'Countdown with Keith Olbermann' for Jan. 3

KEITH OLBERMANN, MSNBC HOST: At this hour in Iowa based on early entrance poll results from NBC News, Governors Huckabee and Romney are fighting for first place in the Republican straw poll.

On the Democratic side the early entrance poll shows Senators Clinton and Obama with initial support greater than the other candidate's. Well then, we shall start.

Which of these stories will you be talking about tomorrow? Key numbers already in. Thirty two, 30, 23. The high temperatures in Council Bluffs, Des Moines and Davenport respectively. Good weather for good turnouts at the Iowa caucuses. As the doors close Clinton, Edwards, and Obama and, no, not necessarily in that order. And what's a win if all three of them are within six or seven points of each other.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: We've said from the start that if we couldn't do well in Iowa, it would be hard for us to do well in other places.

(END VIDEO CLIP)

OLBERMANN: Polling all over the place but one survey suggesting where it gets down to second choice for supporters of Kucinich and such, Obama and Edwards gain a lot. Clinton only gains a little. Bill Richardson and Joe Biden both denying reports they would ask their people to float to Obama. Republicans - is Huckabee in the morning polling by six unless it's Romney in the morning's statistical model by seven. Nobody is ready to predict nothing.

(BEGIN VIDEO CLIP)

MIKE HUCKABEE, (R) PRESIDENTIAL CANDIDATE: We don't have to finish first here in order to feel like we've been successful.

MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: I'm reminded of what Yogi Berra said. He said I don't like forecasting, particularly if the future is involved.

(END VIDEO CLIP)

OLBERMANN: Today is about the 20th time Romney has said that. Unfortunately there's no evidence Yogi Berra ever said that. Why did they choose the way they chose from our NBC entrance polling, what it all means from Washington bureau chief Tim Russert, what to look for not so much in the results as in the spin from Chuck Todd, what the candidates look like from Richard Wolffe, what the races will look like now from Chris Matthews. This is MSNBC's continuing coverage of the Iowa caucuses. Finally some meaningful numbers. And when I say meaningful, of course I mean meaningless. Iowa, the first day of the rest of your campaign. All that and more now on Countdown.

And good evening from our MSNBC headquarters in New York. This is Thursday, January 3rd, 306 days until the 2008 presidential election, also known as the fastest 306 days in show business.

The Iowa caucus, the last vestiges of a labyrinthine 19th century political maze that used to end in the proverbial smoke filled back room with favorite sons and 103rd ballots. The only remaining part of our system that truly looks like the 1912 Democratic convention where 100,000 Republicans participating in what amounts to a straw vote would be considered a remarkably large turnout, where Democrats can go in vowing to support one candidate and get cold feet or get talked out of it and have to cast an anything but secret vote that isn't really a vote to award delegates who aren't really delegates to establish a front-runner who isn't really a front-runner.

As we await the interpretations of the entrants polling for many of the 107, 081 caucuses and we will have some more guidance momentarily, let us recap the last day of campaigning.

Senator John Edwards, the man who came in second in the 2004 Iowa Democratic caucuses hoping to better that finish tonight. Congressman Dennis Kucinich in 2004 having told his supporters to caucus for Edwards if the Ohio congressman did not meet the 15 percent viability threshold, that time no such luck for Senator Edwards this year. Congressman Kucinich as you know having thrown his support to Senator Barack Obama yesterday for a second choice.

And no similar luck for any of the top tier candidates in this race,

the Democratic side of it, in securing the support of either Senator Biden

or Governor Richardson. Both of those candidates denying reports today

they had also cut deals with the Obama campaign. In Des Moines this

morning, Senator Edwards making the claim that his campaign finds success

by doing without.

(BEGIN VIDEO CLIP)

JOHN EDWARDS, (D) PRESIDENTIAL CANDIDATE: You know, two campaigns believe that their money would make them inevitable, but tonight Iowa caucus-goers are going to prove our campaign, to stand up for the middle class and to stop corporate greed in America, is unstoppable.

(END VIDEO CLIP)

OLBERMANN: Two guesses on which two campaigns those might be and we'll repeat what we told you at the top of the hour. The early entrants poll results from the democrats in Iowa show in Clinton and Obama with initial support greater than the other. One of those obvious candidates, Senator Obama admitting on the "Today" show this morning that his dream of becoming president rests heavily on doing well in Iowa tonight.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: This is a straight answer. We do have to do well in Iowa. There's no doubt. We've put money, we've put time, we've put energy. We've gotten tons of volunteers and we've said from the start that if we couldn't do well in Iowa, it would be hard for us to do well in other places. So we are looking for a good result. I think it is going to be very close. I think that we've got a lot of strong candidates in the field, but what I've seen is that the people of Iowa are hungry for change. They want to bring the country together to solve big problems like health care and energy. And I think that our message has resonated. So we hope for a good evening.

