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Glenn Beck

Putin Consolidating Power in Russia; Homeland Security Secretary Pushes Stronger Border Security Measures; Miss America Talks about Rein So Far

Aired February 29, 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, our comrades over in Russia are preparing to vote for their next president. The likely winner? This guy. But the real power stays with this guy. I`ll explain.

And from the people who brought you our economic crisis, debit cards for your 401(k). Raiding the nest egg and other not-so-smart retirement tips.

Plus, a legal loophole that considers some child porn legal and talk to one of the people responsible for sorting out this sickening mess.

All this and more, tonight.

(END VIDEOTAPE)

BECK: Hello, America. Welcome to it. It is Friday. And the Cold War is over. Communism defeated. Russia no longer a threat to us or freedom-loving people around the world. Oh, how I wish that were true, but here`s "The Point" tonight.

Communists never went away. I think they just changed their name, but they`re playing the same game. Here`s how I got there.

This Sunday, Russian voters are going to hand Dimitri Medvedev a victory in their presidential election. How do I know? OK, it`s a lot easier to predict a landslide when the guy is running virtually unopposed.

According to Russia`s constitution, Vladimir Putin is barred from running a third consecutive term as president. So instead, he did the right thing. He stepped aside, and picked his successor, shut down all opposition and now, he`s ready to serve the people and the motherland as prime minister. So I guess that means that Putin will be Russia`s next prime minister.

Must be -- must be easier to cover the elections in Russia. You know what I mean? They`ve taken all that pesky guesswork and freedom of choice out of the system.

The truth of the matter is that the unchecked power of Vladimir Putin is nothing to laugh about. This guy is one scary dude. He`s not only the guy who was running the old-school KGB, but also, he`s new school in his appeal. The world went weak in the knees when, oh, yes, they saw this picture of him shirtless. Hmm? Yes. He`s got the Bowflex. Now, he`s even in Russian music videos.

(BEGIN VIDEO CLIP)

(MUSIC)

(END VIDEO CLIP)

BECK: I know. I know. Who listens to the words in a killer dance number like that one? But the lyrics in this song actually are about how women are tired of their weak boyfriends, and they crave a powerful man like Putin who will take care of them. Can you imagine a song like that about our president? Wait, wait, wait. Obama already has two.

So tonight, here`s what you need to know. Russia is enjoying its longest economic boom in a generation fueled by record prices for oil and gas. They are sitting on the largest natural gas reserve in the world, the second largest supply of coal, and the eighth largest supply of oil. Not only are these invaluable natural resources, but it`s almost an endless supply of income, as long as energy doesn`t collapse.

Add to that the fact that Russia, the country we virtually spent into collapse, is debt-free or damn close. Putin is funneling all that new wealth into buying and developing new arms at an alarming rate. Plus, he`s having play dates with the world`s scariest leaders. He`s sitting down with Ahmadinejad and Hugo Chavez and Kim Jong-Il. Now that Putin has the centralized power and tons of cash on hand, the sleeping bear is out of hibernation, and I think he`s hungry.

Edward Lucas is the author of "The New Cold War: Putin`s Russia and the Threat to the West."

You know what, Edward? I don`t know if I`m right on this, because you know, I`m not a guy who, you know, is a political strategist, but I am a thinker. It dawned on me about a year ago, I don`t think that the former Soviet Union or communism ever went away. They just restructured and renamed themselves. What is it? The Progressive Democrats. This is the same thing, coming back with renewed vigor.

EDWARD LUCAS, AUTHOR, "THE NEW COLD WAR": Absolutely, Glenn. I think what`s happened is that the communists have gone. The capitalists have come, but the KGB`s still there. And this is the really striking thing: the first time in Russia`s history, the KGB are in the Kremlin, and they`re running the country.

And that`s bad for several reasons. First of all, they`re not very competent. They`re actually rather incompetent. They`re quite corrupt. But also, they don`t like us, and they particularly don`t like the way in which the countries of Eastern Europe regained freedom in `89 and `91. They want those countries back, not with not tanks but with banks. They don`t need to conquer the countries; they can just buy them. And that money`s flooding westwards, too.

BECK: This guy -- I`m telling you. Putin is just -- I know. Our president says, "Oh, no, I looked into his soul. I looked into his eyes. He`s dreamy." I think this guy is one evil SOB, quite frankly. He`s taken freedom of speech and flushed it down the toilet. He`s now given the presidency to his friend, who he also made the president of Gazprom, which is their big oil and gas -- gas -- nationalized program. Correct? So this guy has a ton of power now.

