thank you for watching. "hardball" starts right now. deal done. market down. let's play "hardball." good evening. i'm chris matthews out in los angeles. leading off tonight, if tea party republicans get what they want by threatening to blow up the economy what's to stop them from locking up government again ? they took the american economy to the brink of disaster and it worked for them. everyone fell in line. republicans, president obama all moved by the threat of economic chaos at the hands of tea party ideologues. the president today signed the deal into law averting disaster after the senate passed it 74-26. for the tea party, if the end

justifies the means, what will they do for an encore? do it again, of course. can president obama stand up to them next time? then democrats gave away a lot in this deal. how are they going to sell this thing to their voters when they get home this august? we're going to talk to two members of the house, u.s. congressman steve israel who backed the deal, and congressman barney frank who voted nay. plus politics aside. let's look at what this deal did to the ll 26. it was dowfor the eighth day in a row. a first rough reaction. not a good one at what congress did. president obama says the deal will make things stronger, but if you want to know what happens when you cut government spending during tough times, take a look way back to 1937 during the new deal. we know how that story ends. and the mittness protection program. mitt romney, the republican front-runner, the guy who says he can run a business and fix the economy, but he's been awfully quiet on the debt issue.

call him a debt dodger. finally, let me finish with mugger and the victim who got away this time. let's begin with what the tea party will do next time around. nbc political analyst david corn. and ron reagan is a political commentator. i want the gut reaction of both of you guys. how does your gut feel after you saw the senate vote down with a three quarters vote today after this whole thing is over with my buddy who i've come to respect so much, david corn, your gut? what does it say about this deal? >> my gut wasn't happy. not because of all the particulars, but because i feel like president obama got pushed onto republican territory and was fighting a deficit fight on a republican -- on republican terms regarding the economic narrative of our country. that the issue is deficits, cut spending and that's what's wrong with the economy.

i think ultimately the deal may not be as bad as a lot of democrats progressives will be and there are some things i think the white house won tactically, but i still feel it reinforces an overarching narrative not to the benefit of progressives, more importantly to the economy overall. that's why you saw today the president come out and try to pivot very quickly from this story, and i'm waiting to see if he can be successful in that pivot. >> ron reagan. your gut reaction to what we've just watched there and covered every night here? >> well, my guts are twisting agents here, too. i disagree with the president's negotiating strategy. i don't understand why he sits there for a month or so saying bottom line, we have to have a balanced approach. the public comes over to his point of view. even republicans, a majority of republicans thought that revenue and spending cuts should be part of any deal, and yet at the end of the day, do we see any revenue in this bill? no. none at all.

i score this as clear win for the tea party at this point. >> i'll tell you, the israeli government says never give into hostagetaking. we did. president obama this afternoon talking about what needs to be done and what needs to be on the table when it comes to lowering the deficit. here he is talking now. but talking isn't leadership. let's listen. >> since you can't close the deficit with just spending cuts, we'll need a balanced approach. where everything's on the table. yes, that means making some adjustments to protect health care programs like medicare so they're there for future generations. it also means reforming our tax code so that the wealthiest americans and biggest corporations pay their fair share. i've said it before. i'll say it again. we can't balance the budget on the backs of the people who bore the biggest brunt of this recession. everyone's going to have to chip in.

that's only fair. that's the principle i'll be fighting for during the next phase of this process. >> oh. you know, i feel like words, words, words. talking again. here's the senator making clear what we saw in last round. that he and speaker boehner were picking members of this super committee, whose chances for okaying tax hikes are pretty low, as mcconnell puts it. listen to the guy laying down the law. mitch mcconnell. >> i can certainly say to the american people the chances of any kind of tax increase passing with this, with the appointees that john boehner and i are going to put in there are pretty low. >> who do you believe there? >> exactly. >> the president or mitch mcconnell? who do you believe will get their way? your thoughts, david. >> i do believe republicans will