(END VIDEO CLIP)

OLBERMANN: Good evening. In Des Moines this afternoon Senator Clinton and her family settling for a good lunch. The senator ordering the hot sausage plate and asking for the Italian dressing on the side with her salad. Her husband, the former president, citing voter turnout as the entree of tonight's caucus buffet.

(BEGIN VIDEO CLIP)

BILL CLINTON, FORMER PRESIDENT: No one really knows. No one knows whether there will be 130,000 voters or 200,000 voters or something in between, and we'll just have to see. So - But I feel really good. We've had great people helping us. She's had a great campaign. She's done a good job. People came out and listened. We'll just see what happens.

(END VIDEO CLIP)

OLBERMANN: On the Republican side the other former Arkansas governor and son of Hope, Mike Huckabee, looking beyond Iowa to tape another late night television appearance. This time with our friend Craig Ferguson of CBS. But his main rival in Iowa, former Massachusetts Governor Mitt Romney sounding like a comedian in his monologue - I'm sorry, in politics they call it friendly stump speech.

(BEGIN VIDEO CLIP)

MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: The politics are getting interesting. The polls show it's just neck and neck, down to razor wire. Tensions are getting high. And comments are being made that are really quite questionable. I saw just yesterday the chairman of Governor Huckabee's campaign said that he'd like to knock my teeth out. My only comment on that is don't touch the hair.

(END VIDEO CLIP)

OLBERMANN: And we'll repeat the 8:00 update from the decision desk based upon early entrants poll results, Huckabee and Romney are fighting for first place in the Republican straw poll and Governor Romney might have more than his hair to worry about. According to the last batch of polling heading into the caucuses, this is stuff from last night and this morning, Governor Huckabee had expanded his lead in the poll to six points according to the Reuters/C-SPAN, Zogby poll which was released this morning. 31 percent to Governor Romney's 25 percent with former Tennessee Senator Thompson at third in 11 percent in this poll, apparently ahead of Arizona Senator John McCain at 10 percent. Again, this is precaucus polling only you're seeing.

In the Democratic race Senator Obama at 31 percent. Edwards, 27. Clinton, 24. It gets worse for Senator Clinton when that 15 percent threshold is factored in. Once those had supported the nonviable candidates are asked to name a second choice in, again, the precaucus polling, this is not even entrance polling material, that gap becomes even wider. Obama leads 6.5 points. Edwards bounds 6.7. Mrs. Clinton would gain only 4.8 points.

And according to the results of a complex statistical model built by Christopher Hull of Georgetown University's department of government, author of "Grassroots Rules: How the Iowa Caucus Helps Elect American Presidents," the 2008 caucuses are estimated mathematically to finish this. Among the Democrats, Obama 35 percent, Clinton 25 percent, Edwards 23 percent. The Republican field, Romney 39 percent, Huckabee 32 percent, Paul 11 percent in what would be a huge upset and McCain dropping to fourth at nine percent. With all those early numbers in let's turn now to Washington bureau chief Tim Russert, the moderator, of course, of MEET THE PRESS who is joining us from Des Moines. Tim, good evening.

TIM RUSSERT, NBC HOST: Hi, Keith.

OLBERMANN: All right. No surprise out of this early - the details we're getting out of the entrance polling of the Republicans. Huckabee and Romney fighting for first place in the straw poll. We kind of knew that.

Interpret for us this other statement that the early entrance poll results for the Democrats show Clinton and Obama with initial support greater than the other candidates, that would mean Mr. Edwards.

RUSSERT: Well, we think it means, Keith, is that leading up to tonight if only hard core Democrats showed up, that would be good news for John Edwards. With Obama and Clinton apparently doing better than Edwards, it's an indication that we're seeing bigger numbers of women, young people, and independents. We don't know how many in each of those categories. When we do, we'll be able to figure out who is going to win this thing.

If it's tilted towards women, huge boost for Hillary Clinton. If there's a big bump up of independents and young people, that's good news for Barack Obama. This could be a very, very interesting night if it plays out because as much as people say it's only a point here or a point there or three points there, psychologically a win is a win is a win. Coming out of Iowa, heading into New Hampshire.

OLBERMANN: Having said that, how likely is it that the Democratic results will be in that range you just discussed, one, two, three points covering three people or even seven points covering three people, so tight that two hours from now and all day tomorrow and all over the weekend we'll be hearing from three candidates who are talking either about victory or virtual victory.

RUSSERT: Absolutely. But you put your finger on something very important and that is the second choice. Of many of the lower tier candidates, Bill Richardson, Joe Biden, it's in their interest to try to keep this campaign going, to live for another day. And there's a sense here that if Hillary Clinton wins Iowa and then goes on and wins New Hampshire, this nomination race could be pretty much over. If, in fact, Obama wins here and then goes into New Hampshire, the race goes on to South Carolina, to Nevada, into other places.

