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Congress Grills Oil Execs; Oil Man Investing in Wind Power
Aired May 22, 2008 - 19:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
GLENN BECK, HOST (voice-over): Tonight, another public display of stupidity on Capitol Hill, as oil executives are grilled by Congress.
UNIDENTIFIED MALE: Is there anybody here that has any concerns about what you`re doing to this country?
BECK: This is going to piss me off, unless he was talking about himself.
Plus, oil man T. Boone Pickens, on what`s next for crude, and why he`s putting all of his money in wind.
And I`ve said it before. I`ll show you tonight. Why illegal immigration is modern-day slavery.
All this and more, tonight.
BECK: Well, hello, America.
As repetitive and uninteresting as it may sound, the fundamental laws of supply and demand are at work. That is what the president of Shell told Congress yesterday as oil executives were called to the Hill for the second time this year.
They`re being asked yet again to justify their profits as gas prices rise over $4 a gallon. Those -- those hearings have continued today.
So, here`s "The Point" tonight. I know this is not something you`re going to hear everywhere else, but this show is different. We, the people, deserve better than small thinkers and finger pointers that make up Congress. And here`s how I got there.
You know, I know it`s popular to hate the oil companies these days. I don`t like paying high gas prices at the pump any more than anybody else. You know, I just don`t understand when we stopped understanding capitalism.
If blaming the rich white guy that happens to be running Exxon and Chevron makes you feel better, or lets you grandstand in Congress, you know, so you can -- so you can pander for some more votes, you go ahead. Let`s talk about the truth here.
The cold, hard truth is, our energy crisis is not the fault of the energy -- of the energy companies. They are the ones who are trying to help. They have an incentive. They`ll make more money.
We need more oil in this country. And taxing oil company profits or trying to embarrass the executives is not the way to get it. California Senator Dianne Feinstein and Vermont Senator Patrick Leahy, oh, they love to righteously call them down and complain about the rising prices at the pump. And then they say what`s causing this?
You know what? You need to realize at the same time, they`re preventing those same oil companies from doing the necessary domestic drilling that will bring prices down.
I`m sorry, senators, maybe you`ve been out of the business world too long. You can`t have it both ways. You know, why not try remembering, for just a second, the American hallmarks of capitalism, and competition? I know they`ve gone out of fashion lately inside the beltway.
More domestic oil will drive the price down of foreign oil. It`s a neat little trick. Go back to the second grade and learn it.
So, tonight, America, here`s what you already know, but let me remind the people in Washington.
Illinois Senator Dick Durbin and New York Senator Chuck Schumer had two of the biggest mouths during the Senate portion of these hearings. Here`s Durbin playing the Americana card.
(BEGIN VIDEO CLIP)
SEN. DICK DURBIN (D), ILLINOIS: Does it trouble any of you when you see what you`re doing to us? The profits that you`re taking? The costs that you`re imposing on working families, small businesses, truckers, farmers? Does it trouble you when you say, you know, "If we take that extra billion dollars here, it`s right out of America. It`s right out of our economy."
Is there anybody here that has any concerns about what you`re doing to this country?
(END VIDEO CLIP)
BECK: You know, the balls on these people. Just shut up. I can`t take it. How these oil executives sat there all day yesterday and listened to this self-righteous nonsense. What they`re doing? Taking money out of the American economy?
By buying oil from overseas and not drilling here, we`re sending all of that money for each barrel or oil and we`re sending it over to countries like Saudi Arabia. Does Congress have any idea what they`re doing to this country?
Then it was Schumer`s turn. Then he piped in with this.
(BEGIN VIDEO CLIP)
SEN. CHUCK SCHUMER (D), NEW YORK: What is Chevron`s future plans in Burma, in the wake of the massive popular opposition to the military junta, and its initial refusal to accept disaster aid?
(END VIDEO CLIP)
BECK: What about -- what -- Senator, what is your plan in Burma? What is your plan in Burma? You`ve got to be kidding me. We don`t want to be bed in with Burma, but we`ll be in bed with Hugo Chavez? We`ll be in bed with Saudi Arabia? We`ll be in bed with Russia?
And then, he went on. He had -- he wanted to make sure to add this in.
(BEGIN VIDEO CLIP)
SCHUMER: But right now, refinery capacity is at 81 percent compared to 90 percent last year. Eighty-one percent would strike most people, at a time when the price of gasoline and other petroleum products is so high, is not very good and not very adequate.
