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Glenn Beck

Election Still Anyone`s Game; Should We Trust the Saudis?; Arizona Legislators Target Human Smuggling

Aired January 18, 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, election `08. It`s getting a little weird with no clear front-runner on either side of the aisle. Political speculation running wild. Dick Cheney for president?

Plus, talk about a crazy idea. Hillary Clinton`s loony scheme to boost the economy by helping people pay for oil.

And the loud and the proud Penn Jillette takes his controversial rants to the web.

PENN JILLETTE, MAGICIAN: Except for that God and no God thing, I agree with the pope right across the board.

BOARD: I`ll talk to pen Penn about his unique show, politics, the future of television and whatever else breaks loose. Tonight.

(END VIDEOTAPE)

BECK: Well, hello, America. It`s Friday. Tomorrow is Saturday. My -- my kids all know that that means: sugar cereal. Cocoa puffs and sweatpants and watch cartoons in the morning. Well, that`s just my house. Too bad the folks in South Carolina and Nevada won`t have it nearly as easy. It`s their primary day and caucus day. So here`s "The Point" tonight.

Warning: things are about to get weird. With the races in both parties closer than anybody could have ever expected, war-gaming this election is going to require some thinking that is way outside the box, possibly. And here`s how I got there.

To keep things now just extra confusing for us, Nevada is having a caucus, which I think is like a combination of a primary and cocktail party with a little bake sale mixed in. And South Carolina is holding a regular old primary. But that`s just for the Republicans.

Is it just me or is there any part of you that would just like to have Randy, Paula and Simon just figure all this out, just get back to us, and we watch the last episode?

Depending on how things go, by Saturday night, we could have John Edwards with his first win, Mitt Romney with three, John McCain with two, Mike Huckabee with two, Fred Thompson with one.

I mean, it could get worse. Like I told you yesterday, primary wins all over the place. The Republicans could actually find themselves with no clear candidate by the convention time, which would result in their first brokered convention in 60 years.

Plus, Rudy Giuliani is still waiting in Florida. That way he can get in and confuse things even more. And, just for extra spice, there`s billionaire Mike Bloomberg entering the race as a spoiler for the left and/or the right.

So tonight, America, here`s all you need to know. No matter how you slice it, there`s an endless number of bitter battles that could rage, depending on who wins where and when. By the way, it`s still January.

Here to break it all down for us and point out some of the more exotic possibilities is Chris Wilson. He`s a Republican strategist, CEO of Wilson Research Strategies. There`s Liz Chatterton. He`s a Democratic strategist and president of the Chatterton Group. And Ira Stoll, managing editor and vice president of "The New York Sun."

You know what? I feel a little -- feel a little little, actually. I`m the only one who`s not a president or vice president in this group. Just a working schlub here, I guess.

Ira, first of all let me tell you something, sir. I read your newspaper every day, "The New York Sun." I think it is absolutely fantastic. You guys -- you guys have the finger on the pulse of what`s really going on in real news better than any other paper, I think, in all of New York.

IRA STOLL, MANAGING EDITOR/VICE PRESIDENT, "NEW YORK SUN": Thank you.

BECK: However, with that being said, today I read your six possibilities in the editorial column, and I`m not sure if you guys are serious, because these are wild.

STOLL: Well, as we said in the editorial, three months ago if someone had predicted that Congressman Ron Paul had twice as many delegates as Mayor Giuliani has or that Governor Huckabee of Arkansas had won the Iowa caucuses, people would have thought that we were crazy. So you know, the possible -- the possible is more than people think.

BECK: OK. So guys, let`s just go -- let me go through some of these. And Chris and Liz and Ira, just chime in.

Here`s the first one. Mike Huckabee or Senator Thompson gets the GOP candidacy. The -- on the Democratic side it`s Senator Hillary Clinton, and Mike Bloomberg comes in. How many think that this is even possible or likely to happen, that we have these three? And if so, what the heck happens?

LIZ CHATTERTON, PRESIDENT, CHATTERTON GROUP: Actually -- I`m sorry to cut in. Actually, I think that`s probably the best scenario for Mike Bloomberg. Because Hillary Clinton is pretty polarizing. And actually, Mike Huckabee and Fred Thompson are pretty far to the right themselves. There`s a lot of room in the middle there for independents. It would be a very different scenario for Bloomberg than, say, an Obama-McCain match-up.

Those guys will be all about independence. Bloomberg won`t have anywhere to go.

BECK: Chris, do you -- I mean, do you really think that Mike Bloomberg is a middle of the ground kind of independent guy? I mean, as a conservative, I see this guy as a -- almost a fascist in some ways, where he`s -- you know, you will not have French fries. You will not smoke. You will not have a gun. I mean, this guy is not a moderate.

CHRIS WILSON, CEO, WILSON RESEARCH STRATEGIES: He`s a government liberal, and at the end of the day, all he`s going to do is hurt the Democratic nominee, whether it`s Obama or Edwards or Dennis Kucinich or whoever it may be, depending on what crazy scenario we may read up.