So those second tier candidates tonight could play a critical role if they begin to move their choice en masse to Obama or Clinton. And that's what we have to watch for early on.

OLBERMANN: If the conventional wisdom, Tim, was that Mrs. Clinton would get the least support in terms of those second choice considerations and we're seeing again it's very early information, it's entrance polling, it's very soft material, it can change because people will tell you one thing and intend to do it and then they get into the caucus and change their minds utterly or go to a second choice. But if it's Clinton and Obama and not Edwards did this whole construct about what would happen with the second choices just fall apart because Clinton was not supposed to get support from those people?

RUSSERT: It could. We just don't know. But if those lower tier candidates think it's in their political self-interests to keep the campaign going and therefore they want to assist Obama, that will be a significant political story. And the other one, Keith, I think we have to keep watching here, is these independent voters not only who they vote for in the Democratic primary but how many decide to vote in the Democratic primary. This is a state that Al Gore won in 2000. George Bush won in 2004.

If independents decide tonight to vote overwhelmingly for the Democratic candidates as opposed to Republican candidate, it's a very strong indication that come November this swing state of Iowa could really tilt blue and that would be very bad news for the Republicans in a general election.

OLBERMANN: From your mouth to the facts, the first number, official number we have tonight is this video that we're looking at right now. That is a live picture that you're seeing on the screen from a caucus site in West Des Moines, Iowa, where the official number of participants at the Democratic caucus site is reported to us at 267, Tim, in the same caucus site in 2004, the one that eventually got John Kerry his props from Iowa, 267 tonight, 86 four years ago. Can you extrapolate off that in terms of turnout?

RUSSERT: Let's see. Sister Mary Lucille taught me that's three times as many there, Keith. We are getting anecdotal evidence all across the state that some facilities are just bursting at the seams. They can't get the people in the rooms. Who are those people? It seems to be based on our early data with Clinton-Obama neck and neck, it's a lot more women, a lot more independents, and a lot more young people than voted in '04. How they divide up in those three critical areas will determine whether Obama or Clinton wins the Iowa caucuses.

OLBERMANN: All right. Let's look at the Republicans. We don't mean to give them short shrift but we have less information because Huckabee and Romney fighting for first place in the straw vote, well, we sort of figured that from the start of this. Does that imply John McCain is not going to do the vampire act here or how do you read that so far?

RUSSERT: Well, it's interesting. There the key number, I think, Keith, is evangelical Christians. What percentage of Republican caucus-goers are evangelical Christians because they will break heavily for Mike Huckabee. John McCain is hoping here for a third place finish, even a distant third place finish. He just wants to be able to say, I won the bronze in Iowa. And he and Huckabee have been working in concert. Huckabee basically saying I'll take care of Romney in Iowa. You, McCain, take care of in New Hampshire, and then we'll end our friendship by going after each other in South Carolina. That's what's playing out here in the Republican Party. If Romney loses Iowa and New Hampshire, he's in grave difficulty. If he wins Iowa and New Hampshire, he's well on his way to the nomination.

OLBERMANN: About third place, though, Tim, what if it is not John McCain? Could it be Ron Paul and what would that do for the republicans in the rest of the primaries for the Republicans?

RUSSERT: Oh, absolutely. Leading up to tonight, I think Paul under samples in many polls. And looking at some of the numbers leading in, you could really see Ron Paul capturing fourth place here, and then you go to New Hampshire where if it's a McCain-Romney battle, Giuliani has basically pulled out. Huckabee does not have great support there. You could see Ron Paul coming in perhaps third in New Hampshire. He raised more money in the fourth quarter than any other Republican. Ron Paul is in this race for the duration, no doubt about it.

OLBERMANN: Let me ask you lastly, Tim, about the process to Republicans pretty straightforward in Iowa but as I suggested earlier the Democratic caucuses are still the closest thing extant that looks like the 1912 Democratic convention in Baltimore and Chap Clark and Oscar Underwood surprised by Woodrow Wilson. Is this caucus process a good thing or a bad thing at this stage for our presidential process and is it still going to exist in 2012?

RUSSERT: I think it will. Iowans really, really believe this is important that they play this lead role. The actual process tonight could be confusing to people on the Democratic side, as you mentioned, Keith, because they do go stand in corners and if one candidate doesn't get 15 percent, you try to lure them into your camp, into your majority, make your majority bigger. But leading up to tonight, I have to tell you, I went to a ton of events around the state and it's very impressive how these citizens really ask demanding questions of these candidates face-to-face and they ask follow-ups. It remind me of ancient Greece, to be honest with you, what I read about, going around from town to town, and it's the last time we really have an opportunity to see people ask presidential candidates tough questions before the candidates win a nomination and get put in the bubble. There will be a lot of talk about a regional primary, a lot of talk about a national primary, but Iowa and New Hampshire will say to potential candidates, if you don't support us going first, and it turns out we still go first, you're dead in our states.

