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Is Fed Helping or Hurting?; Barack, Hillary Go for the Throat in Debate; Sean Penn at Odds with San Francisco Paper

Aired January 22, 2008 - 19:00:00   ET


GLENN BECK, HOST (voice-over): Tonight, markets sell off around the world, and on Wall Street. Have we seen the worst of it? Not by a long shot, and I`ll explain.

Plus, politics at its worst.

SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE: Wait a minute, wait a minute. Just a minute.

BECK: The knives come out as Hillary and Obama square off on everything from slum lords to Wal-Mart.

And free speech in danger. A newspaper publisher says Canadian tribunals are trying to stop him from speaking out on Islam. He says the same thing could happen here in America.

All this and more, tonight.


BECK: Well, hello, America.

If you`re watching this program tonight instead of a, you know, real financial network, it`s probably because you`re looking for a dose of reality. So let me get right to "The Point" tonight.

We finally had a chance to take a baby step towards fixing our economy for good, and we blew it this morning, and here`s how I got there.

While the U.S. markets were saved by Dr. Martin Luther King yesterday, world markets were not. They paid a heavy, heavy toll. Newspaper in France said simply "Crash." The Sydney "Morning Herald" in Australia called it "Black Tuesday," and, as an example of how global this crisis really is, even a paper in the Czech Republic led with this bleak picture of an anxious trader.

All of that chaos set the stage for what looked like to be an ugly opening on the Dow this morning, and then, just as we were about to take some well-prescribed medicine -- or well-deserved punishment, you take your pick -- in stepped the Fed once again to bail us out.

In a rare, emergency meeting, two key interest rates were cut by three quarters of a point. It was the first emergency cut since September 2001, also the first cut of that magnitude since October 1984. Do the words desperation and panic come to mind?

The end result was a Dow that plummeted 464 points at the open but then just finished down a relatively minor 128 points. Woo, everything`s OK, right? Wrong.

If you`re looking for a market cheerleader who will tell you that everything all of a sudden is sunshine and lollypops, again, you`ve got the wrong show.

The Fed did today the same thing they`ve been doing for years: they put a Band-Aid on a gunshot wound. Then they give us a couple of Tylenol to dull the pain and say everything`s fine. Well, that`s not a cure; that`s a distraction. And I know nobody wants to hear it, which is exactly why no one of any importance ever says it, but we must be allowed to go through the pain if we`re ever expecting to heal.

Let me put it this way: if the Dow would have dropped 1,000 points today, everybody would have panicked. You would have had people screaming everywhere today. Oh, tomorrow, however, you would have found a ton of people that said, "Buy. Now`s the time to buy. Look at all the deals."

But after today`s gentle 128-point drop, it`s going to be hard to find those people tomorrow, because they still think there`s more to come.

So tonight, here`s what you need to know. Just as we over-prescribe antibiotics, and we`ve created a flesh-eating super bug, over-prescribing quick, economic fixes created this crisis. And you only need to look back at recent history for proof.

Earlier this decade, the Fed was so concerned about the recession in the wake of the tech bubble that they swooped in and slashed interest rates 12 times in less than two years. The result: the housing bubble, the credit crisis, and now a stock market that has lost over 2,000 points in three months.

Jeff Frankel is an economics professor at the Harvard Kennedy School, and Peter Shift is the president of Euro Pacific Capital and author of "Crash-Proof: How to Profit from the Coming Economic Collapse."

Jeff, first -- or Peter, let me first start with you. I had you on I don`t know how many months ago, and everybody said to me, "This guy`s crazy." You`re starting to look more and more like a prophet.

Today I don`t believe, with this 128-point drop, anybody worth their salt actually believes this thing is over.

PETER SHIFT, AUTHOR, "CRASH-PROOF": No, of course not. I mean, first of all, the only reason we were down 120 points is because of that rate cut. And what`s going to happen the next time the Dow drops 500 points on the open? Is the Fed going to be able to have another rate cut? You said it in the intro: we`ve got to take our medicine.

You know, it`s the same thing with this stimulus package. What do they want American consumers to do? Spend more money. Well, how did we get into this mess? We spent money we didn`t have, and now we`re struggling to pay the debt, and the government wants us to spend even more. We`ve got...

BECK: Jeff, Jeff, let me -- you know, I said this on the radio today, that I understand the economy because I`m a dad. I`m a dad. If I want my children to be strong, I don`t give them what they want. I give them what they need. And sometimes it hurts, but it`s the right thing in the long- run.

You think yet another Fed rate might be on the way.