block any discussion of true revenue hikes in this super duper what do you know congressional committee that's being set up. but on the other hand, the president, if he wants to have this fight again, which you know, we almost had last year, is in a position to say no to the bush tax cuts, which will be expiring next year, which will bring in a hunk, a chunk of revenue if they don't go through. i believe the white house figures that at the end of this debate, as ron just mentioned, they have the public on their side. particularly on this issue. a poll out today shows overwhelming support for including revenues including tax hikes on millionaires and corporate -- >> you're not talking about the politicians at work here. you're talking about the public. republicans in congress led by mcconnell said we are not going to permit a tax increase, period. >> it's up to the president to make that fight, if he believes what he said today, and i do believe he believe what's he said. are we going to deal this way

again or will he fight for this? >> okay, ron. >> why wouldn't he fight that fight in the first place? here's how crazy it gets. why anybody would agree to this. section 402 of this legislation, it precludes, or it guarantees essentially a filibuster or amendments if the committee, the committee of 12, 6 republicans who will never vote for revenue increases if they somehow suggest that some revenue ought to be in the package, that is open for filibuster and amendments. if it's all spending cuts, no filibusters and amendments. who in their right mind would agree to something that is one set of rules for one set of people and another set of rules for us? >> the guy that agreed to it was mitch mcconnell and he got what he wants because he knows the tools. here's the problem you have. it seems to me when casey takes two strikes, i'm going to hit the home run on the third strike, he didn't do it in the poem. is he going to do it now? in casey at the bat, david? >> at some point, the white

house keeps saying, this is not our fight. we need to get past this. they said that in the government shutdown, the debt ceiling, just like mighty casey. took the two swings and didn't hit the ball the way most democrats want to see it hit. most democrats do support this package according to some new polls. nevertheless, the president laid out a marker today. >> okay. >> shared sacrifice in the past, at some point he's going to have to stare down republicans. >> talk it down. get away from words like metaphors and fighting. a super committee report sometime, well, november 23rd's the deadline. it's going to be a deadlock. the republicans on the committee are all going to vote to the last man and woman, no tax increases. the committee report will come out with all spending cuts. because there can't be by the nature of the bipartisan deal any package which gets bipartisan support with tax increases, because the bipartisan republicans are, again, ron, pick it up here. the president looks, he looks at that big basted thanksgiving

turkey being delivered to his table. it's got all spending cuts on it. at that point, he has to say, go ahead and trigger the cuts in defense, and around the edges of medicare rather than doing this but so what? maybe that's what he has to do to teach they guys a lesson. >> maybe that is what he has to do, but you're right, that's what's going to happen. it will blow up in his face, because he's cutting defense and endangering americans. >> go ahead. >> also also what you're -- the report may not even make it out of the super duper committee. if you know, the democrats hold firm and say there has to be revenues and the republicans say, no. only cuts. you may have a deadlock, gridlock, which will lead to the same -- you know, effect. so the president may not even get a choice.

he may just go to the automatic doomsday machine from dr. strangelove. >> that's what i'm talking about. it's call the trigger. >> that's right, and we'll have these cuts in 2013. now they -- the white house believes they protected their priorities from these cuts, and they'll be at defense and on the medicare side, as you mentioned on the providers' side. not on the beneficiaries' side. and i think they think they can live with these cuts. >> and the president says, feeling lucky? mitch go ahead, i'll put the trigger. feeling lucky? >> and at the same time the president has this leverage on the bush tax cuts. if he wants to put that trigger next year. they're talking end the days, maybe the president has figured out a preview of coming attractions, of the coming days. maybe we'll see a doomsday device that gets triggered december 23rd. maybe that will be the best answer for this whole gang. david corn, thank you, better to

fight than surrender. ron reagan, thank for looking ahead. coming up, what will democrats say to their constituents in in which they gave away the store? got little in return, they turned over the wallet to the mugger. two house members are coming up, steve vale running the campaign committee for the democrats, and barney frank who voted against it. you're watching "hardball," only on msnbc. fiber one. uh, forgot jack's cereal. >> we're pressed for time. feeling lucky, mitch? feeling lucky -- um... try the number one! [ jack ] yeah, this is pretty good. [ male announcer ] half a day's worth of fiber. fiber one.