OLBERMANN: Tim, if you get any of those good questions, write them down, e-mail them to me so we can use them later on in the campaign. Tim Russert, NBC's Washington bureau chief, moderator of MEET THE PRESS, great thanks. We'll talk again later tonight I hope.

RUSSERT: Thanks, Keith.

OLBERMANN: The results, one thing is clear, whatever you think they mean, the key Democrats on a slightly different interpretation. That is a live picture from the caucus site at West Des Moines, Iowa, West Ridge Elementary school where turnout is about three times what it was or more than it was in 2004.

And the key Republicans, can John McCain do better by finishing third than Mitt Romney can do by finishing second? Unspinning the spin in advance next. You're watching Countdown on MSNBC.

(COMMERCIAL BREAK)

OLBERMANN: In all due modesty the primary target for candidates of both parties tonight is neither Iowa nor New Hampshire but, well, me. Me and of course the rest of the national media and thus ultimately you.

In our fourth story tonight, first and second tier candidates did not wait for the results to begin spinning them, fighting to remain viable in the mainstream media, that engine of so much mo - momentum and more money.

The most obvious spin, of course, lowering expectations. Senator Clinton's campaign, for instance, suggesting even a third place finish would be just super, reminding us she started off in single digits in Iowa and a poll done so long ago no archaeological dig has managed to locate it. Without winning in Iowa, former Senator John Edwards will face media questions about failing to capitalize on the strength of his 2004 showing in that state and probably won't want to respond that those same media have fixated on the easy narratives of the Clinton-Obama clash.

Obama for his part not fighting to lower expectations. A top adviser telling politico.com his internal polling put him in the lead even as he, like Edwards, sent signals he'll be in it past Iowa no matter what.

Let's turn now to NBC political director Chuck Todd joining us from the Polk County convention center in Des Moines tonight. Our involuntary quadrennial salute to the man for whom the county was named, the famously testy 11th president of the United States James K. Polk. Chuck, good evening.

CHUCK TODD, MSNBC POLITICAL DIRECTOR: Good evening, sir. It's the beauty of Iowa. They have 99 counties so I think we almost have a county for every president.

OLBERMANN: As the polls tightened up in those 99 counties, Senator Clinton tried to cage her bets by dropping the inevitability and suggesting in Iowa, maybe, she might have a smidgen of evitability which would not be confused with evitability. But what rationale has her camp preemptively offered for possible Obama victory tonight? What does she do if that happens?

TODD: Well, a few things. I think you've seen Terry McAuliffe for instance go out there and remind folks it took Bill Clinton five or six primaries before he ever won anything in 1992.

So this idea that, you know, things are going to drag on, I think you're going to hear - I'm already hearing trickles of being told that they're sending key staff to these February 5th states, places like Connecticut, New York, New Jersey, California. Again, sending signals that this is just a one-state deal. This is not going to decide the whole thing, this thing goes on.

And then I think, you know, I'm already hearing whispers about this idea if Obama does do well here and it is on the backs of independents and maybe even a few Republicans that, hey, wait a minute. Democrats haven't had their say and that among Democrats Hillary Clinton is still doing well and shouldn't it be Democrats that decide the primary? So I think that some form of all of those spin is where the Clintons are going to go tonight if things don't go well. Of course we're hearing that things are very close.

OLBERMANN: Stand by. We're going to pick up that thread in a moment, Chuck. We want to get the breaking news out of Des Moines where NBC White House correspondent David Gregory is standing by for us. David, good evening.

UNIDENITIFED MALE: One times five divided by 267 .

OLBRMANN: Technical problem with David Gregory. That's not him projecting his voice. We'll try to get that straightened out and go instead back to Chuck Todd. We'll pick it up on Obama and the outsiders' argument. If that's the route, if something goes wrong for Hillary Clinton tonight, is there not an undertone to that which is she's implying his viability in the general election because of an ability to bring in outsiders?

TODD: However, if you recall, Keith, eight years ago Bush made a similar argument against John McCain because it was outsiders. It was independents. It was nontraditional Republican primary voters who were propelling McCain in places like New Hampshire and in Michigan. So, you know, we sat there and said, well, doesn't that - isn't Bush making the argument that McCain is more electable? Sure but you can make that argument into a smaller where some of these Democratic primaries are Democratic voter only primaries, won't allow a lot of new voters in.

And so, look, that argument can work in a primary. You can do a litmus test like that and that stuff can work. Yes, electability usually does mean more to Democrats than it does Republicans so it's a harder case to make, but it's one you can make.

OLBERMANN: Stand by again, Chuck. We're going to interrupt you again with the technical glitches fixed, go back out to David Gregory. David, good evening.