LUCAS: Absolutely. And it was right that you hesitated over calling Gazprom a company, because it`s not a company. Companies are things that are run in the interest of their shareholders and trying to do a good deal for the customers and make profit. Gazprom should really be called the gas division of Kremlin Inc. Because that`s what it is. And nothing Dimitri Medvedev`s tenure as chairman of Gazprom gives us any reason that he believes in transparency or depoliticizing Russian industry.

BECK: OK. These -- I`ve heard reports coming out of Russia inflation is at 12 percent and 15 percent. How does the -- how does the average person handle inflation every year at 12 percent or 15 percent? How do they survive?

LUCAS: Because living standards are rocketing up, too. And that`s thanks to the gas and oil boom, which has been a big bonus for the...

BECK: And for the lower class? I know for the upper class they`re making a lot of money. Is the lower class, as well?

LUCAS: Well, it`s certainly benefited the rich most of all. And perhaps really most of all the people in the Kremlin who have made tens of billions of dollars out of this.

But most Russians remember the 1990s, and they think life then was pretty bad, and they think it`s pretty good now in comparison. Actually, I think the record of the ex-KGB guys in the Kremlin is pretty phony. Where are the new roads? Where are the new hospitals? Where are the new world- class universities?

Mr. Medvedev was supposed to be doing that as deputy prime minister. We haven`t seen much of it yet.

BECK: Well...

LUCAS: So I think the shine is going to come off Putin sooner or later, but for now, most Russians think he`s pretty good, particularly compared with what went before.

BECK: Well, but I mean, don`t you think people like their security? I mean, the thing they associate with capitalism is out-of-control corruption, you know, Russian mobs, et cetera, et cetera. And Putin has brought them security and, with that, prosperity because of oil. So they`re willing to trade their -- their freedom for security. Yes or no?

LUCAS: Sadly, that`s true. Most Russians, according to opinion polls, don`t think much of democracy. They don`t want much more media freedom. They associate that with the 1990s, which is a time of chaos and national humiliation. And Putin`s changed that. Actually, the oligarchs, these rich tycoons, haven`t gone away. Some of them are gone today, but others of them are still there.

BECK: Edward, thank you very much.

And by the way, just so you know, Putin is going to absolutely win. They`re already changing the prime minister`s quarters and changing his bathrooms and redecorating them. Are they not?

LUCAS: Yes, Glenn. But the big question is whose picture`s on whose wall? Would it be Putin`s picture on Medvedev`s wall or Medvedev`s on Putin`s. That`s how we know who`s really in change.

BECK: I think we know.

LUCAS: My money is on Putin.

BECK: Yes, mine, too. Edward, thank you a lot. Thanks a lot.

LUCAS: Thanks, Glenn.

BECK: All right. Dictatorships don`t come cheap. How is Putin paying for his new Russia?

Kim Holmes is the vice president of the Heritage Foundation, author of "Liberty`s Best Hope: American Leadership for the 21st Century."

Kim, oil, gas prices, the coal, if that ever -- the bottom ever falls out, how is this guy going to keep this together without the point of a gun?

KIM HOLMES, VICE PRESIDENT, HERITAGE FOUNDATION: Right. That`s going to be very difficult if that ever happens. As you rightly pointed out, much of the prosperity and even the political stability that`s in Russia right now is dependent upon the high oil prices.

And the fact that they have all of this income coming in from gas and oil is masking some very severe weaknesses in their economy. As we show on the index of economic freedom that the Heritage publishes every year, Russia has an economy that`s only 50 percent free. And it comes out in a rank of around 134 out of 157 countries as one of the least free economies in the world. And this is -- this shows it has very severe weaknesses in their economy.

BECK: There is a weeklong special that was running out of England that I have been keeping track of this last week on Russia and I thought it was so telling.

They were standing in the stock market there in Russia. And the reporter said, "So, what do you think -- what do you think Stalin would have said? This close to Red Square, here`s the stock market."

And the person had to try and convince the reporter that, "Oh no, this is completely free and we`re a stable society." And they immediately -- fear in their eyes said, I don`t want to talk about politics at all. I can tell you that capitalism is happening here in Russia. And I thought, nope. No, it is not. It`s not really capitalism.

HOLMES: No. It`s an oligarchy capitalism. It`s a capitalism based upon Putin and his friends and an oligarchy of people who are mainly benefiting from the revenues from oil and gas.

BECK: Tim, is this a new style of government? This is kind of what China is doing, but I think it`s kind of what Nazi Germany did, as well. They nationalized the industry. They`re selling overseas so they can make all this money.

It`s really the spookiest form of government, because one guy`s making a decision on what we`re going to do, and he has the resources, economically speaking, to do it. Right?

HOLMES: That is right. He`s using all this money to buy up sectors of the economy. They call them national champions. You know, whether it`s large, state-owned enterprises for shipping or whatever it is. They`re actually buying the economy of Russia.

