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Government to Bail out Fannie Mae, Freddie Mac; McCain Tells La Raza to Trust him on Immigration; El Paso Hospital Treating Mexican Gunshot Victims
Aired July 14, 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, our old friends, Fannie Mae and Freddie Mac get a little government assist. You know, just in case. The bank bailout keeps on coming. Why are your tax dollars on the line for government and corporate irresponsibility?
Plus, McCain speaks out to the radically left Hispanic rights group La Raza, otherwise known as "The Race." He`s telling Latino voters, trust him on his position on the immigration reform bill. Now, if he`s saying that to La Raza, how do the rest of us trust him?
And oil prices continue to make us all worried about making ends meet. "The Real Story" tonight from a guy who`s in the position to know what the heck is really going on. Key word, former, Shell Oil president John Hofmeister. Tonight.
BECK: Well, hello, America.
You know how they say that you gain a lot of weight when you go on a cruise? Absolutely true. Trust me, I know.
Back from vacation and not a minute too soon. The financial markets continue to plunge, all thanks to irresponsible borrowing and lending and their devastating effect on the housing market. The problem now is so huge that two of the biggest institutions that fund and guarantee mortgages, just like yours, Fannie Mae and Freddie Mac, are now at risk of failure. Wait until you hear the scope of this problem.
The government can`t allow that to happen. It`s too important, too big to fail. Fannie Mae and Freddie Mac see about 70 percent of all home mortgages pass through their hands, and between the two of them, they own or guarantee mortgage debt totaling $5.2 trillion. That is almost half of all of the U.S. home loans.
Treasury now has decided to step in and will prop up the loans. That`s where the rest of the media is going to leave this story. This where we begin.
"The Point" tonight: these are not banks; they`re government institutions. We need congressional hearings: not the usual kind where Congress calls people in. We, the people, need to call the congressional members and find out how our politicians screwed things up so bad, and they must be held accountable. And here`s how I got there.
There are plenty of present-day conditions that remind me of the Great Depression of the 1930s. Coincidentally, that`s when Fannie Mae was established as part of Roosevelt`s New Deal. Thanks for that. The idea was to provide local banks with federal financing to underpin the struggling housing market.
Then, in 1970, the government established Freddie Mac to provide some competition to Fannie. I don`t think Congress understands the word "competition." That genius move, at least where I sit, is like Ford introducing the mustang to compete with the Taurus. That`s not competition: that`s insanity.
Freddie and Fannie now account for 90 percent of the U.S. secondary mortgage market. It`s bad enough when cowboys like Bear Stearns act recklessly and screw things up and leave you holding the bag.
But remember, Fannie and Freddie are not private banks. They`re chartered by our own government. Considering that, kind of a miracle that they didn`t fail years ago, isn`t it?
Get this: last September, the president and chief executive of Fannie Mae pleaded to have restrictions eased on its ability to purchase even more residential mortgages. That was 10 months ago. Then back in February, I reported that people like senators Chris Dodd and Chuck Schumer were in favor of loosening restrictions. They were pleading for those restrictions to be loosened. That was then.
Today, Senator Dodd, making the rounds, blaming everybody except him for the mess.
(BEGIN VIDEO CLIP)
SEN. CHRIS DODD (D), CONNECTICUT: This didn`t need to have happen. Again, the failure to have regulators doing their job four and five, six years ago, when they should have been doing it. And this administration has to bear that indictment by history. This did not have to happen.
(END VIDEO CLIP)
BECK: Yes. I agree with that part, didn`t have to happen. But Senator, I think you`re hoping that nobody remembers that you are the head of the Senate banking committee. Yes, yes. Inconvenient truth, isn`t it?
So tonight, America, here`s what you need to know. Not only do we have politicians to blame for this gigantic screw-up, but they`re looking to blame everybody else. And if you don`t pay attention, they`ll get away with it.
The cherry on top of this whole disaster is that Congress now has taken one more step towards nationalizing the banking industry, something I`ve been warning you about for months. This is -- I really think, man, we are one step closer to textbook fascism. It is around the corner, America. Wake up. Stay tuned.
Whether it is the airline industry, or the banks, or those big, bad energy companies, suddenly, the government is going to have to go in and making sure that everything is OK because these industries are just too important to fall.
John Tamney is the editor of "Real Clear Markets" and senior economist at H.C. Wainwright.
