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Glenn Beck

Is U.S. Socializing Financial Markets?

Aired March 31, 2008 - 19:00   ET

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

(BEGIN VIDEOTAPE)
GLENN BECK, HOST (voice-over): Tonight, Treasury Secretary Paulson and the government`s plan to overhaul the U.S. financial markets. More federal regulation. How we`re moving away from capitalism and headed towards socialism.

And speaking of socialism, The Real Story with Hillary Clinton. She has the details of her universal health care plan. I`ll explain how her premium cap is nothing more than a back-door tax on the rich.

And Al Gore pushes the perils of global warming on "60 Minutes." You`ve got to be kidding me. Leslie Stahl couldn`t come up with any hard questions?

All that and more, tonight.

(END VIDEOTAPE)

BECK: Well, hello, America.

I know you don`t come to this show to hear a recovering alcoholic lecture you about monetary policy or the ins and outs of the Federal Reserve system because I know that makes me want to page Dr. Jack Daniels. But you come here, I hope, because I and our Founding Fathers, and I believe you, have a profound love for our country and our constitution.

We also have a healthy distrust of our government. I don`t trust our government to protect my family. I don`t trust them to protect my rights, and I certainly don`t trust them to protect my money.

Unfortunately, they don`t seem to be hearing that message in Washington. Earlier today our treasury secretary announced a sweeping new blueprint for our financial system, a plan that would, quote, "give broad power to our Federal Reserve system."

Now, you might think this is just another example of government agencies using fear and panic to give themselves more power. But there`s a real big difference here this time around, and it brings me to our "Point" tonight.

The Federal Reserve isn`t the typical government agency, because it`s not a government agency at all. They are the biggest special interest group ever crated. And they answer to virtually no one. And here`s how I got there.

This may come as an eye-opening surprise to many people, but the Fed`s own Web site explains their role like this: they are, quote, "not owned by anyone, and they are, instead, an independent entity within the government whose decisions do not have to be ratified by the president or anyone else in the executive or legislative branch of government."

Well, it`s fantastic. It`s like a -- it`s like a fourth branch of government, or maybe an entire new tree. Isn`t that great?

But it gets worse. The 12 banks that make up the Federal Reserve system each have a nine-member board. This is tedious, isn`t it? Six of the nine members are elected directly by private commercial banks, who are -- what a surprise -- only really looking out for themselves. It`s like -- it`s like if I told my 3-year-old son, "Hey, you get to pick the baby- sitter when my wife and I are gone."

Yes, that`s right. Do you think that he`s going to pick the person who makes him eat his spinach and goes to bed at 7 p.m. at night? I don`t think so.

Let me ask you this. Would you be in favor of Exxon Mobile controlling our nation`s energy policy? How about handing the keys to our Defense Department right over to Lockheed Martin. Or giving the U.N. control of our sovereignty. Actually, that`s a bad example, but you get my point.

This is exactly what we`re doing with our Federal Reserve. Now they`re asking for even more power and everybody like zombies, filing into the room. So tonight, he`s what you need to know.

If common sense were still alive, this plan would have bipartisan hatred as far as the eye could see. Conservatives like me would hate it, because I don`t want the government in my face. I want the government as far away as you possibly can see them. Stay out of my wallet.

The left, who`s constantly complaining about big business and special interests controlling our government, should hate this, because this virtually hands over our entire economy on a silver platter to big business.

Maybe both parties need to spend a little less time kissing up to the Fed and a little more time listening to the words of our hate-monger of the day. He said, quote, "The history of liberty is the history of limitations on governmental power, not the increase of it. When we resist the concentration of power, we are resisting the powers of death."

The hate monger? Oh, yes, President Woodrow Wilson, who ironically, uttered those words about a year before he signed the Federal Reserve act into law.

William Fleckenstein, he is the president of Fleckenstein Capital, the author of "Greenspan`s Bubbles: The Age of Ignorance at the Federal Reserve." And Jim McTague, he is the Washington editor for Barron`s magazine.

Bill, let me start with you. Why would we give the Fed more power? Isn`t the Fed the one that`s been creating all of these bubbles?

WILLIAM FLECKENSTEIN, FLECKENSTEIN CAPITAL: Well, you hit the nail on the head, Glenn. I think the only thing that I would disagree with what you said was the Fed hasn`t exactly asked for this mission. But I`m sure they`re happy to accept it.

The Fed is the problem in creating the bubbles, and now what the government wants to do is propose more regulation when we don`t need more regulation. We need to enforce the rules that are in existence. So we`re going to put -- they want to put the fox in charge of the chicken coop and create more rules to have the fox guard the chickens. I mean, it`s complete nonsense.

