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Big Bailout Round 2; Constitution in Crisis
Aired October 01, 2008 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
GLENN BECK, HOST: Tonight, congressional craziness is a big factor on what put us up right at the edge abyss of the Great Depression. Now the Senate is back to vote on a new bill. Does it have any common sense in it to back us out?
Plus a crisis in confidence with our leadership. Where`s the man or woman who will put party politics aside and focus on us?
And we`ll launch our special series tonight, "We the People`s Court." The nation`s in crisis, time to hold the politicians from both parties accountable.
Barney Frank, tonight.
Well, hello, America.
Tonight under the cover of darkness, the United States Senate will vote on a revised $700 billion bailout bill. The House rejected the original bill on Monday, and then that little move gave the Dow the single biggest one-day point loss in history.
So what`s different about this bill? Oh, oh, this is great. Hello, Congress. We have candy. That`s what`s happening here.
What is in this BILL that makes us think that the Senate, you know, and then the House should sign off? Or will sign off? It`s simple.
Here`s the point tonight. The reason these lawmakers feel this bill will get more love from politicians is because now it is just chockful of bull crap that doesn`t have anything to do with the bailout. Oh, but lots of candy.
And here`s how I got there. First, there`s the alternative minimum tax relief. Tax cuts for small businesses, then raising the FDIC insurance limit, and then there`s something about mental health parody in this one.
These are some of the carrots that have been dangled in front of congressmen. Hello, come on. Come this way. Just to get them to pass the bill.
I guess saving the economy and serving the American people, just not enough incentive for those guys; got to have my special interest, too.
Let`s look at some of these things. First of all, the FDIC change. Okay, right now the government insures all bank accounts up to $100,000. Good thing, right? But now in this bailout bill, it lets the FDIC insure all accounts up to $250,000.
When I first heard that yesterday, I was like, hang on just a second. Is it just too much trouble to have two bank accounts for people? No, no, no, I actually did my homework, I looked it up. The reason why they did this is because this is a reaction to Congress announcing that they would guarantee mutual funds. The banks were pissed at them.
So this is Congress fixing a problem that congress created just last week. I guess that`s the legislative process the president was talking about a couple of days ago.
So tonight, America, oh, here`s what you need to know. You know, it didn`t have to go down like this.
I think John McCain, honestly, I think this guy could win the election, or could have won the election if he would have come out in front of the microphones and said, "You know what, gang, I`m sorry. This bill isn`t going to happen. Here`s what we`re going to do. We`re going to cut the capital gains tax to let the free market invest in these banks. We`re going to cut the taxes on corporations. We`re going to let the marketplace work this thing out. You were too stupid to make that loan to somebody? Well, you know what? Sucks to be you, Jack."
But of course, he didn`t do that. Both parties are taking us right directly to hell, I believe; except one party is taking us there in a very nice fast plane and the other on a steam train.
Sometimes I think we should just let these irresponsible companies fail and declare bankruptcy. Hell, it works for the airlines, why not the banking system. Am I the only one on this?
Jeffrey Miron, he is the senior lecturer for the Harvard University Department of Economics. Jeff, why can`t we use the airplane model?
JEFFREY MIRON, HARVARD UNIVERSITY: I don`t see why we can`t. I think we should. I think it`s a much better model than the government bailout.
BECK: So is there -- I didn`t expect that answer, like, yes, we should. I mean, what is different between a bailout and chapter 11 that we`re missing here? Or that our Congress is missing?
MIRON: There are a couple of crucial differences. First of all, if it`s chapter 11, then the people who pay are the shareholders and the bond holders of these investment banks. If it`s a bailout, then it`s the taxpayers that pay. So that`s one crucial difference.
The second crucial difference is the government comes in and does the bailout, it is going to be able to claim that this was all due to private greed and the government came in and fixed it and we always need government to fix everything.
If we let it happen via bankruptcy, there`s at least a chance people will recognize that, one, markets can right themselves, but two, even more importantly, the government created this mess in the first place.
BECK: Oh, thank you for saying that.
MIRON: The government created it with Fannie and Freddie Mac and by pushing them to make enormous amounts of sub-prime loans which should never have been made in the first place.
BECK: I have to tell you, I think the media on this story is almost criminally negligent on the message that they`re sending. They`re not talking about the community reinvestment act or the fact that our government pressured people for political purposes to make these kinds of loans. And then when they give up and they`re like, whatever, then also on top of it, banks got greedy and the people down at the bottom got greedy.
MIRON: Absolutely. So there`s plenty of blame to go around.