John, I read two stories today. One was from -- this is just the ramifications of it. This one comes from Sean Egan. He`s the head of credit ratings from Egan Jones. He says if Fannie or Freddie failed, it would be far worse than the fall of Bear Stearns. It could throw the economy into a depression.
The other one comes from the S&P report. They say their doomsday scenario would cost taxpayers more than $1 trillion. They say if the government bailout of Fannie or Freddie happens, it could force the agency to lower its rating on the creditworthiness of the United States. Those both sound a little frightening.
JOHN TAMNEY, EDITOR, "REAL CLEAR MARKETS": Yes, it`s a little scary. The problem with the government`s backing certain organizations like Fannie Mae and Freddie Mac, is that investors, of course, feel that their investments are safe.
So entities around the world have invested heavily in Fannie Mae and Freddie Mac debt. And the result is, if treasure says we`re not sure that we`re going to back this debt, you`d see a worldwide cascade of stocks and companies going out of business because they`re all tied into this.
BECK: OK. But OK, so that`s the reason to do it. But on the flip side of that, if these things would collapse, we would have to put that money down on our -- basically, on our credit report that we owe all this money, our -- our federal debt or deficit would double overnight, and then we would -- we`d lose our credit rating, which would also destroy us.
TAMNEY: Oh, yes. Yes. Suddenly, you`d see -- you`d see that, for us to go to the market and actually raise capitol, for Treasury to go into market with it`s treasury bills, suddenly, it would cost a lot more. And I don`t necessarily think that`s a bad thing, but we`ve got to get realistic about issuing all this debt. But that -- those are some of the results.
BECK: Wait, wait, wait, wait, wait. Because I just asked this in my office upstairs. I was talking to somebody about this, and I said, you know, what are -- what are the solutions here on some of these things. And we were talking about, you know what? You`ve got to take your medicine. It might not be a bad thing to take -- as painful as it`s going to be, to take the medicine, to be able to recover, or the patient gets sicker and sicker.
TAMNEY: I`m not against us taking the medicine. I`m just talking about what would be the big result. This is a big shame. This is discrediting capitalism. These people out there assume that, in fact, what`s happening in the housing lending markets is capitalism. But as you pointed out, this is big government capitalism, where they have a big role.
So in my perfect scenario, we would let Fannie and Freddie fail and wake up to the fact that we cannot have the government inserting itself into all sorts of industries. So that`s what I would like. I`m only talking about what could be the near-term implications. Long term, this could be a good thing.
BECK: All right. John, thanks a lot.
Now, talking about Fannie Mae and Freddie Mac, I can`t leave out IndyMac. This, one of the nation`s largest home lenders, but late last week they were taken over by federal regulators and transferred to the FDIC in what could tern out to be the most expensive bank failure in history, for which the office of thrift supervision -- I can`t believe that`s an actual government office -- but they are placing part of the blame on New York senator, Chuck Schumer, quite possibly one of the dumbest men alive.
Brent Arends is the personal finance columnist for the "Wall Street Journal." Agree or disagree that Chuck Schumer could be one of the dumbest men alive?
BRENT ARENDS, PERSONAL FINANCE COLUMNIST, "WALL STREET JOURNAL": I don`t want to go -- I don`t want to go there. But it certainly -- it`s certainly the case that something...
BECK: Name somebody worse. When it comes to this kind of stuff, he issued a letter...
ARENDS: It was not a smart move. The letter he issued on June 26, essentially questioning the viability of the bank, I mean, even the regulators said, you know, there was a run on the bank that followed this.
Of course, if people -- if people kept their deposits at banks below $100,000, then there would be no reason to have a run on the bank, because you`re guaranteed up to $100,000.
And if you want to keep $200,000 in the bank, keep it in two banks -- go across the road to another bank and deposit the second amount.
BECK: But that`s such a hassle for people with $200,000.
ARENDS: I mean, this is a California thing. I`ve got to drive across the freeway.
BECK: I know. It`s such a hassle.
ARENDS: I`ll just keep it all in one bank, and then I`ll panic the minute Chuck Schumer says your bank`s in trouble.
BECK: Right. I panic any time Chuck Schumer even speaks.
All right. Let me ask you this. Here`s Chuck Schumer. He said -- he -- you know, he wanted Fannie Mae and Freddie Mac to expand the ability to loan. He says these companies have a responsibility to use this flexibility to assist those homeowners most in need, period. That`s what he was saying just a few months ago. Now, everybody in Congress is saying, "How did this happen?" They did it.