DAVID GREGORY, NBC NEWS CORRESPONDENT: Hi, Keith. People wondering what a caucus actually looks like, this is it. Precinct 214 West Des Moines, Westridge Elementary School. You can see what's happening behind me. This is the final stage, they have determined who is viable, who is not. Now the question is how many delegates - it's about how many people actually show up. Huge turnout here is the story. Four years ago 86 people crowded this library at the elementary school. Tonight 267. This is a Republican part of the city. It shows you independents, maybe even Republicans, are caucusing as Democrats. All these people gathered around the party chairman who is now going through what the hard count is to determine the delegates and the various camps for the various candidates assembled out there, they are waiting to find out how many delegates this small piece of the very big story here tonight. Keith?

OLBERMANN: Talk about retail democracy in action, David Gregory at precinct 214 in the Iowa caucuses. Thank you, David.

All right. Let's go back to Chuck Todd. How is this spin going to be affected by what we've seen so far and, again, 17 some hundred precincts, caucuses going on, we have one where we have a hard number of 264 showing up as opposed to the 86 four years ago for the Democrats so three times the number. Presuming that's not a total aberration and there is heavy turnout among the Democrats, how does that factor into the spin when somebody wants to say, well, this is why I didn't win?

TODD: Well, I think part of it will be, well, new voters came in. They weren't necessarily rank and file Democrats. Look, it's not an easy case to make and then particularly because, for instance in the case of Hillary Clinton, she wanted some new caucus-goers to show up, too. She wanted them to be women and they had spent a lot of money particularly some groups on her behalf, Emily's list in particular tried to spend a ton of money getting new women to the caucuses so, you know, it's, like you said and you're implying, it's a tough thing to do.

OLBERMANN: NBC News political director Chuck Todd at the Polk County convention center. We will go and light a candle in memory of the late President Polk. Thanks, chuck and thanks for your forbearance with us.

TODD: Fair enough, Keith.

OLBERMANN: We are expecting some results from the Republicans in the next half hour and more data from the entrance poll and what the Democrats intended to do when they went in. So far it appears Clinton and Obama are fighting for support greater than the other candidates. All that next. This is Countdown.

(COMMERCIAL BREAK)

OLBERMANN: From MSNBC headquarters in New York, this is our continuing coverage much the 2008 Iowa Caucuses. As - if as suggested, this was a day of intense turnout, a Democratic frontrunner will be anointed by 0.012 percent of the American population. Our early entrance poll results, Clinton and Obama with initial support greater than the other Democrats.

A Republican looking for that mantle of leader fears a heavy turnout. Mitt Romney's Iowa campaign chairman, a heavy turnout would be 80,000. Our early entrance poll results there, Romney and Huckabee are, as expected, fighting for first place.

What is this bizarre process on which we are focused tonight? Chris Matthews will join me at the anchor desk. That's ahead. But first, this breather, Countdown's top three "Best Persons in the Caucus World."

Number three, best taste, you, Mr. and Mrs. Book Reader. The second time in as many days we are reprinting the special comment book, due to the great demand. That's four printings. We are advised the book will debut on The New York Times bestseller list weekend after this at number 19, end commercial.

Number two, best attempt to turn Anderson, Indiana, into a banana republic. Former Mayor Kevin Smith, denied reelection last November, but he claims the new mayor, Kris Ockoman, was improperly sworn in on Tuesday. Ockoman wasn't a city resident, he says, the time required before the vote. His lawyer says ex-Mayor Smith won't interfere with city business but intends to "rule from exile." Nobody is saying where the exile will be. Could be Muncie, could be Kokomo. Or maybe he'll go so far as to cross the state line and rule from Beaves (ph), Ohio.

And number one, best delusion of grandeur, Lou Dobbs of CNN. Senator Clinton decried anti-immigration commentators, asking, does all that hot air accomplish anything? Dobbs assumes that means him and responds:

"Candidate that pander to both extremes are, as far as I'm concerned, abject fools." And that's saying something considering it's coming from a guy who makes his money by bashing illegal immigrants, then spends his money at horse shows where his daughters compete and the poop from their horses are picked up by illegal immigrants.

(COMMERCIAL BREAK)

OLBERMANN: Our third story on the Countdown. The first hard numbers from the Iowa Caucuses. They are very preliminary. But let's go to them immediately. The Democrats first at 8 percent of the caucuses reporting. This is overall support. It's very early and it does not exactly dovetail with the early entrance poll results. As you see, Edwards 35, Clinton 32, Obama 30 with 9 percent now reporting on those stats. And the numbers widening a little bit to Edwards at 39 now. Clinton 38, Obama 36. Very heavily weighted in the early numbers to the top three candidates.

On the Republican side with - let's see, the numbers are a little stronger than that. Additional Democrats - sorry, Richardson at 2, Biden at 1, Chris Dodd at 0. Gravel, Kucinich and uncommitted also reporting at zero, by the way.