Certainly the borrowers who took out loans they should have reasonably known were just too good to be true, should bear some responsibility. The congressmen from Bill Clinton to Barney Frank, to people on both sides of the aisle who put huge pressure to make more affordable loans, they have to bear a huge part of the responsibility. The American people, for wanting to indulge in the fantasy that everybody should be able to own their own homes, they have to bear at least a little bit of responsibility.
But first and foremost, if we have these stupid policies in place, then we`re going to get disasters like the current one.
BECK: You know, Al Gore tells us we should listen to tweed jackets and we should listen to all these experts because the science is settled.
Yet nobody is listening to people like you, nobody is listening to the 165 economic geniuses that are saying, this is really bad stuff.
Correct me if I`m wrong, Jeff, but I am not an economic expert, but I am a thinker. I do try to read history. We`re going down the same road, and we`re making the same mistakes that we made in the 1930s that prolonged the Depression. We have government getting their hands in it, and they`re like, oh, I don`t know, let`s try this one, what happens when we turn this knob?
Are we not?
MIRON: I agree. Government played a huge role in the downturn from `29 to `33. It played a huge role in a new recession that occurred in `37- `38. It engaged in all manner of attempted engineering which was not especially successful through the 1930s.
Not to mention other bailouts that have occurred for exactly the same reasons the government put the wrong incentives in front of the financial sector. The financial sector responded in a way that was sensible given those incentives.
GLENN: Real quick, yes or no; if this bailout passes in its current form, is it going to work?
MIRON: I don`t think we know that for sure. We don`t know that they`re going to end up buying the illiquid but valuable assets and providing more liquidity or they`re just going to make it easy for banks to keep doing the same bad things.
GLENN: Ok, Jeff, thanks a lot.
MIRON: Thank you.
BECK: Now that we`re in the hand basket, let`s go to hell together, let`s go to Washington and get an insider`s view from South Carolina`s own Republican Senator Jim Demint.
Senator, I`ve spent the day looking at this bill. Let`s see, we`ve got the FDIC`s opening up the accounts. The AMT is in there, renewable energy tax incentives in there and mental health parody. What the hell does that have to do with the bailout?
SEN. JIM DEMINT, (R) SOUTH CAROLINA: I hope I`m not a Washington insider at this point. Americans are mad and they`re frustrated, and I think they should be -- we`re given two bad choices here; either we do nothing and suffer a catastrophe, we`re told, or we do the wrong thing and end up socializing a large part of our economy.
I`m very frustrated with the process. They`ve added a bunch of sweeteners around the same bill, hoping they can buy some votes on the House side. But I`m still convinced this is the wrong thing to do. We`re not doing anything to help our free market system work better and get our economy back on track. This seems to be a short-term fix in my mind.
BECK: Senator, when I read the mental held parody, I thought, you know what, you people in Washington -- not you, senator, because you`ve been on the right side of this one -- you people in Washington need a mental health checkup. Are you out of your mind? Is this thing going to pass?
DEMINT: Yeah, it will pass easily in the Senate. I mean, while we`re saying the sky`s falling around the world, we`ve passed $20 billion of earmarks in the last two weeks. There`s no sense of responsibility here.
But everyone pretty much is convinced we`ve got to do something or the sky`s going to fall. And I`m convinced if there was no problem at all, that this national propaganda campaign would have created the problem in the last couple of months.
So we do need to do things. This is very unfortunate that none of our principles about free markets and limited government are being applied here. And none of the normal legislative process where we debate and amend a bill, this is being brought up and stuffed down our throats. So I`m very disappointed in the process. And on behalf of over half of Americans, I am very angry with this Congress.
BECK: I have to tell you, last night I had David Walker sitting here. You know David Walker, he was the chief bean counter there in Washington.
BECK: I said, there`s nobody I can trust, David, nobody in Washington that anybody trusts anymore to give us a straight. And we`re about to give $700 billion to the same people who got us into this mess. And they keep claiming they want oversight.
I thought of it, Senator. I`d like oversight, but here`s who I would like to provide the oversight for the people who are overseeing this mess, and that`s General Petraeus. I would like to see somebody bring General Petraeus in and have him sit there with all the stars on his shoulders and say, "Ok now, explain again how you didn`t create this mess?"
DEMINT: Exactly. You`ve mentioned the key word here. Americans just don`t trust Congress. They saw what we tried to do on the amnesty bill. They`ve seen what we`ve done with so many of America`s key services like education and health care.
And they`ve seen all year long, we`ve told them, oh, if we send everybody a rebate check that will fix it. Or if we do a housing bill, that will fix it, or if we buy out Fannie Mae, that will fix it. But we haven`t been getting the truth.
