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Glenn Beck
Obama Changes Mind About Delegate Controversy; How Bad Will Oil Prices Get?; Public Viewer Pens Book
Aired April 10, 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, an Obama update. First, the delegate charged with calling kids a monkey. Where does that stand? And now Michelle Obama says Americans need to give more, so others can benefit. Common sense or, oh, socialism?
Plus, a perfect storm of trouble for the airline industry, as oil prices skyrocket and carriers fold. I`ll explain why the industry`s future is up in the air.
While most economists won`t even say that we`re in a recession, 79 percent of Americans think a depression is possible. How possible is it? And how do you prepare? A story you ain`t going to get any place else.
All this and more, tonight.
(END VIDEOTAPE)
BECK: I love the open there. A story you`re not going to get anywhere else. Yes, that`s because I`m crazy.
Hello, America. I got an update for you on that monkey business story we gave to you last night, as our PC culture goes on yet another fishing expedition for racism.
Last night, I told you about a Hispanic Obama delegate who was asked to step down by the Obama campaign because police fined her 75 bucks for disorderly conduct after she apparently referred to the children of her African-American neighbors as monkeys. They were swinging in the tree. Wait till you hear it in context.
So here`s "The Point" tonight. This is a trumped-up race charge that ignores context. It defies all kinds of common sense. This poor woman is finally fighting back. My spiritual adviser says amen. And here`s how I got there.
Linda Ramirez-Sliwinski, she says -- I think I just butchered that name, but we`re going to go on anyway. She said the word "monkey" was not a racial insult. Her mayor agreed with her. He disagreed with the police, said she should have never been given a ticket. And now she`s standing up for herself. She said she`s not apologizing or stepping down. You go girl, mm-hmm.
Yesterday, the Obama campaign -- is all of America uncomfortable? Yesterday, the Obama campaign called the incident divisive and unacceptable. But today, it was, quote, "just a misunderstanding." I mean, I think I have whiplash from them changing their mind so fast.
So here is what you need to know. Barack Obama`s -- Barack Obama`s campaign did not have a change of heart. He got caught playing PC politics, and this guy was actually willing to sacrifice the name and reputation of one of his own candidates. When will anyone, besides me, in the media hold this guy responsible and accountable for his actions?
Abdon Pallasch, he is the political reporter for the "Chicago Sun- Times." Abdon, yesterday, divisive and unacceptable. Today, it was just a misunderstanding. Was it ever her decision to step down as a delegate or was she asked?
ABDON PALLASCH, POLITICAL REPORTER, "CHICAGO SUN-TIMES": That`s a great question. I would love to ask her that question. But she is not returned calls. I think she`s someone besieged by the media right now, so she`s -- we`re getting things second hand. But her mayor said that he had encouraged her from the beginning to stand -- stand her ground and not get rid of her delegate seat.
The first night -- I mean, this happened on Saturday. The news kind of came up over the weekend. When I talked to the Obama campaign on Monday and told them about it, they said, "We`ll get back to you." They called her, asked her to step down. I`m guessing just because they would rather not you and me be talking about this right now. This is getting them off message. They`d rather be talking about economics or the war in Iraq.
BECK: You know what, I -- isn`t -- isn`t this exactly what a guy who says we should have a reasonable discussion about race? Isn`t this what he should be doing, saying, "Look, part of the race thing is, we`ve got to bring all sides together."
And quite frankly, there are people who are called racist who aren`t racist. Because I know me. I don`t know about you, but me, I know who I am. I`m not a racist. Do I say stupid things from time to time? Yes, but I`m tired of walking around on egg shells all the time.
I`m going to say stupid things. Other people are going to stay stupid things. But that doesn`t make you a racist and mean that you should be destroyed immediately.
PALLASCH: That`s the campaign stance right now, is that now they accept her explanation. This was just a misunderstanding, that she had no racist intent when she said, "You shouldn`t be playing in the tree like monkeys."
BECK: The fine, she was fined for -- this was the -- this is the statute. They banned activity or language that alarms or disturbs another. What the hell kind of law is that? Why was that even passed?
PALLASCH: I`ve never -- I`ve never heard something similar myself, so -- there was a big question. What was the fine, disorderly conduct? Disorderly conduct generally implies, police breaking up a fight.
BECK: You`re drunk or something like that?
PALLASCH: Municipal ordinance -- yes, it`s a municipal ordinance for this small suburb of Carpentersville. They can interpret how they want to interpret. I don`t know if it will hold up in court, before the judge it will go before.
BECK: And real quick, there`s a history with this neighbor. I mean, because it didn`t make sense to me. I would have never called the police on this. This is like the Hatfields and McCoys.
PALLASCH: Yes, the neighbors don`t get along. One happens to be Hispanic. One happens to be African-American. Does that play a role or not? They don`t get along. And the village recently passed an ordinance about recycling, and...
BECK: Don`t throw recycling into this. My blood will shoot out of my eyes.