JEFF FRANKEL, ECONOMICS PROFESSOR, HARVARD KENNEDY SCHOOL OF GOVERNMENT: Well, it`s quite, quite possible. I mean, you two are taking sort of an unusual position. Everyone else in the financial markets is saying, "Oh, it`s too little, too late."

I have a lot of sympathy with what you`re saying. I do think a lot of our problems are stemming from excessive monetary ease for the last seven years, an excessive fiscal expansion for the last seven years. We`ve dug ourselves in a pretty-- pretty deep hole.

Having said that, I think some amount of monetary easing at this point and some amount of fiscal easing, if it`s done correctly, is probably in order. But I agree with you -- I agree with you, we can`t do much more of it.

BECK: OK. So hang on. So let me go back to that here with you, then. The only reason why I would support anything is to have the market take a gentle fall and to gently land, instead of fall out of the sky, you know, like it could.

However, we`re talking about a massive spending bill to give $800 now as a tax rebate -- I heard last night -- to people who don`t even pay taxes. How is that going to help anything?

SCHIFF: Well, it`s not. And then, of course, Americans are going to take those rebates, assuming they don`t do the responsible thing and pay off some of their credit card debt or their mortgages, and they go out and buy something like a new plasma TV.

We`re buying products made in other countries. We`re just borrowing money to run up our trade deficit. We`re creating more inflation, which is putting us into a deeper hole.

BECK: Jeff, agree or disagree?

FRANKEL: Well, I agree with a lot of that, but first, any talk about giving tax cuts to people who don`t pay taxes -- there`s -- we want to be very clear here -- the tax cuts which have been truly massive that have been passed over the last seven years have gone overwhelmingly to the rich, to some extent to the middle class, and not at all to lower income working Americans, including...

BECK: They don`t pay taxes!

FRANKEL: I`m sorry, they do pay payroll taxes.

BECK: Payroll taxes. They`re going to get that money back, supposedly...

FRANKEL: You know they`re not.

BECK: ... through Social Security.

FRANKEL: We all know that.

BECK: Jeez.

FRANKEL: People have improperly focused on incentives in this country, and we realize that incentives are important. If you`re trying to lift yourself out of poverty and work yourself up into the middle class, we have a high marginal tax right now, including the payroll tax and including when you do move into paying income taxes.

All of the past tax cuts have gone primarily to the rich, and I think it`s time to give some of it to lower-income, working Americans.

BECK: Wow, let me tell you...

FRANKEL: They`re going to extend it...

BECK: Nice of you to join us, Stalin. It`s a redistribution of wealth!

SCHIFF: But the people who are getting hurt the most by the inflation tax -- which is what the government is giving us with the stimulus package -- they`re creating money, they`re debasing our money. And we`re getting inflation, and it`s the poor people who are struggling with higher food prices and higher energy prices as a result of what the government is doing...

BECK: Jeff...

SCHIFF: How`s more inflation going to help the poor?

BECK: Here`s my point. I say the cure, the real cure is, just cut spending. You stop the government from spending all of this money, because that`s what`s really coming down our road, and breathing heavy down our necks in about four years.

Beyond that, if banks got greedy, let them pay the price for it. If you signed an interest-only loan, you are too stupid to own a house. You should lose the house. Let the people that made mistakes pay for the price -- pay the price.

Why should the American taxpayer come in and bail out a system and let them not feel the pain? Do you think anybody`s going to learn the lesson?

SCHIFF: You`re right, they shouldn`t.

BECK: Jeff?

FRANKEL: You`re talking about the principle of moral hazard, and you`re entirely right, and this administration has been very big about talking about it and then bailing people out.

BECK: It`s horrible. It`s a horrible policy.

SCHIFF: The problem is we can`t afford to bail anybody out. The government doesn`t have any money. The government can only create money out of thin air, which means it debases everybody`s savings. We can`t bail out ourselves.

FRANKEL: Well, I mean, after the hundreds of billions of dollars we`ve had in assets for the rich and after the greater increase of spending, which has been three times higher in this decade than the `90s, I think we can afford a little bit of a fiscal stimulus package.

SCHIFF: We can`t afford anything. We`re broke!

BECK: I am with -- you`re absolutely right. Let`s just cut it all off. Thank you so much. Jeffrey, Peter, thank you. I appreciate it. We`ll continue this conversation, I`m sure.

Coming up, we`ve got bad news here, but do we have any good? What should you, the average Joe, do to protect your financial future? We have some answers in just a minute.


BECK: Well, as global markets tumbled today -- and the market here isn`t exactly rosy -- our fearless leaders in Washington are tripping all over themselves to try to figure out what to do about it. Don`t wait for these clowns. Take care of yourself, a guide to making sure that you don`t lose your shirt in just a few minutes.