BECK: Right.

HOLMES: And also, they`re using it to buy off the middle class, because there`s a lot of people benefiting from this and so long as the economy is going well, oil revenues are coming in, everybody`s happy. But what happens when that stops, that`s when you could have a political crisis that gives more political space for the opposition.

BECK: Well, I know that they`re now revamping their aviation, you know, Boeing and McDonald Douglas. And they said, the only problem is it`s three companies and we don`t think three companies can survive. It would be better if it was one and run by the state.

But they`re also, at the same time, laying these pipelines into Europe which will just enslave Europe to Russia. Right or wrong?

HOLMES: Oh, well, it certainly will make them dependent. It`s not just the Europeans. It`s the Ukrainians and the former Soviet Union. Countries like Georgia. They depend on these subsidized low gas prices and a way of sucking them in to the sort of geopolitical energy sphere of Russia.

Energy is a political tool in Russia`s foreign policy kit. So it`s not just about what they`re doing domestically. It`s also how they`re using this revenues to assert themselves on the world stage.

BECK: Kim, thanks a lot.

Now coming up, finally some common sense coming out of Washington, D.C. The government has raised fines on companies who hire illegals. We will speak to Homeland Security Secretary Michael Chertoff about it in just a second.

Plus, signs that the government may be gearing up for a nationwide banking disaster. Is there a plan? And more importantly, is it a good one? Coming up.

(COMMERCIAL BREAK)

BECK: Now, the most important thing I think we can do to start fixing the illegal immigration problem in this country is simply enforce the laws we have on the books. Doesn`t take a brainiac. We`ve been saying it for years. Everybody`s been saying it. Except usually the clowns in Washington.

Plenty of legislation already out there, with fines in place for businesses who hire cheap illegal immigrant labor. Some want to up the ante even further. Good for them. The Bush administration is listening to them. They just announced higher monetary penalties against businesses that knowingly hire illegals. It is the first increase in nearly a decade.

It`s no surprise that now business owners are upset. Boo-hoo, cry me a river. They feel the government has allowed illegal immigrants into our country to infiltrate the workplace -- like it`s hard to figure out who`s legal and who`s not -- and then they`re left holding the bag, paying the price for a problem that the feds should have solved long ago.

The bottom line is, illegal immigration threatens our national and economic security and that anything that helps stems the tide is good news for everybody.

Michael Chertoff is U.S. secretary of homeland security.

Mr. Chertoff, congratulations on this policy, sir. I see the fines are up 25 percent. That is just the start? Or is that where they...

MICHAEL CHERTOFF, SECRETARY OF HOMELAND SECURITY: Well, that`s as high as we can raise money under the existing law. Now to be honest, we have proposed last year to really raise them significantly more. Congress did not do that. So we`re doing the best we can, given the existing legal framework.

BECK: OK. Reagan said $1 million. I think, personally -- I think you should put these businesses out. I mean, I`m a small businessman. I can figure out who`s legal and who`s not. If you don`t -- if you have sketchy documents, well, no, I don`t think so.

And the key is, legally. I mean, I`m sorry, knowingly hiring these people. What kind of businesses -- what kind of excuses are these businesses giving you saying, "Well, gee"...

CHERTOFF: You know, it is amazing, Glenn. First, let me say, one of the things we are doing is we`re bringing criminal cases. Of course, the value of that is you get jail time.

Last year we brought criminal charges against almost 100 people who were involved in the supervisory chain of employers, who knowingly hired illegals. So that`s the most powerful weapon that we have.

But I`ll give you an example of something we`re trying to do that business has really blocked us from doing. We`re trying to have a simple fix so businesses are told when they get a letter from Social Security, pointing out that there`s a discrepancy between the name and the Social Security number of their employee, that they go and check on it, not merely throw it in the waste basket.

And yet, our simple regulations that we mandate that employers do this has been blocked by a court case in San Francisco for many months. We`re hoping to revisit this within the next couple of weeks, but it`s a good example of the kind of thing that some businesses are doing to try to prevent us from enforcing the law.

BECK: OK. I want to talk to you about the fence here for a second. But I just want -- I would like to ask you, I think, a rather easy question, and you may think it`s tough.

People in this country who want security borders, with an "S," north and south, who believe that open borders are not only dangerous for us because of terror, but also economic security and also crime. We`re called racists if we say that.

Do you believe, if I care -- if I want fences and security at the border because of economic security, because of terror security and because of crime, am I a racist, sir?

CHERTOFF: Glenn, look, I think every American has a right to insist, in fact an obligation to insist that we enforce the laws of this country. And I don`t think that the vast majority of people who want to see that are racist or prejudiced. I think they generally feel that, if we set a set of rules in place, we have an obligation to make sure that they`re observed.