BECK: Jim, let me pick it up from there. I mean, I think what Bill just said is absolutely right. But it`s the same with the border and everything else. We don`t need more laws. We need to enforce the ones that we already have on the books.

JIM MCTAGUE, WASHINGTON EDITOR, BARRON`S MAGAZINE: There are two ironies here. First of all, the accounting profession is involved in the current crisis. Secretary Paulson didn`t mention the word "accounting" once in his blueprint. That`s strange. How did they get out of it?

Secondly the Federal Reserve, as you noted, helped create the current crisis. And it just wasn`t by keeping interest rates too low too long. But they gave the banks an exception from Enron accounting. Remember, Enron kept a lot of assets off the books. And they passed a law called Sabanes-Oxley so it would never happen again. Except banks were allowed to have an exemption.

BECK: Bill, what I can`t figured out is I still have -- on my radio program, people call me and say, "Glenn, we`re not even in a recession. You`re just hyping and trying to scare-monger."

And what kills me is everybody who`s reporting this story today is adding this one line: this is the most sweeping reform and concentration of power in the financial sector that has been done since the Great Depression. If we`re not even in an economic slowdown, why would we be doing this?

FLECKENSTEIN: Well, you know, that`s a good point, Glenn, and the other slight -- slight twist of that point is that I think we`re in recession. I gather that you might, too. But it hasn`t -- it hasn`t really gotten people`s attention yet. And the financial system already almost imploded last week. So what happens when this gets worse?

I mean, the fact of the matter is in -- from 2002 to 2006 or `07, the equity extraction and real estate related jobs was, in fact, the economy. That`s not there any more. So folks that want to pretend we`re not going to have a recession I think are living in a fantasy.

BECK: Jim, the -- the story I read today is they were talking about how this is going to be like the Nordic banks if the Fed did this with the Nordic banks. And I hate my life sometimes. I actually looked up what they did with the Nordic banks.

What they did there is, when that started to fall apart, they made sure that people weren`t profiting on stocks. They just -- you washed out. I`m sorry, you lost your money. The big CEOs, they didn`t get any big golden parachute. But that`s not what we`re doing here. This is one step towards nationalization or socialization, is it not?

MCTAGUE: It is. And they`re trying to take the risk out of the financial system, which will hurt us more. You know, there`s a risk-reward ratio.

BECK: Right.

MCTAGUE: What they`re trying to do is turn us into the nanny state, where nobody ever loses anything. You know, heads you win, tails the taxpayers lose. It`s just befuddling to me that with the first MBA president in history, we have this type of socialism creeping into the agenda.

BECK: Well, let me -- let me end it with a question to both of you. I`d like to hear your opinion on both. You just said that, you know, the taxpayers lose if the banks lose, et cetera, et cetera.

It seems to me under this -- under what they`re proposing here, and what we`ve already done with Bear Stearns and everything else, that really, the only losers are the tax payers or the consumers. Explain who wins in this.

First of all, Jim, I`ll start with you. Do you agree that the losers are the consumers and the taxpayer in this?

MCTAGUE: Yes, under regulatory consolidation states. Regulators are often much more responsive to consumer needs. The winners are the big financial institutions who know how to manipulate federal regulation to keep any competition at bay.

BECK: Right.

MCTAGUE: And so they create a mockery for themselves by manipulating the Fed and the bank regulations.

BECK: Bill, any winners here outside the big banks? Any consumer win here? Any little person win?

FLECKENSTEIN: No, no little person wins. Jim -- Jim it the nail on the head. I can`t really improve on that. The only other thing -- point I can make that I think is useful to think about is, as long as the Fed insists on targeting interest rates, we`re going to continue to have problems. They need to get out of the interest rate and mismanagement business.

BECK: How do you mean? Isn`t that -- I mean, a lot of people will tell you that`s what they do.

FLECKENSTEIN: They don`t have to. They can target the money supply growth like Volcker did. It broke the back of inflation in the early `80s. They could target gold prices. There`s a whole bunk of things they could target that more closely mirror economic activity than thinking they can guess what the right level of interest rates needs to be.

BECK: I have to ask you a question, because you started with, you know, I don`t think the -- the Fed wanted this job, but they`ll take it. I don`t buy that for a second.

There was a story three or four weeks ago that said that the big banks were getting together, and they were talking about ways to kind of utilize this system that we`re in right now, this environment, to ease their pain, to go ahead and throw more logs on the fire. You don`t think this is a result of meetings like that?