This is not about building new refineries. This is the same existing refineries and the capacity they had.
(END VIDEO CLIP)
BECK: Of course. I mean, what would be better? Ten percent more in your refinery? Or a whole new refinery?
We haven`t built refineries in this country for 30 years, because the laws that Congress makes, they can`t be built. And, just for a little bit more icing on the cake, we have reduced those refineries since the mid-`80s by about 50 percent.
We`re not naive. You and I both know that Congress has a job to do, and they think that job is to do and say whatever they feel like to keep them in office. But oil companies and American entrepreneurs have a job to do. And that is to keep America running. And that`s going to -- it means it`s going to take a lot more oil and fresh energy innovation.
Listen up, Congress. You either lead, you follow, or you get the hell out of the way. If you`ll just stop making empty speeches full of senseless bravado, maybe you`d finally realize you don`t get to complain about the lack of progress when you are the ones blocking that progress. Get out of the way.
T. Boone Pickens is the CEO of BP Capital and author of upcoming -- the upcoming book, "The First Billion is the Hardest: How Believing it`s Still Early in the Game Can Lead to Life`s Greatest Comebacks."
OK. I`m -- I stay away from Congress as much as I possibly can. I can`t even watch these guys. But I`ve seen the clips. And Boone, I have to tell you -- are they this stupid? Are they reckless? Are they intentionally trying to destroy us? What is going on in Washington?
T. BOONE PICKENS, CEO, BP CAPITAL: I don`t know, but surely they`ve got something more substantive to do than what they`re doing, as far as the oil companies are concerned.
BECK: Give me -- tell me -- let people know. Out of all of the oil produced, how much of a role does Exxon play? Out of all of the oil produced every day?
PICKENS: Eighty-five million barrels is the number that`s produced globally.
PICKENS: Exxon`s part of that is a little over 2 percent.
BECK: So, we`re sitting here, we`re screaming over 2 percent, like they can control the price of oil, when really, they`re such a small player in the world global game. Where is -- who is -- who is really controlling it?
PICKENS: Well, the state-owned oil companies own in the world today, 85 million barrels. Seventy percent of it is owned by Saudi or Amco, P- Mex, Pertevesa (ph), the state-owned oil companies.
BECK: Congress said -- one of the congressmen said, none of you people are to leave here until you give us an answer on what is going on, why is gas so high? I had a lot of answers.
PICKENS: The answer is very easy.
PICKENS: Yes, OK. It`s 85 million barrels of oil produced every day, and the demand in this quarter is 86.4.
PICKENS: OK. So, the demand is greater than the supply.
PICKENS: That`s easy to see. That`s why I said, well, you can`t cover 86.4 with 85. So, you come out of inventories. All right, so, inventories are going down, the price is going up. And it`s that simple.
BECK: Can -- because they say, oh, if we drill offshore, which they won`t do; if we drill in ANWR, which we won`t do; if we go for shale, which we won`t do; if we convert coal to oil, which we won`t do; that`s not enough to make a difference.
Could we -- could we be a lot more energy independent if we aggressively went after all of the resources that we have here in America?
PICKENS: Glenn, let me tell you: a fool with a plan can beat a genius with no plan. I promise you that`s the case. We have no plan. We have no plan.
BECK: So why? Why?
PICKENS: All we keep doing is investigating and asking people. We`re importing 72 percent of the oil that we use every day.
BECK: But Boone, I hear this all the time. When I talk to people all across the country. They all say the same thing to me: "Glenn, it`s not this hard. Why is it this is happening?"
And that leads to conspiracy theories that, oh, the oil companies are stifling things, or this is going on. It`s not this hard. What should we be doing right now?
PICKENS: We should be working our way out of a horrible problem. The horrible problem is, at $125 a barrel, we are exporting $750 billion a year out of this country to purchase oil. That`s going to a few friends and a hell of a bunch of enemies.
We are paying for both sides of the war that we`re in. That`s it.
PICKENS: That`s what`s going on. We are being fleeced by the $750 billion.
So, OK, what can you do about it? We have -- something we should have done years ago. But the leadership was never in place to accomplish it. If you go back and look at the people that run for president, from back to Nixon`s time, Nixon said, "By 1980, we will not import any more oil."
BECK: I know.