And like you, Americans don`t know who to trust. And I don`t know if I`m getting the right information. But I do know that none of the solutions that are being talked about recognize the real cause of this problem. And that`s just bad policy, and we`re not fixing any of the bad policy.
BECK: Senator, don`t you dare give up the fight. We need you there. Thank you very much, sir.
DEMINT: Thank you, Glenn.
BECK: We`re going to talk about Sarah Palin. She`s the victim of a hatchet job in the media. We`re going to look at some examples and examine the effect it might have leading up on tomorrow`s vice presidential debate.
And also, I want to talk to you about this. I mean, do you trust anybody in Washington? Do you trust the people on the stage tomorrow night? Do you trust the reporters? Do you trust the audience? Do you trust the media? Is there anybody that can step to the plate that has some trust in the banks?
Ben Stein, we`ll talk about that in a moment.
And court is in session. Tonight I`m going to hold some of these political weasels accountable as we begin our new series "We the People`s Court" coming up.
BECK: All right. When William Shakespeare wrote, love all, trust few, I think he was talking about politicians in Washington, except for maybe the love part. Trust is in short supply. It`s not your fault. Approval ratings for Congress and the president, they`re in the crapper.
Think about it. I don`t disapprove of them because it`s not like, I don`t like that guy`s tie, it`s because they`ve shown us over and over and over again they`ll just beat us up in the dark alley every chance they get.
Politicians, lawyers, bankers, the media, hookers, crack dealers, they`re all the same. Do you trust any of them? The stakes are too high and the necessary decisions are too big, we need to be able to trust those that we have elected to lead us.
I know it sounds like an article in some cheesy woman`s magazine, but given everything we`ve been through, how could we let ourselves trust again. Ben Stein is a writer, commentator, co-author of "How to Ruin the United States of America."
All right. Ben.
BEN STEIN, WRITER, COMMENTATOR: Glenn, say that part about the hookers again. Sorry. Just kidding. Just kidding.
BECK: This is uncomfortable. Can somebody please call HR? This is an uncomfortable and hostile work environment. Mr. Stein, Gwen Eiffel, do you follow this story today?
STEIN: A little bit.
BECK: She`s making money -- if Barack Obama is elected, she`s got a book coming out after the election, I think in January, about how Barack Obama is the new kind of African-American candidate. That is a real story. It`s a real kind of book, et cetera, et cetera.
But just the appearance of this woman trying to be neutral when she`s got financial gain, don`t you think she should recuse herself from this debate tomorrow night?
STEIN: Absolutely, without question. But I`m afraid the thing is that the media has got it in for Sarah Palin so viciously, that no matter who they chose, the long knives will be after Sarah Palin. She is just a babe in the woods and they just want to carve her up for breakfast.
BECK: Do you think, Ben, that this woman is going to be able to survive, Sarah Palin? Because I think, you know what I`m afraid of? This debate, they`ve been saying now in the media that she`s been handled and they`re trying to make sure that she`s tough as nails and everything.
Let the woman be herself.
STEIN: Well, the problem is, as herself, she doesn`t really know a heck of a lot. And they really should be prepping her like mad. I don`t know if they get to look at the questions in advance, but I would think even if she just read the "Wall Street Journal" every day for two weeks or "The New York Times" every day for two weeks, she would know all she needs to know. I think she`ll do fine.
There is a certain incredible likableness to her. The problem is that Biden, while nobody`s idea of a genius, is also quite likable, too. So I don`t know. They both are very likable, but not very smart candidates. I think Sarah Palin is smarter, but she`s inexperienced.
BECK: Let me ask you this. The media criminally negligent in the way they`re handling the financial crisis here by not pointing out people like Barney Frank, who is in our "We the People`s Court" segment here in a second, Christopher Dodd, the role that the CRA played, et cetera, et cetera? Nobody really knows what caused this, because the media won`t point it out, because it hurts their side of the candidate.
STEIN: The media does not want to point out the fact that everybody in the Washington was on the take from all the high rollers on Wall Street, all the high rollers in real estate finance, all the high rollers in the government-sponsored enterprise in Washington. They were all on the take.
Look, this thing has been coming down the pike for a long time. Your humble servant, fat little me, and many others have been writing that there`s a crisis with the government not doing anything about wild casino operations on Wall Street. Nobody really hammered this home the way they should have. Nobody on Wall Street, except maybe Mark Abrams from Massachusetts took this on.
It`s been a real serious omission by the federal government. Now, of course, as usual, the taxpayer is asked to bail them out. And unfortunately we have to.
BECK: But my question is, Ben, there`s nobody really protecting the people anymore. You can`t trust --
STEIN: I agree.