FLECKENSTEIN: You know, it could be, you know. Let`s just say it that way. I`m sure they`re rather be regulated by the Fed, given the Fed`s track record on regulation, than they would be by -- but there was a lot of other people that fell down on the job in the last five, six, seven years. Basically, nobody enforced any of the laws. I mean, there`s an amendment to the truth in lending act that specifically precluded lending against just the potential rise in the value of the asset. Nobody enforced that rule.

BECK: Right, right. All right. Yes, guys. Thanks very much.

Now, on tomorrow`s program, I guess you could call our next guest, or our guest tomorrow a critic of the Fed, if you define critic as somebody who thinks we should totally get rid of it for the good of our country. It`s Ron Paul. That`s on tomorrow night`s broadcast.

Up next, once a politician, always a politician, as proved by Al Gore`s interview on "60 Minutes" last night. Why global-warming hypocrites need to start practicing what they preach. That`s next.

And the anti-extremist film "Fitna" hits the Internet. Protesters hit the street, but the world doesn`t end as a result, despite what the U.N. secretary-general and the head of the E.U., what they said over the weekend. And I guess it`s a good thing we`ve compromised free speech, guys? Is that right?

(COMMERCIAL BREAK)

BECK: Coming up, Hillary Clinton finally gives us more details on what Americans can expect from her health care program. If she becomes president, what does that mean for your pocketbook, comrade? Well, I`ll break it down for you, premium by premium, in just a minute. I`ve got to tell you, if it gives you a headache, get your aspirin now, because it will cost you about $400 in about 18 months.

Now for years I maintained that Al Gore chose global warming at -- as his cause, because it would turn him into a rock star and then he might, you know, run again for the White House and win an election. Well, I don`t think this is the year that that is going to happen, but you have to admit, his appearance on "60 Minutes" last night was conveniently timed.

After all, Obama and Clinton have basically beaten the snot out of each other every day: "You better drop out for the good of the party."

"No, no, no, you better do it."

Oh, shut up, the two of you.

Now here`s Al riding in on his white horse to talk about how we need to come together on climate change. He did, however, get a little personal when asked about climate change skeptics.

(BEGIN VIDEO CLIP)

AL GORE, FORMER VICE PRESIDENT OF THE UNITED STATES: I think that those people are in such a tiny, tiny minority now with their point of view. They`re almost like the ones who still believe that the moon landing was staged in a movie lot in Arizona and those who believe the earth is flat. That demeans them a little bit, but it`s not that far off.

(END VIDEO CLIP)

BECK: Demeans them just a little bit, kind of like, you know, as demeaning as someone saying that you only care about the earth because, you know, you think that it will make you rich and put you in the White House. Is it about -- is it about that far off or is it a little less than that?

There are too many good scientists out there. You couldn`t -- he couldn`t name one that actually believes "I don`t think man is causing this." Lots of them disagree with Al Gore. But the scientists don`t believe about crafting their image for the Oval Office or padding their bank accounts. And nobody in the media will actually mention them by name. Which is exactly why you won`t see any of them on "60 Minutes" in an election year.

Joe Bast is the president of the Heartland Institute.

Joe, last night Al Gore talked about his $30 million ad campaign where he`s going to try to convince Americans that we have to go it alone, we have to == we have to start enacting policy. If everybody agrees with global warming and man is the cause, why would you need a $300 million ad campaign?

JOE BAST, PRESIDENT, HEARTLAND INSTITUTE: That`s an excellent question. I don`t think you would. And I think, instead of featuring celebrities and former celebrities, you`d actually put some scientists on TV, explaining the issue to the American public.

BECK: Right. Well, but he says the issue -- the science is solved. I guess we just need celebrities to fix it.

And here`s the question that I`ve never seen "60 Minutes" leave alone. Watch this question that Leslie Stahl asked him about that $300 million ad campaign.

(BEGIN VIDEO CLIP)

LESLIE STAHL, "60 MINUTES": We`re told that this ad campaign is going to cost a barrel of money. How are you paying for this?

GORE: Well, Tipper and I -- thank you again, have put all of the profits from the movie and book that we would have otherwise gotten, "An Inconvenient Truth," to this.

(END VIDEO CLIP)

BECK: Wow, the movie and the book made $300 million? If I`m really generous, I`m going to give him $10 million. Where is the other $290 million coming from, and why isn`t "60 Minutes" asking that question?

BAST: Precisely, precisely. That whole interview is just a series of softballs. I think it was really disgusting to see a reporter just treating a controversial public figure that way.

BECK: Any idea where this money is coming from?

BAST: Well, I think we have a pretty good idea. I think there`s a lot of companies that stand to profit big-time if we start rationed access to energy. So you have all the alternative energy companies, all the ethanol manufacturers, all the financial companies.