BECK: Good.

OK. Let me talk to you about the virtual fence. This one kind of upset me a little bit because I am a fence guy. I want the fence that we`ve all been promised. You, I know, have been pushing for the virtual fence. It was just announced, I think it was this weekend that it was announced. Is this in lieu of an actual fence?

CHERTOFF: No, it`s not. And there`s a lot of misunderstanding about this. Some of it`s deliberate. Some of it`s misinterpretation.

Let me be very clear. We want both. Not everything works in every area. So we want the right type of technology or the right type of fence, depending on what the lay of the land is.

We have over 300 miles of fence that we have now built across the southwest border. That`s pedestrian and vehicle fence. There are some parts of the southwest border where a fence doesn`t make any sense. And in that area we need what we call a virtual fence. It`s a combination of radar and cameras that allow us to see people crossing so we can intercept them. And that`s what we accepted in 28 miles of Arizona just about a week ago.

BECK: I talked to a sheriff down at the border, and he went to this big conference where they were talking about all the things that they were doing. And one of the sheriffs stood up and asked the congressman. He said, "We need more money." But because of the Merida business where we`re giving money to Mexico, this congressman actually said to the sheriff, "You`re going to have to talk to Mexico and see if you can get some of that money."

CHERTOFF: I think that was maybe a congressman trying to be a little too clever. The Merida Initiative, it really complements what we`re doing at the border.

Here`s the bottom line. You have a president in Mexico who`s really, maybe for the first time, taking very aggressive steps against the organized criminal gangs who are moving drugs and human beings into the United States. Because you`ve got to attack this on both sides of the border.

He is arresting people. He is having them extradited to the U.S. to serve their jail sentences here. That is a good thing.

And part of the consequence is some of these drug gangs are striking back by literally killing Mexican officials. We owe them the support that they need to get the job done on their side of the border.

BECK: All right, Secretary Chertoff. Out of time, but as always, thank you very much for being part of the program.

Coming up next, 2008 Miss America, Kirstin Haglund, stops by. A little one-on-one time. You know, it`s the way I roll. Really, just hanging out. That`s up next.

(COMMERCIAL BREAK)

BECK: You know, you see these beauty contests, and it`s -- I don`t know. It`s negative, usually. What`s going on? One pageant -- one pageant actually has its reputation intact, and it`s Miss America pageant. And Miss America is with us now.

Kirstin Haglund, she is talented and involved in the community. And you are a champion for the Children`s Miracle Network, which is one of my causes, as well.

KIRSTIN HAGLUND, MISS AMERICA 2008: Yes.

BECK: Amazing, amazing work. How did you get involved?

HAGLUND: Well, this will be the second year that the Children`s Miracle Network is the national platform for the Miss America organization. So not only was I crowned Miss America, but I was also named national goodwill ambassador for the charity.

BECK: Do you have to wear the crown? Do you, like, wear it to bed? Do you...

HAGLUND: Yes, I sleep in it and everything. I brush my teeth in it.

BECK: Let me ask you this. When you first got it, did you wear it around -- did you wear it for a while and just like, "This is cool"?

HAGLUND: Well, I had to wear it all -- I mean, after Miss America you have press conferences. You have a VIP party that you have to go to. And then meet these people and say thank you to these people. And so there`s a lot of events right after the pageant that yes, you have to end up wearing your crown.

BECK: No, I mean, like at home in your pajamas?

HAGLUND: No.

BECK: Never?

HAGLUND: No, I take it off.

BECK: Really?

HAGLUND: Yes.

BECK: You never were, like, "I`ve got to learn how to wear it," and walk around in it?

HAGLUND: Well, it has this neat elastic on the top and then you just pin it in. So it`s actually pretty easy to wear, if you. You want to see it?

BECK: That doesn`t look comfortable. Yes. Can you get a shot of it? That doesn`t look comfortable at all.

HAGLUND: Yes.

BECK: I`d put a cupcake in there. You never know when you`re getting hungry.

So OK -- so you also were -- tell me this is wrong -- spokeswoman for IHOP`s National Pancake Day?

HAGLUND: Yes. I was.

BECK: Really?

HAGLUND: Yes. IHOP is also partnered with Children`s Miracle Network.

BECK: OK.

HAGLUND: So, for National Pancake Day, which was Tuesday, February 12, I helped -- I did a satellite media tour and spread the message around the country that you can go to your local IHOP, get a free short stack of buttermilk pancakes in return for a donation that will go to Children`s Miracle Network.

BECK: Danny, can you put a split screen between the two of us, please? Can you split the screen? Let me just give -- let me just give a message here to the International House of Pancakes. Do you have that? Can you do that yet, Danny?