BECK: You can`t trust anybody.
STEIN: It`s a very bad situation. You know, we`ve had a situation, I`ve written about this for the "Times" over and over again, we basically have a kleptocracy in this country in which whoever is the biggest thief gets the most political influence and gets the most political power. That`s been going on for a long time. Small wonder people are furious.
BECK: It kills me to see what happened with Bloomberg here in New York.
STEIN: I see he`s going to run again. Even though the law says he can`t.
BECK: I wonder, didn`t he go after -- if my memory serves me right, didn`t he go after Bloomberg saying, that`s crazy, and the arrogance of people saying they`re the only ones that can run it. Now he`s announced because of the crisis he should run a third time.
STEIN: I know. There`s something wrong with that attitude. It`s a very bad -- but it`s a typical Wall Street attitude which is we are above the law. We just -- just give us everything we want. It`s just a hog swelling at the trough.
Unfortunately these are the people who are running America. Not directly, but through their puppets in Washington. Now we have a rebellion of people standing up against them. Unfortunately these people are at the nerve centers of finance and we`ve got to give them the money. It`s criminal, but we`ve got to do it.
BECK: Does it say anything about what`s going on and how we feel as Americans that there`s a run on safes now? Did you hear that?
STEIN: I heard that there was a run on safes, and a run on guns.
BECK: Yes. I`m looking into that one, yes.
STEIN: And not surprising at all, considering the fearfulness. This government has just let us down very badly. The Congress at least as badly as the White House. The media has let us down. We could have seen this coming. It was just shocking that all the people guarding us walked off the job and just put their hands out for the money.
BECK: Ben, my friend, always good to see you, sir.
STEIN: Nice to see you, sir.
BECK: All right. Talk to you again.
Coming up, something needs to be done to solve our current economic crisis but that doesn`t mean we have to tear apart our constitution in the process. We`ll examine the words of our founding fathers for some insight. That`s coming up next.
It`s not as boring as you think. I just made it sound really boring, but it`s not.
If you really want to know who`s responsible for putting us in our economic crisis, don`t miss tonight`s "Real Story." We kick off the new series "We the People`s Court" coming up.
BECK: We talk about the founding fathers all the time, because they were absolutely brilliant. Look at George Washington, I`m reading another book on him right now. He was just a great, amazing man. Not only did he use his farewell address to warn us about the dangers of a political system based on parties and partisanship, hello, but he actually left us with some advice, "one method of assault may be to effect, in the forms of the constitution, alterations which will impair the energy of the system and thus to undermine what cannot be directly overthrown."
Ok. I`m not smart enough to figure out -- he was warning us about something. What exactly was he warning us about? We go to Professor George from Princeton University.
What exactly -- what kind of end runs was he warning us about here, professor?
ROBERT GEORGE, PROFESSOR, PRINCETON UNIVERSITY: George Washington was, as you say, a very great man, and a very thoughtful one. He also had excellent advisers who assisted him with that speech, James Madison and Alexander Hamilton.
What he`s expressing concern about there is the possibility that constitutional forms could be used to undermine the substance of the constitution. He`s saying that the constitution is more than merely a set of formalities. It embodies a set of ideals.
And those ideals are, if anything, are more important than the formalities. The ideals exist for the formalities, not the other way around. So he`s worried democratic means being used to undermine the substance of the constitution.
And in particular, I think, Glenn, what he has in mind here is undermining the ideal of limited government. The Constitution could be used to undermine the great constitutional ideal of a limited central federal government.
BECK: Which was violated a long, long time ago, you know, over 100 years ago, we got off of that. And we even got off the idea that ideals mattered. We have gone to a system where it`s just the structure, haven`t we?
GEORGE: Well, we`re not entirely lost. I wouldn`t take us past that --
BECK: No, no, but we`re on that road. We`re certainly not --
GEORGE: We`re on the wrong road. We need to get back onto the right road. And guess what, the right road is put forward for us in the kind of road map by the Constitution. So what we need to do is get back to the Constitution.
BECK: Help me out on this. Because this is from yesterday`s show. I had David Walker, who was the head of the GAO accounting. And this is what David walker said to me yesterday.
(BEGIN VIDEO CLIP)
DAVID WALKER, FORMER GAO: Washington is out of touch and out of control. We need tough statutory budget controls. I wouldn`t send them any more money until they do something --
(END VIDEO CLIP)
BECK: He wouldn`t send them any money. That would put me in jail. I would love to do that, but that would put me in jail. I think most people feel right now, professor, that, gosh, man, I`m working hard. I`m playing by the rules. I`m paying my taxes. They`re not listening to me. How do we get them to listen to us?