I mean, the one thing about the "Sun" piece that is consistent is the obsession with Bloomberg throughout it, and he gets in and becomes a serious player. He may be a serious player, but the only way to become serious is by taking votes away from the Democratic nominee.

BECK: Ira, tell me about -- tell me about your scenario where -- well, it`s a second one, I believe, where Dick Cheney is the nominee.

STOLL: Well, if the Republicans aren`t drawn to Bloomberg, and if this trend keeps going, where each of the dozen Republican candidates win one primary apiece, we can go to the convention, as you said, the first time in 60 years without a clear nominee.

And none of these candidates seem to like the other ones much. It`s hard to imagine one of them stepping aside and throwing their support to another one. And there is an elder statesman in Vice President Cheney.

BECK: This is the one that I read today, and I went, "OK, come on." I mean, who is writing this? There`s no way Dick Cheney is going to become the nominee. Am I wrong? Liz, any chance?

CHATTERTON: No, I don`t think there`s any chance, but frankly, that would be the Democrats` dream scenario.

BECK: Oh, my gosh.

CHATTERTON: The only person we want to run for president in 2008 on the Republican side more than Dick Cheney would be George Bush. I mean, you`ve got to be kidding me. But no, I don`t see any scenario under which Dick Cheney is the nominee for the Republicans. No.

BECK: OK. So Bloomberg and Newt Gingrich team up to win the electoral vote majority is the next scenario. Chris, I think -- I think putting Mike Bloomberg and Newt Gingrich in the same room together, it`s like matter and anti-matter. I think they just both disappear.

WILSON: It wouldn`t be a room. You`d need a steel cage match and a time limit and someone to tag out with. I mean, it`s just -- maybe we will appeal to the native son provision and let Arnold Schwarzenegger run, or maybe the 22nd Amendment and Bill Clinton runs. It`s just the time, the absurdity that lives through these and just -- it`s almost unfathomable.

BECK: So who is -- who is Mike Bloomberg, because he keeps toying with this? Who does Mike Bloomberg, I guess, want to hurt? I mean, because does he really think that he actually has a chance of winning?

STOLL: Well, it`s hard to -- it`s hard to poo-poo anyone who`s worth about $25 billion. I mean, he could spend 10 times as much as Hillary Clinton could, even if she raised all the money from suspicious donors that she could.

BECK: OK, Dave. But Liz, I mean, Forbes tried to, you know, spend his way in. And it doesn`t matter. Romney -- he accused Romney of doing this now, of using his own money. The amount of money, sure it helps a little bit, but it`s not going to get you elected.

CHATTERTON: Well, again I do think it has to do with who the real nominees are going to be. If it`s Clinton/Huckabee, I actually think there`s some room for Bloomberg to grow. And I do think the money will come in -- come in handy.

Now, he`s going to need a platform. He`s going to need to talk about the things he`s done in New York. And he`s going to have to convince a lot of middle America that he can relate to them. But with all that money, he might be able to pull it off.

Again, if it`s an Obama-McCain match-up, I don`t see there`s any air in the room for Mike Bloomberg. There are no independents left on the table for that.

BECK: Yes, there`s no -- and it won`t be McCain because honestly, you know, people always say, "Well, if there`s a big snowstorm, we`ve got to hope there`s not a big rain storm."

I have to tell you, if McCain wins, there`s not a conservative in this country that will go out in a light mist. I don`t know. I might get a little misty. I don`t think I can make it today to vote for him.

I mean, as a conservative, if you`re an independent that kind of leans, you know, Republican, maybe. But I don`t know anybody who has, you know, values that they actually believe in on the conservative side that says McCain is my guy. Am I wrong, Chris?

WILSON: Well, I don`t want to make this too much about John McCain, because I do think he has some attributes that appeal to conservatives to a certain extent. True, there`s no question he has challenges.

I want to defend Mike Huckabee here a little bit. Let`s say Huckabee is the one guy who -- I talked to a lot of my Democrat friends and said, you know, he`s the one candidate on the Republican side that I can kind of listen to what he`s saying and appreciate it. So I think all the Republican candidates have some crossover appeal. I don`t know if you see it in Hillary Clinton.

BECK: Let me tell you something. Mike Huckabee right now is the guy that everybody who has an agenda in the media is just salivating. They`re like, give me Mike Huckabee. Because they`ll go through all of his sermons, all of the stuff about God, all of the stuff about homosexuals and everything else. And they will steam-roll this guy within a week.

Mike Huckabee will rock -- be rocking back and forth in his shower like some Lifetime movie going, "I don`t know what happened. I can`t get clean."

WILSON: One, that`s what they said about Reagan in 79: "I`ll go through his speeches and his columns." You may be right.

BECK: I`ll put a bet on that one, Chris.

WILSON: OK.

BECK: Chris, Liz, Ira, thanks a lot.