But first, let me paraphrase an old Rodney Dangerfield joke. Last night I was watching a fight, and the Democratic debate broke out. I think these guys hate each other.

Just days away from the Democratic South Carolina primary, and the race between Hillary Clinton and Barack Obama is seriously heating up. After last night, it`s plain to see that the gloves are coming off on both sides, and I think John Edwards is there, as well.

Barack wasted no time. He opened with a poke at Clinton, painting his early days as a simple man of the people and Hillary as a corporate shill.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: While I was working on those streets watching those folks see their jobs shipped overseas, you were a corporate lawyer sitting on the board of Wal-Mart. I was fighting these fights.


BECK: Then -- this is where it gets good -- Clinton countered that, while she was busy railing against Republican injustice, Obama was defending the dishonorable.


SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I was fighting against those ideas when you were practicing law and representing your contributor, Rezko, in his slum landlord business in inner-city Chicago.


BECK: That`s great. I say we vote for neither of them. Maybe John Edwards is the next president. No, no, wait, he felt the need to chime in and pile in -- and pile on Senator Obama. Here he is scolding Barack for his voting record in Illinois.


JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: Why would you over 100 times vote "present"? What if I had just not shown up to vote on all the things that really mattered to this country? It would have been safe for me politically. It would have been the careful and cautious thing to do, but I have a responsibility to take a position. Even when -- even when it has political consequences.

OBAMA: John, you asked -- you asked...


BECK: This is just tremendous.

The real unbeatable team -- at least in my book -- is Clinton/Obama, but based on last night`s festival of hate, I don`t think that`s going to happen any time soon.

Peter Fenn, former Gore adviser, friend of the program, Democratic strategist, a Democrat I like.

Hello, Peter, how are you?

PETER FENN, DEMOCRATIC STRATEGIST: I`m glad. I`m doing fine, after last night.

BECK: Do they hate each other as much as I think they do?

FENN: Well, I think we`re in the rock `n` roll phase here in this campaign, and I would say that there was not a lot of love between the two of them last night. But I will tell you, Glenn, compared to what we`re going to see -- either of those candidates is going to see from the Republicans in the general, this was patty-cake.

BECK: Oh, this is -- this is just nasty. Peter, are you surprised? Because I really -- you know, sometimes I`m just dumb as a box of rocks -- I really thought this would be pretty much a walk to the finish line and no big deal. These guys are hitting each other hard. The knives are coming out.

FENN: Yes. I mean, after the debate in Nevada, which was very civil -- you know it was civil to the point of some people thought it was kind of boring -- this one just started right out of the box.

And you know, they`re funny. When they`re standing up at those podiums, they`re tougher. When they`re sitting down next to each other, I think it`s a little easier for them, the latter part of the debate.

BECK: Yes.

FENN: But no question. Look, this is high stakes now. This is serious business. The Clinton folks don`t think that the Obama record has been looked at enough. Obama`s mad at Bill Clinton for taking shots at him. I think this is going to go straight through Super Tuesday and maybe possibly beyond.

BECK: May I -- may I ask a question? I, through the grace of God, missed the debates last night. I only read about them. I have a life. So I didn`t actually sit and watch these things, because blood would shoot out all over my television set.

But every review I heard from people today that actually watched it was Obama could handle these -- these hard punches, but Hillary looked shrill. And I wondered, because I only heard it from guys: is that a sexist -- I mean, was it that a woman can`t say these things without looking like the "B" word?

FENN: I think it`s hard. I think it`s harder for a woman always in these situations.

But you know, I`m not sure she was shrill. She was very tough. But I think on these things, you know what it does? It hardens. I got e-mails from both sides, friends of mine, because as you know, I haven`t endorsed this thing. And I`m waiting for the nominee, if it ever comes.

But I got -- I got e-mails from folks who were Obama people who were mad as all get out of Hillary, mad as furious. I got words from Hillary people who were really mad at Obama: "What was that cheap shot?"

I mean, the trouble is this doesn`t help. Voters don`t like it. They want to talk about issues. Edwards -- the little piece you have, I know in there, was Edwards coming back saying how does this get education for our children? How does this get health care for our people? How does this get jobs for our folks, handle the credit card crisis? It was interesting. A good comeback...

BECK: But I mean, John Edwards, I wonder why he`s even in the race.

FENN: Well, I know.

BECK: Tell me who you think -- how it impacts the race that Fred Thompson is out today?

FENN: You know, I think this probably will help John McCain. He had endorsed John McCain in 2000. I think they`re friends. I think he`s sort of simpatico with him.