not a lot of winners in this debt deal on the liberal side. here a couple overall, first, vice president joe biden and mitch mcconnell. biden made the white house's last ditch play over the weekend called upon his 25-year connection with senator mcconnell and proved how valuable he is to president obama. mcconnell a winner, too, a grownup, who was willing to cut the deal with the v.p. finally, senator mark warner comes out a winner. the virginia democrat burnished

his centrist bona fides by leading the gang of six. welcome back to "hardball." transfer! transfer! hello...my name is... peggy? come on!!! hello? want better customer service? switch to discover. ranked #1 in customer loyalty. it pays to discover. so i took my heartburn pill and some antacids. we're having mexican tonight, so another pill then? unless we eat later, then pill later? if i get a snack now, pill now? skip the snack, pill later... late dinner, pill now? aghh i've got heartburn in my head. [ male announcer ] stop the madness of treating frequent heartburn. it's simple with prilosec otc. one pill a day. twenty-four hours. zero heartburn. no heartburn in the first place. great.

welcome back to "hardball." demming split evenly roughly. now they all head home for the month to explain themselves. what kind of reception will they get? we'll hear from to democrats split each way on the issue. start with someone who say nay. barney frank, ranking democrat on financial services. mr. frank, i guess the question is, would you have voted against this measure, or would you have voted a nay if your vote were decisive? >> yes, i thought long and hard about it. it wasn't something to play games about it. i rose twice this year to raise the debt limit. i thought it was important. i also believe if this had fallen, what you would have seen would have been an immediate short-term extension, but it's a dilemma. i understand that. are you ready to take the pain? once you accept the premise you're going to vote for

anything to stave off a disaster, then you give the people who have an interest in disaster even more leverage than they already have. it would have been a mistake to say the tea party people are out to dismantle government, they're out to reduce and discredit the president and don't mind screwing up the economy, and to stave that off you will do anything they ask, then you are in big trouble. so i think a line had to be drawn. i wanted to vote for this. i saw reasons to vote for it, and as early as monday morning before i saw the specifics, i was inclined to vote for it, but when i read the bill, i couldn't do it. >> i've never seen anything, on on the outside. mr. frank, i've never seen anything like these people seem to be, they should be standing outside of the white house with placards. what are they like on the inside? do they defend the right to vote against everything that the government does? they're not opposition. they seem to be protesters. >> there's a little bit of a hypocrisy. you notice some are upset we're

going to end subsidies in airports and can't make it on their own. when it comes to subsidizing western european allies some are on the right side and want to cut it, some don't. by and large, a combination. some of them, frankly, there's a lack of knowledge. ignorance, and in its most fundamental sense. they don't understand government. they hate it. they do not realize that there are things we have to have done in a civilized society that we can only do by pulling resources. pooling our resources. and some of them have a -- a hatred of president obama, that goes beyond anything reasonable. so ordinarily people are deterred from taking actions that are going to do damage to the country, but some of these people, because they think he'll get blame for it, don't mind seeing what they think would be temporary damage, and there were some of them who -- who are simply beyond any reason i can think -- some individuals you could find -- i've been working with some of them on cutting the

military. your prior guest, cut military spending and hurt america. what's hurting america is this wildly excessive military spending such a major cause of the deficit. and some are them are okay on that. >> let me ask you about the hatred. is it ideological? do they think he's a socialist? lefty, like bernie sanders? do they think he's just far over the side? or is it tribal? what is it? >> i think it's more the former. i haven't seen any racism in it, although you never know what's in the unconscious of people. but it just went around the bend. partly i think it's people who thought they were losing their america. some of these people who have seen in america, an america if you're gay or lesbian you're not demonized anymore. in which women are freed, as they ought to act and see people are free to be religious or not religious. i think that's a part of it, and for

