my relatives in newark for a while. and i was able to go to rutgers law school the next year because of a national defense student loan. so i'm running, because of the opportunities that i had -- i'm under no illusion, if i grew up now into the circumstances that i was born into, i wouldn't be here as a state senator running for the governor of new jersey. >> senator, one of the local papers said you should not be written off, and having just heard your introductory remarks of this campaign, i don't think you can be written off in new jersey. and they said, the local papers said that you are the anti-christie. how do you see yourself as the anti-christie? >> well, you know, i see myself as, there's certainly a stark contrast between myself and governor christie. governor christie supports. his idea of jump-starting the economy is to propose a trickle-down income tax cut last area. and me and his budget addressed this year, he stated his support

for it again. i support property tax cuts for everyone else. you know, he coddles millionaires while the rest of new jerseyans are struggling under the highest property taxes in the nation. and our state is unfortunately, and i hate to say this, but we are at the bottom of the barrel in economic growth. we're number 47. so i would have is an economic plan to pull new jersey out of the dire straits we're in. this governor's economic message was a campaign speech. he's in denial about our economy. either he doesn't realize or he doesn't care about the middle class and the working poor in new jersey, who are struggling to make ends meet. i mean, he's out of touch. he actually vetoed a minimum wage increase. he sent it back to the legislature. we actually had an increase -- cost of living increase, so people don't have to.

the dow strikes back. who gets the credit? let's play "hardball." ♪ good evening. i'm michael smerconish in new york filling in for chris matthews. leading off tonight, the market strikes back. we've heard it all before from the right, president obama he hates the free market. he's a socialist. his policies are going to destroy the economy. well, he seems to be doing a pretty bad job of ruining the economy because today the dow closed at an all-time high of over 14,250. that means the dow has more than doubled since its low in 2009. it's not all to the president's credit, of course, and the recovery is uneven at best. but you can be sure that if the dow were in the tank, obama would get the blame. so maybe he should get some of the credit.

also, the empire strikes back. could we be looking at another bush run for the white house? jeb bush isn't saying no, and when they don't say no, they often mean yes. add to that bush's apparent shift to the right on immigration, and you can see the outlines of a presidential run. so you know what that means. we could be looking at another clinton/bush election. plus, why was president obama so eager to get past the sequester fight? here is why. his job approval is dropping as a result of that mud fight, at least for now. more important, he wants to move on to climate change, to immigration reform, to gun safety. the president's window to claim a legacy is brief, and the time is now. and the beat goes on. once again the right wing loves a story so much it doesn't bother to find out whether it's true. finally the story that broke just hours ago. venezuelan president hugo chavez died today after a battle with cancer. his death leaves open questions in a country he led for 14 years. we begin with president obama

and the economy. whooil an imperfect measure of the u.s. economy, the dow jones is still what many americans look to in order to measure the health of the stock market. it reached a new high adding 226 points in trading. the low points of the election, the dow has more than doubled. which has surprised many market watchers. ezra, i've been reading what you've been writing about this. to quote the great larry david, i think you're about to curb our enthusiasm. >> i am going to be a buzz kill. i am. the way we measure the dow doesn't adjust for inflation. every other sort of long-term economic measure we use for adjusting inflation, that does it. you have to do that to get any reasonable number off of it. if you adjust for inflation, it is not a new record. it is not beating where it was in '08 or in '00. while it sounds like new highs, it is true the stock market has been doing good lately but it is not all real new highs. the distance between the real economy and the stock market that is implied when you hear people say it's at a new high or

the s&p is nearing a new high is not as great as it sounds is, these are basically bad numbers. we wouldn't use them in other contexts. >> ben, his is an intelligence nuanced perspective. what i'm thinking is the white house, they love this news, but doesn't it undercut what the president's been saying about the events of the sequester? >> it certainly does do that. they'll be happy the stock market is doing good, but on the arguments against the sequester that have a terrible negative reaction, that's obviously not happening. the headlines that people are seeing in the newspapers and on tv is that the dow is at record

highs, profits are way up. there's not the big headaches that we expected to see with the sequester. it does undercut that argument that the sequester would be this big problem. that we're not at an all-time high not in a nominal sense. a lot of this is driven by the federal reserve. the fed has pumped $3 trillion in money into the economy. and the stimulus helped a little bit early on. right now we're talking about fed stimulus and picking up less risky assets. stock market goes up, happens every time the fed does this. one of the reasons the market went up today was because the chinese said they were going to spend a lot of money on domestic growth to help boost consumer demand. republicans could make the argument that we could cut a lot of spending, the market goes up. the real reason the stock market is going up today is because of china spending a lot of