Coming up, the tour of the Mideast with the president. Boy, that was great. He swung that big sword, you know, with Saudi Arabia, and they discussed the usual: the NFL playoffs, oil, and, you know, finalizing a multibillion deal for weapons technology. Sounds like a successful trip, because the swords were involved. But not so much.

And Penn Jillette is coming up. He conquered Las Vegas, but can he handle this program? We talk politics and so much more with the outspoken Penn Jillette. Buckle up.

(COMMERCIAL BREAK)

BECK: Good news for Citigroup today. After reporting the biggest loss in its 196-year history, just over $20 billion today, the bank is getting by with a little help from their friends. Just who`s writing the checks may surprise you. Billions came courtesy of the governments of Singapore and Saudi Arabia. Isn`t that great? I hear China turned them down.

President Bush is over in Saudi Arabia right now. He`s begging not for money; he`s begging for oil. Please help us pull our economy out of the basement.

Meanwhile, the Saudis are essentially buying our banks right out from under us -- under us. And to put it mildly, the United States and Saudi Arabia have an unique relationship, because they`re buying and we`re selling. And -- and just like us, the Saudis fear Iran`s insane leadership, because Saudi Arabia has a majority Sunni Muslim population. And Tehran is Shiite -- or it might be the reverse.

So how can we help? Well, we`re there for you, Saudi Arabia. Let us give you a chance to buy 900 J-DAMs. Those are state-of-the-art, precision-guided smart bombs, because nothing could go wrong there. And if you call right now, we`ll also top in some more advanced weaponry, including a Patriot missile, for a total estimated value of $20 billion.

Can we have some more oil please? No?

We arm these kooks out in the middle of the desert. What happens if they ever decide to use those weapons against us or our pals in Israel instead of our enemies in Iran, because they don`t have a history of ever picking up a gun against anybody we`re against?

Here`s the thing: you can`t really say very much, because George Bush has dusted off the presidential knee-pads to plead for our needed oil. The Saudis are responsible for almost one-third of OPEC`s total output. So, God forbid we say anything bad about the Saudis. We`re their slaves.

So what`s next? No, I`m asking you. I have no -- I have no freaking clue.

Let`s check in with Bob Baer. He`s an intelligence columnist for TIME.com, knows the Saudis inside and out.

Bob, friend or foe, Saudis?

BOB BAER, COLUMNIST, TIME.COM: They`re foes. Glenn, let`s don`t forget the facts of 9/11. There were 15 Saudis on those airplanes. All of the money came from Saudi Arabia. And until today -- how many years has it been? -- there hasn`t been a single indictment of a Saudi. The Saudis have not told us who paid for 9/11. The Saudis have not told us who recruited the 15 Saudis.

The majority of the suicide bombers killing our troops in Iraq are Saudi citizens.

BECK: Hey, you know what? Bob, I just saw this picture, and we`re showing it on the screen now, George Bush coming down off of Air Force One, and he`s saying hello and kissy-face with the -- with the prince and everybody else. And for the first time in my life, I see the president of the United States as a slave.

Here he is, coming down and he is kissing their ass, because we need their money and their oil. We have put ourself in a situation to where we are slaves to Saudi Arabia, right or wrong?

BAER: Glenn, they own us. They own us. Face it. They bailed out Citibank. We`re begging them to bail us out of the oil markets. Otherwise, we`re going to have a recession like you`ve never seen. They own us.

We are addicted to cheap oil. They provide cheap oil. And they call the tunes. It`s the facts.

BECK: OK, $123 million in weaponry that we have given them. You would know this because you`re a guy who used to be in the CIA. You used to live under cover in the Middle East and did all kinds of stuff that I don`t want to know. Tell me -- help me out on the history. Has Saudi Arabia ever fought anybody that is on our side? Have they ever -- where they were with Kuwait?

BAER: They have never fought a war, Saudi Arabia. End of story. They fought in the desert in the `30s and the `20s. It was on camels. They never fought a war. They have never come to our side in any single war. They fought one battle against Iraq in 1991, Kakji (ph), and they ran. They ran. Every one of them ran.

BECK: OK.

BAER: And the Marines had to bail them out. They`ve never fought a war. So I don`t know what they`re going to do with those weapons. They`re normally used to pay out bribes.

BECK: May I -- may I just -- may I just line out a spooky scenario? Our economy goes down in the crapper, because we can`t get cheap oil. And our banks are now owned by Saudi Arabia and everything else. So we have a real hard time, which in turn hurts the rest of the world and the Middle East. We all start going down in the crapper.

Already Saudi Arabia is -- is destabilized from within. They`re surrounded by their enemies from within. They`ve been doing to their enemies what we have done to them, just try to make peace with them: just leave us alone. Just leave us alone. What are the odds of those weapons falling into hands of our real enemies?