some reason it would seem to me -- i can't fully understand it, chris. the health care bill drove them wild. >> yeah. >> i do not understand it. there were inaccurate arguments at the health care bill. i mean, frankly, many thought was too meek. >> here's what i don't get. why don't they want the average person to take some responsibility for their health care? nixon believed in employer mandates. what's wrong with an individual mandate? seems to me a conservative idea, not a socialist idea. why do they hate making individuals responsible instead of throwing it on the cost of society? emergency rooms and all that? >> i can only say i share your curiosity. i can tell you this. listening to them talk about it does not elucidate any logic behind the predictions. >> let's go back to the word about ignorance in government. did they accept their fiduciary -- -- i wish there were a simple word. you're in financial services. is there a simple word to explain the responsibility you have as part

of the u.s. government to pay its bills? do they accept that? >> no. some of them -- they don't accept it on the moral sense. some of them say, well, this whole thing has been illegitimate. i do not understand that. some are simply, literally, ignorant of the consequences of it. there are people there who have a conspiracy theory of the world. i do not, again, cannot explain it. you know, look, i would love to be able to vote for tax cuts, make them popular, but i never saw a tax cut put out fire or build bridges. they say, well, we don't want to leave these debts to our children. i don't want to leave them highways that will collapse or bad air. it is very puzzling to me. but i tell you this, chris, we have one good thing and i voted against this, because incredibly to me, it said the wars in afghanistan and iraq were not covered by any caps. they were open-ended, but going forward, we're going to have this important debate next year.

i'm serious about this. the way this works, you talked about the sequestration. both of those are to come into being at the end of next year. here's the debate we're going to have. i think these people underestimate the support americans have for our coming together to build roads and keep desperately poor people from starvation and providing decent health, research, and doing a lot of things that can only be done if we do them together. here is the choice america is going to have. we can raise taxes on income above $250,000. what we're saying is, for every $1,000 you make over 250, we want to tax you $30 more. if you make half a million dollars, you'll pay another $7,500. i do not believe that will deter anybody from doing anything that is economically productive. if we're going to save these people $30 on $1,000, we're going to have to cut environment cleanup and not have as many cops and firefighters on the streets. that will be the debate.

either sequestration take effect with all of its damage, including the military. i would welcome those cuts, but others don't. >> congressman, i wish you could call the white house speech writers with that basic formulation. i mean it. i don't think he spelled out those terms. >> chris, with your help, that's the way we will put it to people. can i congratulate you on one thing? probably your parochial school education, you pronounced bona fides in the best way. >> thank you, i appreciate that. >> coming up, thank you, congressman. congressman israel, i often talk to you. get to the bottom line. you guys want to protect medicare as an issue. do you still have it? >> absolutely we have it. these republicans were willing to take this economy to the brink, push it over the cliff, or pull it from the cliff in a relentless pursuit of the end of medicare. we stopped them from doing that.

we're going to have this argument again in november and december with this super panel. this super bipartisan panel. >> what about trigger against trigger? there's not going to be a deal. mitch mcconnell has made clear there won't be a deal and no risen increase. there can't about deal. if these triggers go into effect late december, around the edges of medicare, did you write the law or members of joe biden write it carefully enough to still have that issue of protecting medicare? >> chris, every time we remind voters in bucks county pennsylvania or the suburbs of chicago or new york, those independent moderate voters, every time we remind them who's willing to protect medicare and who's willing to end it, we win the debate. i have no problem with this debate continuing into the next election year, because the contrasts are stark. we're going to continue to remind the american people with a republican house majority, they started 20 years ago. you know this. 20 years ago, they want medicare to wither on a vine. they tried to do it on a ryan budget. they tried to do it last night. we're going to keep reminding people who's fighting for who in

this debate. >> let's look at this new poll. pew research center polled americans this past weekend, asked to describe the debt negotiations in one word. the top ten answers. bigger the word, you can see it there. visually. ridiculous disgusting. stupid. frustrating. poor. terrible. disappointing, childish, messy, and joke. ridiculous bombs right across the screen there. how do you defend most of the votes for this debt deal when it's called ridiculous? >> i would say first of all, all of the above, because you had a group of people, 87 tea party people who continued to go too far. walked out of negotiations every several days. every time we got close to the goal moved the goal post further and further to the right. was it a great deal? no, but republican members of congress are going back to their districts and we are holding them accountable every single day. >> who's happier?