PALLASCH: Yes.
BECK: And I`m anemic. Thank you very much.
Now, I`ve got to move from racism to Marxism, and Obama is still in the center of it. For months, I`ve been telling you, Barack Obama, and more his wife than Barack, I mean, at least looking at her language. I believe there`s a socialist agenda there for America.
And Michelle ain`t helping him any. She`s adding fuel to the fire. Remember, Michelle is a campaign surrogate for her husband. So he can`t be everywhere. So he sends her out to speak for him.
This is what she said at a North Carolina campaign stop, and I quote. "The truth is most Americans don`t want much. Folks don`t want the whole pie." I do. But I have a fat man screaming to get out of me. "Most Americans feel blessed to thrive just a little bit." Well, good, let`s lower the bar. "But that`s out of reach for them." And then she continued, "The truth is, in order to get things like universal health care and a revamped education system, then someone is going to have to give up a piece of their pie so someone else can have more."
Well, hello and welcome back, Karl Marx. A redistribution of pie doesn`t make me feel any better. Thanks, but no thanks, Michelle. When it comes to pie, or money, I`ll take all I can get. I want all my pie. I should be able to keep my pie. And you know what? I want you to have a huge piece of pie, as well. Have the whole thing. It`s not because I`m -- I`m selfish. I`m not. Unlike the Obamas, I happen to give away more than 1 percent of my income to charity.
The bottom line is this. Success and money, it`s not finite. This is America. That`s not a zero sum game. There`s as much as you feel like working for it. You know, you`ve got to -- you`ve got to look at money and success as the ocean. It doesn`t hurt the ocean to back a dump truck up to it and take a bunch of water out of it. There`s more. Stand in line, go get it.
Let`s stop thinking about pieces of pie, and remember that if you want to look at it as pie, this is America. We`re a freaking bakery. Bake more. Make as many pies as you want.
Mark Steyn is the author of "America Alone: The End of the World as We Know It." It`s out in paperback this -- this week. And you`ve got to read this book, if you never have. Why? Because Canada is trying to ban it.
Mark, talk to me about this pie stuff. I think -- I think there is hidden language in especially Michelle Obama. Her language is riddled with socialism.
MARK STEYN, AUTHOR, "AMERICAN ALONE": Yes, I think she`s a conventional university socialist.
And you`re right. I give enough of my pie to the federal government, and they waste most of that pie. So, when she`s talking about universal health care and revamping and reforming education, by any reasonable measure, American education is overfunded. We spend more per student on public school education than any country except Switzerland, and we have nothing to show of it. By any reasonable measure, a third of the pie that is thrown at public education is completely wasted.
BECK: First of all, there`s two things. You want to talk about public education, I just read something in -- it`s in Hartford. It`s in New York now. I think they`re doing it in Maryland. They`re starting to pay kids to go to school.
STEYN: That`s right.
BECK: Don`t take any more money from me, man. You`re going to have to take it with a shotgun. You`re not taking any more money from me.
STEYN: No. It`s a complete waste. We would be better off enrolling them in these schools in Switzerland. It would be cheaper to actually board America`s students in Switzerland, and at least they get a decent education there.
By any reasonable measure, the pie is wasted. And that`s the point. If you believe in redistribution, who does the redistributing? The government. The government is an inefficient spender of money.
BECK: You know, look, here`s the thing. I`m tired of -- tell me how big my piece of pie has to be. Tell me how much I have to -- tell me what the top is. Right now, we have, in "The Real Story" tonight, we`re going to give you the stats on this. The top 10 percent of American -- the top 10 percent pays 70 percent of the tax bill.
STEYN: That`s right.
BECK: The bottom 50 percent only pays 3 percent, and the bottom 48 percent get money back.
STEYN: Yes.
BECK: It`s insane.
STEYN: And Michelle Obama understands this. Because just a couple of weeks ago this crazy woman was saying that she and her husband had a hard time paying for their kid`s piano lessons because they only earn half a billion bucks a year between them.
On the one hand, it`s America`s fault that she and her husband can`t get by on a lousy half million a year.
BECK: I know.
STEYN: Why is that? Because the government takes too much of it.
BECK: Let me -- let me ask you this -- or you`re really bad at budgeting. Either way, I don`t want you in the Oval Office.
STEYN: That`s right.
BECK: Let me give you this. You just tell me what -- what we`re missing here in Michelle Obama`s language. Listen to this. Quote -- this is from the UCLA speech she gave. "And Barack Obama will require you to work. He is going to demand that you shed your cynicism, put down your division, that you come out of your isolation, that you move out of your comfort zones, that you push yourselves to be better and that you engage. Barack will never allow you to go back to your lives as usual, uninvolved and uninformed."
My gosh.
STEYN: Yes, exactly. Soft, fluffy totalitarianism. The right to be uninvolved, the right to be left alone is one of the most precious rights in a constitutional republic. And if she wants me to shed my cynicism, she`s going to have to prize it from my cold, dead, cynical fingers.