You know, look, the problem is he doesn`t have a lot of support, though, you know. But I suspect, you know, he may down the road here endorse McCain.

BECK: But I don`t think endorsement matters. I mean, you`re -- if you agree with Fred Thompson, you fundamentally disagree with John McCain.

FENN: Well, I don`t know about that. I mean, you know, look, John McCain -- John McCain likes the -- the role of president that Fred Thompson played, the role of strong military guy.

BECK: Right.

FENN: So he`ll take that endorsement.

BECK: All right. Peter, thanks a lot. We`ll talk again soon.

FENN: OK. Thanks.

BECK: Now, yesterday also was Martin Luther King Day, a national holiday where most had a chance to take a day to relax and reflect on the man and his accomplishments. OK, let`s be honest: we watched TV, maybe even caught a nap. We had the day off.

Which brings me to the most embarrassing, and yet, somehow, oh, so very satisfying videotape of Bill Clinton seated behind Martin Luther King III, having a dream of his own.


MARTIN KING III, SON OF MARTIN LUTHER KING JR.: Equally important and not too often overlooked, Martin Luther King Jr. encouraged all peoples to live up to their purpose and potential.


BECK: I just -- this is -- this is my favorite video maybe of all time, but it raises the question -- look, we`ve all done this. I mean, we`ve all sat there and fell asleep when we shouldn`t have. You know, but we`re not all the former presidents seated behind the heir of the civil rights legacy.

My question is, if a Republican -- Giuliani, Mitt Romney, Thompson, anybody, me -- in a week after blasting away at Barack Obama, we fell asleep, do you think the cry would be racism or laughs?

Coming up, how do faded celebrities like Sean Penn jump-start their careers? According to "The San Francisco Chronicle," they sit down with wacko dictators like Venezuela`s Hugo Chavez. I`ll have the story, next.

Then, the Mexican government is in an all-out war with the drug cartels in border towns, and the violence is spilling over into America. Who would have seen that coming? Answers in just a bit.


BECK: Well, if Hollywood history has taught us anything, it`s that there are three basic ways to revive your career. You can play a character with a disability, you can marry Tom Cruise, or you can become really good friends with a ruthless dictator.

Last part was suggested in a humorous article in the "San Francisco Chronicle," and it made actor and director Sean Penn a little testy. Penn responded by calling the "Chronicle" an "increasingly lame-brain paper," leaving some to question whether Penn`s byline would return to the paper. Back in 2005, you might remember his five-part series on his experiences in good old Iran.

Phil Bronstein is the executive editor of the "San Francisco Chronicle."

Hi, Phil, how are you?


BECK: Very good. First of all, congratulations on, you know, printing this, and his going to be cool on the other side, not you know, just letting it all hang out. That shows courage on your part.

BRONSTEIN: Well, you know, people have things to say, you want to let them say it.

BECK: Good. Here`s one thing, he said in his letter that he is a journalist. And I looked it up, and he doesn`t have a degree, but you responded, "You know, anybody who wants to do journalism can try. Whether they`re a journalist or not is a judgment other people have to make." Isn`t journalism a degree?

BRONSTEIN: Well, you know, Glenn, I don`t have a journalism degree, so -- and I`m a journalist. So I think it`s not necessarily about degrees so much as it is about experience and skill.

BECK: OK, so hang on. Wait, wait, wait -- so I`ve done radio broadcasts for 30 years now. I`m not a journalist. I want people to understand that. I`m an opinion guy. If I went over to some ruthless dictator and, you know, got into bed with him, and I wrote a paper...

BRONSTEIN: Do you think it would help your career, is that...

BECK: No, I`m asking, should I be printed as a journalist?

BRONSTEIN: Well, you know, look, newspapers, people who write opinion columns and people who write for the editorial pages are also considered journalists. The newsroom staff, people who write for newspapers or take photos or edit are considered journalists. That`s true.

So you`re obviously, in your case, you feel because you`re an opinion guy, you`re not a journalist. I don`t know that everyone would agree with you, but that`s why I said...

BECK: I can`t believe somebody from "The San Francisco Chronicle" is saying this to me. I love this. I love this.

BRONSTEIN: Which part do you love, just so I know?

BECK: I love the part that you say not everybody would disagree that I`m a journalist. I`m not a journalist, man.

BRONSTEIN: Well you know -- you can`t determine whether you`re a journalist or not, and you know, I get to watch you and say, "Well, he is or he isn`t."


BRONSTEIN: That`s the point. That was the point of the quote.


BRONSTEIN: If someone`s going to put someone on the air or if we`re going to put someone in the paper who`s not a regular journalist attached to the staff or newsroom of this paper, then readers will make a determination. I think, you know, the term journalist does imply some skill, and it does imply from training, no question about it.