government money. >> understood. ezra, why aren't those companies doing well on wall street hiring more folks? >> we talked about this sometimes. it's almost an issue of patriotism. to them it's a cost benefit analysis. they don't see they will get a profit back because they don't see enough profitable opportunities. this is something that i think we actually should worry about. you are seeing -- while i don't think the dow's numbers are a great example of it, we are seeing it detaching the corporations and the very wealthy from sort of the average working american. in the last couple of years, the top 1% has gotten 121% of the income gains. the reason they can get that is the bottom 99% lost a bit of money. meanwhile, as ben mentioned, profits are up.

they're near record levels as a percentage of gdp. in a bad economy for workers, you are seeing a good economy for people at the top. and that distance between how they can be doing and both what they need in terms of labor and also how much their profits are shareholder, that should worry us. >> and ben, there are ripple effects from this. folks who have 401(k)s but of course if you're unemployed, you don't have a 401(k). >> it's not broadly shared. and part of the reason that corporate profits are as high as they are is the companies don't see the need to increase wages at all. because there is so much slack in the labor market because people are unemployed and don't have the skills to take on these jobs. so companies can squeeze more productivity out of their existing workforce. and as they hire people as they're reluctant to do, when they do hire them, they don't feel the next far high wage. that's what's driving profits. >> despite your buzz kill, you have written about making an argument that there are good

things going on. you can point to some indicators that suggest that a recovery is underway. unfortunately, household income is not on that list. it still lags far behind where it needs to be. >> yeah. look, there are a lot of things that are happening in the american economy. i would call them longer term. they're positive right now. health care costs have been very, very low. they're beyond what the recession can explain. obviously china's not doing that badly. europe is getting back on its feet. we are seeing some good movement in the housing market. and if the housing market does recover in a big way, that makes all this federal reserve policy suddenly activate to begin driving a real recovery. the absence of housing as a driver. the big thing standing in front of it is still congress, still washington. one place i'll disagree with ben, it's true for the moment we're not seeing massive lines in the street for the sequester or worries in the market. it is still likely goldman sachs will knock about a half point

off gdp growth this year. that could be enough to put us in a recession. if we could get washington out of the way if it would stop pushing policy in a weak economy, we could have a much quicker economy than we're having now. >> on the issue of income and recovery despairty. "the new york times" illustrated the story about the city of detroit. the paper noted around the country as businesses have recovered, the public sector has in many cases struggled and shrunk. detroit may be the example of a dual fate. public and private diverging at times it has been awkward even tense as investors contemplated opening coffee bean roasters, urban gardening suppliers and fish farms. and even a dearth of toilet paper. that's that whole wage and income disparity that gets brought to the forefront. >> when you have the federal government cutting back on aid to the states, money sent to places like michigan and detroit. you're going to have the public sector doing worse than the private sector 37 but we have some austerity at the federal level. we've got money coming out of localities, layoffs and localities that makes economic growth harder.

that's why most would say they don't want this sequester right now. talk to us about long-term entitlement reform. but this will hit areas like detroit. you'll see the disparity of how corporations are doing and how municipalities are doing. >> what's the indicator you would look to? tell me when this quantitative value has changed, that's when we'll know we're ahead of the curve. >> i think just to continue to look at housing prices. in terms of what's really going to drive a broader recovery. you're getting people feel wealthier, they'll spend more. it drives fed policies more effective if people can actually get these mortgages at low rates, see prices going up. people more willing to sell the houses they have. i think that's the critical piece of this economic recovery. it started a little bit but from a low base. >> ezra what do you most want to see turn that you'll feel we're ahead of the curve?