BAER: It`s almost inevitable. Glenn, I don`t like to make your day, but it`s almost inevitable this is going to happen. Look, if we go into a recession or a depression -- let`s consider the worst -- oil goes back go down to $10. The Saudi monarchy collapses. And you have these crazy Wahhabis who will have the weapons.

And I don`t know what they`re going to use them on. Probably us more than anybody else. You`re right. And that is a scary scenario. But it`s not completely off...

BECK: So -- so I started -- I started -- you know, I asked Americans, so what do we do? I don`t know. Do you have an answer? What do we do?

BAER: I don`t know, Glenn. I came to this interview in my SUV. I should give it up. Sorry. In the full name of full disclosure.

BECK: No, seriously, what do we do?

BAER: We`ve got to get -- we have to be energy-independent. You can`t rely on the Middle East, because that place is going to collapse. You can put a million Marines in the Middle East. It`s still going to collapse. I guarantee it.

BECK: Bob, it`s always a delight talking to you. It is. It`s always sunshine and lollipops with Bob Baer.

Thanks a lot, Bob.

BAER: Thanks.

BECK: Coming up, the ongoing battle for the border takes a new turn to drop houses. These are places where smugglers hold their customers until they`re paid. It`s a charming little story. We have that coming for you next.

(COMMERCIAL BREAK)

BECK: Well, who would have thought that stopping illegal immigration, the secret would be found in real estate? Officials in Arizona are now targeting drop houses. These are homes where smugglers hold customers, if you will, until travel arrangements can be made and the illegals pay up.

Democratic Governor Janet Napolitano wants to go after the property managers who knowingly rent homes to smugglers, who often use the houses to commit gruesome crimes: assaults, rapes, hostage-taking.

Now, there`s a Republican; his name is Russell Pearce. He`s a state representative. He actually wants to take the step, takes the plan one step further. And he`s with us now.

Russell, tell me what is the next step you want to take?

RUSSELL PEARCE (R), STATE REPRESENTATIVE, ARIZONA: Well, first of all, you know, we passed probably the toughest employee work-site enforcement bill in the nation, which you know, the governor signed it. And you have to keep ratcheting this up. Enough`s enough.

And this illegal smuggling of people has become such a violent, violent crime. And it`s a big problem. So you`re right. And it`s just like renting. It`s against law to harbor, aid and abet illegal aliens. Well, we have worse than that in this case. You have landlords that know what`s going on with this violent activity of captives -- and it`s really kidnapping in some cases. And there`s executions related if they don`t pay, and they take somebody out...

BECK: Give me -- give me some examples on what -- some of the bad things that happened in drop houses? I mean, some real examples, not just...

PEARCE: They just didn`t cover -- in the last few weeks we`ve had several drop houses where they escaped their window and called. They were being held hostage. They were tied up. They were beaten. Some of the women are sexually assaulted.

And we`ve had others where they`ve been taken -- even taken from the group and taken out and executed as an example what happens to the rest if they don`t pay up. I mean, it`s a -- it`s really a violent, violent world.

BECK: So who are the -- who are the smugglers? Are these American citizens? Are they Mexican illegals?

PEARCE: Oftentimes, they`re a combination of -- but many of them are involved in the drug cartel, and they`re illegals themselves in most cases.

BECK: OK, and so you want to take, you not only want to go after them, but you also want to go after the people who rent the houses. And you say take their assets.

PEARCE: Absolutely. Well, we already have some pretty good smuggling laws in the state of Arizona for human smuggling, going after the coyotes and the smugglers. But you`re right.

But we have a loophole in there. And that loophole is people can knowingly rent to these organizations which, again, this barbaric practice that they have. Millions of dollars, and their assets ought to be up for grabs. If they knowingly -- and again, the culpability standard. And if they know that you`re running that house to participate in that illegal activity, then we`re going to close that loophole.

RICO (ph) covers it as far as the organization is concerned. But that loophole doesn`t cover the landlord, because he`s not a criminal enterprise. So we`re going to close that loophole, and if you transport, house, aid and abet these kinds of organizations, in any way you know about it, we`ll take everything you own. Enough is enough.

BECK: And the odds that this thing is going to pass?

PEARCE: I think fairly good. I mean, I`ve had trouble. I actually ran this bill in another form a couple of times, and it`s not passed. With the governor`s help, I`m hoping that we can get it out of here...

BECK: And has the governor said she will help?

PEARCE: Well, that was her indication. We`ll certainly see. She has vetoed about 16 of our bills to deal with these kinds of issues. So I`m hoping with her help that we can have a good bill and get it out of here and go after these -- these folks. I mean, it`s a terrible -- it`s a terrible activity, IT`S a violent activity. And it`s wrong.

BECK: Thank you very much, sir. Appreciate it.

Coming up, it is not just Republicans who have come up with some really bad ideas for helping our economy, although they`ve had their share. But the Democrats have their own stimulus plans. We`ll have "The Real Story" coming up in just a bit. Stand by.

