclusions. chris: if they decide not to go with it, that matters. if you bomb them, they'll go at it again.

all this talk of us going to war, the israelis, going or not going, bluffing or not, oil prices spike again? >> yes, they spiked. chris: we have been talking about this, the president, his war, you wrote a book about it. will he pull back on that war because of the anger most of us feel about the overreaction of the afghans to our burning of the koran? >> no, he already is pulling back. i think the headline is that within the military in certain political figures in washington, there is a strong movement, don't pull back too fast, let's not give up on this war. obama says he is not giving up and he certainly is not going to give up before the election. chris: when we come back, "scoops and predictions," right chris: when we come back, "scoops and predictions," right from the notebooks of these top

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>> tell me something i don't know is brought to you by charles schwab. let's talk about the personal attention you and your money deserve. talk to chuck. chris: welcome back, bob, tell me something i don't know. >> one of the key foreign policy people in washington says that given all of the issues, not just iran, it is the most difficult time to manage foreign policy since the cuban missile crisis 50 years ago. >> wow. chris: becky quick. >> we're watching the markets again very closely.

we are pushing at the highest levels we have seen in 4 1/2 years. the turn is going to come next week when we see if we can keep at these levels and sustain it. chris: 13,000. >> not that just that, 1350 on the s&p, too. >> everyone agrees that ohio is the big kahuna on super tuesday. there is a big sense that santorum could do very well there. however, a little footnote that the same group that was organizing the early voting and ballots for romney in florida and m.v.p. has been in ohio for a month. he may have a leg up already. >> the general election campaign, the r.n.c. moved state directors into ohio, florida, north carolina, virginia this week. they'll have four more by the end of next month. it may not sound like much, but it is three months ahead of where john mccain was in 2008 and there will be hispanic state directors in all battle ground states for the first time in its history. chris: when we come back, the big question of the week will the republicans pay a price this year for rush limbaugh? be right back.

chris: welcome back, rush limbaugh outdid his usual this week talking about the georgetown university law student who testified about the need for insurance coverage for birth control. >> so miss fluke and the rest of you fem nazis. here is the deal if we're going to pay for your contraceptives and pay for you to have sex, we want something for it. i'll tell you what it is. we want you to post the videos online so we can all watch. >> wow. chris: the big question, will republicans pay a price for rush limbaugh? we'll start with the women on this. >> first of all it was despicable and vile as i wrote in my column this weekend. he has gone way over his usual as you say. republicans need to stand up and condemn what he said. they need to truly distance themselves. it's going to take courage. they have to apologize to rush. chris: not just the inappropriate language? >> it's beyond inappropriate. it's horrible.

you lose either way. you lose if you condemn him. you lose with his fans. you lose either way. they better come out and condemn him. >> judgment on this should be way above politics. i mean that's just disgusting talk. >> and republicans can't win if there is any echo chamber of this kind of discussion or this kind of language around any of their domestic policies. and right now that's the place they find themselves. chris: my advice to take it all back, every single word of it. take it all back. thanks for a great roundtable. bob woodward, becky quick, kathleen parker and major garrett. that's the show. thanks for watching. we'll see you back here next thanks for watching. we'll see you back here next week.