weerp watching television. most of what goes on on the hill. not most. what goes on on the floor is transparent. i saw a lot of faces on the republican side. boehner looks like he's relieved. you guys, on the other hand, you're hanging heads, bowed down. i don't see the physical manifestation of a happy democratic party. am i missing something? >> who could be happy when you are in a negotiation with people who are willing to destroy the economy of this country and the pull it over the cliff? now, they may think they were happy on the floor but they're going home to their districts, and we are giving them an accountability august. we are going to ask them to defend the indefensible and they're not going to able to do it. i wouldn't want to be them. i don't know what the weather service is saying about the temperature in august. i promise you, for these republicans it's going to be very, very hot i. hope we can get ahold of you throughout august. you chair the democratic committee. how this is playing out there. i want to hear from the other

side, too. thank you. heard all sorts of analogies. metaphors out the kazoo, eating peas to jell-o, to riding on trains, the worst of all sophie's choice. creativity at the time of crisis. let's check out the metaphor magazine. you're watching "hardball." only on msnbc. [ male announcer ] looking for a complete picture of your money?

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back to "hardball" now. the "sideshow." first up over the course of the debate over the ceiling of the debate we've heard several off-the-wall comparisons, metaphors related to the turmoil we've seen in this debate. let's look back at some of the more creative moments of the showdown. >> might as well do it now. pull off the band-aid. eat our peas. >> sometimes it's good to back away from the tree and take a look at the forest. >> i came back against, away from the tree, to take a look at forest. >> dealing with the white house is like dealing with a bowl of

jell-o. >> several trains have left the station. it's a decision which train we'll be riding when we get to the next station. >> it's a sophie's choice, right? who do you save? who do you pay? >> our objection is to any proposal that puts us through this three-ring circus again. >> wow. hard to keep up. let's try and agree on the metaphor. if it is a band-aid, a case of pulling one off or putting one on? michele bachmann had to opt off an appearance in iowa to rush to washington and vote nay on the debt ceiling agreement. rather than disappoint a group of supporters who gathered outside a pizza shop to hear her speak she calmed into a called into the event through a p.a. system. though she didn't take questions, she did conduct an interesting kind of poll herself. let's listen. >> let me ask you this question. raise your hands -- do you want me to vote no on raising the debt ceiling? raise your hand.

very good. they'll tell me the results. i can't see it. very good. >> sarah palin says she can see russia from alaska. michele bachmann saying she can see all the way to iowa from washington, d.c. despite her attempt, the vote did pass. time for congress and the senate to head home for summer recess. harry reid is ready to head back to nevada. after a less than tranquil couple months. what does he miss the most by staying in washington? let's listen. >> i've been here for a long time. i have a home in nevada. and i haven't seen in months. my pomegranate trees are, i'm told, blossoming and i have some fig trees and roses and stuff that i just haven't seen. >> wow. searchlight, nevada. sounds exciting with all the pomegranates and figs and rose bushes blossoming.

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i'm milissa rehberger. here's what's happening. stocks plunged on fears after weakening global economy. the e-commerce department reported that spending was cut in june for the first time in nearly two years. jurors in the polygamy trial heard audio tapes of jeffs telling his 14-year-old spiritual wife how to please him sexually. nasa has confirmed a piece of equipment is a tank from the il-fated "columbia." tropical watches and warnings are in effect as the still disorganized emily approaches.

it sure takes a lot to stop new yorkers in, but a peacock flew the coop literally, and was perched on a wanedsill in a very swanky apartment building. zoo keepers hope he finds his way home, but this building probably has a doorman. he may not want to. back to "hardball." back to "hardball." you just heard, i guess, in the news today, the dow took a beating today. perhaps a seen that markets don't like the debt deal. perhaps. are you kidding? any chance the deal focuses on debt and not job creation, will help the economy? for the short run? joining us to talk about this, simon hobbs, great as this and msnbc political analyst eugene robinson who understands the politic. i'm setting you both up, gentlemen.