GEORGE: Well, by political pressure. It`s exactly what the citizens of the United States did a couple of days ago when the bailout bill, which everyone was expecting to pass, by everyone, I mean all the political elites and journalists and commentators, actually was defeated. And it was defeated because thousands, literally thousands of citizens phoned in, e- mailed into their congressmen and said no deal, no dice.
BECK: But they`re voting again tonight.
GEORGE: Yes, they`re voting again tonight but the people are out there as well.
BECK: How many times do we have to say no? I mean, I say this to my kids all the time, does no mean something else to you?
GEORGE: The constitution provides something called the ballot box; elections. People pay a political price when they violate the will of the people. It sometimes falls to the people, Glenn, to protect their own constitution.
BECK: Professor, thank you very much.
Coming up, we hold the weasel also responsible for our financial meltdown accountable. We`re going to kick off a new series, "We the People`s Court."
We`re going to do it next.
BECK: Well, welcome to the "REAL STORY." With everybody so focused on how many more billions of dollars should roll off the presses on the U.S. mint, I thought it might be time to take a step back and figure out, yes, how in the heck did we get here?
Don`t forget while we`re all now getting used to hearing about big huge price tags, it wasn`t that long ago that what we saw $100 billion flameout. It shocked us.
Do you remember Enron, WorldCom? Yes. Those two companies had $207 billion in combined assets $207 billion; both of those companies together. Let`s put that in perspective.
Lehman Brothers had $639 billion in assets when they filed for bankruptcy, over three times more. In fact, if you add up bankrupt Bare Stearns, $400 billion in assets, along with companies that we had to save, like Fannie Mae, $886 billion, Freddie Mac, $803 billion, AIG, $1 trillion, you get over $3.5 trillion in assets that have either vanished or are now supported by taxpayers like you; $3.5 trillion and zero accountability.
Why aren`t these people in jail? What`s going on here?
While the crisis has resulted in losses exponentially greater than Enron or WorldCom they`re also exponentially fewer people being held responsible.
Do you remember Ken Lay? Jeff Skilling? How about Andrew Fastow? Names you all know. Dennis Kollowski, I remember that guy; I think I saw him on "60 Minutes."
These guys are either dead or in prison. But now? Where`s the hearings? Where are the investigations? Where are the trials? Where`s the media outrage?
There`s nothing but re-election campaigns. I think that`s about time for this to change, don`t you?
"REAL STORY" is, there are plenty of politicians, special interest groups, and greedy CEOs that are responsible for what`s going on right now, and you`re about to pay for it. They should pay for it. It`s time they`re held accountable for what they`ve done.
And if the politicians won`t do it, then I will. In something I like to call the "We, the People`s Court."
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: This is the plaintiff. The citizens of the United States of America; they are sick and tired of weasel politicians doing absolutely nothing while the country burns to the ground in a socialist blaze of glory.
They`re clinging to their guns and their religion in the hope that voters won`t keep electing [bleep] like Congressman Barney Frank, the liberal from Massachusetts has accused of leading the way and encouraging Fannie Mae and Freddie Mac to grant risky loans to sub-prime borrowers.
What you are witnessing is real. The participants are not actors they are tax payers just like you and me with a major axe to grind. Both parties have agreed to dismiss their court cases and their threats to sucker punch each other in the elevator and have their disputes settled here. In our forum, the "We the People`s Court."
(END VIDEO CLIP)
BECK: Yes, and here`s the nice thing. I`m your congenial judge. I got this from Nancy. Yes.
Joining me now is the "We the People`s Court" prosecutors, Steve Cordasco, he`s also host of "Big Money" show in 1210 WPHT in Philadelphia. By the way, Mr. Frank has ignored our repeated invitations for him to testify today. So I guess he`s just pleading the fifth.
Prosecutor Cordasco, evidence on Barney Frank?
STEVE CORDASCO, HOST, "BIG MONEY" 1210 WPHT IN PHILADELPHIA: Your honor, we the people are accusing Barney Frank of impeding reform of Fannie Mae and Freddie Mac and a lack of reform that led to $200 billion taxpayer bill.
Let me begin with the evidence.
In 2003, at a time when the Bush administration was pushing for change, Frank opposed significant overhaul of the Housing and Finance industry. Back in 2003, and here`s what he had to say. "These two entities, Fannie Mae and Freddie Mac are not facing any kind of financial crisis. The more people exaggerate the problems, the more pressure on these companies; the less we`re likely to see affordable housing."
BECK: All right. So he came out and he said that there is no problem. He has pushed for these kinds of risky loans his whole time. He is also connected financially to Freddie and Fannie?