BECK: What`s the difference between him, because he started his own hedge fund now? What`s the difference between Al Gore making money or these companies making money and Exxon Mobil on the other side?

BAST: There`s no difference at all. There`s no difference at all. His self-interest is absolutely transparent in this. This guy has made millions and millions of dollars by scaring people about global warming. And then he has the audacity to accuse his critics of doing it out of financial interest.

BECK: Let me -- let me go to the Antarctica ice shelf here for just a second. A big ice shelf fell off this weekend. I read in the paper today it`s proof that the oceans are warming. And yet, NASA has put robots down into our oceans and shows there`s no global warming of any of our oceans. Who do I believe, and why is the ice shelf cause thrown in?

BAST: You should believe NASA on this one. And they would also tell you, NOAA would also tell you that temperatures over the Antarctic are actually going down. So it`s not...

BECK: So what caused the ice shelf to fall?

BAST: Probably ocean currents. First of all, they`re not sure. There`s no scientists who can tell you for sure what`s going on there.

Secondly, we know that there`s a lot of ice shelf being created. Ice shelves around Antarctica right now are at their largest extent since we started to keep measurements on this stuff. So at any given time, chunks of this ice are going to start breaking off.

We now know that there`s some volcano activity under the oceans around this -- this small peninsula off of Antarctica where the breakup is occurring. So it`s probably being caused by geothermal energy coming up underneath the continent.

BECK: OK. Joe, I`m so sorry that we didn`t have time to get to get to the hard-hitting question from Leslie Stahl. She said there`s a lot of people that are very credible that, you know, don`t believe in global warming, like Dick Cheney. I mean, can you off the top of your head -- Joe, can you come with you one scientist that`s respected that disagrees?

BAST: Theli Bailey Younis (ph) and Willie Soon, both at Harvard University.

BECK: OK.

BAST: Richard Lindsen (ph) at MIT.

BECK: All right. Just -- I just need one, besides Dick Cheney. Thanks.

BAST: Outrageous.

BECK: Coming up, what does Barack Obama mean when he says that Hillary Clinton can stay in the race as long as she wants? Find out, coming up in just a second.

And "Fitna," the controversial anti-extremist movie I told you about last week, hit the Web in a big way over the weekend. Over 400 million views. So far, Europe hasn`t been burned to the ground. Why? Find out in just a bit.

(COMMERCIAL BREAK)

BECK: I swear to you, I don`t know why you`re watching the news. I don`t. I can`t take it anymore. It`s just political nonsense, every yelling. First, it was yelling at Mike Huckabee, "Oh, get out of the race." And then, now people are screaming at Hillary Clinton the same thing. This is political bull crap and positioning. That`s all it is. Stop telling the candidates to pull out. Aren`t the people supposed to vote? You know, it`s the process. I know, as ugly as it can be.

Rich Galen is a GOP specialist, former senior advisor to Fred Thompson who should have pulled out a long time ago.

RICH GALEN, GOP SPECIALIST: Lonely days (ph).

BECK: Rich, you know what -- you know what kills me on this, is the cries of people saying Hillary Clinton should drop out, I believe it`s only to cause people to hesitate to support her. It makes it look like, well, she doesn`t have a chance to win. Look at all these people who are coming out and saying, "Pull out."

GALEN: Yes. Well, you know, the danger is that Hillary Clinton is never so strong as when she is allowed to portray herself as America`s victim. And I think the Obama people, the Howard Dean people, the MoveOn.org, everybody is getting perilously close to that line that Rick Lazio crossed back in her first Senate race. She allowed herself to portray herself as being victimized. And she`s very good at that. So if they keep this up, this helps her a lot.

BECK: I am so sick of people playing the victim. Get over it.

GALEN: She`s -- she`s a genius.

BECK: Oh, no. I know. The other thing is, it`s kind of -- in a way, it`s all coming to bite them in the butt. I mean, because all of the things that the Clintons have done over the last few years, she can`t -- I mean, she`s using and it`s not working.

For instance, stealing the votes. You`ve got the super delegate charge. You know, if she goes in and she gets the super delegate, she`ll be charged with stealing votes. You have the disenfranchised, not counting every vote. And you have -- you`ve got that happening in Florida and Michigan. And then you have the cries of racism. Every time anyone said something about policy, it was immediately, "Well, you`re a racist."

Now she can`t do that, because she`ll be called a racist. It`s kind of ironic, isn`t it?

GALEN: Yes. Well, it is ironic, and justifiably so. The other thing about calls to have her pull out now is that would have the effect of disenfranchising the people of Pennsylvania, whose primary is on April 22. That will add Pennsylvania to Michigan and Florida as people whose votes meant nothing to the Democratic Party. And I think that`s dangerous for the Democrats, writ large.