BECK: OK. Are you going to print and is he going to do anything more for the paper? Will you -- if he wants to -- I don`t know, if they give CPR to Hitler or anything, can he go over and do an interview and you`ll print it? Or are you guys done with each other?

BRONSTEIN: If he can get an interview with Hitler, we`d consider -- we`d have to consider that.

BECK: Yes, well...

BRONSTEIN: That would be a coup.

BECK: I might actually consider that one. It would be an interesting thing to know.

BRONSTEIN: And you would be a journalist then.

BECK: No, I wouldn`t be. No, it wouldn`t be.

Phil, thank you very much. I appreciate your time.

BRONSTEIN: You`re welcome. Sure.

BECK: Coming up, one former magazine publisher may be charged by the Canadian courts for reprinting that Danish Mohammed cartoon. He says the same thing could happen here in America. Is freedom of speech in jeopardy? I`ll tell you after I go try to revive Hitler and ask him some questions.


BECK: Well, you can stop stuffing your cash in your mattress. There are other ways to make sure that you don`t go broke during this financial crisis, like, you know, keeping gold in your coffee jar or something. Maybe that`s just me.

Some practical advice in just a bit, but first, welcome to the "Real Story."

Front page of today`s "New York Times," I saw a little item on the war that is being fought along our southern border with Mexico, how the violence could soon spread to the United States.

The "Real Story" is, hey, "New York Times," we know, we got it. Welcome to the party. I can`t help but be amazed that America`s paper of record finally is waking up to something that we on the fringe of the media have been shouting about for months -- Mexico has a weak, ineffective government, drug cartels have muscled in, filled that power vacuum. They`re out of control. American citizens now are paying the price with their very lives.

Maybe if the story had been happening, I don`t know, maybe, you know, between the border of Park and Madison avenues here in New York, The Times would have gotten around to this story a little sooner. The only word to describe what`s going on our border is war.

According to "The New York Times," surprisingly, one story that they seem to be getting right -- at least today -- thousands of Mexican troops have flooded into border towns like Rio Bravo and Tijuana with .50-caliber machine guns mounted on their Jeeps while jets are streaking across the Mexican sky. In response, the drug cartels are fighting fire with fire. They are unleashing thousands of rounds and trying to level the playing field with rocket-propelled grenade launchers.

These armed drug smugglers are now taking their violence to the United States. Just last weekend, yet another border patrol agent was killed as he tried to stop one of them. We reported that on last night`s program. Maybe now that it`s on the front page in Manhattan, we can start talking about this crisis that is on our border and help Americans understand how Mexico`s problem is our problem and it is a deadly one, both physically and economically.

Rusty Fleming is the producer of "Drug Wars." He`s a documentary filmmaker that looked into the different Mexican drug games.

You -- Rusty, you`re one of the few people that have actually hung out with these people. I can`t get anybody who`s in television or, you know, in a newspaper anywhere near the border to talk about this. These drug gangs are completely out of control.

Why the uptick in violence today?

RUSTY FLEMING, FILMMAKER, "DRUG WARS": Well, it`s simple, Glenn. I mean, up until now, the Mexican government has never represented a threat to them. Up until just recently, until really in the last six months, there has never been a real offensive mounted against them. So if they weren`t threatened, they didn`t have to come out with a lot of violence.

BECK: All right, so let me just recap. Somebody came up to me in church on Sunday and said, "Glenn, do you know that they`re rolling heads into restaurants?" And I said, "Yes."

I`ve got the pictures of what happens when they behead people and then try to freak people out. I`ve got them in my office. I can`t yet get clearance to showing them on TV. But now they`ve crossed the line into killing women and children and anybody who happens to be standing around.

Right or wrong?

FLEMING: All the boundaries are gone, Glenn. I mean, this particular group -- the cartels that we knew growing up and the gangs that we knew are gone, smash, they`re history. They don`t exist.

BECK: OK. This is -- for anybody that doesn`t understand, this is 1920s Chicago-style kind of stuff, plus 10. They`ve got -- explain the Zeta war tax that they have.

FLEMING: The Zeta what, Glenn?

BECK: The war tax? Are you familiar with the war tax?

FLEMING: Oh, the war tax. Oh, absolutely.

BECK: Yes.

FLEMING: It`s -- for instance, in Nuevo Loredo, they now have a war tax that they`ve imposed on not just illegitimate businesses like drug dealers and extortion schemes, but they`ve imposed it on legitimate businesses -- pharmacies, dentists, doctors. And everybody has to pay this tax, or if they don`t, then they risk either being kidnapped or killed.