CORDASCO: There is a tie. But it continues along the way, because in 2005, on top of that, he voted against the watered-down bill.
Yes, there`s a tie. It`s become aware to the people of the United States that he`s accepted $40,000 in contributions, as a side bar his friends, Dodd, Kerry, Clinton and Obama are the top four recipients of money from Fannie Mae and Freddie Mac.
BECK: Because I`m seeing here that he has donations from just about everybody that would have benefited off of it.
CORDASCO: National Association of Realtors, Securities Industry, Finance Association, National Association of Home Builders, Credit Union National Association, Bank of America, we`ve heard that name before, Mortgage Bankers Association.
BECK: Ok. What is he saying now? What does he want to do now? Is he still on the Freddie and Fannie bandwagon saying, that hey, everything`s still ok, we just need to fix it up a bit?
CORDASCO: Well, in September of `08, just recently, he was quoted as saying, "Hey, the taxpayers need to protect Fannie Mae and Freddie Mac." Look, it`s a sub-prime issue out there, and we must be able to keep an institution like Fannie Mae and Freddie Mac supporting those that can`t afford housing.
BECK: Steve, I have read the stuff that goes back on Barney Frank for a very long time. There`s no doubt in my mind that this man actually helped push us, not just watched it, pushed us into the mess that we`re in right now. Any doubt in your mind?
CORDASCO: No doubt in my mind. There`s actually documentation that the Clinton administration and Frank was there along the way that wanted the standards of Fannie Mae and Freddie Mac to come down so everyone could afford housing, those that in the past should not have had a mortgage.
BECK: Ok. Steve thanks a lot. If the media did their job and laid out the facts for the people every day, they would look at these things. I believe that you would decide that while Barney Frank may not be alone, he is without doubt -- may I -- guilty as charged.
Now we`ll continue with our week-long series "Sub-Prime Leadership." As for this credit crisis, as it continues to unfold, Obama has been quick to blame everybody, and everything, from trickle-down economics to deregulation to greedy CEOs.
But as it always is, once again, the "REAL STORY" is, Obama should clean out his own house before he starts throwing stones at others.
The questionable judgment that Obama has shown in his religious life, Reverend Wright; business transactions, Tony Rezko and personal life, Weather Man co-founder, Bill Ayres have been well documented. You`ve heard these, once we pulled it out of the media.
But what about his life as a national politician when it comes to economic policies? Could there really be somebody on his team right now who not only led the charge into aggressive sub-prime lending, but also whose decisions resulted in a bank collapse and the loss of $10 million in savings of ordinary Americans like you?
That could not -- with any other politician, I would say that couldn`t be possible, could it? It is. You haven`t been paying attention apparently.
And I`m talking to the people in the media.
This woman`s name is Penny Pritsker, she is not only the 135th wealthiest person on planet earth. But she is also the national finance chairwoman for Barack Obama.
David Freddoso, he is the political reporter for the National Review, author of the best-selling book, "The Case against Barack Obama" back tonight to do the job that the mainstream media just won`t do.
Tell me, tell me who she is. Penny Pritsker; her history, and what has she done?
DAVID FREDDOSO, AUTHOR, "THE CASE AGAINST BARACK OBAMA": Well, she and Barack Obama go a long way back, Glenn. When he first made his mind up that he wanted to run for the U.S. Senate, all the way back in 2002, he went to her and asked for her support. And she was able to bring in a lot of the wealthy people of Chicago to support his campaign. That was critical to his success.
And right now -- and her family has actually given very large amounts of money to his various campaigns. I think $46,000 to the current one; and $39,000 to his senate campaign back in `04. She also happens to be the former director of -- and long ago the chairwoman of the board for a bank that collapsed because of an aggressive sub-prime lending strategy that she championed.
BECK: Ok, if I`m not mistaken, this was -- she was so aggressive, even the left came after her?
FREDDOSO: That`s right.
In fact, in 2000, a community activist group wrote a letter to Federal Regulators complaining that her bank, Superior Bank, was targeting minorities for sub-prime loans at a rate that was out of proportion with other institutions. But in the end, you know, the sub-prime strategy was important to Pritsker up to the very end when the bank collapsed.
In 2001 -- May of 2001 she wrote a letter promising that superior was going to lead the way once again in sub-prime lending, and a couple of months later the bank collapsed. It cost the account holders on aggregate 1,400 account holders lost $10 million of their life savings, because of the bank collapse.
BECK: What did the federal investigators say about all of this?