>> unemployment. i know it sounds trite to say it at this point and i agree with ben in terms of housing being a leading indicator. but i will feel better about the economy when we are back down to 6.5% unemployment. that's when you'll see other positive cycles in the economy where corporations start bidding up wages. unemployment is the core still of a lot of major problems. >> to what extent are their psychological factors that are out there that are holding us back. people that could impact change but people looking at washington saying if they can't get their act together, there's no way i'm hiring or expanding? >> it is very difficult to find evidence that that kind of policy is what's holding us back. it can't be helping. in a broader way, the feeling that the economy is not quite recovering, that puts a bad thought on. people would say why should i hire when washington gets us into a problem with the sequester. >> thank you very much. coming up, it sure looks like jeb bush is thinking of running for president in 2016.

that could mean a clash of the titans. another bush versus clinton election. this is "hardball," the place for politics. hey! did you know that honey nut cheerios has oats that can help lower cholesterol? and it tastes good? sure does! ♪ wow. [ buzz ] delicious, right? yeah. it's the honey, it makes it taste so... ♪ well, would you look at the time... what's the rush? bee happy. bee healthy. with clusters of flakes and o's. oh, ho ho... it's the honey sweetness. i...i mean, you...love.

no chris christie at next week's cpac conference but they're making room for donald trump. the head of the conservative union says donald trump is an american patriot and success story with a massive following among republican conservatives. he also led the birther movement which lost steam when president obama released his birth certificate. we'll be right back.

welcome back to "hardball." what are the odds that we could wake up in november of 2016 to

the news that the next president of the united states has a very familiar last name? as in bush? well, the election is still a long way off, of course, but the prospect that another bush might at least run for the highest office seemed a bit more likely after a recent round of interviews in which jeb bush was talking about his new book. take a look at what he said to nbc's chuck todd. >> you're being much more open about considering national office than i have ever heard you before. what's different this time? >> well, i'm not saying yes. i'm just not saying no. >> that's what's so different. you used to be pretty definitive. >> so 2008 i was asked about it, and i said, heck, no. it wasn't the right time. in 2012 is wasn't either. this may be the wrong time, too, i don't know.

it's way too early to go through that process four years out. >> but i guess what is your motivation to at least not shut the door this time? what's different this time than shutting the door before? >> i have accomplished some things in my life that allow me now to have that kind of discretion to be able to think about it. >> "the washington post's" chris cillizza points out that jeb bush's recent high visibility makes a strong case he's strongly considering making a run. quote, this was jeb's less than subtle signal to donors that he's seriously considering 2016, and he sent it in a way that marco's sure not to miss. that, of course, refers to senator marco rubio, also of florida, who is considering a bid of his own. if he decides to run, will jeb bush be the front-runner in the republican field or will the recent flap over his contradictory statements over immigration dent his public image? michael steele is the former chair of the republican national committee and an msnbc political analyst, and ron reagan is an author and msnbc political analyst. michael, is he your front-runner if, in fact, he gets into it? >> i believe he is.

very much like hillary for the democrats would be an automatic front-runner. i think jeb has a great deal of gravitas in the republican party. i know that there were a lot of folks pining for him to enter the race in 2012 and obviously 2008 as well. so i think he's right, i think he's taken his time. he's measured himself on these things, and i think he's now beginning to put out there what you noted in setting this segment up, the conversation with donors as well as with activists around the country. i think he needs to be a little bit careful in how he does that obviously. he's already kind of got a little left foot/right foot problem on immigration which he needs to correct i think fairly quickly before it snowballs, but it's jeb, and i think he brings a lot of juice to the table. >> jeb bush's position on one of the most contentious components of immigration reform, backing a path to citizenship, seems to have undergone a bit of a transition. in this book he makes a strong case against it. he writes, it is absolutely vital to the integrity of our

immigration system that actions have consequences. in this case that those who violated the laws can remain but cannot obtain the cherished fruits of citizenship. to do otherwise would signal once again that people who circumvent the system can still obtain the full benefits of american citizenship. it must be a basic prerequisite for citizenship to respect the rule of law. now, that's a far cry from what he said last year, as late as last summer, presumably when he was writing this book, when he was seen as one of his party's most progressive voices on immigration. listen to what he told charlie rose back in june. >> you have to deal with this issue. you can't ignore it, and so either a path to citizenship, which i would support, and that does put me probably out of the mainstream of most conservatives, or a path to legalization, a path to residency of some kind. >> ron reagan, read the tea leaves for me. he seems more hardened now in his resolve against a path towards citizenship. you'd expect the reverse, i think, given the direction of his own party in the last couple

weeks and months. >> yeah, it's very difficult to read him on this, as you pointed out. first he was for the path, then he was in the book against the path, and now he's maybe for some kind of path again. he's kind of delicately straddling the fence. i think what he has in mind are who he may be the -- the opponents he may be running against in the primary in 2016, foremost among them perhaps marco rubio, a fellow floridian and somebody who has come out with his own path to citizenship immigration plan. he's trying to kind of play off of marco rubio to a certain extent. the larger problem for him, of course, is the larger problem for the republican party. there's an argument there whether their issue is really marketing or substance. so ask yourself, does jeb bush help them with marketing or with substance? as a marketing ploy, i think bush 3.0 is a mistake.