BECK: You know, I find it amazing people are still talking about he stupid -- which I don`t think gave us any information, stupid, you know, I was dodging bullets and wearing body armor bull crap.

And yet, nobody is talking about this weekend. Reverend Wright came out of hiding or wherever he was and attended a -- some sort of Catholic service in honor of Maya Angelou. And he was given a standing ovation. Here`s a guy who Barack Obama has distanced himself from. I mean, what he said was racist and anti-American. And yet, the people are standing up and giving him a standing ovation. Is this even going to hurt Barack Obama? Or...

GALEN: I think it does in the general election. I mean, if I were the Republican National Committee, I would hire Reverend Wright and get him on tour in front of as many people as possible.

I mean, that might be in that particular church in Chicago. But when we get into the general election -- remember, we`re still in the primary election phase. We`re talking about Democratic activists.

BECK: Yes.

GALEN: You get into the general election, and people start thinking two, three, four times about this. And that doesn`t help Barack Obama a bit.

BECK: Rich, thanks a lot.

Now, coming up, our economy in crisis. You thought billions in write- downs and losses were bad. You ain`t seen nothing yet. The author of the trillion-dollar meltdown. The number`s too big. What does it mean to you? Tonight`s "Real Story," coming up.

(COMMERCIAL BREAK)

BECK: Coming up next, the anti-extremist film "Fitna" debuts on the Internet. Oh goodie.

New reports say that because of Islamic outrage over the movie, the Dutch filmmaker may change parts of the movie. Freedom of expression and freedom of speech seem to be in increasingly short supply, as are spines.

We`ll talk about that coming up in just a minute. But first, welcome to "The Real Story."

It seems like the weather is finally starting to change, at least back here in New York. And, you know, while I like the warmer temperatures, this is usually the time I get sick. And I do have a cold now. But I actually think that`s good news.

I think I need to get it out of the way, because if Hillary Clinton does win the presidency, getting the sniffles next year, oh, it`s going to cost me a fortune. And you too.

In an interview with "The New York Times" last week, Clinton said that, if elected, she would push for a universal health care plan where your contribution for health insurance will be 5 to 10 percent of your income. Really?

"The Real Story" is Hillary`s health care is going to make you sick. Not only is there just a few details missing on this one, at least for the taste of my wallet, but it`s nothing more than a back-door tax. More new, progressive redistribution of wealth.

When politicians talk about snatching a percentage of your income, they usually put a cap on top of it. So no matter what -- you know, what the end percentage is, there`s a ceiling on what your fair share should be.

Well, according to her published plan, Clinton doesn`t say where she would place that cap, or if there would be one at all. So, that means under Hillary`s plan, at least the way we understand it now, the exact same variety and quality of health care is going to cost some people exponentially more than others.

She wants to tax everybody the same rate, with no regard of the annual total. So, in other words, if you make $60,000 a year and your assistant makes $30,000 a year, your runny nose costs twice as much as hers. Isn`t that great?

Not just unfair, but it`s insane. They better start hanging up Prozac with your penicillin.

Taking from the rich and giving to the poor makes for a great fairy tale, but it`s an idea left for fiction. You know, or the old Soviet Union. Picking the pocket of some Americans and dressing it up like policy is a deceitful, underhanded, dirty little trick, one that progresses in socialism, and playing for a long time.

Why am I now surprised to now see it out of politicians from Washington?

Kim Strassel is a member of "The Wall Street Journal" editorial board and writer of "The Potomac Watch" column.

How are you, Kim?

KIM STRASSEL, "WALL STREET JOURNAL": I`m well. It`s so nice to be here.

BECK: Is it really?

STRASSEL: It is. Really.

BECK: Five to 10 percent of your income with no cap, it seems like socialism.

STRASSEL: Well, look, you know, you`ve got to step back here, Glenn. This is -- you`ve got to look at this from 30,000 feet.

What Hillary Clinton learned back in the 1990s when "Hillary Care" exploded was not that Americans didn`t want socialized medicine, but that she had to go about it a different way. And so what we`ve got here now is sort of a two-prong step to get to that point, socialized medicine.

You`ve got her offering some sort of public insurance for those who supposedly can`t pay for private health insurance. And now she`s come out and said, OK, she`s going to cap what people can pay on their health insurance. Basically what she`s saying, she`s going to cap what a private insurance company can charge people.

BECK: Well, she says this in "The New York Times" interview -- that "It might be appropriate to require insurers to spend a heavy proportion of every premium dollar on health care, as opposed to overhead and profit."

That doesn`t seem like the capitalist system, that they are requiring you.