The Republican side, with 2 percent of the caucuses reporting, not a surprise at the top right there, Huckabee and Romney fairly close, 33 percent, 24 percent. That, of course, a straw vote, not a caucus per se. Fred Thompson, early on at least, with numbers to hearten his camp and supporters. McCain in fourth, just ahead of Paul. And Giuliani with 2 percent, having not campaigned essentially in the state. The first hard numbers out of the GOP straw vote and the Democratic Caucus in Iowa tonight.

The last four American presidential candidates, Kerry and Gore, Bush and Dole have one thing in common, victory in Iowa. We'll be awaiting word anytime now of which Republican, barring a Pat Robertson-like upset, it will be either the Massachusetts governor, Mr. Romney, or the former Arkansas governor, Mr. Huckabee, has won the Iowa Caucuses this year. With Democratic results, we hope, not far behind.

The weather in Iowa today relatively moderate for January, just below freezing, pointing to a strong turnout tonight. There are really four races playing out this evening. In each party, one group fighting for first and one group is fighting for, hey, look how I didn't suck so badly.

In the first group the final polls going into today's caucuses had put Senator Obama at the lead of the Democratic pack. Former Arkansas Governor Huckabee ahead of his Republican rivals, several of whom decided long ago to bypass Iowa. Some of them perhaps regretting that decision tonight.

Not bypassing Iowa tonight, MSNBC political analyst Richard Wolffe, who is also, of course, senior White House correspondent for "Newsweek" joining us from the now inevitable Polk County Convention Center in Des Moines.

Richard, good evening.

RICHARD WOLFFE, MSNBC POLITICAL ANALYST: Good evening, Keith.

OLBERMANN: All right. We've heard from most of the campaigns, in particular Clinton, Obama, Romney, about the importance of turnout. We have that one precinct, number 214 among the Democrats where it's three times what it was in 2004. Any idea at this point what turnout has been like throughout the state and what effect we should be expecting?

WOLFFE: Well, I'm hearing some early word from the Obama campaign where they say the turnout is so heavy that it could reach as high as 200,000. To put that into context, it was about 120,000 in 2004, so that would be in the Democratic terms a blowout which obviously, according to our pre-existing models, would benefit Obama himself, but also Hillary Clinton because she has been reliant on new voters, too.

I just want to add some other number to put it into context as well. 200,000 a big turnout, is still only around a fourth of the number of voters who showed up to vote for John Kerry in the general election. So a big turnout, and the caucuses are still not anywhere close to half of the Democrats in Iowa.

OLBERMANN: And yet here we all still are. We have the latest characterization, by the way, Richard, from the NBC interpretation of the entrance poll, and early precinct results on the Democratic side, the results show Obama with a lead and Clinton and Edwards vying for second place. And based upon the, again, same entrance polls and early precinct results, Huckabee is leading Romney in the Republican straw poll as we saw from those early numbers as well. In that context or just in any context, whose organization shined today particularly?

WOLFFE: Well, look, getting new people out to the caucuses is not easy. It's a difficult process. There's a lot of voter education that has to go on. And remember, the caucuses are there as a party building exercise. So if Obama has been true to his community organizing roots, and they have got up to about 200,000 turnout, that's a phenomenal performance for a guy whose name, even a few months ago, was really unknown by as many as a third, maybe even half the voters in the state.

So, you know, that would be a significant achievement for his part, just in terms of turnout. Of course, winning is the key and the other prize, the booby prize people don't want to get is third place. In many ways, this is a contest not just about winning but avoiding third place.

OLBERMANN: Newsweek's White House correspondent Richard Wolffe at Des Moines. Thanks, Richard. We appreciate it.

And every four years, of course, it's the same story. Entrance polls, exit polls. This is the one time we get to say that intriguing phrase, entrance poll. And we're beginning to get the numbers, as you saw, we're beginning to get the reasons. Norah O'Donnell will join us in a moment with what they're saying they did and for what reasons and which of these candidates will do the most talking about it tomorrow. Rube Goldbergian, less a vote than a beauty contest, whoever wins will happily take it. Countdown and MSNBC's coverage of the Iowa Caucuses continue after this.

(COMMERCIAL BREAK)

OLBERMANN: Based upon entrance poll and early precinct results, Mike Huckabee is leading Mitt Romney in the Republican straw poll in Iowa. Among the Democrats, the entrance polling and precinct results show Senator Obama with the lead, and senators Clinton and Edwards vying for second place. What do the early entrance polls say about the why in all of that? That is next. This is Countdown.