i don't think it says moving into the future. substantively, well, the jury is still a little out there. he seems uncertain on immigration, which is a low-hanging fruit issue, frankly, for the republicans. let's see how he does on income inequality or marriage equality and things like that. >> michael, on this issue of immigration and his position, in recent interviews jeb bush seems to walk back a bit his recent opposition to granting a path to citizenship for illegal immigrants. take a look at what he told chuck todd on that issue. >> -- because in november, i think prior to the election we weren't even in the game. >> so you think it's possible that the path to citizenship may be included in the eventual bill? and are you going to be okay with that? >> i think if there is a path to citizenship that has enough then we have to respect the rule of law. a longer period of time. >> the flip-flopping relative to the republican base, how do you see that playing? >> you know, i think jep has an

opportunity here. much to ron's point on the substance, to really move the party in a different direction off the, you know, particular pinhead it's on right now on immigration to a broader, you know, acceptance of the party of assimilation which we always at least have been historically this idea that you all are welcome to this great land of opportunity. and i think that he has a chance to carve that out. you know, don't try to out marco rubio or be more conservative than. if jeb bush is himself and as comfortable in his skin as we've seen to this point, don't let the prospects of running for theed. si change you into something you're not. you run into the mitt romney problem, and then it's downhill from there. be himself and bring the party to your reasoning on this subject and i think, i think quite honestly people will be surprised at the response. >> ron, do you think that american voters have the ability to judge him on his own merits without looking at his brother or his father for that matter?

it asks a lot, does it not? >> it does. in a word no. i mean, we'd like to think that you could and i'm sure many people can, but basically that bush name is going to be a big albatross around his neck ultimately. i don't think a lot of people out here, certainly out here on the west coast, are just sitting around waiting for jeb bush to show up. you know, he's got a tough road ahead of him. >> michael, do you buy into that? i think the world of 41. i don't know about the legacy of his son, but 41's legacy is rock solid at least in my view. how does this play? >> i think your view is the accepted view inside the party and across america, and i think ron again is on point when he raises the question of how this plays for the average voter. this is, again, the reason i think jeb has an opportunity to do a number of things. carve out fresh space on a very hot topic like immigration and rebrand, if you will, you know, the bush name if that's possible, but know it's going to

be an uphill climb and know it's going to be very difficult. the country looking at a clinton/bush election in 2016, i don't know how they feel about that. we'll see. >> how do you think it plays, ron reagan, relative to marco rubio? all of a sudden the attention being focused on illegal immigration, they're both from the same state. what is rubio's reaction to this? >> well, i think marco rubio's probably chuckling a little bit to himself because, again, on a low-hanging fruit sort of issue like immigration, jeb bush seems to have kind of done a romney. can anybody describe what his actual position on immigration is at this point? is it his book? is it what he said before? is it what he's saying now, whatever that is? you know, it's a little confusing, isn't it? >> just the fact he's publishing a book at this time seems like it's painting by numbers, the first thing you do when you're getting ready. thank you, michael steele. thank you, ron reagan, as always. we'll be back right after this. oh this is soft.

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more now on the breaking story late today. the death of venezuelan president hugo chavez. nbc's mark potter is with us from miami. mark, i guess not entirely unexpected. he's been sick for a while. >> reporter: no, but it still comes as a shock. he has, indeed, been sick for a while, but this is a shock to the venezuelan people. many of them had been holding out hope that somehow miraculously he would recover and return as president. many people there hated him, but many people there loved him. and they were counting on him to recover. but that did not happen, as was announced today about an hour and a half ago. venezuelan vice president nicolas maduro announced at 4:25 caracas time that, indeed, venezuelan president hugo chavez had died at the military hospital in caracas. maduro appealed for calm. he guaranteed peace would be maintained, and he also said extra security would be put on the streets. chavez had returned to venezuela on february 18th after a battery of treatment in cuba, cancer treatments.