PICKENS: Wrong. But everybody since Nixon forward has said, "Elect me, and we`ll be energy independent." It`s been just the opposite.
BECK: But didn`t we stop -- didn`t we stop -- when we were going to make coal to oil back in the `80s, the Saudis, OPEC crashed the price of oil. Because it`s a little thing called competition. They knew they -- we were serious about getting out of bed with them.
If we did that again and we were serious, wouldn`t that change the dynamics of everything?
PICKENS: There`s been one thing happened from that point to this point.
PICKENS: That is, they can`t overproduce anymore, because they don`t have the capacity to do that.
BECK: All right, well, that`s the other side of the argument, was, they`ll crash it, and it will be too expensive. Do you see us going back to $2, $3 a gallon?
PICKENS: No, no. Because...
BECK: That`s not really reassuring. I don`t like the way he laughed there. I don`t know about you, America, but when he laughed, it kind of scared me.
PICKENS: Let`s switch -- switch to their side.
PICKENS: If we had the finite resource that everybody wants, but we want it more than anybody else.
PICKENS: Because we`re importing 25 -- excuse me. We`re using 25 percent of all the oil produced every day.
PICKENS: Now, we`re importing 16 million barrels, and we use 21 million. So, we supply ourselves with five, import 16. We`re using 25 percent of all the oil, and we have 4 percent of the population. I mean -- somehow, looks to me like we -- our appetite`s way bigger than it should be.
BECK: OK. We`re going to get into a couple of other things.
By the way, in case you don`t know this gentleman, he`s the one who said oil is going to be $150 a barrel, and here we are approaching that.
Different vision for our energy future: wind-ergy.
And a reminder, tonight`s show is brought to you by Sleep Number Bed by Select Comfort. The Sleep Number bed is the one that counts.
BECK: Coming up, Democrats and Republicans, who always disagree on who should be paying more taxes, but in the end, it`s Uncle Sam. He`s going to take his 20 percent, no matter who`s paying.
So instead of arguing over who pays taxes, maybe Congress should just spend some time finding out ways to grow the nation`s economy, like getting out of our way and stop crushing the people who make our economy run. I`m just throwing it out there, something for them to chew on. That`s in tonight`s "Real Story."
Now, when you`re born with the name T. Boone Pickens, you can either be a cartoon character, a country music star or an oil man. T. Boone Pickens, you have just met, about to meet again here, decided on option No. 3. And his latest crude awakening predicted that oil would go to $150 a barrel, because, quote, "Producers are running out of it."
Back to the simple law of supply and demand. Remember, not only does America need more oil but China, India, coming online, sucking up all they can get.
China has doubled its thirst for oil in the last ten years alone. So, it looks like T. Boone Pickens was right. Oil is trading now at $135 a barrel. Oil futures are at $140 a barrel, and the sad reality is, prices are only going up. While Congress, OPEC and the oil executives continue to hash it out, T. Boone Pickens is putting his money where alternative energy is, wind power.
He`s just purchased 667 turbines to run what he says will eventually be a 2,500 turbine wind farm that will cost over $10 billion and power 1.3 million homes. What does it say when an old-school oil man bails on crude and takes to the air?
Joining me again is T. Boone Pickens, CEO of BP Capital, author of the upcoming book, "The First Billion is the Hardest: How Believing It`s Still Early in the Game Can Lead to Life`s Greatest Comebacks."
I want to talk to you about wind power here in...
PICKENS: Before you do...
PICKENS: OK, Glenn, the other day, somebody said, "Should we start identifying you as wind man?"
And I said, "No. Neither wind or gas man. I prefer oil man." And you did that. And I appreciate it.
BECK: Oil is where it all starts. You know what people don`t understand: oil is in everything. Every time I go to the store, and I buy a piece of meat, I look at the Styrofoam tray. I kind of like the fact that it`s all wrapped up. That`s oil. I mean, it`s everywhere.
PICKENS: And we`re importing it.
BECK: Yes. That`s crazy. All right. Let me go -- let me take you here for a second. You said oil was going to go up to $150 a barrel. And lo and behold, here we go. A lot of people say it`s because you`re basically -- you`re the E.F. Hutton of oil. You speak, people listen, speculators jumped in. Tell me if you buy into the -- this is all a giant oil bubble, and it`s just speculators making money.