BECK: OK. And we had a border agent that was killed over the weekend.

This is -- this is going to spill over and already has in the United States. You say these are, now, right here in our country, a new kind of terrorist in our country.

FLEMING: Oh, absolutely. And you know what, Glenn? Their reach goes way beyond the border.

They have cells in Chicago, Dallas, Atlanta, in Virginia, in L.A. These guys can have somebody executed with a text message. They don`t have to cross the border to inflict any violence upon our people.

BECK: Rusty, thank you very much. Thanks for being brave enough to tell the truth. Can`t get a lot of journalists today to do that.

Now, as far as national neighbors go, you can`t really ask for anybody better than Canada. Well, maybe Switzerland. That would be kind of nice, because they make all that great chocolate. But Canada does have delicious syrup, and they invented the bacon that is on top of the Egg McMuffin, and they gave us Michael Buble.

So, Canada, I`m cool with you.

However, Canadians now have found themselves in a stranglehold of oppressive, politically correct thinking and strong-arms. The "Real Story" is, what is happening in Canada right now nobody is paying attention to, and it is heading south across our border.

I want to tell you tonight a story of Ezra Levant.

Two years ago he was the publisher of the now defunct "Western Standard" magazine. In this magazine, they reprinted those Danish cartoons -- remember, of Mohammed with the bomb in his turban? When they did that, a radical Muslim tried and failed, thank goodness, to have him arrested for exercising his rights as a journalist.

The imam had Levant hauled in before the Alberta Human Rights Commission, however, and on January 11th, he was grilled by a human rights officer for 90 minutes. This is in Canada, not Nazi Germany.

He was finally smart enough to bring a videotape camera with him, and he videotaped the entire proceeding. This guy`s pretty sharp. He pulled no punches, telling the officer exactly what he thought of her, the commission, and their right to question him.

I want to show you a bit of this clip.


EZRA LEVANT, FMR. PUBLISHER, "THE WESTERN STANDARD": We published those cartoons for the intention and purpose of exercising our inalienable rights as free-born Albertans to publish whatever the hell we want, no matter what the hell you think. The only thing I have to say to the government about why I published it, because it`s my bloody right to do so.


BECK: It is too easy to dismiss whatever happens in Canada as being irrelevant here in the United States, especially since some of the same variety of strong-arm tactics are alive and well within the borders of our own progressive movement here in the United States. You might think that commissions and tribunals aren`t official arms of the government, but in today`s PC universe, they wield their own variety of power that is even more insidious than bad laws enforced by dimwitted politicians. And I know, because I have had my wrists slapped plenty of times and been called to the principal`s office over and over again.

If we see a progressive president in Congress, get ready, America. You just may wake up in a brand new, brave new world. Unless we watch and learn from our neighbors to the north, we`re going to get caught in their slippery slope.

Ezra Levant joins me now.

Ezra, I have to tell you, your life, you`re living right now in some sort of brave new world -- or better yet, Orwellian "1984" hell.

What is it like?

LEVANT: Well, I think that most Canadians didn`t even know these commissions existed until I videotaped it. And it`s -- when we think of governments hauling publishers or editors or journalists into a room and grilling them about their personal political thoughts, we think of Stalinist Russia or North Korea. We didn`t think it would be here in North America.

We don`t have the same First Amendment strength that you do, but we still have 800 years of a British tradition of free speech. It`s eroding in Canada and Americans should be aware, too.

BECK: But I have to tell you, Ezra, you can "Mein Kampf" in Canada, but you`ve got an imam who is pushing for Sharia law in Canada, and you can`t print a cartoon?

LEVANT: Well, you know, that`s what`s ironic, is that you have a radical, fundamentalist imam who is using the secular, tax-funded bureaucracy of the government to enforce his fatwah. And if they come after "The Western Standard," they`ll come after talk show hosts, they`ll come after other books, too. So...

BECK: Well, that`s a good book. I don`t know if you`ve read that yet. Who set that up? That`s brilliant.


LEVANT: No, I`m serious, though. If they can -- it`s a strange alliance between domestic, politically correct censors with their speech codes and foreign radicals who don`t want to have a discussion about issues like radical jihad. I think it`s a terrible mix, and because the domestic left, which normally stands for free speech and the separation of church and state, because they`re too politically correct, they stand silent when it`s a question of the separation of mosque and state.

BECK: Right. And so you`re not getting any support from the Canadian media? I mean, probably lame support from the Canadian media.

LEVANT: You know, the radio talk shows and some opinion columnists have been great, but I`ve had more press coverage in the United States than in Canada, which is really weird. You`d think a reporter hauled before the government -- and I`m still going through the process. I`ve had to spend tens of thousands of dollars in legals -- you think that would be news in Canada.