(COMMERCIAL BREAK)

BECK: Well, politics, the economy, maybe even a little Britney Spears, these are a list of crazy things happening in this country, and it is endless. And who better to dissect each one of them than Penn Jillette, who is taking his colorful commentary to the Internet. He joins me in just a bit. Believe me, you don`t want to miss it.

But first, welcome to the "Real Story."

Last night`s program, I liken the bad news that we keep getting on the economy to waves coming towards the beach. There is a wave for the housing crisis. There`s another wave for the credit crisis, one for the giant deficit, and so on and so on.

But the wave that can do the most damage of all of them is inflation. And that has now come ashore.

Consumer prices rose 4.1 percent in 2007, the largest increase in 17 years. Meanwhile, wholesale prices -- these are the ones that businesses pay and are ultimately passed on to you -- rose 6.1 in 2007. That`s the largest increase in 26 years.

So what does that mean to you? What does that mean to your paycheck?

Well, if you take inflation into account, the average wage actually declined by 1 percent last year. And when wages decline, the real story is that it sets off an entire cycle of despair into motion.

Less income means less spending. Less spending means less profit for businesses. Less profit for businesses means employees get laid off. Less people working means less tax revenue for the government. And it goes on and on and on.

The question is, how do you break the cycle? Well, it`s obvious, isn`t it? Just listen to the politicians.

Here`s Hillary Clinton in last night`s debate.

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I want to see money in the pockets of people who are having trouble paying their energy bills. That stimulates the economy. And then if we need additional stimulation, we should look at tax rebates for middle class and working families, not for the wealthy who have already done very well under George Bush.

(END VIDEO CLIP)

BECK: I`m trying to figure that one out. I mean, I`m no first lady, but I`m a thinker. How does helping low-income families stay warm suddenly help our economy? I mean, are they also excited that they run out of their house and go on an exotic vacation where they spend days on the beach brainstorming ways to employ hundreds of people?

No. That is a completely separate issue, but that`s what these clowns in Washington do every single time. Whenever these people see an opportunity to promote government handouts, they jump on it.

If you want to talk about heating and helping people buy heat this winter, fine. I`m actually not a black-hearted monster.

Yes, I want people to have heat, but that`s an energy issue. That`s a "Gee, I`m cold" issue, not an economic one.

And then, on the other point, instead of tax rebates, which are like economic crack because you get a temporary high, followed by an even lower low, how about we put some trust back into the system by slashing government spending? What do you say? A few less peanut museums.

How about we finally signal to the business community that taxes are not going to be going through the roof after you are elected next year? No business owner -- and this small business owner myself says this from experience -- no small business owner is going to start expanding if they believe our tax rates are about to skyrocket. So, businesses don`t employ people.

Take away that uncertainty. Cut the corporate tax rate. It`s the highest in the world.

And watch as once again American businesses bail us out by creating new jobs and pump billions of tax dollars back into Washington. Or, of course, we could just give checks for people who can`t meet their bills for oil. And then they can take that money and give it to the oil companies and watch how many jobs those poor people are going to create.

It makes no sense!

Gerry Swanson is the author of "America the Broke," and professor of economics at the University of Arizona.

Gerry, just this weekend I was going through a bunch of books at my house. I came across yours. I`ve had yours on my shelf. When did it come out, three years ago?

GERALD SWANSON, AUTHOR, "AMERICA THE BROKE": That`s correct, three years ago.

BECK: OK. And I started thumbing through it and thought, oh, my gosh, look how accurate this guy is.

You are making predictions three years ago and now many of them have come -- have come true. We are in the situation that you predicted and yet you went further.

Where are we headed?

SWANSON: Well, right now I think the economy is looking at a situation of stagflation, which is going to be a very difficult one to solve. As you mentioned at the start of the show, we do have major inflation back in the economy, and without a doubt, we did a prediction recently here -- and I know there is mixed feelings about this -- but I think we have slipped currently into a mild recession that could get -- be rather extended and possibly go deeper.

BECK: OK. When you say stagflation, in case anybody doesn`t remember, that`s the 1970s, the late 1970s, where the Fed can`t open up and push more money into the system, they can`t lower interest rates. They have to keep jacking them up because the dollar has fallen so low and because inflation is so high.

This really is a problem that was created by the Fed trying to bail us out from the tech bubble, right?

SWANSON: One of my feelings is that the Fed -- you know, we went down to a 1 percent interest rate on federal funds, and we virtually -- we had a negative interest rate. We were virtually giving money away, and that invites speculation and asset bubbles.

BECK: Yes. OK.

Gerry, there is somebody that I consult with, one of the -- I talk to a lot of financial people, and most of them not on the air because they won`t say the same things off the air as they`ll say on the air. One of my guys said to me, "Glenn, if the Fed opens up the valves, there are very few valves left, but if they really open the valve and they pump more money into this system, it could send the dollar spiraling out of control and really cause some real damage."