he had announced on december 9th that his cancer he had been treated for in 2011 had returned. another tumor had returned. on the 10th he went to venezuela. on the 11th he received his first of the battery of treatments. for the next 2 1/2 months, no one heard from chavez. he did not speak, although there were mixed reports from cuba on how he was doing. at times it was said that he was doing fine, that he was recovering, he was looking good, and then there were reports that he was in dire straits and that the end potentially could be near, at least that was assumed to those who were reading the tea leaves. many said that he was still -- some said at some time that he

was actually still giving orders as president even though he had not been sworn in after winning re-election in october to his fourth term as venezuelan president. he was not sworn in because of those cancer treatments. again, on february 18th he returned to venezuela and did not speak. he was still not heard from. the only evidence that he was alive were some pictures that were released from cuba showing him holding the daily newspaper, but that was it, and now this announcement from venezuela that he has died. >> how might his passing impact the relationship between the united states and venezuela? >> reporter: well, of course, the hope in the united states is that it will help improve the relationship, and there has been reporting that u.s. officials have been trying to make entrees with the maduro government. the answer to your question may be determined by what happens in

the next month when there's an election as required by the venezuelan constitution. within 30 days there must be an election, and the likely candidates are maduro, the current vice president who will become the president now, an interim president, and enrique capriles, the opposition leader the more right wing opposition leader who lost to chavez in the october election. if he wins, it's believed that the relationship with the united states will be much better than it is now, but there is some hope that if maduro wins, given the bad relationship between venezuela and the u.s. over time, that there can be a softening, a warming up. after all, a lot of this is about oil, and even with all the problems between the u.s. and venezuela, venezuela never cut off oil to the united states. there was always that relationship, always that open door, and there is still some hope that maybe that can be improved. >> mark potter, thank you very much for your report. up next, president obama is eager to put the sequester fight behind him, and here is why. his approval rating has taken a hit. how does he turn the page? that's ahead. you're watching "hardball," the place for politics.

starting next week, there will be no more tours of the white house. the officers who secure the tours are being reassigned due to the sequester. there may soon be relief at the pump for drivers. prices are lower than a year ago and they can fall by 25 cents welcome back to "hardball." if there's unanimity on anything in washington, it's that everybody is tired of talking about the sequester. possibly no one more so than president obama particularly because it's siphoned momentum away from issues he wants to make signatures of his second term. in both his inaugural address and the state of the union, he outlined the specific goals that he has for the country. >> we will respond to the threat of climate change knowing that the failure to do so would betray our children and future generations. overwhelming majorities of americans, americans who believe in the second amendment, have come together around common

sense reform like background checks that will make it harder for criminals to get their hands on a gun. our journey is not complete until our gay brothers and z sisters are treated like anyone else under the law. our economy is stronger when we harness the talents and ingenuity of striving, hopeful immigrants, and right now leaders from the business, labor, law enforcement, faith communities, they all agree that the time has come to pass comprehensive immigration reform. now is the time to do it. now is the time to get it done. >> and with the president's picks for energy secretary and epa head, we're getting a glimpse of how he may achieve his goals. today's "washington post" notes that obama's second term cabinet members will have bigger roles and more latitude for action. quote, obama will rely on these new nominees, several of whom have experience in the agency they have been picked to lead, to identify the levers of executive power they can wield

quickly. joining me is eugene robinson and jonathan alter. both are msnbc political analysts. jonathan, what's doable from that list? >> well, i think a lot of it is doable. you know, he's throwing a lot of things against the wall to see what sticks. it's important to remember though that we're not going to move to that agenda right away because, you know, not to get too down in the weeds, but what they call the continuing resolution, which is basically the budget to keep the government open, is going to come up at the end of this month. so we have at least three more weeks of a lot of arguments about the sequester and about the larger budget issues. you saw that today the white house canceled all white house tours saying that it was the sequester that was to blame. that's really going to get the attention of congressmen because they use those tours for their constituents.