all i can ask, a simple question, dow jones industrial down 265 points today. any winners in this whole kerfuffle. simon, you first, except gold. gold went up, telling me nobody trusts anything except bullion. >> let me frame it this way, chris, and it's really important. we're in the middle of a major breakdown in world markets. we have fallen for eight straight sessions. we have lost on the dow jones industrial average 858 points in eight sessions 6.7%, because we believed the world is slowing down and that america, possibly, possibly, could tick back into recession. that is the backdrop. meantime perhaps ironically people are stampeding into bonds, send ing interest rates down. if you ask me specifically about the debt ceiling and what we accomplished in washington i would say the world markets most definitely dodged a bullet but a bullet from a game of russian roulette wholly of washington, d.c.'s making. >> politically, give me your

damage assessment, gene. >> i've seg all along it was a negative-sum game, not a zero-sum game. democrats lost worse than rs, but we all lose given the weakness of the economy. i think it's it's underlying weakness of the economy and the threat of a double dip recession that we're seeing reflected in the poor performance of the markets. >> the only two guys that look good, two people, i should say were biden and mcconnell. they were at least driving the ambulance the last day. showed up with the ambulance and i'm not a big fan of mcconnell. together they managed to avoid that disaster. let me put together what i heard you believe, simon, so we can cut to the chase tonight. the idea we're going to cut spending dramatically is absurd. we're going to increase spending dramatically is not going to happen. basically, let me cut to the chase. if were you the chinese government, a command society running this country right now.

forget elections, forget politics, interest groups, and just wouldn't it be smart to shift a lot of the money going to entitlements to maintenance people, a little tough love. shift it into job production for the good of everybody. is that the right god-like thing to do or not? >> ideal thing to do but i don't think in your god-like world that's ultimately what's going to happen. so much of the economy is destroyed. you cannot escape the fact looking for long-term structure control say by the end of the decade, whether you like it or not, chris, you have to cut entitlements and you have to have revenue increases and tax increases. the question, how you balance them out. you can't have one or the other. somehow, you have to bring together the two sides of this ideological argument. the problem, checks and balances set up by the founding fathers and i am a guest in your country, i'm pleased to be here, but the checks and balances don't seem to bring the two sides of that argument together. it was a politics, fine. when you didn't have to make difficult, hard decisions in the

'50s and the '60s, but to deal with the deficit problem you've got to bring the two sides together. >> gene is a progressive. would you go along with that? as an analyst. should the country have a grand going together, much higher revenues, much tough love on the entitlesments side? would you go along with a deal like that? >> there's got to be entitlement reform and there's got to be more revenue. those two things have to happen. it depends how you do entitlement reform whether it would make me personally happy, but you could come up with ways to do it that i think progressives would certainly go along with and, in fact, there are progressive members of congress who have come on the show and offered ideas about social security, for example, or

medicare. >> it ain't so freakin' complicated. 25% of our gdp, simon and gene, going to government spending and 15% being paid. it's a 10% differential. it's got to be closed. close it. >> we were there. when obama was locked in the room with boehner. we were getting there. it's only when boehner brought it back to the tea party in particular, that it fell apart. there were wise men in there trying to do the deals. >> when congress returns from recess, he asked them to concentrate on one thing. let's listen and see if we believe. let's listen to the president. >> we need to begin extending tax cuts to middle class families so you have more money in your paychecks next year. if you've got more money in your paycheck you're more likely to spend it. that means small businesses and medium size businesses and large businesses will all have more customers. that means that they'll be in a better position to hire. >> what do you make of that, gene? i'm getting what, what is it? whiplash here trying to keep track of this. he wants revenues to go up, now revenues come down.