(COMMERCIAL BREAK)

OLBERMANN: Huckabee is leading Romney in the Republican straw poll. Obama in front in the Democratic Caucuses in Iowa. Clinton and Edwards vying for second. Those are the results so far from the entrance poll and early precinct results. But as to the meat of why people are doing what they're doing or did in the Iowa Caucuses and that straw poll. Let's go upstairs to the analysis desk and Norah O'Donnell.

Good evening, Norah.

NORAH O'DONNELL, MSNBC CHIEF WASHINGTON CORRESPONDENT: And good evening to you. You know, this election has been about change versus experience in many ways. We're learning tonight which quality voters prefer. In fact, 51 percent say they wanted a candidate who could bring about change, 20 percent want a candidate who has the right experience, about the same amount, 19 percent, want someone who cares about people like me.

And as you've talked about, Obama has a lead at this point. Clinton and Edwards battling for second place. We're learning more about those particular qualities. First Hillary Clinton, among the voters who care about experience, 52 percent are throwing their support to Hillary, while 40 percent of married women who came to the caucus also behind her, 36 percent of those who want a candidate who can win in November think Hillary is the candidate for them.

Now when it comes to Obama, this is really interesting, 49 percent of those who say they want a candidate who can bring about change, 58 percent of his support is coming from people between the ages of 17 to 29. That is significant, Keith, and while it's too early to say at this point how many young people came out to vote, we can tell by these entrance poll numbers that he has a great deal of support among those young people that he certainly has been courting this campaign - Keith.

OLBERMANN: Norah O'Donnell analyzing the entrance polling for us tonight. Great thanks, Norah.

And we're going to be back in a moment. Chris Matthews and I are going to wrap up this hour of coverage, or at least sum up what is beginning to move quickly in Iowa on both the Democratic and Republican fronts, and we'll wade waist high into our formal coverage much of the Iowa Caucus and straw vote, next here on MSNBC.

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OLBERMANN: And we continue to get early dribs and drabs of the hard numbers from Iowa. In the Democratic Caucus, it couldn't be, as they say in sports, any closer. If you were expecting a closer race than this, we're sorry to disappoint you. Edwards at 33 percent. Clinton at 32 percent. Obama at 32 percent. And that with about one-quarter of the caucuses reporting. The numbers are still fairly low in terms of actual votes.

Among the Republicans, though, as we begin to get into the thousands of votes cast, Mike Huckabee leading Mitt Romney by 36 percent to 23 percent, with Fred Thompson early on showing strong lead for the third place race, anyway, at 14 percent. Again, this is with 15 percent reporting from the Iowa Republican straw votes. Just to round that out for you, McCain 12 percent, Paul 11 percent, Giuliani 3 percent, Hunter none as of this hour.

And it's time for me with great pleasure to bring in my co-host for the evening's festivities, Chris Matthews, of course, of MSNBC's "Hardball."

Your impressions so far here? I mean, obviously turnout is an issue but what else?

CHRIS MATTHEWS, HOST, "Hardball": Big turnout, that helps Obama. It's good for democracy. We'll see. I mean, this is early. These numbers are very close, as you point out. I mean, we're going to know who wins and who wins is going to decide it all. This - if Obama wins this caucus, it will be the biggest political story in maybe 20 or 30 years in this country. It will be a story certainly as big as Ronald Reagan defeating Jimmy Carter. It will be a story about a change in political direction for the country. A shot heard round the world, if you will.

Barack Obama, son of Kenya as well as America. With Kenya in turmoil right now, to be a son of that country, to be over here as a candidate for president and to win the Iowa Caucuses is a change of American history. There's no doubt about it. And there's no way to read it except as rebuke of President Bush.

This is seen in the world as a man who represents kind of a Third World view of the thing, of issues like Iraq. He looks at it as a member of the world community, not just as an American, not our way or the highway sort of person at all. Very much a member of the world community. And I think that the world will be very happy to hear this.

OLBERMANN: Most of what we've seen in - over the years from Iowa, Chris, has been about interpretation and momentum because these are so, on the practical scale, almost irrelevant to the nominating process. They're about momentum and publicity and who gets to wear the badge and who gets to wear the yellow overall here - the yellow vest as they bicycle through the "Tour de American Politics."

But what happens if those numbers were to hold up in whatever order, where the Democratic voter is split 34-33-32? Don't you have three winners there? Is just - is the person who is 1 percentage point ahead really able to claim that they're the leader in this race?

MATTHEWS: No, and especially if you're Hillary Clinton, who is known far and wide as Hillary Clinton, we all know who she is, we've known her for 20 years, the fact that after all the buildup, all the sense of entitlement, all the publicity, all the endorsements by her husband and all the other major leaders of this country, that she only gets a third of the Democratic vote after all that promotion tells you the voters are hesitant to say, yes, you're our nominee.

And I think that's a big story tonight if these numbers hold in the one-third, one-third, one-third pattern they're in right now, because that's two-thirds who say no to Hillary.