ARENDS: Well, you know, it`s -- you look back to -- federal interest rates were keep at 1 percent all those years, and Freddie and Fannie essentially subsidized mortgages and kept them. They allowed bankers to write mortgages at cheaper and cheaper rates than they should have done. Those two really helped fuel the housing bubble. And that`s where -- that`s essentially what got us here today.
BECK: Wait a minute. Wait, wait, wait a minute. Wait, wait. They did much more than that. This bank in California, in particular, they gave loans out -- try to on for size, America. They -- they allowed you to come in and say, "I don`t have a job. I don`t have any income. I don`t have any assets..."
ARENDS: This is ninja mortgages. They call them now -- now the term is the ninja mortgage, because these people had no income, no job. I have no sympathy for the shareholders in these banks, although I wish that the executives had to give back all the money that they`ve earned over the years.
BECK: These people should be in jail.
ARENDS: I will not disagree with you on that. I wrote a number of things about 18 months ago. When this all started falling apart, I read a number of columns about bank executives who have been cashing out some of the mortgage banks. New Century Financial was one them. They made...
BECK: Why are they not going to jail? This is criminal. It`s criminal on the government`s part. It`s criminal on the banking part. It`s criminal on the people who came in and thought that they could get $1.7 million and not have a job.
ARENDS: That is exactly where a lot of the focus needs to be. There needs to be accountability. People need to really -- people who are really responsible need to feel a lot of pain, and you know, we need to hold these people accountable.
BECK: It won`t happen. It won`t happen.
ARENDS: Well, you know -- I`m getting old and cynical.
BECK: No, come on. Tell me. Who`s going to -- you know what? I mean it. I think the people should have the real people`s court. We should hold these people in Washington -- they`re always dragging executives in front, "why don`t you" -- why don`t we, the people, drag these people in front of us and say, "What the hell were you thinking?"
ARENDS: I agree.
BECK: OK. Solved. Brent, thanks a lot.
Coming up, John McCain speaks to the way, way, way, way, way, way left, the Hispanic rights group La Raza. He says, "Trust me." I think they should. Which is exactly why I don`t think I should and neither should you.
Plus, Barack Obama`s new ad criticizes McCain`s energy plan, saying it will take seven years to produce more oil. Is seven years worse than never? Find out in tonight`s "Real Story."
BECK: You know, coming back to work on Mondays is always interesting to me, because I reflect on all of the conversations that I had with my friends, you know, in front of a barbecue or whatever. And they never reflect what the media is saying.
None of my friends -- I don`t know about you -- are asking if gas prices are going to continue to go up. The question is, how much are they going to go up? And the bigger mystery, at least with my friends is why? Why is no one doing anything?
Well, tonight, we may have some answers. Former president of Shell Oil in tonight`s "Real Story." Key word, former, president of Shell.
But first, during the early days of the primaries, it was John McCain`s amnesty-riddled immigration policy that hurt him with the Reagan Republicans and old-guard conservatives. Well, now that he`s the GOP presumptive nominee, McCain is hoping his views on immigration don`t get lost in translation.
So today, with the goal of bolstering support, McCain addressed the National Council of La Raza. La Raza, otherwise known as "The Race." What did McCain say to these people? Basically, he said, "Trust me." He feels he`s earned some street cred.
Well, since he almost committed political suicide by co-authoring insane immigration bill with Senator Ted Kennedy, McCain said that the key Hispanic voting bloc has the best shot with him. La Raza may be buying what McCain is selling, but if they do, should we?
Jim Geraghty writes the Campaign Sport blog for "National Review" online.
Jim, tell me about La Raza. A group called "The Race."
JIM GERAGHTY, "NATIONAL REVIEW" ONLINE: Glenn, I`m at the point where I think now we have to take our small victories where we can. And for me, it was a small victory that McCain gave the speech in English today.
Well, this -- you know, it`s one of those things where immigration had turned into that awkward issue that you don`t talk about at the family dinner table.
GERAGHTY: When it came to the Republican base and to John McCain. But as he got into the general election, he had a choice when it came to invitations to groups like this and LULAC and a couple of other -- groups with similar views on the issues of illegal immigration. He can either turn them down and then get pilloried for it and you know, his already low support numbers amongst Hispanic voters can go even lower. Or he can go before them and try to make the case for himself. And that`s basically what he did today and I think we`ll see more of.
He already has an ad up on the air in three states with high Hispanic populations, all kind of touting his response to a comment earlier in the GOP primary, where he kind of gave a bit of a verbal smack-down to Tom Tancredo, emphasizing the contribution of Hispanic-Americans have made and how they served their country for...