FREDDOSO: Well, that and precisely the Office of Thrift Supervision would later report that it was precisely though that decision to engage in sub-prime lending which had been made all the way back to 1993 when Pritsker was chairwoman of the board for Superior Bank, that was what ultimately led to their undoing, the fact that they were so aggressive with sub-prime home and auto loans.
BECK: David, does it amaze you at all that the media just does not report on any of this stuff? I mean, here`s a woman who is part -- I mean, led the way, and was targeting, according to one group, African-American and minorities, and in using predatory lending practices, and Obama treats her like a queen and brings her in and she`s deep in the fold?
FREDDOSO: Well, she has a lot of money. She knows a lot of people with a lot of money. Someone like her is an ideal finance chairwoman. So it doesn`t surprise me. She also has the long-standing ties to Obama. But how would Obama know, of course, that this sort of thing was going to lead to the enormous collapse that it`s led to?
That at the very least we can draw from this, he shouldn`t be throwing stones perhaps.
BECK: Ok, well, I think he should have known. I mean, some dummies like me saw it coming a long time ago.
David, thanks a lot. That`s the "REAL STORY" tonight.
Our week-long series "Sub-Prime Leadership" continues tomorrow night. And don`t forget, David is also writing an exclusive article for my free email newsletter subscribers. It happens every day. It is on Obama`s ties to the credit crisis.
Tomorrow`s piece takes a look at the pivotal players in the run-away train wreck that was Fannie Mae and also the pivotal player on Obama`s campaign team. Where is the mainstream media on all of this? Is anyone get a hold any of this people accountable that`s tomorrow in our free email newsletter. Sign up for it, please, right now at glennbeck.com.
Coming up, an inside look at Putin`s evil empire with chess master and former Russian presidential candidate Garry Kasparov. What role is Russia going to play in the future? Next.
BECK: You probably know the name Garry Kasparov as being synonymous with world class chess. Well, since his retirement from the game in 2005, Kasparov has devoted time to politics running for the Russian presidency against Prime Minister Vladimir Putin`s hand picked candidate, or puppet, some would say.
He pulled out of the race. And I know that, because he`s still alive. And he`s here on my set. He was there when Russia suffered their financial implosion in the late 1980s.
He joins me now to perhaps provide some perspective on America`s current financial crisis. Garry Kasparov welcome to the program sir, how are you?
GARRY KASPAROV, CHAIRMAN, UNITED CIVIL FRONT: Very optimistic introduction.
BECK: You were there -- Ron Paul, who is a Congressman here in the United States, he said that we are facing in the coming months and coming years a 1980s style implosion like the Soviet Union. Did you guys know it was coming when it was coming? Did you feel it?
KASPAROV: In Russia?
KASPAROV: I think the Russian economy is not an island of stability that was presented by Putin and his cronies.
KASPAROV: There is a wrong concept, popular unfortunately, in the West and Europe and here in America, that Russia is very strong today. It looks almost invincible. And Putin is very popular. The economy is thriving. The huge currency reserves, and oil, price is soaring.
But it`s all on the surface. Beyond -- beneath the surface, it`s a very, very different picture.
BECK: Because now we`re talking about today, is -- is part of that that people don`t trust the government? I mean, billionaires are leaving and fleeing because they don`t trust the investment --
KASPAROV: People are confident with the government. Here in America, you`re talking about a $700 billion package, and despite the President`s support, the administration, the leadership of the both parties, many of the rank and file members of the Democratic and Republican parties voted against it because the voters didn`t want them to support it.
In Russia, Putin with a stroke and pen, spent $720 billion, which is much bigger amount for Russia than $700 billion for America, and most of this money went to support his buddies, his cronies, who owned so-called nationalized banks and companies.
BECK: But he`s really popular.
KASPAROV: Now, that`s -- it`s another fake.
BECK: I`ve seen pictures of him with the shirt off.
KASPAROV: Saddam Hussein was popular. Stalin was popular. Hitler was popular. You cannot measure the popularity of an authoritarian leader with no free press, with the brainwashed propaganda, with opposition are literally pushed underground.
BECK: So are you -- because I think Putin is a very dangerous man.
KASPAROV: Hey he`s a big guy, yes.
BECK: You --
KASPAROV: But Putin is -- let`s not mix Putin with old style Soviet Politburo.
KASPAROV: It`s a business KGB. So they`re very active shareholders. So they`re doing business on their terms. It`s like street gangsters who are suddenly are in charge of big empire with huge oil and gas reserves and with nuclear weapons.
BECK: Now, you have oil prices, if they collapse --
KASPAROV: If they collapse at $80 they are in trouble; $60 it will all go bust.