This is not -- this is Kim Jong-Il dressed up with a bit of Oprah Winfrey dressing. It`s unbecoming of an American presidential candidate.
BECK: I just wish these candidates would go back and read the worlds of the Founding Fathers. You have a right to fail.
STEYN: Yes.
BECK: You have a right to starve to death.
STEYN: That`s right.
BECK: You don`t -- the government is not the person to come in and tell you how to live your life. If you want to fail -- there are a lot of people that, you know, hold themselves up in the woods in a cabin, like, "I`m going to sit here and eat my tin can." That`s exactly what you have a right to do in America.
STEYN: Yes. And that is the most -- that`s the most precious right. And I wouldn`t mind if she was saying, we need 300 million self-reliant, engaged citizens out there.
BECK: Yes.
STEYN: But she just wants 300 million cheerleaders...
BECK: Yes.
STEYN: ... for a messianic president. Sorry, count me out.
BECK: Thank you very much, Mark. Appreciate it.
Coming up, oil prices soar, thousands of flights are canceled across the country. How much more can the U.S. airline industry stand?
And some of you thought I was crazy for talking about an economic doomsday scenario, but guess what? Guess who`s not crazy? Sucks to be me, doesn`t it? We`ll speak to the former chief global strategist for Morgan Stanley and find out what he believes we should prepare for.
And just a reminder: tonight`s show brought to you by the Sleep Number bed. Sleep Number by Select Comfort, it`s the bed that counts.
(COMMERCIAL BREAK)
BECK: Let me take you back to, oh, I don`t know, maybe around 1776 when our Founding Fathers had a problem with taxation without representation. I don`t know about you, but I think I can make a pretty strong argument that none of the dopes in D.C. actually represent me or you.
So, you know, kind of makes me wonder how we`re going to fix the modern-day tax system which, with over 200-plus years has evolved into a few paying for the many. How is that fair? We`ll talk -- talk about this question in tonight`s "Real Story."
But first, if you think filling your car with gas is expensive, try filling a semi truck. How about this one: try to fill up the tank of a 747. The airline industry is hurting, oil is $120 -- sorry, $112 a barrel, and that is their biggest pain.
Three regional airlines have just gone out of business in the last seven days. Rising fuel prices, just the tip of the iceberg. Coming back from a five-year slump since the 9/11 terrorist attack, has been a little tough considering the $35 billion in losses. Demand for air travel remains high. Have you been to an airport lately? Customer satisfaction, all-time low, faulty inspections, canceled flights. There are thousands of people right now stranded in airports all across the country. That ain`t really helping.
The good news is, at least the food is just as bad as it`s ever been. And the security lines are just as long.
Barney Gimbel is the writer for "Fortune" magazine, the focus on this issue.
How bad is it? I read a report today that said this kind of stuff is going to go on through June.
BARNEY GIMBEL, WRITER, "FORTUNE" MAGAZINE: It`s going to get worse this summer. I mean, this is only the tip of the iceberg. But we`re getting sort of a taste of it now, thanks to these, you know, safety inspections that came at the last minute.
BECK: So what is the cause? Is it just the oil? What`s causing this?
GIMBEL: Well, I mean, a lot of things. As you said earlier, it`s tremendous demand. People are actually traveling, you know, despite all this. People are traveling.
BECK: Yes.
GIMBEL: The problem is that it`s $140 a barrel with -- for jet fuel now. The airlines -- it`s going to continue to...
BECK: So here`s -- here`s my fear. Please talk me down from this insanity tree. I could see, you know, some of these big airlines start to fall apart, and then our stupid government coming in again and saying, "You know what? This is too big to fail. We`ve got to help you out." And the next thing we have is Amtrak with freaking wings.
GIMBEL: I don`t think that`s going to happen just yet. And I think the big guys will stay around. They`ll probably go into bankruptcy again. The question there is actually not who is going to fail but when. So, it`s a matter of the survival of the fittest.
BECK: Yes. Are any of them fit? I mean, I had Richard Branson on for a full hour, and he said to me -- I don`t know if this is on the air or off the air or off the air -- but he said, "Your airline industry here is crazy." He said, "What is your government doing?" He said, "You guys are saving all the bad ones." He said, "Just let them fail. They`ll get stronger."
GIMBEL: That`s true. The last time -- the last time we had oil this high really was really back when it was regulated. So the airlines could bring up the fares as they needed.
But deregulation, you`re only as smart as your dumbest competitor. So if you want to have a fare war, you`ve got to match it.
BECK: OK. David Neeleman is a good friend of mine. He runs JetBlue. I think he`s -- what is the, the president of JetBlue now. This guy is always forward thinking. I talked to him three years ago and he was talking about, "You know, we should have -- we should have an oil field of our own. We should have these big reserve tanks, because it`s going to happen. It`s going to come to a time where we`re going to need it." And he was talking about JetBlue.