PICKENS: Well, it`s not speculators. Speculators have nothing to do with the price of oil. There`s 85 million barrels, and the demand is greater than 85. So, supply and demand are in very critical balance.
So you put a speculator in there, what can they do? They can`t do anything. And, you know -- and they talk about value of the dollar, get the value of the dollar up, and it will make oil prices go down. That, too, is a myth.
BECK: You know, I -- because I believed that, that the value of the dollar, until the last couple of days, when the Fed has said, "OK, we understand. It`s getting bad. We`re going to stop cutting interest rates."
We didn`t see oil prices move down, which they should have, if it was tied to the dollar. So, you`re saying this is all just supply and demand, that`s it.
PICKENS: That`s it. Remember, I`m a geologist, not an economist.
BECK: Right. Real quick question on this. Something else that bothers me. Paying these oil executives all this money. I said today, I make a good amount of money. Not you, but I make a good amount of money. I couldn`t do that job. How many people could run Exxon? You can`t pay them, like, you know, $100,000 a year to run this company...
PICKENS: The thing about it is, Exxon is a valuable asset for this country, as is Chevron, as is ConocoPhillips, all of them. I mean, that`s valuable for us. We don`t have a state-owned oil company like gas problem for Russia, OK? We don`t. We have free enterprise system, capitalist democracy and all. And here they are. What they pay these people...
BECK: Is irrelevant.
PICKENS: And these people pay taxes.
PICKENS: I`m glad, you know, soak them for the taxes. Let them pay taxes if they`re going to make the money. They -- the oil companies pay the taxes, too. Talking about windfall profits tax, that`s unfair to the shareholders.
BECK: How much is oil going to be at the end of the year?
PICKENS: Maybe $150.
BECK: A hundred and fifty, which means how much at the gas pump?
PICKENS: We`ll see $150 before the year`s out. I won`t say at the end of the year it will be $150, but we will see $150 during the year.
BECK: Any idea how much that means at the gas pump?
PICKENS: Gas pump? Oh, you`ll be $4.
BECK: I`m paying $4.42 now. But I live in Crazy Town, USA.
PICKENS: Well, you`ll be $4.50.
BECK: Yes. All right. T. Boone -- we`ll be back with T. Boone Pickens here in just a second. We`ll talk about wind energy.
By the way, if you`d like to hear my take on peak oil -- that`s what you`re coming here for, isn`t it -- and 20 other big problems facing our country, it is never too late to pick up a copy of my No. 1 "New York Times" best-selling book, "An Inconvenient Book." After all, what a better gift to give your dad for Father`s Day than a solution from me on any topic? It`s "An Inconvenient Book," available right now at Amazon.com.
Back in a second.
BECK: Back talking to oil, wind, energy challenges facing our country with a man who knows them well, T. Boone Pickens, CEO of BP Capital, and author of upcoming book, "The First Billion is the Hardest: How Believing It`s Still Early in the Game Can Lead to Life`s Greatest Comebacks."
I just asked you in the break, how long before this breaks the back of our economy? And you made me break out into a sweat. You said we`re here. What do you mean by that?
PICKENS: We`re here. We`ve peaked on oil production in the world.
PICKENS: Now, we can continue to drill, and try to bring it up.
PICKENS: But we`re replacing the declining production every year of six million barrels. So before we get to 85, we`ve got to replace six.
BECK: Because it`s declining every year.
PICKENS: That`s right.
BECK: All right, so -- but my question is -- at what point do you think oil has to be before planes don`t fly and we can`t move trucks like we move trucks now? Our whole economy is built on cheap oil.
PICKENS: That`s right. And we`ve produced our oil. I mean, that`s why -- we peaked in 1970 at 10 billion barrels. Not we`re down to five. So, we peaked in `70. The world has peaked, I believe, probably in 2006 or 2007.
BECK: So, this is why you are in wind.
PICKENS: It`s one of the reasons. It is.
BECK: See, I read a lot about wind, and I get conflicting reports. First of all, how long do you think it will be before the environmentalists, say, call you a bird killer for all the birds these windmills will kill? Because I`ve already -- I talked about it on the air once, and I got a lot of people who are bird lovers who said that.
PICKENS: Well, I know they say that, but if you look at the speed of the turbine, and it`s located -- the hub is at 280 feet up. And then you have the tip on the radius, another 120, so -- it`s up high, and birds do fly at that. But if you`re not in a fly-way, you`re not going to be killing many.