I`ve had more access to American media than in Canada.

BECK: I tell you, you guys are following Europe. And I hope we`re not following you.

I mean, I know that Mark Steyn, another guy who printed "America Alone," which is a fascinating book, he is being hauled in front of the same tribunal or commission up in Canada. You guys are in deep, deep trouble if you don`t turn this thing around.

LEVANT: You`re right. The same thing`s happening to him -- a radical Muslim who has publicly called for -- apologized for terrorist attacks against Jews, is hauling him before the human rights court.

It happens a little bit in the states with groups like CARE, who are suing talk show hosts like Michael Savage. I mean, it`s a censorship attempt on people like you and me who have a different point of view.

BECK: Ezra, thank you very much.

LEVANT: My pleasure.

BECK: We will follow your story. Best of luck to you.

LEVANT: Thank you.

BECK: That is the "Real Story" tonight.

For links to the full video of Ezra`s human rights commission meeting -- you`ve got to see it -- sign up for my free newsletter. It`s an e-mail newsletter. You can get it at We`re going to put it in tomorrow`s edition, but you have to sign up tonight to be able to get it.

It is completely free.

Coming up, the Dow finished down over 120 points today. The president has a plan to make the economic and stock market boo-boos all better. I`ve got a better one for you -- fend for yourself.

I`ll give you the hard medicine, next.


BECK: Every single time that Wall Street tumbles, the experts say the same thing -- don`t panic. And you know what? Over the long term, they`re right.

However, that`s not much consolation to the average hard-working schmo who, you know, logs into their 401(k) account and realizes their retirement is now indefinitely delayed. But I believe that the best antidote to panic is preparation. Know what`s going on, develop a plan, and then stick to it.

Here to help get started is John Bogle. He is the founder of The Vanguard Group and a guy who`s seen plenty of market panic over the years.

First of all, John, I had a guy on, I don`t know, about a month or two ago, and he was a Wall Street expert. And the Dow was at 14,000, and he said, "Oh, there`s nothing but upside." And I said, "You`re out of your mind. Get out of it now."


BECK: It`s too late to get out now. If you`re still in it, you stay in it, right?

BOGLE: If you`re still in it. But if you`re doing the right things, stay in it.

BECK: What does that mean?

BOGLE: Well, that means be very diversified. Don`t be betting on stocks, but be betting on American business, and hold for the long term. Get your costs out of the equation and make sure you have a decent anchored windward, if you will, a bond position that has something to do with your age -- higher and higher as you get older and older.

BECK: OK. We just talked about bonds last night, municipal bonds last night, and because of the insurance thing and everything else, this market could shimmy apart.

BOGLE: Well, first of all, it depends on whose insurance you`re buying. We happen to have here at Vanguard a high-grade municipal bond fund that is uninsured. It has done just fine because it`s high-grade bonds. And even our insured bond fund has bonds that would stand on their own in an A or AA basis, and they`re insured to bring it to single A.

So it`s not necessarily a big risk.

BECK: John, you know, I saw a picture today, and I don`t know if we have this picture -- it was of George Bush with Nancy Pelosi and Harry Reid. Those are the three people I don`t want touching the economy, for the love of Pete.

BOGLE: Glenn, you`ve hit it right -- you`ve hit it right on the nose, man.

BECK: Thank you.

I really am convinced with the stock market down what it was today, that there are going to be more people -- or fewer people in Wall Street today -- tomorrow saying, you know what? You got a good sale today. You got a good -- you know, it took the blood that it should have taken. Let`s go in and, you know, we can invest again.

I don`t think the shoe has dropped, because they stop the shoe from dropping. Isn`t it better to take the medicine?

BOGLE: Well, the market is totally driven by emotions. Economics are not what we`re talking about today. Maybe the potential economics of lower earnings in a recession, but nothing like the amount that the market has been fluctuating here. So I think if we can get the emotions out and stay the course, as we would say, in Vanguard terms...

BECK: But how is that going to -- how is that possibly going to happen in an election year? Look, I`m not throwing the Democrats under the bus. I`m throwing the Democrats and the Republicans.

They all say they want to give, you know, taxpayers back some money. First of all, that won`t show up until the first quarter of `09. How is this going to make any difference at all?

BOGLE: Well, and don`t forget, I have not seen anybody ask the question if we`re going to give -- if we`re going to give people $120 billion back, whose $120 billion is it?

BECK: Thank you. Thank you.

You know what? You and I -- you and I, we need to party.

BOGLE: Yes, we need to party. We`re rational.