STRASSEL: No, and this is the other part. It`s so -- not only is she going to sort of set a price cap on what people -- what insurance companies can charge a person, which is a price control, she is also going to say, and you have to spend a certain amount of all the premium money you get in on health care. Not on profits, not on your overhead, on this.

The goal of this, Glenn, is slowly to strangle the private insurance industry, which would send more people to her public option. And then at some point you hopefully, if you`re Hillary Clinton, get nationalized health care.

BECK: Well, this is exactly what they have been doing in New York City. I mean, you know, we`ve got 30 percent of the population in New York City on Medicare. And the reason -- and the reason why is because the government has strangled any opportunity to get out of that system and get under private health care. They`ve made private health care so expensive and so ridiculous that you can`t -- you have to go to the state.

Let me go to this, because most people don`t remember what Hillary Clinton did with childhood vaccines. Are you familiar with what she did in the 1990s?

STRASSEL: This is an excellent point, Glenn, because people want to know where you going to get with "Hillary Care`s" health proposal. Now, look back at what happened in the 1990s, after "Hillary Care" fell apart. The mop-up was they decided to do this program for children where the government, they made the same argument -- vaccines are important, Americans can`t pay, the costs are too high, government needs to step in.

So, now the government is the prime buyer of the vast majority of vaccines that get handed out to kids. And as a monopoly buyer of vaccines, they have dramatically negotiated down the price of vaccines to the point where a whole bunch of companies don`t even think it`s worthwhile being in the business. They got out, and our vaccine industry is really in shambles.

BECK: Kim, thanks a lot. And it was great to have you on here.

OK. Now, just like you, I love a good book. You know, about the end of the world at the hands of religious extremists. But sometimes I need a break. You know, lighten things up with a good book about, I don`t know, end of the world through economic meltdown.

When I first started reading about the fallout from the mortgage crisis, you know, everybody was denying it -- Wall Street, the banking industry. And they started saying, well, maybe it will be a couple hundred, you know, billion dollars in write-offs. Then they upped it to $400 billion. And last week I read that I think it`s up to now $600 billion, I think, is coming our way.

"The Real Story" is, a new book says the real number could be $1 trillion. Like any major national crisis, our economy didn`t get this way overnight. How do you -- I mean, all of a sudden, oh, jeez, where did I leave my checkbook? I`m overdrawn by a trillion dollars.

Throughout the 1980s and the 1990s, a number of financial trends flowed together that created sort of a credit bubble. Then in the wake of 9/11, you know, people were focused on the war and terrorism, airport check-in lines, energy issues. Opportunities arose for thrill-seeking investors. You know, too many people leveraged themselves too severely, including some of us with homes and credit cards that shouldn`t have either.

The result is -- have you ever play Jenga? You know when you pull that one piece out and the whole thing gets wiggly and you`re, like, watching it and all of a sudden it all tumbles down? Well, that`s where we are.

If you dare to be honest about it, that wreckage is hovering at about $1 trillion. And to give you a sense of how much $1 trillion really is, Oprah would have to get into a polygamist marriage with Bill Gates and Warren Buffett, I think one of the Saudi princes, and she still wouldn`t have $1 trillion. If you spent a dollar every second, 24 hours a day, it would take you almost 32,000 years to spend $1 trillion.

If officials get too freaked out to be sincere about the meltdown, it will only delay our recovery and lead to something much, much worse. Let me remind you, the first step to getting better is admitting you have a problem.

I know this. I`m an alcoholic. Hello, America. My name is America, and I`m a spendaholic.

The man who came up with a lot of these ideas I`ve been trying to pass off as my own here, cleverly enough, is Charles Morris. He`s the author of "Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash."

Charles...

CHARLES MORRIS, AUTHOR, "THE TRILLION DOLLAR MELTDOWN": Yes, sir?

BECK: A trillion dollars, I always thought that was a made-up number when I was in school. Explain in layman`s terms, if it is a trillion- dollar meltdown, what does that mean to the average person, the average Joe Sixpack?

MORRIS: What is means is that every house that was bought since about 2005, every office building that was purchased since 2006, every private equity takeover deal since about 2006, has been wildly overpriced. And those values simply have to -- have to drop.

BECK: So what does that -- but what does that mean? Is this -- are we looking at the 1930s? Are we looking at the 1970s, the 1980s? What is this going to look like?

MORRIS: I think we`re looking at -- if you recall in the late 1970s, consumer price inflation jumped all the way up to about 12 or 13 percent. Paul Volcker came into the Federal Reserve. He put -- from 1970 through 1982, he put the whole country through hell, and that`s what it took to really, really squeeze that out. We have to do the same thing.