BECK: Has anybody questioned -- I have never, ever once questioned the Hispanic-American and what they have brought to this country. I`ve never, ever once questioned any immigrant that comes in the front door. In fact, I encourage them to come in the front door to remind us lazy Americans what we`ve got here. What does this mean with John McCain`s ad?
GERAGHTY: Well, Glenn, with answers like this, he`s running well ahead of the straw man involved in recent polls.
BECK: And you say nobody`s making this argument.
GERAGHTY: Absolutely. But it`s one of those things. Look, here`s the thing. The Republican brand is very badly damaged amongst all kinds of voters, amongst the Hispanic community in particular. So what he`s got to do is kind of reestablish his bone fides. He`s got to get them listening again.
And so by showcasing this moment in which he kind of stood up to Tom Tancredo and said, "Hey, let`s not paint with too broad a brush. Or let`s not get into anti-Latino sentiment," you know, this kind of establishes his street cred. Or at least that`s the thinking behind this ad.
But I also know that, to a certain extent, even if, even amongst other groups who may not agree with the National Council of La Raza or other organizations, they don`t necessarily want to be seen as supporting a racist or xenophobic or nativist candidate. So to a certain extent, this is also...
BECK: Wait a minute. Wait. Let me just get this straight. So, John McCain knows that people don`t want to support a racist, right? Which I agree with. I don`t want to vote for a racist either. So, by proving that he`s not a racist, he goes to speak to an organization called "The Race"?
GERAGHTY: Indeed. You know -- you know, there are times where I do keep looking around for Rod Serling, to see if we are actually living in the twilight zone.
BECK: Man. We are.
GERAGHTY: This is one of those things where he has to, you know, reassure the soccer mom vote, and say, look, I would never associate with these types. I would never associate with, you know, all of the hatred of other people, all the other things that make small town Pennsylvanians so bitter, Senator Obama.
BECK: I`m going to have to tell you, I`m so sick of this argument. I am so sick of the people on the other side trying to paint people who would like to end modern-day slavery by forcing people to live in the shadows at the -- at the wealth expansion of these global corporations. I`m tired of being painted as a racist on that.
Jim, thanks a lot.
BECK: Coming up, we`re going to talk about Iran. You know, if they`re good at one thing, they`re good at freaking the rest of the world out. I`m going to talk to one best-selling author who says we should be, and he didn`t really want to come to this conclusion.
Then, you know, the border problem is getting worse when El Paso hospital starts using the same security scale as the homeland -- Department of Homeland Security. Mexican gunshot victims are sending the immigration issue to code red. Oh, racists look out. That`s coming up.
BECK: Well, immigration advocates love to hide behind the little poem on the Statue of Liberty base: "Give me your tired, your poor, your huddled masses yearning to breathe free." Where does it say, "Give me your Mexican gunshot victims?"
That`s what`s happening in Thomason Hospital in El Paso, Texas. That`s what they`re dealing with. You`re not going to believe this. They`re now under maximum security this weekend as another wounded Mexican police officer came to the U.S. for treatment.
The hospital`s president says, "We haven`t accepted these patients, but we have to treat them under our federal law." From now on, this American hospital now has to use the homeland security scale to assess the threat level as a hospital, because the drug cartels are coming over the border to kill doctors who will treat Mexican police officers.
Mike Cutler is a former INS special agent and senior fellow at the Center for Immigration Studies.
Mike, this is -- this is craziness that nobody`s talking about this.
MIKE CUTLER, SENIOR FELLOW, CENTER FOR IMMIGRATION STUDIES: Yes, so much craziness. By the way, Glenn, as always, thank you so much for having me on.
BECK: You bet.
CUTLER: You know, the bottom line is that the folks coming across the border aren`t only coming to wash dishes and mow lawns. We have no idea who`s coming across the country. And in this case, we`ve got wounded police officers. But by the way, those cops are still in danger, which is why they`re had to tighten up security at the hospital, because the killers that shot them still want to kill them.
BECK: Right. And that`s why they`re not going over to Mexico.
BECK: Because Mexican has their hospital shot up if you treat Mexican police officers.
CUTLER: That`s exactly right. And understand why this is happening. Drug cartels have become so powerful, because they have so much of our money because we`re not stopping the flood of narcotics coming across our border. And then we train their people.