And then there was something else that he was working. Then he went to the government and said, "Hey, I want to make sure that we`re into energy." And, you know, they didn`t have a clue.
If David Neeleman, a guy who is as forward thinking as he is, is off now starting an airline in Brazil, what does that tell you about the airline industry here in America, and the regulation and everything else?
GIMBEL: Well, you know, it tells you, it`s been as screwed up as ever. It`s an incredible business.
But the other thing is there`s no airplane ever been built that can handle $100 a barrel oil. Period. These planes are, even the most efficient ones, are -- we never designed them to be profitable at that level. You know, the airlines, to their credit, in the last couple of years, some more than others, have really streamlined. They`ve cut everything they can cut.
BECK: Tell me -- please tell me I`m wrong, that some pilots are now making $20,000 -- for regional, $20,000 a year?
GIMBEL: Starting salary at some of the regionals.
BECK: The guy flying my plane is making $20,000 a year?
GIMBEL: Look in the cockpit. They`re 21.
BECK: Don`t -- don`t -- no, please. Don`t ever open up the cabin door if he`s 20 years old, and he`s flying a plane making 20 grand, please.
GIMBEL: But the problem is, people want both things, right? You want -- you want low prices and you want this to survive in $100 a barrel oil. Something`s got to give.
BECK: Not the pilots.
GIMBEL: That`s what they would tell you.
BECK: You know, I`m kind of a stickler on parts, wings and pilots. You know what I mean? Stop with the cart. Stop with the -- I can even say, just get some guy who`s just a big sweaty guy with the cones coming in, going, "Buckle up or I take you out." I don`t even need the stewardess.
GIMBEL: Well, the lucky thing is, we kept a lot of the great pilots. Even though they`re making 20 percent less than they were making a couple of years ago, these guys -- I don`t know how they survive.
BECK: All right. Thank you very much, Barney.
We`ll be back in just a second.
A quick news alert, Brian Sack, the public viewer, has escaped from the cage that we usually keep him in. He`ll be appearing on the program next. Parental discretion is advised.
Now, are we on the brink of a disaster that even a fall-out shelter couldn`t save you from? Break out the bars of gold, gang. Buckle up, stick around. We`ve got it all for you in just a bit.
(COMMERCIAL BREAK)
BECK: After like -- I don`t even know -- 20 weeks on "The New York Times" best-sellers list, I decided to step aside and make room for some other successful authors. My next guest will not be one of them.
He`s this show`s long-time public viewer and the author of a mildly amusing little book due out this May, entitled "In the Event of My Untimely Demise." Mr. -- wait a minute. Hold it just a second. Picture of the book doesn`t even have my endorsement on it.
BRIAN SACK, AUTHOR, "IN THE EVENT OF MY UNTIMELY DEMISE": What happened? I didn`t take that picture. Maybe we took it off.
BECK: You weasel. Brian Sack, welcome to the program.
SACK: Thanks for having me.
BECK: Yes. Now I understand that you have a problem with me having a problem with illegal immigrants?
SACK: I don`t have a problem -- we -- I`m here because I want to talk to you about my wife. She just got her citizenship on Friday.
BECK: Congratulations.
SACK: Thank you very much. We did it legally, you`ll be very happy to know. Seven years.
BECK: Yes.
SACK: Dealing with bureaucracy, red tape, canceled checks, things like that.
BECK: Did you ever consider doing it illegally?
SACK: You know, it`s tempting. They seem to get through faster.
BECK: Yes.
SACK: Seven years.
BECK: Yes.
SACK: And I wanted to ask you the questions that she was asked before, in order to get her citizenship.
BECK: OK.
SACK: These are the same questions she was asked.
BECK: Got it.
SACK: What are the colors of our flag?
BECK: Red, white and blue.
SACK: All right. Good; pass.
BECK: Good.
SACK: There you go. What do the stripes...
BECK: Did she have a hard time?
SACK: No, no. She got that one.
BECK: OK, good.
SACK: She`s a citizen.
BECK: Got it.
SACK: What do the stripes on the flag represent?
BECK: The colonies. Or the 13 states.
SACK: Yes.
BECK: Yes.
SACK: Good job.
BECK: OK.
SACK: There should be a bell sound.
BECK: There is a bell sound. You just can`t hear it.
SACK: Who wrote "The Star-Spangled Banner"?
BECK: Francis Scott key.
SACK: OK.
BECK: I know that because I lived in Baltimore.
SACK: OK. Key`s from Baltimore?
BECK: Yes. You were born here, too, weren`t you?
SACK: Yes, sir. What did the Emancipation Proclamation do?
BECK: Lowered your interest rate on Mastercharge?
SACK: To 2.45 percent.
BECK: Yes. No, it was -- it freed the slaves.
SACK: Most of them, yes. You got the right answer, although technically, it didn`t free all of them. Wikipedia taught me that.
BECK: I get all of my information from there Wikipedia.
SACK: Me, too. Yes.
BECK: I wasn`t being serious.