OK. IHOP, which one looks like the guy who should say, "Come on, let`s go have a bunch of pancakes?" Her or me? Come on. I`m just saying. You`re looking for a pancake spokesman, right here. Right here.

How is the -- how is the pressure on being a -- Miss America? Being - - you know, you`re supposed to be in shape. You`re supposed to be thin. All the pressures with the girls and everything. And I know one of your big things is eating disorders.

HAGLUND: Yes. That`s my personal platform. And that`s what so many people don`t see, is they just see the night of the pageant. They don`t see that it`s a yearlong job. You know, I`m not only a spokeswoman for the Children`s Miracle Network, but for my platform, I represent the organization, and it`s my job to be a role model.

So that is the cause that I`ve taken on. And every time that I speak to an audience, whether it`s an interview like this or a newspaper or a radio or young women themselves, I`m able to talk to them about the value of self esteem and self worth.

BECK: Do you think it`s -- do you think these beauty pageants, per se, everything, the stuff that was going on -- I think it was, what, with Miss Teen or whatever. I mean, it`s just getting so nasty. And it doesn`t -- I mean, Miss America, if I`m not mistaken, is like the only that hasn`t been really tainted.

HAGLUND: We`re haven`t had a scandal like that, and you know, that`s what the media looks for. They look for a scandal. They look for the negative. We`re here to show the positive. Right?

BECK: Right.

HAGLUND: But I think it`s just -- you know, everyone in life makes poor choices at times. But, you know, I try to realize that I`m a role model. And that`s why I chose to do this and compete in this program.

BECK: Good. We will see you at the Children`s Miracle Network.

HAGLUND: Yes, in March.

BECK: You got it.

Back in a minute with "The Real Story," next.

(COMMERCIAL BREAK)

BECK: Well, law enforcement agencies are having problems distinguishing between real child porn and digitally-enhanced photographs depicting child porn...

BECK: Well, law enforcement agencies are having problems distinguishing between real child porn and digitally enhanced photographs depicting child porn. And our government actually believes there`s a difference between these two. And believe it or not, it is somebody`s job to look through all of this porn and I`m going to talk to that unhappy person. They have to be unhappy, next.

But first, welcome to "The Real Story." Over the last 12 months, wholesale prices have risen to their highest rates since the early Reagan years. Inflation is back and it is big and you know it if you`ve bought eggs or milk at the grocery store. You know exactly what it means to your checkbook. Now if you`re living on the financial edge, there are people who have already maxed out their credit cards, their home equity lines and there`s only one way to get extra cash and that is something that would have seemed unthinkable to Americans just a few years ago.

They are now raiding their 401(k)s. In the old days, you know, like 2005, we actually tried to discourage people from draining their nest egg, but not anymore. These days, you can actually use a debit card to withdraw money directly from your retirement account at an ATM machine.

No surprise, this idea is catching on. How long before we bail these bozos out? We`ll get to the wisdom of the credit card here in just a second but "The Real Story" is 401(k) debit cards are just another example of how we are all learning a dangerous lesson from our government. They have taught us not to worry about retirement, social security will be there. No, it won`t. They`ve taught us buy what you want, when you want it. They`ve taught us live for the present, not the future. Well, guess what? We have listened, America and we have learned these lessons.

One of the county`s largest 401(k) providers recently reported loans among their accounts were up 13 percent last year. Even worse, hardship withdrawals, these are the ones where they make you pay 10 percent tax penalty, up 14 percent. Hardship withdrawals from fidelity 401(k)s up 17 percent. That is the largest rise in that company`s history.

Here`s the problem. When all of these people who no longer have a 401(k) pension plan or social security to fall back on realize they can`t retire, guess who foots the bill for the massive government program that will be needed to take care of them all? You will.

Jennifer Waters, the personal finance editor at "Marketwatch." Jennifer, have you ever heard of a more stupid idea than debit cards for your 401(k)?

JENNIFER WATERS, PERSONAL FINANCE EDITOR, MARKETWATCH: Well, well, it`s -- the idea overall of taking money out of your 401(k) is stupid to begin with. I mean, that has no, no bearing on anything. I mean, you should -- your retirement money is there for one thing -- your retirement. So you should keep it there. But having said that, Glenn, there are people who have catastrophic events in their lives.

BECK: Wait, wait, Jennifer. Jennifer, I have taken money out of my 401(k). I don`t remember what the deal was but it was a catastrophic event in my life and I had to have the money and I took the money out. But that`s what it`s there for, for emergencies. And there are people that -- we`re not talking about that. We`re talking about debit cards.