In your book, you talk about serious hyperinflation. Can you explain historically what that is? And then give me some indication if you believe that`s even possible to happen here.

SWANSON: Yes, we`ve had -- history is ripe with the different types of inflation, the post-World War I Germany inflation. We had major inflation in South America in the 1980s, in Brazil and Argentina.

Hyperinflation is when your inflation rate starts to exceed 50 percent a month and you lose all control over prices and your money becomes worthless.

BECK: Right. And...

SWANSON: Will it happen here?

BECK: Yes, will it happen here?

SWANSON: Probably not. These things happen in relatively closed economies, but we don`t need it to go that high. If we just get back to double-digit inflation, it will cause havoc in this economy.

BECK: What does it mean to the average person?

SWANSON: Well, they`re going to -- you know, we`re trying to keep interest rates low, but if inflation goes up, interest rates are going to go up. Everything they buy is going to go up. And if their wages lag, as you mentioned, inflation is a tax in and of itself. It takes the spending power away from the average person.

BECK: And real quick, I was surprised to hear this point of view because I believe you and I differ politically speaking. I`m a conservative, you tend to run the opposite direction, or at least that`s what it feels like to me in reading some of the solutions in your book. The Bush tax cuts, you actually believe they worked out well and they should be extended -- or made permanent.

True or false?

SWANSON: True. I have to admit than when I wrote the book, I was disappointed, and I don`t think I would have structured them the way he structured them. And I would have, as you said at the start of the show, I would have insisted on some payback. I wouldn`t have just cut taxes. I would have cut some government spending.

BECK: Yes, good.

Gerry, thanks a lot. We`ll have you on again. I appreciate it.

Well, now all week we have been talking about what Washington should do, but the truth is, aren`t they the ones who got us into this mess? Isn`t it -- isn`t us asking what Washington should do kind of like asking Britney Spears to come over and baby-sit our kids? Haven`t they already proven their incompetence?

Instead, it`s up to us, we, the people.

Americans have done it over and over and over again. We need to rely on ourselves, not our government.

So, while they debate, you know, should we give poor people heating oil money or $100 rebate check, what do we do? What do we do right now to protect our own family in our own home and prepare in case things continue to get worse?

Michael Panzer is the author of "Financial Armageddon: Protecting Your Future From Four Impending Catastrophes."

I love that title. It`s not something -- I mean, the books are going, well, this sounds like a light read.

Michael, the average person who is living paycheck to paycheck, just struggling to keep food on the table, they maybe have a little bit in their 401(k), what do you do?

MICHAEL PANZER, AUTHOR, "FINANCIAL ARMAGEDDON": Well, the first thing is that you don`t listen to Wall Street. You have to go out there and realize that what`s going on now is fairly dramatic.

We are in the beginnings of a recession, and I think it`s going to get a whole lot worse. And the point is, don`t believe all the happy talk. So, it`s an attitude.

BECK: OK. Well then how do you trust?

I mean, look, I`m just going to be real honest with you. You make money on your book and you are also an investor, et cetera, et cetera. So, you have this opinion, the other guy says it`s going to be fine.

How does the average person know who to trust? Because I don`t think you are getting the truth on television, myself. I think you`re getting it on this program, but that`s just my opinion.

How does the average person know?

PANZER: Well, the point is that you always have to know where people are coming from. Yes, I sell books, but, you know, I was on Wall Street for 25 years. What`s the upside for me in speaking this kind of talk when I could have been doing much more -- much more success, I guess, if I was still on Wall Street?

BECK: Yes. OK.

And I will tell you this, America. I mean, do you think I want to be a crazy man talking about financial Armageddon? It`s no real upside for me either, because we`re pretty much alone on this.

So, the average person, you don`t listen to these people on television, the Wall Streeters, because make money either direction. But what do you do with your money?

PANZER: Well, I think the first thing to remember is that recessions are bad for stocks, bads for all sorts of assets. And the reality is cash is king in this kind of environment.

BECK: OK. And so what do you mean? Are you suggesting you put money underneath your bed, or you just pay off your debt? What do you mean cash is king?

PANZER: Both of those. I think the key here is to pay down debt, is to live essentially a more prudent kind of a lifestyle going forward. Save cash. If you have money in 401(k)s, as an absolute last resort you may be forced to tap that, but the point is, you want to accumulate savings, pay down debts, and really adjust your lifestyle to what I think is going to be a long and lingering affair.

BECK: Yes. Well, that was what I was going to ask you, because a lot of people have seen -- you know, we have bubbles.

I mean, we were just talking about the tech bubble. The Fed rode in to rescue the tech bubble and they created the housing bubble. But we had a little downturn, and then it went back up, and downturn, and that`s cyclical.

You don`t believe that this is that kind of a quick little downturn and then back out of a recession?

PANZER: No. I think we`ve seen the last hurrah of the bubble making. And clearly, now we`ve got the Federal Reserve, which doesn`t really seem to have a strong clue about what they`re doing. And I think, you know, we are paying the price now for all those years of pushing forward the bad times.