SACK: All right. Here`s one. Who is the current governor of the state you live in?
BECK: I live in -- what are these crappy little states? Jodi Rell.
SACK: Oh, you got it. OK, Jodi Rell. You`re in Connecticut. It`s funny, because when my wife took the test, the governor was Eliot Spitzer. But when she got her naturalization a couple weeks later, David Paterson.
BECK: Yes, what happened? You know what? I kind of like David Paterson.
SACK: yes?
BECK: Yes.
SACK: He`s interesting.
BECK: Yes.
SACK: Puts it all out there.
BECK: He`s a blind man who, you know, I think we should get actual blind people to run the country, you know what I mean? Fly the ship, navigate with blind people. He actually seems to have a clue.
SACK: OK.
BECK: You don`t even know, do you?
SACK: No.
BECK: He`s your governor.
SACK: I don`t know much about him yet.
BECK: I`ve seen a couple of things that actually make him look pretty good.
SACK: Can I ask you a few more questions?
BECK: All right. Go ahead.
SACK: These are not asked on the test, but this is questions from me. How long did the swearing-in drag on?
BECK: The swearing-in drag on? Uh...
SACK: Three and a half hours.
BECK: No way.
SACK: Yes. Despite being one of the first people to show up in the morning, who is the second to last person to leave?
BECK: Due to paperwork?
SACK: Yes.
BECK: Stuff like that? Your wife.
SACK: That`s right.
And what are the four signs that -- inviting you to vote. What languages were the four signs when people walked out? When you got...
BECK: Hopefully, they`re English, English, English.
SACK: English.
BECK: Spanish.
SACK: Spanish. Chinese.
BECK: Chinese.
SACK: And Korean.
BECK: Oh. Korean.
SACK: Yes. And speaking of the English language, I have a funny photo I`d like to show you.
BECK: Yes.
SACK: This is taken from ZombieTime.com.
(PHOTO: Marchers with sign reading "5 Years To Many".)
SACK: This is Cindy Sheehan marching with a banner, and they spelled "too" incorrectly. Welcome to America.
Thank you, Glenn.
BECK: All right. Thanks, Brian.
Coming up, say bye-bye to the Bush tax cuts and hello to what`s being called the money bomb. How it expects you -- how it affects you in tonight`s "Real Story," coming up.
(COMMERCIAL BREAK)
BECK: If you want to know what Americans think about taxes in this country, I`m a pretty good guy to ask, I think. I mean, I don`t have any government studies on me, or polls to rely on. But I do have my gut. And considering that I have been in every single tax bracket this country has to offer at one time or another, I think my gut is pretty reliable on this one.
It`s human nature. We want the rich to pay more. Yes, let them pay their fair share. That`s why we have a progressive tax system. Progressive, by the way, applies to both how the system works as well as the political ideology behind it. Whenever the government needs more money, the wealthy, I think along with the cigarette smokers, are the first to be the target.
In fact, Maryland just passed the nation`s first-ever state`s millionaires tax to close their deficit. New York is still considering one. Yes, I`ll stick around for that one. But with tax day right around the corner, maybe it`s time to check in on how that logic really works in the real world. After all, taxing the rich, oh, it`s easy, until they start closing down their businesses, stop spending or leave the state entirely.
It`s not like I`ve thought of that one, which is exactly what`s happening here in New York. Our taxes are so high now that the new governor, who is a Democrat, by the way, is finally putting his hands up saying, whoa, whoa, whoa, whoa, whoa, slow down. Slowing our spending binge is the answer, not more taxes.
Again, he`s a Democrat. But he has friends that have fled the state because of it. The "Real Story" is, the tax burden in this country has by any reasonable measure become so completely distorted and out of whack, it`s not good for the poor, it`s not good for the rich, it`s not good for you.
Take a guess at what percentage of Americans paid no taxes but still got money back from the government in 2005. I mean, people who didn`t get a tax refund, I mean, they paid nothing, but got a government check. You have a number in mind, 1 percent, 5 percent, 10 percent? That 10 percent, that would be crazy, right? How about 40 percent of all America, 40 percent of Americans actually made money off of our tax system.
Can you say socialism? And if you flip it around the other direction, the top 10 percent of earners paid 70 percent of our country`s nearly trillion-dollar tax bill, 10 percent paid 70 percent.
Nobody says that it should be 50-50, but I think both sides of the aisle can come together to admit that those numbers that show that we`re focusing on the wrong issue. It`s not about taxes at all. The debate should be about not how many more dollars we can get the rich to pay, it`s how can we get the bottom 40 percent to make more. Geoff Colvin is a senior editor at-large for Fortune magazine. He just wrote a great article about this exact subject.
Geoff, taxing the wealthy, I have news for you, they`re just going to say enough. They`ll move to Texas.
GEOFF COLVIN, SR. EDITOR-AT-LARGE, FORTUNE: Yes. They`ll move and I suspect that there`s going to be some kind of effect like that in the case of the Maryland tax you mentioned that was just passed.