BECK: Yes. That`s exactly right. And there`s nobody rational on this anymore.

All right, John. Thanks.

Now, let`s check in with tonight`s "Real America," brought to you this evening by CSX.

The road to recovery is a long one for any soldier that is at Walter Reed Medical Center, but I want you to see how man`s best friend is actually making that trip a little bit more comfortable for some of our soldiers.


BECK (voice over): You don`t really expect to see dogs walking in the halls of Walter Reed Army Medical Center, but these dogs are in the hallways and they`re on a mission. Their mission -- to help injured soldiers going through rehab forget the pain.

MOLLY MORGAN, WALTER REED PET THERAPY LEADER: We go around to many of the wards and the clinics and the rooms and visit with the patients, the soldiers. And our mission is to bring a little happiness, a little comfort, a little feeling of home.

UNIDENTIFIED MALE: She`s a beautiful dog.

MORGAN: At first, we sort of startle people, but then when they see us, then you suddenly see their demeanors just becoming more and more calm. And they sort of settle in, and then they want to see us and they want to talk to the dogs. And then they just seem to take a little break from what they`re going through and what they`ve been through in the last couple months.

BECK: The dogs and their handlers are trained and certified by PAL, People, Animals, Love. This is a group that was started in 1981 by a veterinarian who knew firsthand how animals can lift spirits.

UNIDENTIFIED FEMALE: It`s a welcome relief because they`re friendly and pretty. Yes, it really boosts your morale when you see, you know, people bring in the dogs.

PFC JOHN HOLT, U.S. ARMY: When I was in a hospital bed, they brought over all the dogs and they were just really nice to see, and it made me happy. It just made me think about home, and they helped me out, because it`s just -- I don`t know, something about animals, just little, happy dogs make you feel a little bit better.

SSG RENEE DEVILLE, U.S. ARMY: It`s great therapy for me because you`re in a lot of pain, and, you know, it kind of takes your mind off of what you`re actually feeling and what you`re going through for the moment that they`re here.

BECK: So, after a long day of spreading their special brand of cheer, these dogs know that they`ve done their job, to help a soldier relax and forget, even if only for a few minutes.


BECK: You know, the number one comment I have received over and over again is, how come you don`t tell more stories that are positive and good about the troops? Well, I`ve got a ton of these stories just like this one on You`ll find them under the "Real America" section.

Tonight`s "Real America" sponsored by CSX. It`s how tomorrow moves.


BECK: And now Prince Charles fights global warming. Oh, look, here he is doing a speech as a hologram to lower his carbon footprint.

Help me, Obi-Wan. You`re our only hope.

This brings us to today`s "Inconvenient Segment" as we (INAUDIBLE) into chapter one of "An Inconvenient Book" on global warming. But honestly, with the economy at the top of the news today, it fits perfectly, and let me tell you how.

The EPA has just released a cost-benefit analysis of one particular global warming bill that has been thrown around. This bill is from New Mexico Senator Jeff Bingaman.

His plan is not Al Gore crazy. It is thought of really as less radical than the Democratic candidates` ideas, or even the plan from John McCain.

What does it do? Well, not a lot. What does it cost? Oh, that`s a different story.

The EPA estimates that by 2050, it will cost our GDP -- get this -- between $400 billion and $1.2 trillion every year. But even at this high, high, high, high, high, high, high cost, at least it solves our global warming problems, right? No.

I want to show you a graph.

The red line that you can barely see peeking out at the top measures the carbon dioxide if we do absolutely nothing. The line below measures the effect if the Bingaman plan is successfully implemented and actually followed under several different versions.

Get the point? Gosh, it looks like one line there, doesn`t it?

The difference is almost undetectable by 2050, at which point, I remind you, it will be costing between $400 billion and $1.2 trillion every year. If you zoom all the way to the end of the century, the effects are still basically nonexistent, and imagine what it would cost then. Even in a fairy tale scenario of almost every other major country playing along, we are still at CO2 levels that are around 30 percent higher than the supposed climate crisis that we`re already in.

Now back to the cost.

Inflation affects those numbers, but the point still stands, this would eventually cost between $400 billion and $1.2 trillion. Right now we`re negotiating an economic stimulus package of $145 billion. If giving $145 billion, people, would stimulate the economy, what happens to the economy when we take out $1.2 trillion?

This is what I talk about in "An Inconvenient Book." Solutions that you hear about are just stupid and they cost us a fortune. They cost a fortune and do nothing but make you feel better about yourself.

May I remind you of Prince Charles?

You can hologram yourself right now to the book store and get a copy of "An Inconvenient Book," or go to

From New York, good night, America.