Look at the Zetas. This is a bunch of Mexican cops and soldiers. We taught them. We armed them. He instructed them, and then they went over to the bad side. And they`re the ones that are behind so much of this violence. And I fear that what`s happening in one town right now along the Mexican border may soon happen across the whole border and then will head into the interior of the United States.
BECK: Yes, I mean, it`s not -- on tomorrow`s program, I hope to bring you a story about how we`ve given $1.6 million to the Mexican government to fight this, but we won`t give $100,000 to our own sheriffs in the border towns to up their -- to up their weapons.
CUTLER: We also, by the way, not even telling the American people live in the ice age, as well. They declared that the national security information. I mean, it`s an outrage. They`re hiding behind this smoke and mirror game.
BECK: OK. Let me give you something. This comes from the -- this comes from the head of Mexico`s intelligence service.
BECK: He says, quote, "Drug traffickers have become the principle threat, because they are trying to take over the power of the state. What he`s talking about here is that Mexico is on the verge of collapse, that the government is on the verge of collapse. Let me ask you this.
BECK: How did that statement happen last week to our -- about our neighbor, and nobody in the media`s following this story?
CUTLER: Look, they`re not following lots of stories -- they`re not following the fact that the guy that killed one of our border patrol agents by intentionally running him down was released because our country apparently never made the proper request for extradition.
Our country is so determined, so hell-bent, it would appear, on not interfering with the flow of illegal aliens and, consequently, with the flow of narcotics across the border, that the American money going into Mexico has enriched the coffers of these drug cartels that want to destabilize the Mexican government and destroy it.
We`re talking about building democracies in the Middle East. How about worrying about the democracy right on our southern border?
BECK: Mike, thanks a lot.
I have to tell you, I`m wondering how long we`re going to be able to bring you these kinds of stories, quite honestly, in America.
Tonight, "The Real Story": oil and gas prices. A candid conversation with the former president -- former president -- of Shell Oil. Don`t miss the frank conversation, next.
BECK: Coming up, if Iran is going to be able to make nuclear weapons sometime in the next four years and Barack Obama is the president elect, will Israel just sit back or will December be a very good time to avoid the Middle East?
I`ll introduce you in a couple of minutes here to somebody who says he has the answer.
But first welcome to the "Real Story," last week I receive an email that, surprisingly, was not about cheap Viagra which you`re going to buy the book now or giving my checking account number to a Nigerian royalty for a change -- which I have done and I`m expecting to be very wealthy soon. It was actually sent out by Delta and it was signed by the CEOs of 12 of the largest U.S. airlines.
The email said that the high oil prices are causing them thousands of jobs and hundreds of flights. You know things we are already know but what was unusual about this email -- I don`t know if you got it too. It was actually -- they were singling out who is allegedly responsible for all of this mess. Wait for it, the oil speculators.
The CEOs claim that the nation would just band together, we could stop these evil traders and oil prices might drop $30 to $60 a barrel. Ok, that`s good. Like that. Ok is it true?
Well, I might not be an economist, but I am a thinker. I understand business a little bit. I understand supply and demand. I understand the idea of getting reward when take a risk, that`s why I`m pretty confident that tonight`s "Real Story" is that the only people who are complaining about the speculators are those who have speculated incorrectly.
If speculating was a license to print money, why aren`t we all doing it? The truth is, like a casino, more people lose at it than win. For example, CEO of Southwest Airlines, likely doesn`t have any were near the issue as speculators the Delta does that`s because Southwest speculated. They locked in 70 percent of the fuel cost at $51 a barrel. They now pay $2 a gallon for fuel.
That`s pretty good huh, how do they do it by speculating correctly, they took a risk. It turned out that Southwest was right and now, Southwest is being rewarded for it. Isn`t that how capitalism works?
The truth is that while market speculators may play a role, they`re not solely responsible for $140 oil. We are or let me be more specific, the small minded politicians in Washington are responsible and nothing`s changed. Instead of looking for solutions, Washington is still looking for villains.
There are no less than 12 different bills targeting speculators that are floating around Congress right now and Congress has spent untold hours and millions of your dollars debating them. They don`t need to debate this; they need to look back in history. Back in 1958, farmers thought speculators were driving down the price of their onions -- I can`t believe I know this crap. So they got a law to pass banning all future trading in onion.
Now, onion prices soaring 400 percent, in under a year then crashing a 100 percent, then climbing another 300 percent, now, farmers, pretty sure they want the speculators back. Why? Because they play a vital role in signaling future demand and evening out the price swings.