It has become an increasing trend, by the way. You mentioned the amazing fact that 10 percent of the taxpayers pay 70 percent of the income tax. And by the way, the top 1 percent, the famous top 1 percent pay 40 percent of the total income tax, and that is all much more extreme than it was just 20 years ago. It has been tending more and more in that direction.
BECK: OK. So, you have got the bottom 50 percent that, let`s be honest, the Treasury, these could just skip out on their tax bill, the bottom 50 percent, and the Treasury wouldn`t even notice.
COLVIN: You could give them the ultimate tax cut. You could eliminate income taxes completely, and the Treasury wouldn`t know the difference.
BECK: Right, it`s like -- it`s 3 percent for the bottom 50 percent, right?
COLVIN: That is correct.
BECK: That`s -- so let me -- here`s the problem as I see it. If you only have 3 percent paid by the bottom 50 percent, this goes to the argument, I saw a study some place that said 70 percent of Americans want smaller government and lower taxes. However, at the same time, they`ll tell you, tax the rich.
So, it`s -- there`s the bottom 50 percent, they don`t -- they`re not paying any taxes, any real taxes. So, there`s nobody to stop these giant programs and stop people from saying, wait a minute, wait a minute, let`s slow down on taxes.
COLVIN: That`s exactly right. And the real problem here, as you`re suggesting, is that this is socially divisive. You have got half the country thinking that government is free. They don`t really pay anything into it. Everything they get seems free to them. And that`s not healthy.
BECK: Right. So, how do you -- how do you make an argument against health care, et cetera, et cetera? I mean, because most people, they see somebody with a giant salary and they are like, well, look, they don`t need the money. These are the people that are creating the jobs.
When they`re talking about taking the cap off of Social Security, I`m a small business owner, I run a business. I`ve got, I don`t even know, 20 employees. If you take the caps off of Social Security, I`m going to lay people off, I`ll have no choice. If you raise my taxes anymore, I won`t be able to create jobs, I will take jobs away.
How do you explain that to people?
COLVIN: Well, you know, small business owners like yourself and a lot of other regular Americans can understand it very, very well. But there`s an awful lot of other people who are not in your business or any other small business, they have never had to meet a payroll or anything. And so it is very hard to explain it to them. But the effect is real.
BECK: So, when we have a candidate now saying to us, oh, yes, well, we have got to have health care, too, I find myself on television every night talking to people and going -- I mean, what are you thinking? I mean, we don`t have the money to spend now. What do you think? And the response is always the same. Tax the rich.
COLVIN: Tax the rich. And that is what we`ve been doing. And, look it has to be said also that one reason the rich are paying so much more in taxes is that the rich are making a lot more money, which gets to the problem you mentioned earlier, which is, we really need to focus on getting the incomes of that bottom 50 percent back up, because they haven`t been going up.
BEC: Yes, but you know what? You don`t do that by taking it from the rich and redistributing it. You create things, you have -- you help people create things to get them out -- you push them out of poverty.
COLVIN: That`s exactly right. This is not something that the government can make to happen. And they certainly can`t do it by taking the money from the rich. It has to be allowed to happen, and that`s very frustrating for a lot of people in government.
BECK: Thanks, Geoff.
COLVIN: You bet.
BECK: You and I see the same stories on the news just about every night, about the economy, worried about our families, we`re worried about keeping our jobs. It`s easy to forget who else is impacted when the economy struggles, especially if that certain someone is the government.
Here in New York, the top 20 taxpayers contributed $533 million to the state through mid-March of last year. This year, the same taxpayers have contributed just $72 million. That is an 87 percent drop-off. And it`s all because the economy is grinding to a halt, which brings me right back to taxes.
The "Real Story" is that pretty soon, our federal government, our state and local governments are going to figure out that the economy is going to make a joke out of their projected tax revenues. In fact, that may have already started happening.
Today the government has announced that the deficit -- listen to this one, buckle up. The deficit through the first six months of this year is up 20 percent over last year. That makes it now the largest first-half deficit in the history of our country.
And gang, this ain`t about spending, it`s not about the war. This is about the economy. Of course, most politicians are going to look at that and say, that`s why we have to raise the taxes on the evil rich. But that`s exactly the problem I just showed you in New York, they don`t have it. We`ve put all of our eggs into the top 1 percent basket. And now that basket is drying up, because of the economy.
Fortunately, for the spineless weasels in Congress, they`re not going to have to raise taxes this time around. They just have to do something they`re really, really good at, and that is, do nothing. Doing nothing is going to cause the Bush tax cuts to expire at the end of 2010. This will result in the largest increase in personal income tax since World War II.
And guess what? No matter what you think, it`s going to affect you. No matter the tax bracket you`re actually in. Maybe you are older. You live of the income from dividends. Well, you`ll now have the privilege of paying 62 percent more in taxes on those dividends.