BECK: Right, but he did that by making money darn near impossible to get. If money -- if you can`t have -- if the money supply is tight, which is the problem now -- it`s too hard to get money and people can`t pay a higher interest rate -- if you get into Paul Volcker zone, how is anybody going to be able to pay their house payment? The money just chokes off.

MORRIS: Wait, Glenn. We got here because people were borrowing way too much and then spending way too much.

BECK: No, no, Charles. Listen, I agree with you. And the best way - - the best thing we can do is make money hard to get. But when you have a GDP is 70 percent people spending money -- and let`s be honest -- that they don`t have, how do you get out of that cycle?

MORRIS: We are going to have a nasty 12-to-18-month recession. People hate saying that "R" word. There`s no other way.

BECK: Thanks, Charles.

That`s "The Real Story" tonight.

If you`d like to read more about this, or if you found a real story of your own, tell us about it. Visit glennbeck.com and click on the "TV" button.

Coming up, Muslim communities around the world react to a shocking new film "Fitna" -- next.

(COMMERCIAL BREAK)

BECK: Well, for a couple of weeks I`ve been telling you about a new Dutch film called "Fitna." It features verses from the Koran juxtaposed with images of some of the world`s worst terrorist outrages. The film`s message is that Islam and violence are inseparable, and for millions that`s an insult. So, let`s just say it`s getting the big thumbs down from many in the Muslim community and especially in the Muslim extremist community.

First, those people were hacked off at the Danish cartoons, which I still cry myself silly about. That offended them six months after the cartoon was published, which is weird, because it took time for the clerics apparently to organize the outrage.

Now there`s this little 15-minute film. This is much more than just a disturbing trend. There is a storm of Muslim intolerance blowing across Europe. I believe it`s part of a master plan and will blow here.

In Denmark, political cartoons that targeted radical Islam sparked violent protests across the globe and death threats to the artist. Now we have this new Dutch film. Its director has been forced underground by threats from extremist Muslim factions. "Fitna" was finally made available online last week.

The Dutch government actually said that they were -- I`m quoting -- pleased with the muted reaction. Well, then, why don`t we just send them a bouquet of tulips? "Pleased" for obeying the law and being decent human beings?

If you ask me, so far this has been all setup and no story. What`s coming next?

Brad Thor is a best-selling author who has done work for the Department of Homeland Security. He has a new book out that I think is going to get the man killed called "The Last Patriot." It will be released in July.

Your book is -- I mean, it`s going to be this kind of reaction in some parts of the world.

BRAD THOR, "THE LAST PATRIOT": There is that possibility, yes. I`m hoping it doesn`t happen.

BECK: And you don`t really -- you don`t really -- your wife is here. Your wife is sitting on the set. What are you out of your mind?

THOR: This kind of stuff, Glenn, needs to be said. People need to know this.

Now, granted, my book is fiction. It`s a thriller.

BECK: Yes.

THOR: I`m not doing it to inflame. I`m doing my stuff to entertain and to inform people, because I think some of these messages are not getting through to average Americans.

BECK: Yes. Well, this one -- I will tell you that I saw "Fitna," because we were -- we were talking about playing it on this broadcast when it was released on the Internet. And we watched it, and there`s nothing -- there`s nothing really new in this that hasn`t been shown before.

I`m surprised -- because there`s been a lot of planning, organized planning by clerics and countries for the release. They are still boycotting the Dutch and everything else.

You think that this is just -- this pent up frustration is actually going to hit for another movie that is coming out. Yet another Dutch...

THOR: There is -- right, there is an Iranian-born Dutch politician, a young guy, 22 years old, who has left Islam. He`s made a movie called "The Life of Muhammad." And I have seen only one frame of the movie. It`s an animated movie. I have it posted on my Web site, BradThor.com, on our forum, and it is going to set the Muslim world off, probably even bigger than the cartoons did.

BECK: What is the one frame?

THOR: The frame is the Prophet Muhammad taking his 9-year-old bride to the mosque to consummate the marriage, and he is obviously aroused. And she is holding a teddy bear.

BECK: What are you doing?

THOR: And this is this guy doing this. We have a discussion thread and people are talking about it. And why is -- why is the effort on silencing free speech instead of saying, like you said, this is not appropriate? It`s not appropriate to riot and do all that kind of stuff.

BECK: Right.

THOR: And that`s where the focus should be.

BECK: But here`s the thing -- I mean, believe me, on Friday, we had massive discussions on, you know, what does security look like for putting something like this up? Here`s what happened -- Live Leak (ph) finally put it up Friday -- or Thursday afternoon.