BECK: And real quick, do you se anybody out there on the political realm that you say, well, this person has a handle?

PANZER: Well, I mean, some argue Ron Paul is the man. I mean, he`s basically made the point we need sound money, we need to go back to our roots constitutionally. I don`t think he`ll win, but certainly I think his message is one that people can follow at the sort of individual level.

BECK: Great. Michael, thanks a lot.

That`s the "Real Story" tonight. If you`d like to read more about this or if you`d like to, you know, look at the books, we`ll have a link for them on any of the guests in this segment.

Just sign up for the free e-mail newsletter at glennbeck.com. We`ll provide the links for you. We put all the information in tomorrow`s edition, so sign up tonight and receive it free, absolutely free at glennbeck.com.

Coming up, Penn Jillette. We`re going to talk a little bit about the Democrats, the debates, the race. Also the Republicans.

He`ll speak his mind. He means what he says and says what he means. It`s rare these days.

It`s coming up next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BECK: I thought P. Diddy -- Puffy? Just keep going.

I thought I saw him walking down the hall because there were so many people surrounding him. You know how these celebrities come into the Time Warner Center, and usually it`s the rappers that have all of these people around them when they`re walking down the hall. It was Larry King and I...

UNIDENTIFIED MALE: Larry King has a posse?

BECK: He has got a massive, massive posse. They are like, yo, king dog. How are you doing? Good to see you.

That album you got coming out, that new CD, it`s hot, man. It`s hot. It`s rocking.

UNIDENTIFIED MALE: When does your next single drop?

BECK: Dog.

(END VIDEO CLIP)

BECK: All right. Whenever you want to talk about real politics, you want to cut all through the bull crap, you go right to our next guest. His ideas make so much sense that I could swear he could probably win the Nevada primary himself, but that, of course, would be just nothing but gangsters and hookers that would be actually voting.

So, magician, comedian and host of a new online show called "Penn Says," which lunched on Sony Digital this month, Mr. Penn Jillette.

PENN JILLETTE, HOST, "PENN SAYS": Thanks for -- oh, I wanted to -- aren`t you on the cover of a magazine show (ph) on your watch now?

BECK: Yes.

JILLETTE: Should I do that?

BECK: Yes. Watch time. Yes.

JILLETTE: Watch time. Watch time.

BECK: Let me just start with some politics first.

Did you watch the debate last night?

JILLETTE: No, I did not.

BECK: Good for you.

JILLETTE: No, I did not. I just don`t care.

The only good news about the people is that a lot of them are going to lose.

BECK: Yes.

JILLETTE: I get very thrilled about that.

BECK: Yes.

The interesting thing is, it was Hillary Clinton, Barack Obama and John Edwards, and they were saying all these things -- look, I have so much respect for this individual -- but they would never turn to each other. The body language is that they hate each other.

JILLETTE: Well, of course.

BECK: I think it`s amazing.

JILLETTE: But they are also so -- the nutty thing is that there is this make believe that negative politics is a new thing and that negative politics is bad.

BECK: Yes.

JILLETTE: If you don`t dislike the other guy that`s running, don`t run.

BECK: Well, you don`t have to dislike the individual.

JILLETTE: Well, yes, you can.

BECK: Well, you can, but you don`t have to.

JILLETTE: You want a good person as president.

BECK: Yes, right.

JILLETTE: I think you are supposed to count everything.

BECK: I agree with you.

JILLETTE: I believe that, you know, the campaign finance thing, anybody should be able to pay any amount of money to say anything they want...

BECK: Yes.

JILLETTE: ... or pay no money. It bothers me so much that because I learned to juggle I get to say my political opinions. And if you happen to have made a lot of money somewhere, your political opinions are not considered as valid as some uneducated freak who learned to juggle when he was 12.

BECK: I don`t think you are uneducated, but...

JILLETTE: You know what I mean.

BECK: I know. I know.

JILLETTE: The point is, if you want to make commercials and spend your money that way...

BECK: Sure.

JILLETTE: ... we spend less on the campaign a year, on the presidential campaign in the year, than we do on frozen yogurt.

BECK: Let me ask you this. I know because on your view video blog you have said that Hillary Clinton scares the holy crap out of you...

JILLETTE: Well, I just think that she gets -- I want to make it very clear. I wasn`t talking about scary, like, politically. There`s a whole thing to talk about there.

I was talking about scary like Jerry Lee Lewis. You know? Like you just go, I don`t want that person yelling at me.

I mean, I remember Teller and I went to see Jerry Lee years ago. You know?

BECK: Yes.

JILLETTE: And Jerry Lee came on stage and just looked at the audience, and Teller turned to me and said, "I would not argue with him over a parking space."

BECK: A friend of mine went to see -- I think it was Fiona Apple -- and said -- and sat in the front row. And he said to his wife -- turned to his wife halfway through and said, "I think she might kill us. Clap. Clap."