Maybe you`re hoping to inherit an estate tax free. Not so fast. You`ll now pay as much as 55 percent in tax on those estates. Maybe you are just getting by. Maybe you are just suddenly living paycheck to paycheck. Even if you are a lower income tax earner, your tax rates may go up by 50 percent.
But the worst consequence of all of this is one that I can`t even put into numbers. This country`s government is addicted to spending and we keep giving them more. Giving them more money, more tax dollars would be like handing a bottle of Jack Daniels to a guy who`s already passed out in the gutter. What the hell is wrong with us? Glenn Hubbard is the dean of Columbia Business School and the former chairman for the Council of Economic Advisers under President George W. Bush.
How did you get into Columbia? You worked for President Bush. That doesn`t make any sense.
GLENN HUBBARD, DEAN, COLUMBIA BUSINESS SCHOOL: I`ve been here for many, many years. Good to be with you.
BECK: Good to be -- slip in under the radar. OK, what have I missed? This isn`t just for the rich, this is going to hit everybody.
HUBBARD: We`ve got a very big tax increase coming. And you are exactly right. If the 2001 and 2003 tax cuts expire, we have the largest increases in personal taxes since the Second World War, twice as large as Lyndon Johnson`s surcharge. And it is across the board.
BECK: OK. So help me out on this one, because this is -- look, I`m not an economist, I`m not a professor or anything, I`m just a thinker. You have got a weak economy. You have higher -- the highest tax increase in the history of the country. More regulation. You have the financial sector very, very weak. You have uncertainty on what`s coming next because the government is talking about all kinds of regulation. This is a recipe for the 1930s, is it not?
HUBBARD: Well, it is true that a tax increase which would be bad economics any time is especially bad in a period of economic weakness. And the truth is, we don`t need this tax increase for long-term budget balance. The government, and this is not a partisan comment, on both sides of the aisle has been in a spending binge for more than a decade.
BECK: OK. So, why isn`t anyone talking about cuts? They talk about, you know, I get it, you know, the ham hock hall of fame, oh, that`s great, we need another one of those. But that`s not enough. I mean, you can`t just cut the ham hock hall of fame. You have got to cut, but yet, no one, not a single one of these politicians is talking about actual reduction of spending.
HUBBARD: Well, we need to. Just to frame it, if you looked at 1997, the year the binge really began, and just grew spending with inflation and add in all the homeland security spending that`s necessary, domestic discretionary spending, excluding defense has a binge of about $125 billion in this year alone.
BECK: OK. So, Glenn, help me out, because you are more than a thinker, you are an actual professor. If people don`t agree that tax cuts help the economy, then why was there such clamoring to get your picture taken behind the microphone announcing the stimulus checks?
HUBBARD: Well, the stimulus package is certainly something that may have some short-term benefit for the economy. The big issue is how to keep the right tax system for the long term. And these big tax increases are no way to do it any more than when we face the big entitlement wave coming at us, we should raise taxes then.
BECK: Glenn, watch your back. You`re in Columbia. I mean, you never know what`s going to happen there. That`s the "Real Story" tonight. We`ll talk to you again.
Now, don`t forget, you want to read about how much trouble our economy is in, I mean, not just in the next few months, but the years ahead, check out the latest issue of Fusion magazine. Former Comptroller General of the U.S. David Walker, I asked him to write an article for my magazine. He wrote the "Four Deficits of the American Economy." Please, don`t miss it. Get your copy right now by going to glennbeck.com.
And speaking about how bad it will get, maybe it won`t be this bad. Find out next. Could we actually be facing a catastrophic failure?
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BECK: Well, as this economic crisis has played out, my mantra the whole time has been pretty simple. Nobody really has any clue as to what`s going on and what`s coming. There`s no harm in preparing for the worst.
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BECK: Look, I`ll tell you what to buy. You go out and you buy a coat, you buy shoes, for what your kids are going to need two years down the road. Because if this continues, the dollar is going to continue to fall, everything is going to collapse. You know, at least buy something that you are going to need. You know you are going to need, not another plasma television.
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BECK: OK. This comes from my grandfather. He told me that people who survived the Great Depression were the ones who had the money to buy what everybody else was selling. As the crisis is spread, there have been more and more people saying that things could get much, much worse.
Former Labor Secretary Robert Reich has even said that he thinks there`s a 20 percent chance that we`re in for an actual depression. I hope that`s not right. The word is being overused now, just like it was underused a few months ago. I mean, you would be laughed at, trust me, just for saying, you know what, maybe we should really pay attention to this stuff and prepare. You were a crazy person.
So how likely is a depression? How likely is it that things are going to get much, much worse before they start to get better? What do you do to prepare just in case we face something ever, God forbid, like a Katrina, if it ever went global? Barton Biggs is the former chief global strategist for Morgan Stanley, and author of a great new book, "Wealth, War & Wisdom."
