MATTHEWS:Welcome back to Boston. We're joined here at Faneuil Hall by former Vermont Governor Howard Dean. Here he is.

(CHEERING AND APPLAUSE)

You know, you are popular. Governor-- I always wondered what that sound meant.

Governor, thank you. You know, personally as a father, one of my happiest moments of the campaign was watching my son Michael, who goes to Brown, out campaigning for you, when we were covering the New Hampshire primary. I went by that movie theater downtown, the Palace or whatever it's called, and there he was out there, waving a big sign for you. You got a lot of young people excited about politics.

UNIDENTIFIED WOMAN: Yeah!

MATTHEWS: What do you feel about that?

HOWARD DEAN (D), FORMER VERMONT GOVERNOR: I think, you know, all you have to do to get young people excited about politics is tell them the truth. The young people are very sensitive to what we call the B.S. quotient. And they don't like it.

MATTHEWS: What does B.S. stand for?

DEAN: Well, we can't say. Although the new standards with the vice president's language in the Senate, I ought to be able to say that...

(CROSSTALK)

DEAN: I'm sure that would bump the ticket by about 8 points.

MATTHEWS: You know what? I think it did.

Let me ask you about that, because I think if I were you, I remember growing up with Gene McCarthy. I still love the guy. I mean, he had a few quirks, but I loved the fact that he got me interested and passionate about an issue in the campaign. Do guys like you and Gene McCarthy always have to lose?

DEAN: No.

MATTHEWS: I mean, the true believers, seem like they are the guys who are the warm-up acts for the pols.

DEAN: No, I don't think that's necessarily true.

MATTHEWS: It was this year, wasn't it?

DEAN: We're trying something different anyway. What we-- after our campaign ended, we put together DemocracyforAmerica.com, and all these folks are probably involved in that, or a lot of them are. If you aren't, you better. And you know, we're running candidates for office all over the country.

So the one thing-- you know, we learned from what happened to Gene McCarthy and Gary Hart and John McCain. We're just going to keep going. And you know, maybe my role is not to be president. Maybe my role is to make sure the Democratic Party gets back to its roots and creates a different kind of country.

MATTHEWS: You know, Governor, a lot of people in this crowd-- and I poll them almost every hour-- very much disagree with the Bush administration's policy for this war in the Middle East, the whole thing, and yet the candidate of the Democratic Party doesn't quite speak with clear anti-war language. Do you think that John Kerry should be more like you?

DEAN: I think John Kerry is speaking with clear language that makes it very clear that the right way to have gotten rid of Saddam Hussein was an international coalition of people and not a preemptive attack. I also think that John Kerry has made it very clear, because I have heard him do it in Portland, that it is not OK to misspeak and not tell the truth when you're sending troops to die in a foreign country, 900 of which, our brave soldiers, have already died, not to mention all the Iraqis that have been killed.

So it seems to me that the real problem is that the media is not reporting fully what John Kerry says. I've been with John Kerry in Portland, Oregon when he went after the administration for not telling the truth. But you know, you can't write that story 30 days in a row, and so it doesn't get written. And we get concentrated with media reports on stuff like "shove it" instead of John Kerry's Iraq policy. You know, that's not my problem, because I'm not a media person, but I do think that that's the part of the deal.

I think if people want to find out what John Kerry's...

MATTHEWS: Let me prove my bona fides. Hillary Clinton today said that the reason-- she did it in answering a question on the record at a luncheon-- that the reason she thought John Kerry did not move stronger on the war, did not come out clearly against the policies of this administration, she said because the people in the middle, the persuadables, as she called them, were more ambiguous on the war and it would be more dangerous for this candidate, your candidate now, John Kerry, to move in a more anti-war direction. In other words, she said it was pure politics. What do you think-- what do you make of that?

DEAN: Look, I don't think, to be honest with you right now, I don't think that there's a big difference between the position right now of John Kerry, Howard Dean or George Bush. Because George Bush has adopted John Kerry's position on the war. Now he's completely incapable of doing anything about it. But the truth is, Kerry's position is very much like the one I took after we got in. We disagreed on going in, there is no question about that. After we got there, the question is how do you get out? Kerry's position is let's send the U.N. troops in. This ought to be an international reconstruction, not an American occupation. George Bush has adopted that position, but he is incapable of doing anything about it, because he insulted every one of our allies on the way in.

MATTHEWS: Isn't this election...

(CHEERING)

MATTHEWS: Is this-- let me ask you completely openly-- is this election about foreign policy and doctrine and philosophy and whether we should be a country that takes preemptive action, that it invades a country before it invades us? Or maybe there will be more countries down the line that this administration has their eye on. You hear them-- you hear the neoconservatives say, well, next we're going after Iran. They want to go deal with Syria. They may want to get tougher with North Korea.

What-- isn't that what the question is about, the direction of our foreign policy? And whether we're going to support an administration which was-- which took us into this war? Why do you step back that what we do next week, what we do next month. That's sort of practical-- this isn't very philosophical.

DEAN: This election is not going to be decided on the Iraq war. It's going to be decided on jobs, health insurance and decent public schools.

Now, the reason the Iraq war is a big issue is not so much whether we should or we shouldn't, all that stuff-- we can disagree on that-- the reason the Iraq is a big issue is because it underlines the fact that the president of the United States is losing his credibility because he did not tell the truth about how he got into Iraq. And because...

MATTHEWS: Did you know there were no weapons of mass destruction evident in that country, at the time we debated?

DEAN: No, but-- I did not...

MATTHEWS: So you didn't know any more than the president knew?

DEAN: I had a strong suspicion that was there no link between al Qaeda and Saddam Hussein, and it turned out there wasn't. I had a strong...

MATTHEWS: Weren't you shocked to know there was no evidence of weapons of mass destruction in Iraq?

DEAN: I wasn't shocked. What I was shocked at was to find out that the United Nations knew more than the CIA, or at least more than the president was willing to admit.

MATTHEWS: OK. We'll be right back with Howard Dean in the next hour.

Plus, NBC's Tom Brokaw. (UNINTELLIGIBLE). Stay tuned for more HARDBALL.

(UNINTELLIGIBLE) Democratic National Convention in Boston on MSNBC.

However, MSNBC's transcript ends here.