So much angst there.

JILLETTE: I have seen, you know, The Sex Pistols and The Clash and The Ramones and all the bands that are supposed to be angry, but nothing touched Sinatra when he came out and I turned to the guy next to me and said, "What did we do wrong?" You know, we applauded, we were happy.

BECK: Right.

JILLETTE: And I get that feeling. And it`s totally unjustified.

BECK: Right.

JILLETTE: I never met her.

So, Hillary, if you are in the room when she loses, it`s going to be really uncomfortable.

BECK: OK. So, I wanted to get your point of view on this -- the Republicans are coming out with a new plan. I think it`s next week. Maybe introduced or voted on as early as February of being able to snoop and read everything on the Internet, your e-mail, everything without any questions asked.

JILLETTE: Oh, they didn`t run that by me.

BECK: Is that insanity?

JILLETTE: What are you talking about? You`re exaggerating or something.

BECK: No, I`m not. No. Read it. It`s in the "New Yorker" this week.

JILLETTE: All e-mail?

BECK: Everything. They can read everything. And here`s the excuse...

JILLETTE: They will enjoy some of mine.

BECK: Oh, I bet they will.

JILLETTE: They really will enjoy it a lot.

BECK: Here`s the scary thing. They are saying because a giant cyber hit is coming, so we need this power. And I`m thinking, I don`t think so, Jack.

JILLETTE: Did you read the article in the -- I guess it was "The New York Times" today or yesterday, or maybe it was even Sunday, about the cardiac problems caused by the alerts about terrorism?

BECK: No.

JILLETTE: There has been more deaths, you can show statistically, from people worrying about terrorist attacks from all the level -- you know, all the color-coded stuff than there actually were at 9/11.

BECK: How do you -- oh, jeez, we only have 30 seconds.

JILLETTE: How do you book? Thirty seconds?

BECK: Penn Jillette for only 30 seconds.

Give me something in 30 seconds.

JILLETTE: Go to "Penn Says." You can find out everything. Go to...

(CROSSTALK)

BECK: It`s -- unfortunately, it`s the future of television. It`s where we`re all headed.

JILLETTE: Especially with the strike.

BECK: Right -- straight to hell. If you`re one who believes in hell.

Penn Jillette, thank you very much, sir.

JILLETTE: Good to see you, man.

BECK: Good to see you.

JILLETTE: See the watch?

BECK: See you.

Strike the pose.

Coming up, Democrats had a primary in Michigan last night. Hillary Clinton won. I mean, the choices were "uncommitted," but the exit polling was very, very telling. Details you don`t want to miss.

That`s coming up next.

(COMMERCIAL BREAK)

BECK: So last night`s focus was on Mitt Romney as he beat John McCain in Michigan. That much you know. But looking deeper into the exit poll data, there is some fairly interesting stats.

Romney actually beat Huckabee among evangelical Christians by a five- point margin. You hear that? Among non-evangelicals, he beat Huckabee 39- 8.

Also, people who thought the Iraq war was the biggest issue voted for McCain by 10 points over Romney, but that margin was fueled mainly by people who didn`t support the war. Of those who do support the Iraq war, Romney won 42-27.

I found the most interesting stuff on the Democrat side. I thought this was great.

Hillary Clinton survived a tightly-contested battle between last night between her campaign and the always formidable "uncommitted" vote last night in Michigan. But it wasn`t all good news for the Clinton campaign.

Clinton lost to "uncommitted" by 14 points among Independent voters, 51-37. Among African-American voters -- and this has to be a gigantic concern with her campaign in the southern states that are all coming up -- Clinton lost by 38 points.

How is she going to win South Carolina?

Among young voters, she had a big problem as well, losing to "uncommitted" by five points. And strangely enough, unmarried men didn`t seem to find Hillary attractive. They decided no one instead of Hillary Clinton.

Now, obviously many people were registering votes for Obama and Edwards when they chose "uncommitted," but those trends have to be incredibly upsetting for the Clinton campaign. At some point, you have to believe that primary voters are going to realize that she comes in with so much baggage, wouldn`t it be easier to get into the White House with the baggage from Obama?

Now, a lot of people are pointing out, you know, Dennis Kucinich, the other candidate for the Democrats that was on the ballot, lost to "uncommitted" in literally every single demographic category, but we decided to look closer. And we found a couple in which Kucinich actually did very, very well.

For example, he won by 89 points among visitors from outer space. And people who are aware of Gollum from "Lord of the Rings" embraced Kucinich like crazy. Somehow or another, by 106 to negative 12 percent advantage. That is the sort of enthusiastic support that makes him unbeatable in the middle Earth primary, which I think is next Tuesday.

Don`t forget, if you want to know what`s happening on tomorrow`s program or if you would like a little more in-depth commentary on the news of the day, sign up for my free daily e-mail newsletter at the all new, completely resigned, glennbeck.com.

From New York, good night, America.

END