And, Barton, I have to tell you that I read something in The New York Times, and this isn`t really the point of your book, but it was put into this article. And it was quite shocking. You said: "You should assume the possibility of a breakdown of the civilized infrastructure. Your save haven must be self-sufficient and capable of growing some kind of food. It should be well-stocked with seed, fertilizer, canned food, wine, medicine, others. Think Swiss Family Robinson." That`s pretty intense.
BARTON BIGGS, AUTHOR, "WEALTH, WAR & WISDOM": I think I was in an apocalyptic mood when I wrote that.
(LAUGHTER)
BECK: So now you don`t think that?
BIGGS: No, I do think that. Look, I think what Robert Reich said is probably right. There is one chance in five that we could have a depression or we could have -- we could have anything like a long-term power failure. We could have a bird flu disease, a plague, something like that. So there`s -- and so.
BECK: Have you ever been in a situation where you have seen this many things coming together? I mean, see, what scares me is, I don`t think we`ve ever had -- you know, in recent history, we haven`t had this many things out on the table. And your book kind of looks at the history.
Have there been -- has there been a time when we`ve had all of these huge things that we could survive individually and even collectively, as long as everybody doesn`t panic?
BIGGS: Yes, look, I mean, I`ve been running money for 40 years, and at every time there`s a bear market and a recession, the threat of plunging into the abyss, in a depression, always comes up. It has never come up yet. But there is one chance in five of it this time, and as there always is -- there always is a plausible case for an apocalypse.
BECK: OK. You talk -- you actually run one of these hedge funds, and today, there was a story that I saw that said, they`re going into -- the hedge funds are starting to go into survival mode. What does that even mean? Do you know that story?
BIGGS: I don`t know that story, but I mean, a survival mode, we went into survival mode, we would cut back and be actually net short, something like that. But I`m not -- I wouldn`t -- I`m not about to do that.
BECK: Right. Is it true -- do you think that we can decouple -- do you think the United States can just decouple -- or not decouple, what people are saying is, oh, the rest of the world needs us too much. We`re such a huge debtor, doesn`t there come a time -- maybe not necessarily in the immediate future, but come a time where somebody like China says, you know what, they`re dragging us down, they`re not going to be good for this -- all of this debt?
Can -- does the rest of the world need us or is that arrogant?
BIGGS: No, the rest of the world definitely needs us. If China didn`t have us, they would have a revolution with their own people. I mean, we`re what provides employment in the Chinese economy. So one of the strengths of the world is that globalization really does exist. And the world is interrelated, and other parts of the world, like China and India, are much faster growing economies than we are.
BECK: Do you have a farm?
BIGGS: Do I have a farm? No.
BECK: Do you have canned good? Did you follow the advice in your own book?
BIGGS: No, I`m just a pontificator.
BECK: OK. Great to have you. We`ll be back in just a minute, stand by.
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BECK: Yes, we can appear on "American Idol." Last night, "American Idol" ran their charity show. And guess who took the time to be involved? Obama, Clinton and McCain. All taped something for the broadcast. You know, it makes a lot of sense. You know, it`s right where politicians usually are. I mean, they get a chance to show their faces in front of millions of people. They get to look like they actually care. And then they get a chance to do what they do best, beg for your money.
Actually, usually, they just take it from you. So maybe this did provide a new challenge for them. But last night, the three people who might run the free world got bumped. Yes. Show ran for two-and-a-half hours, and they couldn`t find enough time for the next president. I say this is why I love "American Idol."
I can`t take anymore politics. I really can`t. I mean, it`s only March. If I were running the show and I was faced with a choice of Obama, Clinton, McCain or Fergie, Mariah Carey, and Miley Cyrus? I would say, let`s bring on Hannah Montana, what do you think?
McCain ended the taped message reportedly by saying, as for me, it`s back to work on my new immigration plan and you better watch your back, Simon. Although McCain`s immigration plan probably -- I mean, why would Simon really have to watch his back, you know?
I mean, if he were here illegally, he could just pay the fine. He already knows English. Simon, you can stay around and do whatever you want to do forever under McCain`s plan. I`m just glad that we have these candidates hanging around for another eight months, and one of them lingering for another four years after that.
Hey, we can really get lucky and maybe get eight out of them. By the way, the "American Idol Gives Back" show is actually an interesting one. It`s a great one. Last year`s broadcast raised $76 million for charities in the U.S. and Africa. But the best part is, everybody wins. This is the way to do business in America. Everybody wins.
Look at it. "American Idol" does an extra night of TV, which gives FOX another night of "American Idol" ratings. Celebrities, apparently politicians as well get to look engaged in saving the world. Some of them actually are engaged from time to time. Charities get more money.
Advertisers look great, viewers are entertained, and best of all, it`s all within the bounds of enlightened capitalism. This is the way it`s supposed to work, another example of private business doing good while doing good business. "American Idol," you get it. Congratulations.
Don`t forget to check out glennbeck.com for the transcripts, audio and video, and while you are there, sign up for my free daily e-mail newsletter for all of the background information, glennbeck.com. From New York, good night, America.
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