WATER: This is not a whole lot different though, Glenn, then taking it out of there. You don`t just get a debit card that has access to your total 401(k) that you can just go use as you would on your maybe your line of credit on your home. But this is a little bit different. It is a little bit tougher to get the money out. But once you get it out, you know, when you take it out from the 401(k) as you well know, you have to do a certain amount of money. You have to let your company know how much you have out how much you want and why you want it. You have to explain to them what that expense is. And then you have to pay taxes on it and then you have to repay it back in, say, a five-year time period.

Now the biggest risk then is if you lose your job or you switch jobs. You have to then -- they`re going to say to you, OK, we need the lump payment no matter how much it is within, say, 60 or 90 days. That`s huge.

But beyond all that, you also have to take into consideration that kind of a rule of thumb is for every thousand dollars you take out, you can expect that`s going to be equal to about $10,000 down the road. So I mean, overall, it is just stupid to do it. But if you`re doing this plan -- if you need to do it, and you do this plan, you don`t tend -- well they claim that you don`t tend to take as much out. But you also, you don`t have the huge fees.

BECK: Come on, Jennifer. We are generation now. That`s what we are. And you know that this is targeted to the younger people. It is not -- this is not an emergency plan. This is a way for people to get access to their money, spend their money and this is just a bad idea. You know as well as I know that the younger people just don`t think that retirement is even going to be there for them.

WATERS: Well, that`s a really good point. And I think what this might even be doing is compounding the problem for younger people because most people in their 20s or 30s can pretty much tell you they don`t plan on social security ever helping them out.

BECK: That`s why you have a 401(k).

WATERS: That`s why you have a 401(k). You shouldn`t touch it.

BECK: Thank you very much.

Now the number of American homes facing foreclosure was up 57 percent in the last year. In Fort Myers, Florida, one out of every 86 homes is now in some stage of foreclosure process. History shows us that when things turn bad in one corner of the market, people flee to safety. To most people, there`s no place safer for your cash than a good old fashioned bank account. After all, it is FDIC insured, right? I`ve seen those stickers ever since I was a kid, but I don`t even know what that means. Where does that magic bail-out money really come from?

A few months ago, I asked my "Fusion" magazine staff to get into those questions. We`ll get into what they found here in just a minute. But the "Real Story" is that the FDIC is simply not prepared to handle any kind of immediate crisis and now they`re scrambling to play catch up. Earlier today, the FDIC released its list of problem banks, institutions that may not have enough capital to prevent a collapse. There are now 76 banks on that list, that`s up from 47 at the end of 2006. But should that number jump anywhere close to the -- I think it was the 572 banks that made the list during the savings and loan crisis of the early 1990s, the FDIC may not be ready to respond.

Back then, the FDIC had 15,000 employees. Now they have less than a third of that. Back then, the government spent over $90 billion to bail out these failed banks. Right now, FDIC has just $52 billion in reserve. Realizing that things could quickly worsen, the FDIC is now trying to, quote, "bulk up for preparedness purposes by bringing back 25 veteran employees from the S&L crisis that it retired."

But is that really enough? And what happens if your local bank or god forbid one of these big, national banks fails? Jaret Seiberg is the Washington policy analyst for the Stanford Group. Jared, first of all, let me start with the FDIC - 76 banks up from 47. I don`t even know how the FDIC works. Is this a -- do they take our tax money and do this? How does this work?

JARET SEIBERG, WASHINGTON POLICY ANALYST, STANFORD GROUP: Oh, that`s a great question. Banks pay insurance premiums and for a long time, the FDIC fund was so over capitalized that banks didn`t have to pay anything and that changed a couple of years ago and banks have been paying in and they built up this reserve that the agency`s supposed to tap in times of trouble.

BECK: OK, so the FDIC was designed during the Great Depression. It was not designed for the system that we have now. Wasn`t -- nobody -- there weren`t these gigantic banks. They were all local banks pretty much. Right?

SEIBERG: That`s true. But it was designed to prevent a run on banks from having depositors panic and run down and pull their money out and thus cause a bank to fail and caused everyone to lose.

BECK: All right. Now 100 banks fail, the small ones that are, you know, your mom and pop banks, you say that`s not a bad thing.

SEIBERG: Well, you know, bank failures happen during a credit cycle and what happens is some banks always get too aggressive and they`re not able to cover their losses and the agencies have very strict rules about when they have to step in. That`s one of the reasons why the FDIC is trying to get ready. You know, they know that we`re going through a difficult credit cycle and they want to be prepared.

BECK: OK. So they`ve only got like $52 billion. What happens if -- and I know you don`t believe this could happen and if I hear this once, I`ve heard it a thousand times, oh things like Citigroup, they could never fail. Really? It could never fail? What about the huge bank because of the scandal in France? What about the Bank in London? What was that, $299 billion that the government had to absorb? What happens if God forbid one of these big banks in America fails?