BECK: Here`s -- I can`t remember what country it is that has a lot of windmills.
BECK: And don`t they import other energy to supplement this, because sometimes the winds don`t blow...
PICKENS: Of course. Look at who developed wind first. Most highly developed areas are Germany and Spain. They don`t have that much wind. We do. We have this unbelievable resource that`s right up through the heartland of our country. The land owners would like to have the turbines. It creates an economy that`s been missing in that part of the United States for years.
You`re going to see a rebirth all the way from Sweetwater, Texas. The wind capital will be Pampa, Texas, and all the way to the Canadian border.
BECK: Now, people tell me that you would have to have a row of wind turbines from New York to Florida all the way back and forth, I don`t remember how many times, just to power New York City. True or not?
PICKENS: That`s somebody that doesn`t understand, but more than that, that`s a negative thinker that wants to tell you, oh, that won`t work. Let me tell you, what we`re doing is not working. I can tell you that. Spending $750 billion a year for oil is not working.
BECK: So we should be building all kinds of alternatives, but should we also be drilling offshore? Should we also be in ANWR?
PICKENS: I don`t care whether you go offshore or not. It is not going to solve the problem. But it will help.
PICKENS: It would help. My dad used to say, "Son," he said, "it`s time to do something now, even if it`s wrong." And that`s where we are in this -- this mess that we`re in. We have to do something more.
BECK: T. Boone Pickens, thank you so much.
Coming up, why illegal immigrants working in America today amount to nothing less than modern-day slaves. Tonight`s "Real Story."
BECK: Last week, I brought you the incredible story of Irena Sendler. She`s the woman responsible for saving the lives of 2,500 Jewish children from the Nazis during World War II. I have to tell you, we`ve done a lot of stories, we`ve gotten a lot of mail on things we`ve talked about, but this was overwhelming. We decided to bring you her entire story.
There is so much more you need to hear about her. And we`ll have it for you in just a few minutes.
But first, welcome to "The Real Story."
Thanks to you, the backdoor attempt by our politicians to sneak a temporary amnesty program into the war supplemental bill in the cover of darkness has died now in the Senate. But the ridiculous theory that there are jobs that Americans just won`t do is still very much alive.
Yesterday, a bunch of our politicians who apparently weren`t invited to the oil executive inquisition decided to throw a press conference to beat up on moi. According to Congressman Joe Baca, I, along with a couple of other cable news hosts, trade in "divisive, inflammatory and often misleading information that only creates fear, hatred and stereotyping of immigrants."
Well, since they brought up the misleading information, Congressman, I would like to correct you here. My supposedly inflammatory comments aren`t about immigrants, they`re about illegal aliens.
Secondly, I would love to know how exactly I`m the problem, when it`s the so-called advocates like you who are financially enslaving the very people you supposedly are fighting for. Let`s dissect the whole "jobs Americans just won`t do" lie for a second.
Americans spend months at sea fishing for crab. Have you ever seen that? They drill for oil. You know how dangerous that is? Americans clean bathroom, crime scenes. Americans man tollbooths, embalm bodies, and inspect sewers.
But you expect me to believe that somehow or another, they won`t work in a poultry plant or pick oranges off of trees? B.S.
"The Real Story" is, the companies hiring illegal aliens do not want Americans working there. And it has nothing to do with wages.
I want you to think about this. Illegal laborers mean there`s no workers comp. There`s nobody to claim workers comp. No age, race, or sexual discrimination lawsuits. They`re not worried about attorneys.
There`s no health care costs, there`s no unions. No demands for raises, vacations, bigger offices, none of that.
Illegal immigrants are the perfect employees because they`re not employees at all. They`re corporate slaves.
People always try to say that, as a conservative, I`m some black- hearted racist who only cares about big business. Oh, he`s in bed with big business. Again, bull crap.
I believe that any business that knowingly hires illegal aliens should have the bat snot fight (ph) out of them. And if they did it again, they should be shut down and their CEO should be lead away in handcuffs.
Does this really sound like the words of somebody who`s in bed with big business?
Let me ask all of you open borders people something. Is it compassionate to look the other way while some of those who came here to work are forced to work in dangerous jobs and live in shift houses where they rent dirty mattresses just for a few hours every day so they can sleep? Is it compassionate to pretend that the trash-filled drop house that was just raided in Los Angeles wasn`t filled with 57 illegals, including young children whose cries at night were the only thing that stopped their mothers from being raped?