Today, finally, President Bush has done something other than simply point a finger at the shadowy evil speculators. He`s done something concrete, he has removed the executive ban on offshore drilling. Welcome to the party, George.
This is a ban that was as antiquated as it is idiotic. Unfortunately, no more oil is going to flow from the Atlantic at least until Congress does the same thing and lifts their ban as well. And they`re still just a little too busy blaming speculators and people like my next guest to do that.
John Hofmeister is the former president of Shell Oil and founder and CEO of Citizens for Affordable Energy. John, how are you sir?
JOHN HOFMEISTER, FORMER PRESIDENT, SHELL OIL: I`m good, Glenn, thanks for having me on today.
BECK: Let`s just start here, the role of speculators where do I have it wrong?
HOFMEISTER: Well, some people call them speculators but a lot of people call them traders. Traders, as you said earlier, are the people who get barrels from one part of the world to another. They just do their jobs; they try to make a little money on the margin. I think speculators are sometimes an irritant, but they are hardly the cause of $140 oil as you said.
BECK: Ok, the cause, again, tell me where I`m wrong, is that we have all of these gigantic resources and we are -- you want to talk about that role of speculators try this, tell me I`m wrong on this. We have all of these resources; we`re sending a message to the market in the world.
We`ll never tap them and that is causing the speculators to say, demand is going up, they`ll never tap this resources so the price is going up I`m betting on higher; where if we sent the other message, by going in, it would go lower.
HOFMEISTER: That`s exactly right. In May, when was still working at Shell, I testified in Congress. I said just about the following. if we could increase domestic production in the U.S. by two to three million barrels a day, produce 2 million barrels a day of ethanol or bio-diesel and destroy demand by two or three million barrels a day, we could hit these oil futures on their head and the speculators would have some convincing now that the U.S. is serious about solving this supply/demand crisis. But there was no interest in the proposal.
BECK: It would happen overnight, would it not? If we convinced the world that we were serious about energy, that we had a policy, the price of oil per barrel because of the speculations would drop overnight, and the fear in the Middle East that we`re going to lose a customer, right?
HOFMEISTER: Well, it has -- oil has less value if the great American machine, people, ideas and technology, is put to work doing on other parts of the other continental shelf what today we do in the Gulf of Mexico. It works.
BECK: All right, let me show you an ad from Obama where he says no more oil are coming our way, watch this.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: On gas prices, John McCain`s part of the problem. McCain and Bush support a drilling plan that won`t produce a drop of oil for seven years. McCain will give more tax breaks to big oil. He`s voted with Bush 95 percent of the time.
Barack Obama, will make energy independence an urgent priority, raise mileage standards, fast track technology for alternative fuels. A $1,000 tax cut to help families, as we break the grip of foreign oil; a real plan and new energy.
SEN. BARACK OBAMA, (D) PRESUMPTIVE PRESIDENTIAL NOMINEE: I`m Barack Obama and I approve this message.
(END VIDEO CLIP)
BECK: As you know I can`t believe -- I`m going over his whole energy program on the mileage radio program. It`s unbelievable. There`s no place where he says you know more oil faster than seven years or even more oil in 70 years. These people are not looking for oil.
HOFMEISTER: No, that`s part of the problem that has to be addressed, which is why I formed a new company called, Citizens for Affordable Energy. It`s not Republicans for more energy, it`s not Democrats for more energy, it`s citizens, because we have a short term problem and in this industry short terms means 10 to 15 years.
250 million cars on the road, all of the drivers of those cars are paying an exorbitant price where public policy, if we changed it -- as we said earlier -- knock those oil futures on their head by producing more domestic. Where is the economic and social justice for the citizens of this country when elected officials aren`t paying attention to their own bosses?
The bosses are the citizens of this country, not the elected officials. I think we need to turn the tables here.
BECK: We do. We do. And I tell you. I said this before I went on vacation and I still haven`t received one -- somebody in America -- I can`t buy them in Manhattan -- I need a pitch fork. Okay.
John, I have talked to people who are at the top of the world banking situation, the highest levels of financial institutions. I talked to the highest levels of transportation; whether at the trucking or airlines or just automobile construction at GM. I`ve talked to people like you. Everybody is saying the same thing then they can`t get government out of the way. You were on my radio program two months ago.
BECK: And you said, "Glenn, I listen to you, and thing I like you, is you call them like it is and you are frank." You said you were going to model yourself after that when you became -- when you were no longer the president of Shell, well, you`re not. What is it that you -- go ahead.