SEIBERG: Well, I mean, that`s what everyone always worries about and regulators have been talking about that for more than a decade. The question really becomes, can we really ever allow a bank, that is so large as some of our mega banks to go down? And the answer seems to be no. They need a way to prop them up.

BECK: What does that mean? You`re just passing the problem on. Everybody says, we couldn`t let Citibank - it`s too big, we could never let them fail. But you`ve got a system where the government has so much debt already they`d have to borrow all that money from some place else and borrow it from china. How do we not fail by not letting a bank fail?

SEIBERG: Well, again, it`s another great question because clearly money does have to come from somewhere but the Federal Reserve and the Treasury have the ability to pump money into the banking system and that`s what they look to do during a time of crisis. And the decision has to be made as to whether or not it`s better for the economy and better for taxpayers to keep an institution standing even if the shareholders are wiped out. Remember, we`re not talking about bailing out the shareholders, we`re merely talking about preserving the institutions to save the deposit.

BECK: OK Jaret, thank you very much. That`s the "Real Story" tonight and if these kinds of stories are interesting to you, you might want to seek therapeutic help or looking into subscribing to my magazine "Fusion." It is not "The Economist" and it is also not "Mad Magazine." If you like great, thought-provoking stories with a sense of humor, also conservative viewpoint, then "Fusion" is right up your alley. You can subscribe right now by going to GlennBeck.com and clicking on the magazine button.

(COMMERCIAL BREAK)

BECK: Last year, there was a group of people in Virginia that looked closely at over 5 million images of child porn and none of them were arrested. In fact, they`re being given more child porn to look at this year. The group runs what`s called the child identification victim program. It`s their job believe it or not to separate real child porn from computer-generated child porn.

Now, I don`t see a difference between the two but apparently the Supreme Court ruled that computer-generated child porn legal. It`s cool. Prosecutors around the country found themselves now having to prove to juries that the pictures of their cases were based on were real.

Fortunately, there are a few brave people out there like Christine Feller. She is the program manager of the Child Victim Identification Program. I have to tell you, Christine, I think you have the worst job I have ever heard. You and how many people every day look at child pornography and try to figure out if it`s real or not?

CHRISTINE FELLER, CHILD VICTIM IDENTIFICATION PROGRAM: Within our team in the Child Victim Identification Program, we have 11 individuals who are reviewing these image and video files every day. Collectively within a cyber tipline, we have a total of 30 individuals who look at it. But specifically the CVIPs, 11 of us.

BECK: OK. You know, I get to the facts here in just a second. First I have to ask, how do you do this job? How do you look at vile images, day after day -- how many in an average day do you see?

FELLER: On an average day, we can review anywhere between 1,000 images within a 45-minute segment.

BECK: Oh my gosh.

FELLER: So it could be -- I could be looking at anywhere between 5,000 and 15,000 files depending on what the content is and how quickly I can move through that.

BECK: I don`t even want to imagine what the most vile stuff that you have seen because it`s video and stills.

FELLER: Correct.

BECK: Again, the question is, how do you do it? How do you -- how do you keep your humanity? How do you not --

FELLER: Right, Glenn.

BECK: Just go crazy.

FELLER: And that`s a question that is commonly questioned is how can you do it? But however knowing what is out there and having viewed these images and video files of children being sexually assaulted, these are children who are as young as newborns, who are being raped by adult males that we`re looking at. Knowing that it`s out there, how could we not work with law enforcement?

BECK: No. Yeah. I understand that.

FELLER: Right.

BECK: But it`s got to be -- just like going to war. You`ve got to out and you fight evil. But goodness gracious, it`s got to leave scars on you.

FELLER: Well, definitely. You know, myself and other individuals in the unit, we can definitely say that we view life now through a different lens because of what we have seen. When I`m out in public and I view interactions between, you know, children and adults, I definitely look at them differently.

BECK: I only have -- about 45 seconds and I`ve got two questions that I want to -- I could spend forever with you because I`m fascinated by this. One, you must have a real good screening process on who you work with because this would be like a pedophile`s dream come true job, yes or no?

FELLER: Obviously yes it would be. We have a very, very tough process.

BECK: OK. And the second one is, does anybody really think there`s a difference between a computer-generated child being molested and a real child being molested as far as the person who`s viewing it?

FELLER: Right. Well, the person viewing it, obviously, they have specific reasons for looking at that. And our focus when we look at each one of those images and videos to see, does this appear to be an identified victim that law enforcement has already notified us, that yes, I met the child, I interviewed them and I removed them from the victimization.

BECK: Holy cow. Christine, god bless you and to your team, my hat`s off to you. Keep up the good work. I don`t know how you do it, but god bless you.