distinguishing the middle class, trying to get taxes for the rich. doesn't he need a consistent message? create jobs, at least force the republicans to say no to something? >> this is the attempt by the administration to pivot away from debt ceiling on to the jobs issue, which everybody knows is what people want to hear about. the problem is, what are you going to say about jobs? i mean, they have several measures that they want to talk about. they want to talk about exports and trade and incentives for small businesses. you know, in the end, is any of this enough to have a discernible, measurable effect on the job situation, when you're coming out of a recession in which you lost 9 million jobs? that's a lot of jobs, and at this rate it's going to take many, many years to get them back. >> let me ask simon as a macroeconomist, is there a set of tools available? fiscal policy seems dead. we have a current deficit, he

doesn't have much wiggle room there. money policy, monetary policy for the fed seems to have been exhausted with qe-2, is there anything left he can do as president between now and the end of the year to get the economy rolling? >> that begs the question, can a president create jobs? the situation is really, really rough. the economy basically almost stalled in the first half of the year and now the consumer is retrenching. you have to create demand in the economy for the businesses -- >> how? >> for the businesses to actually start recruiting people and bring the employment down. i don't know how do you it. i think it's structural. look at saving rate amongst ordinary people, they are rebuilding their balance sheet. we have a housing market that continues to fall. this is big, big stuff. i don't have the answer to that but i know nothing else that's on the table at the moment appears to be working and as you've said, at least with the spending cuts you only start getting $21 billion in spending cuts next year and twice that in 2013, at least for now they are not ramping up the spending cuts

and i suppose in fairness to the republicans they would say, equally, at least now we are not raising taxes. which would also be quite bad in this environment, but i cannot stress to you how dangerous the situation now is in this economy. but if you see this play out on the television night after night. look at the poll of what ordinary americans you spoke about before the break. do you think they're going to go out and buy that extra car, take that extra holiday or ramp up their credit card? of course not. in the middle of all this, with the games we've played on capitol hill, what have people done? taken money out of the money markets so corporations would find it more difficult to borrow. taken it to the sidelines they may not put it back in, and corporate treasurers are hoarding cash. they're not spending in the economy. we're in this revolving fierce circle that we need to break out of, and at least you could have some vision and leadership from somebody to pull us out rather

than the rancor you get. >> i agree. i spent many days thinking, should i call my adviser and take it all in cash. i worry just like everybody else. i have no account. simon hobbs, you're the best. gene robinson, you're the best, in the political area. where's mitt romney? nowhere. he's a debt dodger. supposed to be the candidate of business, the job creator. he's been hiding out for weeks. politico is calling it the mitt-ness protection program. oy love that metaphor. he's been hiding. let's bring him out. this is "hardball," only on msnbc. from the teachers to the students. i had a student the other day that said... "miss stacy, this class is changing the way that i look at things." sparking that interest and showing them that math and science are exciting... it's why i teach. ♪ i know they can, even when they think they can't.

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our girl's an architect. our boy's a genius. we are awesome parents! biddly-boop. [ male announcer ] if you find a lower rate on a room you've booked, we won't just match it. we'll give you $50 towards your next trip. [ gnome ] it's go time. we're back. mitt romney's back in the headlines not because he's making news. romney's being lampooned for being absent from the campaign trail. politico frames it like this -- call it the mittness protection program. through the hot summer of 2011 the front-runner for the republican nomination has been in hiding. joining us to talk about this, the author of the politico piece himself, ben smith, and john heilemann. this thing, this candidacy, what

is it based upon? simply upon everybody knows high i am. i'm a familiar name, the so-called front-runner because i.d. it's going to be a republican year so i don't have to say nothing. is that what it's based on? >> it's an unusual situation. everybody knows who wants to pay attention to his governance. romney is not that widely known, people know his name, but i think in his view, every day we're not talking about him is a day he wins, and if he can kind of get his way through the republican primary keeping his head down, he feels he's in a good position for a general election because of the economy. >> let's go to john heilemann, just being a nominee is a 50/50 shot to the presidency. once he's there -- he doesn't have to build anything in terms of belief or creativity or

stature. he just has to arrive there somehow. >> chris, you know everybody has the same attitude, they keep their eye on the first challenge, to win the nomination, that's obviously what he's focussed on. i would be less dismissive of the strategy in that i think the people in romney world realize mitt romney is going to have to engage and even if he didn't want to engage he's going to be engaged because he is the front runner and the people running against him are going to attack him. i think their strategy has been to keep their head down until now, focus on fundraising to build a big monetary lead over his rivals and talk about barack obama. not only because it makes mitt romney look like a national figure, but also because anti-obama is what is driving both the republican electorate and is a good way to get to the election, i think. >> let's listen.