I always thought, looking at this months ago, that Hillary's greatest advantage was among women. And we're seeing that in the numbers as well. If she gets just half the women, and 60 percent of the party is women, she gets 30 percent of the vote right there. Right there. That's all she has to do is get half the women and she gets 30 percent.

She gets a few men, it goes up into the 30s. Now for someone to beat her, just following the arithmetic here, it's harder when there's two guys both trying to beat her. It's easier if there is one guy who can unite the anti-Hillary vote.

But clearly when you have Obama with his own unique selling points and John Edwards with his unique populist appeal, it's very hard for that vote to unite behind one of them. And therefore the anti-Hillary vote has been split here, but it sits there. It is a statement that's going to be resounding for the next several months.

A lot of the party doesn't want Hillary Clinton to be the nominee, and they're now divided between Obama and Edwards. At some point they will not be divided between those two perhaps. And then you will have a vote in the later primaries between Hillary and someone else.

OLBERMANN: One of the conventional wisdoms about Iowa has been in the last few weeks that it is now incumbent upon John Edward to win, that a strong second or a strong third is not sufficient for him to be able to keep going.

MATTHEWS: I believe that.

OLBERMANN: . because of how much. All right. Now explain why that's the case rather than saying, no, no, now he's elevated and it's a three-horse race?

MATTHEWS: Because in many ways Obama has a national appeal as an idealistic son of the future, if you will, someone who unites black and white, unites young and old, perhaps left and center left.

Someone who can bring about a new Democratic dispensation (ph) for the 21st Century. John Edwards is a much more traditional figure. He is a populist of perhaps the Hubert Humphrey variety, someone who says we are going to redistribute the income between rich and poor, we're going to give a better break to the little guy, the little woman over the big corporation. But I'm not sure that that is a message which sounds like it's going to grab the people around the country. It just doesn't hit me. I think - let me just be blunt about it, he doesn't have the organization worldwide.

OLBERMANN: All right. Let's look in the next three minutes before we round out this hour about those Republican numbers. Throw those up again through now 15 percent of the Iowa straw poll. Put this back up. It's 36-23, Huckabee. And these are - again, the actual vote count is still relatively low, but 36-23 is a significant lead. What happens to Mitt Romney if that holds up?

MATTHEWS: Well, he could well lose in New Hampshire to John McCain, suffering a defeat here. And if that's the case, then Huckabee moves on to South Carolina where he could well win there as well. He could have a string going. And then again, as there is in the case of Hillary, I think you're going to see the anybody-but-Huckabee candidate rising up. My hunch is it will be McCain.

OLBERMANN: Do you think - I mean, are we expecting that Fred Thompson number to continue to hold throughout the evening? Because everything going up to, again, conventional wisdom here had said, well, he needs a third place finish to stay in this race and he's not going to get it. Right now he has got it.

MATTHEWS: Well, then, he's in the race. That's a surprise. There was talk, as you know, throughout the day, that Fred Thompson, were he to suffer a bad night tonight, would endorse John McCain, his old pal. The man who, when he entered the race in a very much way really threatened the chance for McCain to win. So I think that once again we've been upset by reality.

OLBERMANN: And Rudy Giuliani.

MATTHEWS: Which is a good thing.

OLBERMANN: And Rudy Giuliani, who is appearing at 3 percent of the vote, having not campaigned there, where does he stand with the eventuality?

MATTHEWS: He stands in Florida.

OLBERMANN: He stands in.

MATTHEWS: He's waiting for the New Yorkers who live in Florida to rally to his camp. And of course what would go for him and would help him if the Republicans don't seem to have a clear pattern of who is going to be the nominee going into Florida by that later part of the month, he would have a shot at saying, look, they don't have a clear choice net. There's nothing really happening here. Or he could say Huckabee. But Huckabee could well carry Florida, starting with the panhandle and working his way down to through Winter Park and the middle part of the state. He could do it.

OLBERMANN: And then the Giuliani strategy of waiting until the end of January for your first victory might be called into question the rest of the way?

MATTHEWS: Well, I'm not sure it was of his own volition, I'm not sure he had a great a great shot in Iowa or a great shot in New Hampshire. I mean, Giuliani's problem is that he has had a terrible month of bad news about Bernie Kerik, bad news about his relationship to his wife, about billing records in New York, although it turned out that The New York Times was wrong and basically admitted that. But the tabs never admitted it. They continued their assault. It has not been a good time for Rudy Giuliani. And by the way, his record of 9/11 has gotten a bit tired.

OLBERMANN: And has been questioned in most quarters. All right.

Stand by for the next three hours. We're not even going to go commercial. This will formally conclude the Countdown portion of our coverage for this 1,709th day since the declaration of "Mission Accomplished" in Iraq. And that leads us to MSNBC's continuing coverage of the Iowa Caucus and the Iowa straw vote, anchored for you by us right now.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END