Is that compassion? If it is, I am proud to allegedly have none.
Richard Jones is the sheriff of Butler County, Ohio.
Sheriff, tell me some of the things that you have seen. My thesis here is, this is modern day slavery. Anything that you`ve seen to back that up?
SHERIFF RICHARD JONES, BUTLER COUNTY, OHIO: Oh, Glenn, you are absolutely right. I`ve witnessed where they`ll have seven, eight families in a household, they rent the houses out to them by the person, the rent is enormous.
We just had a case here in Butler County, Ohio, where they were selling cars to illegals. They were giving them fake IDs. They were charging for -- basically, a $1,000 car was costing them $8,000. And they would buy here, pay here.
They would never get them paid for. It`s not the American dream that I know.
BECK: OK. And the reason why they are doing it is because they can`t go to you.
JONES: No, they have no say so.
BECK: That`s right.
JONES: They come and complain to us that they are being, they just -- get out of here, we`re going to call the police. You have no say so. They go to the hospital with injuries from jobs that they`re not supposed to be on.
BECK: Oh, you know what, Sheriff? I have...
JONES: And we have to fix them. It`s out of control.
BECK: ... to tell you, I heard about a company where somebody`s hand got into a grinder. It was an illegal immigrant, and their hand went into a grinder. You know what the company did? The company called ICE and said, my gosh, we just find out we have an illegal immigrant here.
That way they didn`t have to pay for any medical cost. This is horrific, horrific kind of stuff.
JONES: Hey, I drove by at night and seen where they have these people. They drop them off in vans. And one will speak English, and they`ll work from daylight to dark. They work with flashlights.
And then they just fire them. They don`t even pay them for the wages they have coming. It`s exactly what you said it was. They kick them out.
There`s 16,000 that are smuggled into this country each year for the sex trade, women and kids. Can`t get anybody to complain about that.
Nobody cares about these people that are being mistreated, and they are being abused. And it is about the almighty buck. And it`s cheap labor with no say so whatsoever. None.
BECK: Have you busted the sex trade ring up...
JONES: We had a prostitution sting, and we busted an individual that had women that they were bringing in from other countries. They were here illegally, and they were servicing other illegals, and it -- just the illegals.
It`s a very close-knit community. And the people that often -- that take advantage of these people are people from other countries. They just speak more English than others.
They rip them off, they drive them to work, they charge them too much. They bring them in large vans. The houses, the food -- they cash their checks, they have no say so.
Then they take them to squander where they live, and then they kick them out, they fight. And it`s -- the police, it`s just totally, totally out of control. It`s just not Mexico.
BECK: No. I know.
JONES: I`ve had them from -- Mongolians, they`re from all over the world. Russians.
BECK: I know.
JONES: A majority of them here in my state, which is Ohio -- and the Buckeye sheriffs are doing everything they can to fight it, as we speak, to get legislation passed, because our state representatives and our federal representatives will not do anything about -- our Congress and our Senate.
BECK: I know. Sheriff, thank you so much.
JONES: Hey, thank you.
BECK: Now, what if I told you that there has been an incredible economic breakthrough that will reduce everybody`s taxes while increasing the government`s revenue? Because that`s what everybody is trying to do. We need more money. Cities are going broke.
Well, unless your name is Barack Obama, you`d be pretty happy, right? Well, the breakthrough actually happened about 15 years ago. But since it doesn`t help any politician justify their job, it`s just been ignored.
Well, here it is. "The Real Story" is, the best way to increase the government`s revenue is not by growing taxes but by growing the tax base.
1993, economist Kurt Hauser, he found that for decades now, the government`s tax revenues have remained at 19.5 percent of our gross domestic product. Which is a fancy way of saying the total size of our economy.
I want to show you a chart here.
Put the chart up.
No matter what the top tax bracket has been, no matter what the economic climate has been, no matter what party has been in power, the government has collected about 19.5 of GDP. Not a range of 15 to 25 percent, but exactly 19.5.
So, what does it mean? Here it is.
Basically, tax revenue, directly proportional to the size of the economy. You increase the size of the economy, tax revenue increases with it. You decrease GDP, tax revenue goes down.