They said on Friday, "We are left with no other choice than remove the film `Fitna` from our servers following serious threats on our staff and their families."

They took it off. Since that time they`ve issued this -- since that time, "We are constantly upgrading all security measures, thus offering better protection for our staff and families. With these measures in place, we`ve decided to once again make this video live on our site. We will not be pressured into censoring material which is legal and within our rules."

I have to tell you, I`m glad to hear this, because I think until people say, I`m more afraid of fascists than I am of death...

THOR: Right.

BECK: ... nothing`s going to change.

THOR: Right. And the one thing I keep coming back to is Islam is not above criticism, it`s not above parody, it`s not above discussion or examination, any more so than Judaism, Christianity, or any other religion might be.

You know, there have been books -- I didn`t see Mormon people threatening (INAUDIBLE) under the banner of heaven. That`s not how we operate in this country. There are people who were hacked off about "The Last Temptation of Christ," but they picketed the theater.

That`s the way western civilization works. And if you don`t like it, you don`t have to watch the movie, you don`t have to read the book. That`s your right.

BECK: So, do you think that the politicians -- I don`t even know what`s in the water over there. They seem to have spines over in Holland. They don`t even -- they seem to have spines.

What`s going to happen to these politicians? You`ve got three of them now. What`s going to happen to these politicians?

Do you think this guy ever gets his life back? Does he win another election?

THOR: Yes. Not only does he win another election, he -- this is my prediction right now, that Geert Wilders will increase -- his Freedom Party will increase the number of seats they have in the Dutch parliament.

They have nine now. At the next election -- it`s a 150-seat parliament. You will see them go up because -- and I`ll tell you why. After Theo van Gogh, the Dutch filmmaker, was murdered in 2004, the Dutch people went crazy.

All the stuff we talked about in "The Perfect Day," where we said al Qaeda might try to force our hands here, they did it in the Netherlands. They fire-bombed madrassas and they torched Islamic schools, and so on and so forth. That happened. These are the most amiable, tolerant people in the world. They`re sick and tired of seating their culture to people that they welcomed into their country who don`t want to be Dutch.

BECK: Brad Thor.

Stay safe, my friend.

THOR: Thank you, Glenn.

BECK: More in a minute.

(COMMERCIAL BREAK)

BECK: If I may, I`d like to take the next couple of minutes just to express the ornery old man that lives somewhere deep inside of me. The side that really doesn`t like all these newfangled trends. You know, the side that believes the good old days didn`t suck as much as they actually did, the side that routinely yells out, "You crazy kids!" as I roll down my window and wave my fist at them.

The NAACP is upset at a new bill that they call clearly discriminatory making its way through the state of Florida. Basically, it`s meant to curb those crazy teenagers wearing saggy paints. By the way, dagnabbit, look at the way these kids are dressing these days.

This is the video we`re showing here. This is basically the new fat guy video.

You know, whenever you have a story on TV about obesity, you see the same video of fat people walking down the streets with their heads cut off. For some reason -- there it is. For some reason, it`s totally OK to show fat people without their head. Showing their faces, well, that would be wrong.

Can you imagine being at home and going, "Holy crap, that`s me. That`s my shirt"?

If we could just get the really fat guy together with, you know, the really saggy pants guy, we could save a lot of space on our servers. I`m just saying.

Anyway, the National Association for the Advancement of Colored People -- nice title, by the way -- says, in essence, it will criminalize the wearing of saggy pants and, therefore, provide a new avenue between young people and the criminal justice system.

Well, I hate to be a truth sayer, but, actually, no. I mean, there are no criminal sanctions here involved whatsoever. I mean, you get a warning the first time, then you face suspension if you continue to ignore the school rule.

But here`s the great thing with laws as I see it. If you don`t break them, you don`t get punished. It`s amazing how it works.

The author of the bill, Gary Siplin (ph), says it`s pro-family, pro- education and pro-employment. What kind of racist hate monger would utter such hate-mongery racism like that? You know what I mean?

Yes, this guy. Yes, he must just hate black people. That`s my guess. Look at him.

Oh, my goodness. He`s black.

Look, here`s the deal -- pants serve a purpose. As I see it, they are designed to make, you know, my eyes not look at your junk. I don`t want to see it. I don`t care what color you are.

When somebody tells you, pull your pants up, don`t cry racism, don`t cry discrimination. Just pull your damn pants up.

Maybe it`s just me and the angry man who`s inside.

Well, if you missed anything, sign up for my free email newsletter at the all new completely redesigned glennbeck.com. You can get updates, transcripts, maybe a belt. Who knows? All at glennbeck.com.

From New York, goodnight, America.

Pull your damn pants up!

END