HOFMEISTER: I said I was going to sharpen my tongue -- so that I could speak at least come close to speaking as sharply as you.
I just said it in part -- it`s time for the bosses of this country to turn the table on the elected representatives and start instructing our elected representatives on what the people of this country -- the consumers of this country demand, and that is more energy of all kinds, including more oil and gas.
BECK: So John, how do we do it? Because we keep telling them this and you know when it was the last time you read the Declaration of Independence? I`ll bet it -- it`s was probably have been a long time. You should read it again, its like it`s alive today. We keep telling them and they continue to re-injure us. So what do we do besides pitch forks and torches?
HOFMEISTER: Well, I think that`s the reason -- you know one of the most successful organizations in this country is AARP. You know why? Because they have the power of 20 million members behind what they say when they say something.
Citizen`s for Affordable Energy is determined to do the same thing. We don`t just limit ourselves to age 50 and above. It`s the whole population.
So if millions of Americans start saying the same thing, that is you work for us, remember that, please. We need more energy; we need more affordable energy I think we can move forward.
BECK: Alright, so you have a Website where people sign up? Or what happens -- go ahead.
HOFMEISTER: CitizensforAffordableEnergy.org. The reality is, we only got the articles of incorporation filed today. So I don`t want to build an expectation that we are ready to go tomorrow.
HOFMEISTER: We have a lot of work to do over the next few months.
BECK: John, I want to have you on the program for an hour when you`re ready and I want to have you on the radio program when you are ready and I`m going to ask you tough questions. Like, well, how do trust you, I don`t know who to trust anymore.
I think the oil companies are just businessmen. I don`t buy into, well, they`ve been crushing other industries. Because there`s more coal than there is oil. What happened to Big Coal? They couldn`t seem to crush all the others.
But I don`t know who to trust. So, when you come back, will you talk to me and address that issue? Why should I trust your organization?
HOFMEISTER: I will. The reason I think -- I am not in it for profit. This is going to be a not-for-profit company. I will get a small, token salary to do what I intend to do. So I`m not putting capital together to make myself wealthy. I`m putting capital together to try to deliver to the American people what benefits them.
BECK: John thanks a lot. We`ll talk to you again.
HOFMEISTER: Ok, Glenn.
BECK: That`s the "Real Story" tonight.
Next, get ready for a release of what might be the biggest book of the summer. It`s called, "Rules of Deceptions" it hits bookstores tomorrow and while it may be fiction, its author will explain while its plot may soon play out in real life. That is next.
BECK: All right, if you`re lucky enough to still have a summer vacation coming up, then I have a book that is going to make you wonder, where the heck of the day is gone. It has twists and turns, suspense, romance but most of all, it has one thing that all good thrillers have; a heavy dose of truth that comes from sources who really wouldn`t think about speaking on the record. But they are more than happy to spill their guts of fiction writers, of the quality of Robert Ludlum or my next guest who wrote the book, "Rules of Deception."
While the story may be fiction, the people who influenced it are very much real. "New York Times" best-selling author Chris Reich, is its author. How are you, sir?
CHRISTOPHER REICH, AUTHOR, "RULES OF DECEPTION": Hello, Glenn.
BECK: Good to see you again.
REICH: Good to see you.
BECK: Could you get anybody heavy to recommend this book? You have James Patterson saying that you have outdone yourself this time. You have David Balducci, you have Nelson DeMille, you have Clive Kussler; I mean everybody is saying -- "New York Times" even said great book. And this isn`t the kind of book that "The New York Times" would typically like.
REICH: I`m very grateful they love the book. It`s a book that`s kind of drawn from the headlines. It feels so realistic, the people are just drawn and saying, "Can this happen?"
BECK: You know I love -- this played such a huge role; the butterfly. At the very beginning -- and this kind of gives you a hint of what kind of book you`re in store for. I asked you earlier today if the butterfly technology is real.
It starts with a butterfly.
REICH: The book opens up with a small butterfly flying above the perimeter of a field somewhere in the world; you don`t know where. And this butterfly, it`s not a real butterfly, Glenn. It crashes when the wind knocks it down and inside, a microwave transmitter, wires, saying what is this thing -- and a guard comes and looks at it and says, we`ve been discovered.
BECK: This is real technology that we are currently employing?
REICH: Absolutely authentic. This is what you call micro unmanned aerial vehicle. In fact this is a butterfly this size and they can be even smaller now. They could fly for hours, they could transmit information all over the world.