Now, if you think about it, it makes perfect sense. Not in Washington. When you increase taxes, there`s less incentive to produce, to invest, to expand, to create jobs. All the things that grow the size of the economy.
With lower taxes, there`s more money there. More money to be invested, more people are hired. And GDP increases.
So, while Obama, Clinton and McCain all fight about the Bush tax cuts and the carbon taxes and the windfall taxes and the gas taxes and every other kind of tax that they can shoot out of their butt, let`s just remember one simple truth. You don`t feed a lot of hungry people by slicing their pie into smaller and smaller bites. You learn to bake a bigger pie.
Kurt Hauser is an economist and consultant with Wentworth, Hauser and Violich. And he is the man who first published this data 15 years ago.
It must drive you crazy when you look -- because I know it does me -- when you look at people in Congress are doing and you know the truth and no one will admit the truth.
KURT HAUSER, ECONOMIST: It`s very frustrating, indeed.
BECK: So, tell me exactly what this means. Should we be at a 19.5 percent flat tax or what?
HAUSER: Well, the work that I did took the economy about five quarters before tax change, and then five quarters after a tax change. And I found that when taxes were raised, the economy grew at a slower rate after a tax increase. And when the tax rates were lower, the economy grew at a faster rate than the prior period.
And we`ve had marginal rates, as you said, from 91 percent down to 28 percent. We were moving toward a flat tax in the 1980s, top marginal rate in 1980 was 70 percent, 1987, 28 percent. Revenues -- the economy grew above tread line in that period, and the tax revenues stayed at about 19, 19.5 percent of GDP. And we collected 50 percent more in taxes in that period.
BECK: OK. So this is the same thing you`re saying when, in World War II, the top tax rate -- and I contend that`s why we were in the Depression so long, one of the reasons -- the top tax rate was like 90 percent. You`re saying it was still 19.5 percent back then?
HAUSER: My data doesn`t go back to World War II. It starts at the end of World War II and comes forward through 1996. And then it`s been brought up to date, to 2007. And the same relationships occur in terms of the taxes collected, a very narrow band, around 19.5 percent.
BECK: Kurt, why is nobody talking about this? Why -- is it just because it doesn`t help get anybody elected?
HAUSER: I think that there`s a very vocal faction out there that believe in redistribution of wealth. Take from those that make it and give it to those that don`t make it. And that results in this policy of soak the rich. Tax the rich.
HAUSER: Punish the rich. Well, you don`t make poor people rich by making rich people poor.
BECK: Yes. I`ve never worked for a poor man.
HAUSER: That`s right.
BECK: Kurt, thanks a lot.
That`s "The Real Story" tonight.
Coming up, a follow-up story that we brought you last week about Irena Sendler. This is an amazing woman who rescued 2,500 Jewish children from certain death at the hands of the Nazis during World War II. There is much, much more to her story that you need to hear, and we have it for you, next.
BECK: Last week I told you about an extraordinary woman, Irena Sendler. She just recently passed away.
She was born in Warsaw, Poland. Irena rescued 2,500 Jewish children from the Nazis in World War II.
Our story was the first time for apparently many viewers that they had ever heard of this woman, and my gosh, the e-mail that we have received from people asking to know more. Well, one of the letters that I received was from Liz Hutton. She joins me now.
She is proud to have known Irena Sendler, and helped raise thousands of dollars needed to help care for this remarkable woman in the last years of her life.
Liz, thank you so much for writing in.
LIZ HUTTON: You`re welcome.
BECK: And what an incredible connection you have.
BECK: How did you cross paths?
HUTTON: Well, we started this as a National History Day project, and that`s just simply an extra curricular activity for school. And our teacher, Mr. Kenard (ph), had several ideas for History Day projects. And that was one of them.
It was a `94 "News and World Report" issue that mentioned other Schindlers, and she had a small paragraph about her, what she did, and that she saved 2,500 children. And at first we though this had to be a typo, because we hadn`t heard of her, and that was obviously more than Schindler had saved. So we decided that we would tackle this project.
And we tried research on it, and we only came one two Web sites off the Internet, which was (INAUDIBLE) and the Jewish Foundation for the Righteous. And we got into contact with the JFR, and they gave us a lot of information, eventually told us that she was still alive, and gave us her address to write her.
And they didn`t tell us whether or not she would write us back, so we decided, you know, well, we might as well try. So, we wrote her a letter, told her who we were, what we were doing, and just wanted to know more about her.