>> to dodge the debate or wait until the debate is over? i don't think that to be leadership. look at rom knee and others in the race, they've taken other positions, it's easy to take a political position later on, it's tough to take a position early on, which is the real world. >> what happens when voters say where were you in the world? >> romney's hope is i was on this side and nobody's going to remember whether it was monday, tuesday, wednesday, exactly when it was. jon's right, it's a strategy that's working so far. the strategy is to just compress it as much as they can into a ferocious short fight in which they are -- >> let's look at the numbers, i think the president's dipped down so far in the polls that romney's starting to look good. the president's approval level is 43%, disapproval is 54%. let's look at pennsylvania,

romney ahead by 2 points, santorum within 2 points. aren't we looking at the weakness in obama this season rather than the strength of romney? >> yes, it's certainly the case. the president has a lot of things going for him, he still remains personally popular with the american people, but the bottom line the economy is horrible and has been bad for the entire two and a half years he's been president. there was going to be a time when the weight on his shoulders was going to start to drag his numbers down and i think you're seeing it in the numbers you've showed and across the industrial midwest. you can see it in pennsylvania, as you mentioned, but also in ohio, michigan, wisconsin. it's going to be the burden he has to carry until election day. >> you are speaking my language, i'm telling you, if the democrats lose that section of the country, they shouldn't be reelected. this idea of picking up virginia, once you lose the heart, industrial base of the democratic party, i don't see

how you can win in other places, i don't think it's moral. you have to defend the guys with the parkas, your thought on that, ben, i'm talking morally. can you be the party of the working people if you don't defend them? >> in the long-term they see the working people moving away from the old stereotype. being less white, less mid western. >> more high-tech? >> there are a lot of working people in colorado and virginia, increasing numbers of them hispanic. >> i find that strategy pretty despicable to turn your back on the people voting democrat for 30 or 40 years and say by the way, we've found some more friends. >> they are not saying that. i don't think they are turning their back on those people, in order to try to expand the map as much as possible they are acknowledging there's another brand of working person in america today. as ben points out, a lot of those voters are latino and in the southwest. no reason a democratic party can't go after both the

industrial midwest and those voters. >> that would be ideal, i'm with you, both. thank you john heilemann and ben smith. when we return, why the tea party's muggings, what we saw this week and this month and this year will continue if the president lets them get away with it. [ p.a. announcer ] announcing america's favorite cereal is now honey nut cheerios! yup, america's favorite. so we're celebrating the honey sweetness, crunchy oats and... hey! don't forget me!! honey nut cheerios. make it your favorite too! what if we designed an electric motorcycle? what if we turned trash into surfboards? whatever your what if is, the new sprint biz 360 has custom solutions to make it happen, including mobile payment processing,

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let me finish tonight with this bad experience we've all just been through. what we saw, what i saw was one

guy with a knife and the other guy trying to avoid being cut. it was a thug attacking a victim, it was a mugging. good news, the victim did get through it. the bad news, the mugger got what he wanted, he got the wallet. i put you, the most important question of the week, the year, the presidency, our time. any doubt he, the mugger, will do it again? not a bit. he declared his intention to name not a single member of the special committee to make the second cut in the debt to an increase, so the mugging continues again and again and again. the people who perpetrated this assault on the president will come back to do it again. the gang will be back and make new demands, make no concessions, do exactly what they want to get what they want. what they want is to control the u.s. government to their ends without having to win the white house or control the u.s.