but once we get into april and may, you're going to see the president shifting more to these other issues that are on his agenda. >> eugene, that's not too optimistic of a look forward from jonathan because, you know, it seems like these manufactured crises, by that i mean those that they just refuse to work together to resolve, they keep coming up and up, and i don't, frankly, see an end in sight. >> no, they keep coming and coming and coming, and so anything that requires action from congress is sort of held hostage to these periodic crises that we seem to have to have. now, there are some things, the president did say that when he can't get congress to act, he will do what he can through executive action, and one thing that is sort of teed up for him is climate change. specifically, through the environmental protection agency's regulatory power limiting carbon emissions at

power plants, which is a huge thing that he theoretically could do when he feels he has the political capital to do it. >> in other words, that story from "the post" today acknowledging that he intends where possible to end run congress and get these things done on his own time. >> that's right. you know, he does have executive powers. remember when congress wouldn't act on the dream act on immigration. he essentially decreed a version of the dream act himself through his executive powers, and he has -- he can do that on some of these issues but not all. a lot of this agenda will require legislation to get through congress, and that's a heavy lift. >> jonathan, in his press conference on friday, the president was pretty

exasperated. he admitted the limits of presidential power. let's watch this moment. >> you're saying this is a republican problem and not one that you bear any responsibility for? >> well, julie, give me an example of what i might do. i have offered negotiations around that kind of balanced approach, and so far we've gotten rebuffed because of what speaker boehner and the republicans have said is we cannot do any revenue. we can't do a dime's worth of revenue. so what more do you think i should do? >> the "new yorker's" ryan lizza wrote of that exchange, quote, all presidents come to appreciate the limits of power of their office, but rarely do they ventilate such thoughts in public. jonathan, is that how you read what you heard from the president last friday? >> yeah. i mean, as he said, you know, he can't have a jedi mind meld with congress. you know, the great editor charlie peters said that to claim that the president should, quote, work his will on congress, which is what you hear a lot of people saying, is like saying that a man should work

his will on a woman or a husband should work his will on a wife. it takes two to tango. at a certain point if the congress doesn't want to go along with him, in our system there's not that much he can do about it, and you really can't blame him. he can only go so far. does he need to use other tools at his disposal to try to, you know, bring them in to work with people below the level of the leadership? absolutely. and he did not do enough of that in his first four years. you saw him have john mccain and lindsey graham in for a private conversation this week. to me that was a very good sign. it's very important that they keep talking to each other and maybe on some issues like immigration they can make some progress. >> and, eugene, politically speaking the white house already starting to lay plans for what's going to happen in 2014. they need 17 seats to take control. that's a tall order. it would have to be clinton-like in terms of its achievement. >> it's a very tall order,

particularly after redistricting has made a lot of safe districts for the republican majority. it's very difficult to draw a map and look at it and see how they pick up those 17 seats. then again, we're getting used to some pretty big swings in the house. >> no doubt. >> and not all anticipated. >> thank you. >> it happens. >> thank you. >> thank you, gene robinson. thank you, jonathan alter. up next, it's happened yet again, the right wing falls for another story without checking into whether it's true. this is "hardball," the place for politics.

late today the senate intelligence committee approved president obama's pick to run the cia, john brennan. the vote came after the obama administration provided the committee access to the top secret legal opinions that justified drone strikes against terror suspects. still, some key senate republicans are threatening to oppose brennan's confirmation unless the white house provides classified information about the september 11 attack in benghazi, libya. the nomination now goes to the full senate later this week. we'll be right back.

we're back. looks like the right wing media may be at it again, failing to fact check a story that makes a democrat look bad. remember last november when the conservative website the daily caller reported that senator robert menendez paid prostitutes for sex in the dominican republic? today "the washington post" reported that the prostitute who said menendez paid her for sex is recanting her story saying she was paid to make up the whole thing. the fbi has no evidence to back up allegations against the senator. menendez told fox news this is part of a plan to sabotage him. >> i can only say what i have said from the very beginning, that nameless, faceless, anonymous sources through right wing blogs drove into the mainstream a story that was absolutely false. that these were smears that began during my election process, and that increasingly become obvious that that's what they were.