And we didn`t really think we`d get a response back. And about two months later -- this would be about May or so in 2001 -- we got a letter back -- or 2000, excuse me. We got a letter back from her, and it was the most beautiful letter. At the very beginning, it said, "To my dear and beloved girls very close to my heart."
BECK: Wow. She -- a remarkable woman, risking her own life, tortured by the Nazis. They broke both her legs, both her feet. And yet, nobody seems to know her name. Why is -- how could this woman be invisible for so long?
HUTTON: Well, that`s a great question, Glenn, and that`s one we get all the time. But you have to kind of look back in history and see, as soon as the war was over, communism took over and she was put on a blacklist, on a communist list. So, for those years, she obviously still had to keep a low profile, and there`s still a lot of anti-Semitism in Poland.
You know, it`s everywhere, just like it is here, too, you know. So it`s just -- with those factors, it`s just hard to get someone known like that.
BECK: Is she known in her own country?
HUTTON: She is now. And she told us that the other girls who went on this last trip in May, just right before she passed, she told them that because of our story, and how we have kind of uncovered it, her country knows about her now.
And that was simply really what she wanted. And it wasn`t necessarily about her. She wanted to let everyone know about what her collaborators did.
She had about 20, 25 people that helped her, and she really wanted them to get known, too. Because they also are somewhat living in poverty. Some of them can`t afford simple medications or even a wheelchair. And that`s kind of what we`re raising our money for now.
BECK: You know, we -- she`s a woman who lost the Nobel Peace Prize to Al Gore. And I can`t imagine that that bothered her at all. It kind of bothers me.
She was also taken care of by one of the kids that she smuggled out actually as an infant. She took him out in a toolbox.
BECK: Did you meet or did she meet many of the 2,500 children?
HUTTON: She had tried to contact a lot of them, especially right after the war. We have met several. We also have a partial list, because we get e-mails all the time saying, my brother, so and so, was in the ghetto. Do you think he could have been saved by Irena?.
BECK: What is the Web address of your project?
HUTTON: It is IrenaSendler.org.
BECK: OK. It`s really -- Liz, what an amazing story. And thanks for help getting it out.
HUTTON: Thank you very much, Glenn.
BECK: You bet.
Back in just a minute.
BECK: Oh, well it`s that time of year again when the flowers bloom and global warming pushes the temperature .7 degrees warmer than our great grandfathers remembered it a hundred years ago. And then I get to leave this tropical island of Manhattan to places in far distant lands where I`m -- you know, I`m not constantly pelted by produce by strangers on the street like I am here in New York.
Yes, it`s time for our summer tour. This year, it`s called "Beck `08: Unelectable."
Starting June 7th, tickets go on sale -- in fact, they are on sale now at glennbeck.com. We are going to be in Atlanta,; Oklahoma City; Harrisburg; Portland -- that`s Portland, Maine; Syracuse, Springfield, Massachusetts; Akron,; Houston and Columbia.
Now, in case you missed it, here is a little taste of our tour from last year.
(BEGIN VIDEO CLIP)
BECK: She saws the arm of the couch off. Then she goes back into the other room, she gets a Dustbuster, because she may be nuts, but she`s neat.
This is when Spock (ph) decides to say, "Honey, what the hell did you just do?" She says, "Well, you know, Dear, we just got this couch, and every time I lay down on this couch, the arm of the couch blocks the TV by about this much."
My father says, "Honey, did you ever think of moving the TV or the couch?" "No."
(END VIDEO CLIP)
BECK: It`s storytelling and so much more. I can guarantee I will be sweating even more this tour.
It`s called "Beck `08: Unelectable," where I show what you a horrible candidate I would be, giving the most politically incorrect campaign speech in the history of America. I`ll be hammering the Democrats, hammering the Republicans, and every other moron associated with this election process.
It`s actually one of my favorite things to do every year because I actually get to say hello to you in person.
It starts June 7th in Atlanta; the 9th in Oklahoma City; 10th in Harrisburg; the 11th in Portland Maine; the 12th in Syracuse; 13th of June in Springfield; and the 14th, I`ll be in Akron. Then we go off to Houston and Columbia in July.
Tickets are available at glennbeck.com, or your usual ticket outlets.
We`ll see you there.
From New York, good night, America.