BECK: And in the book -- the book is really is really about Iran and their nuclear plan, et cetera, et cetera. And you outline in here -- and just knowing you and knowing how these things work -- you have talked to people who will verify that we have been in and we are watching what`s going on.
REICH: That`s exactly right. One of the prime missions for our Special Forces troops right now, is to sneak across the border into Iran to paint some of these buildings where we suspect or know that uranium enrichment is taking place, where uranium is being weaponized, to paint it with special substances so when we overfly that area or when the allies decide to bomb these locations, their munitions will be able to lock on and get it.
BECK: Do you believe this is happening before George Bush leaves office?
REICH: I am convinced that with the rapid acceleration of Iran`s move to nuclear weapons, nuclear powers, that there will be an attack within the next four to five months.
BECK: You`re not a crazy conservative kind of guy.
REICH: I am opposite. This was brought to me by just -- I do have a lot of connections and I`ve written five or six books and I`ve spoken a lot with people in the intelligence community. I`ve always played the devil`s advocate saying you`ve got to be kidding.
They`re not. This is happening now.
BECK: It`s crazy, isn`t it? I`ve gotten to a place where I don`t want to believe the things that I believe. When it comes especially to Iran, with the twelfth Imam, it`s crazy talk that he wants to bring about Armageddon. I don`t want to believe it, but I do. Did you?
REICH: I don`t want to believe it either. And I`ve asked so many of my sources is this man really crazy or that much of a fanatic as he makes out to be? Apparently he is; he believes all this stuff.
BECK: And the Twelfth Imam is -- we talked about it earlier -- he`s a guy who sits in the well of the U.N. and prays that he can hasten the return of the Promised One.
REICH: He is ready I think to go up to heaven and join that group of martyrs and virgins and he`ll be happy to put his finger on the button if they allow them to.
BECK: I tell you, I think you do a service to our country. Hollywood`s not doing it. People aren`t really paying attention to the news anymore. You are bringing the truth in an entertaining fashion and I appreciate it.
REICH: Thank you Glenn. Appreciate it.
BECK: It`s on sale tomorrow. "Rules of Deception" hits book stores tomorrow. You can order your copy right now at amazon.com.
Also, Chris has written a chapter for our serial thriller "7 Days." It appears exclusively in my magazine "Fusion." This chapter is fantastic. And you can read it along with the rest of the story by signing up for "Fusion" right now at glennbeck.com.
Pick it up at book stores tomorrow.
BECK: Finally tonight, the media has lost two remarkable people in the past few weeks. First it was Tim Russert and now Tony Snow, who lost his battle with cancer at 53.
The media and people I talk to keep trying to figure out how to replace them. It`s not possible because honestly, yes, they were great at their jobs, but the real significance of their lives is that they were just good, honest and genuine people by all accounts.
You look at the media and maybe it`s just me, but I don`t expect to find people, like Tony Snow. You`ll find people you like, some people you don`t. But I doubt you`ll ever find somebody capable of writing things like this, quote, "I don`t know why I have cancer, and I don`t much care. It is what it is - a plain and indisputable fact. Yet even while staring into a mirror darkly, great and stunning truths begin to take shape. Our maladies define a central feature of our existence. We are fallen. We are imperfect and our bodies give out."
That`s Tony Snow back a year ago July. Listen to the perspective he had. Not as a big time Washington insider but just as a person.
Quote, "There`s nothing wilder than a life of humble virtue for it is through selflessness and service that God wrings our bodies and spirits the most we ever could give, the most we ever could offer, and the most we ever could do."
Tony Snow and I were only occasional email and phone friends. I met him a couple of times. I always found him to be one of the nicest, most genuine people I`ve ever encountered.
There was plenty of things to learn from him. I never thought the important things to learn from him was anything that was happening in the White House or in the media.
I wanted to know from Tony Snow, how do you keep your soul in the unending nightmare of Washington, D.C.? How can you live in the middle of all of that pressure and the hours that you work and still be a good dad and husband? How do you face something as daunting as cancer and still keep things in perspective?
Luckily, he answered these. Quote, "We don`t know much, but we know this: No matter where we are, no matter what we do, matter how bleak or frightening our prospects, each and every one of us, each and every day, lies in the same safe and impregnable place in the hollow of God`s hand."
Tony Snow, a remarkable man, a genuine man, an irreplaceable man. Tony, you`ll be missed. From New York, good night America.