smears and an attempt to affect the results of an election. >> but the daily caller is standing by its story saying "the washington post" is talking about the wrong prostitute. quote, the prostitute in "the post's" story does not appear to be one of the women we interviewed in 2012. in addition, the attorney for the d.c.'s sources has said "the post's" allegations are fabricated and that the affidavit is false. jim warren is the washington bureau chief of "the new york daily news." carol leonning is with "the washington post." carol, let me begin with you because you wrote that story that responded or debunked what the daily caller has said thus far. what do we now know? bring me up to speed in regard. >> what we now know is that one woman who is an escort in the dominican republic and one man, a lawyer in the dominican republic have gone to dominican authorities, sought immunity from prosecution for any involvement in a smear or

slander campaign, and have sworn in affidavits that they were hoodwinked into making a tape of some sort where they recited a script about having sex for money with senator menendez and also a wealthy donor friend of his. the woman says she didn't realize she was being taped and also said she was approached and paid to make these statements and read them aloud. >> paid by whom? do we know? >> yes. she knows who paid her. it is the first lawyer who has also made another sworn affidavit. his name is mr. galvan, according to the affidavit in the dominican court. he says he also was hoodwinked. he says he was told by another lawyer to please make this tape, that he was a divorce lawyer and needed help in corroborating the infidelity of a particular person, and he needed just somebody to say it on tape, and could he arrange to find these women and get them to say this. >> jim, what is going on with

the stories? there have been a number of them. and one of them stems from an interview that someone at your paper did. is it laziness or is it deliberate willfulness? what drives them? >> i think it's a noxious mix of laziness, to throw in the overriding technology. obviously nobody has a monopoly on what has become this ferocious desire that we all have to be first. but boy, the inherent tension, michael, between that desire to be first, particularly in the online work and accuracy and fairness is pretty substantial. i mean, i don't want to get too pedantic and mythologyize.

i'm sitting near a pulitzer prize winner who gained a reputation and deservedly so for frequently impersonating chicago police officers so that over the years he could get artifacts, including photos from families grieving over the death of a loved one. but fast forward to today. and i really do think you see this tremendous tension between a lot of idealogically driven media and a set of values in which often being provocative and interesting is a whole lot more important than being correct. and i see that absolutely every single day. >> the story i was making reference to is that shocking story that former senator, now defense secretary chuck hagel received speaking fees from a group called friends of hamas, and breitbart tv ran with it, even though it wasn't true. >> yeah. >> even members of congress chimed in before everybody found out it was false. as a matter of fact, sheer rand paul on the hugh hewitt radio program. >> let me bring up one piece of information that ben shapiro at breitbart put out today, which is one of the foreign funders behind senator hagel that he has

not yet disclosed formally is something called friends of hamas. if that is in fact true, senator, would that lead you to vote against mr. hagel? >> you know, i saw that information today also, and that is more and more concerning. with each day, there are new things coming out. >> carol, they just take on a life of their own. it just needs to get into the public domain. it could be by virtue of touching the send key, and then it's treated as if legitimate by media and politicians. >> i think what is important here is two things at once. there were a lot of salacious allegations made about senator menendez, and many, many people in the media wanted to figure out if it was true. at "the washington post," we were really interested in figuring out if there was any evidence of this, and we wrote a story about this a couple of weeks ago about the fbi agents in the caribbean interviewing people and basically coming up with nothing. and that made us intrigued. on the other hand, i have to say there are other reasons for senator menendez to be under scrutiny that we have also written about that have to do with his friendship with a wealthy benefactor and donor.

>> so the fees and alleged lobbying. >> his not disclosing, michael, the plane trips with dr. melgen. what got those going is the salacious allegations and those don't seem to be checking out. >> thank you, jim warren, thank you, carol leonnig. why warren buffett is now bullish on something most people aren't. you're watching "hardball," the place for politics. [ female announcer ] going to sleep may be easy, but when you wake up in the middle of the night it can be frustrating. it's hard to turn off and go back to sleep. intermezzo is the first and only prescription sleep aid approved for use as needed in the middle of the night when you can't get back to sleep. it's an effective sleep medicine you don't take before bedtime. take it in bed only when you need it and have at least four hours left for sleep. do not take intermezzo if you have had an allergic reaction

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let me finish tonight with this. warren buffett is one of america's wealthiest and most successful businessman. such is the interest that buffett commands that even his secretary's tax rate can spark a political debate. his berkshire hathaway incorporated has a market capitalization of $250 billion and employees 288,000 people. it has holdings in everything from auto insurer geico to railroad operator burlington northern to see's candies. buffett just released his annual letter to berkshire stockholders. it's quite an entertaining read. for example, in 2012, berkshire achieved a total gain for its shareholders of $28.1 billion. a number he called sub-par. and guess what he is brutish about? smaller community based newspapers.