All right, let`s take a positive turn now to tonight`s "Real America," brought to you this evening by CSX. One man has taken an unconventionally direct approach by helping the homeless. And by doing so, Felix Middleton is not only helping others, he`s also helping himself.

(BEGIN VIDEOTAPE)

BECK (voice-over): Down in the basement of the Phoenix House, a drug treatment center in Brooklyn, New York, sits an electrical closet. There are no circuit breakers or wires here. Instead, you`ll find a makeshift closet filled with sleeping bags, purses and tons of tossed out materials. And a few feet away from that sits Felix Middleton, sewing, designing and single handedly making a difference one stitch at a time.

FELIX MIDDLETON, FOUNDER, PROJECT WEAR: This is one of the bags, the sleeping bags that I have made already. These plastic bags that are holding the sleeping bag, they were donated from a church in queens.

BECK: It`s called Project Wear. The idea came to Felix while he was being treated for his own drug problems at the Phoenix House.

MIDDLETON: When I came here, the facility was getting new blankets and some of the older ones were damaged, they were going to throw them out. I decided since I was a tailor, maybe I could -- I put in a request with the director that I could make them into sleeping bags and go and give them out to homeless people.

BECK: He slowly stitched his idea into reality and now he makes sleeping bags, sweatshirts and even umbrellas, whatever material is donated - Felix will turn it into something useful. Weekends, he hands them out to homeless people in need.

MIDDLETON: The person was asking for money, right? They were laying there. They had the blanket, laying on the street. They had a cup for money. But when I said, um, I made these sleeping bags and I give them out to homeless people. I don`t have any money to give at the moment but the person was -- they were overjoyed. He was like, you mean you`re going to give me this instead of giving me a dollar?

BECK: Ironically, Felix says if it wasn`t for the treatment center and Project Wear, he would be on the streets again in the exact same situation as the people he`s handing sleeping bags out to.

MIDDLETON: I would have been sleeping in the parks, like I have done once before. It is a shame that we as New Yorkers we walk by people like this and we consider it just like a piece of paper on the ground. We walk by them and like they`re not even there.

If one person tries to help, maybe another person will help and then maybe another person will help and maybe another person will help. We`ll have a lot more help.

(END VIDEOTAPE)

BECK: As a recovering alcoholic and former scum bag myself, I know that the answer always lies in helping others. If you would like to get involved and help out, log on to CNN.com/Glenn. Look for the Project Wear section. There you`ll find out all the information on how to donate material. Tonight`s "Real America" sponsored by CSX. It`s how tomorrow moves.

(COMMERCIAL BREAK)

BECK: Well, regardless of the outcome of Ohio and Texas, we do one thing. Hillary has told us in the last debate no matter what happens, she`s going to be fine. I`m not sure if Obama is that confident considering his wife hasn`t found anything in America to be proud of since her adult life began. But one thing we know for sure. We know that Barack Obama and Hillary Clinton are bringing everyone together under the banner of hope and change. Right?

Hopefully we can bring the words hope and change together. Ah, chopeange, chopeange. Apparently two men, Jose Antonio Ortiz and Sean Shurelds didn`t get memo of it of chopeange. Sean is an Obama supporter. His brother-in-law Jose is a Clinton supporter. And it all started when the Obama guy said to the Clinton guy, "Barack Obama is trashing Hillary." Despite the fact that this undeniably true, Clinton guy was upset. He responded with some vicious trash talk himself.

He said, "Oh, yeah? Well, Obama isn`t a realist." And you know with fierce talk like that, things were about to get ugly. So first, Obama guy and Clinton guy continued to argue. It began to get a little more heated and at one point Obama guy came up behind Clinton guy and began to choke him from behind.

Sounds like the typical response to political discourse in this country but things continued to escalate. Clinton guy says next thing he remembered was waking up while Obama guy was still choking him. The struggle continued. When he was punched in the face by Obama guy. Finally, Clinton guy able to push Obama guy off him and get both Clinton guy and Obama guy off of the floor.

So then Obama guy ran upstairs to get away because somehow or another, police say that Clinton guy wound up stabbing Obama guy. Whoops. For his part, Clinton guy says he doesn`t remember stabbing Obama guy. He never even saw a knife. Later, Clinton guy changed his story which is kind of surprising coming from Clinton guy.

He said, he saw a knife lying on the floor. He picked it up, put it in the dishwasher, that`s where it was found by police. Thankfully we have two Democratic candidates that can end all of this divisiveness. Now all we can do is hope that Obama guy isn`t one of the 47 million Americans without health insurance.

Don`t forget, if you`d like to have more information on the news of the day, sign up for my free e-mail newsletter right now at GlennBeck.com. From New York, good night, America.

END