BECK: Ok, so if it hits $70, I was just talking about this today at my radio program, $70 --
KASPAROV: $70 they`re in big, big trouble.
BECK: Right, and I believe that`s when somebody like Putin is extraordinarily dangerous. Do you think that he will --
KASPAROV: I think it`s this -- I agree with you. I think this regime is now is moving into this phase of agony. But the cost of this agony, for all of us in Russia, and outside of Russia, might be huge.
BECK: What do you think he`s capable of?
KASPAROV: It`s like a rat pushed to the corner. And it`s a man with this mentality. It`s a Mafia-like structure. And he`s probably most powerful Mafia boss ever seen on the earth.
BECK: Do you ever fear for your life? I mean, how many people have been poisoned and all of a sudden they wake up dead?
KASPAROV: Yes look, when in Russia, we talk about survival. It`s not only political survival for many of us. But you have no choice. If I ask people to join us in the streets to participate in the process against Putin`s regime, I have to be with them. Otherwise I have no moral credibility.
BECK: Right, we -- and here we are facing this crisis here in America. Many Americans don`t believe their president anymore. They don`t believe Congress anymore. They don`t believe anybody anymore. They don`t believe the people in the financial district, et cetera, et cetera.
KASPAROV: They have good reason not to.
BECK: Yes I know they do, this is new for America. I mean, relatively new. We`ve been going through it for the last 15 or so years.
KASPAROV: It`s funny that, I think that a lot of the problems that we have been facing in Russia now is inherited here. I always said that Putin`s regime was the strange mixture of Karl Marx and Adam Schmidt; expenses nationalized, profits privatized.
KASPAROV: And here people believe the same is happening. Expenses nationalize and profits are in the hands of very few. And now instead of this old Karl Marx slogan about worker of the world unite; now we could hear rubber barons of the world unite.
KASPAROV: People don`t trust the government, they don`t trust Wall Street, they don`t trust CEOs of big companies; and there are good reasons. These people proved to be wrong all the time.
KASPAROV: And if Secretary Paulson was wrong for four years, why should I trust him now when he asks our money to be put into the -- into this big bucket, but no one knows whether the hole is fixed.
BECK: Right. Your advice? You look at this situation. Does this lead us down -- putting those money in those buckets, does this lead us down a --
KASPAROV: I think it`s -- you know, you have to deal also with the anxiety, you know? After this psychological attack on the public, and both from the right and the left you know it`s -- you can only imagine that Bill O`Reilly and John Kerry supported the same plan.
Yes. I think it`s very difficult, actually, to move back to roll back. I think there is no other choice but to proceed with some kind of a plan.
KASPAROV: Because otherwise the public confidence will be shattered. But I think someone has to actually look at the big picture to understand, how come that the United States, the leader of the free world, the most powerful and vibrant economists in the world are now in such bad shape?
BECK: Ok. Garry Kasparov.
Back in just a minute. Thank you very much.
KASPAROV: Thank you.
BECK: Well, everybody has given Tina Fey so much air time, who would have known that "Saturday Night Live" is actually making fun of Barack Obama as well?
First they hammered Obama in a skit about creating earmarks for Tony Rezko "hush money," and then they went to talk about his tax plan and saying it would help most people like members of the Chicago City Council, as well as building inspectors, because it won`t tax income from bribes, kickbacks, shake downs, embezzlement of government funds or extortion. Actually I thought all of those scandals had been successfully erased from all the media`s memory, but apparently not.
Then, in the same sketch, when the debate moderator asks Obama what he would do differently when he dealt with North Korea, he says after all diplomacy fails and he`d simply play the race card with Kim Jong Il. How would that work exactly?
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Take North Korea. I would ask Kim Jong Il to shut down his country`s nuclear weapons program. If he declined, I would say, all right, I get it, I know why you`re really refusing to stop the program.
And he would say, no, what are you talking about? And I would say, it`s because I don`t look like all of the other presidents you`ve dealt with. And then he would say, wait. That`s not fair. That has nothing to do with it. And I would add, that`s cool. I understand. I`m different.
(END VIDEO CLIP)
BECK: It would be much more funny if he weren`t actually making speeches where he said about Republicans, and, I quote, "What they`re going to try do is make you scared of me, you know, he doesn`t look like all of the other president`s on the dollar bill," end quote. No, no this man would never play the race card.
Of course, Republicans were also supposedly going to attack him for having a funny name. Remember that charge? The man missed something, but I`m busy clinging to my God and my guns and trying not to be punished with a baby. But I haven`t really heard any of those things happened, in fact, the only time I think I`ve heard this, you know, the funny name thing was when his wife Michelle talked about it.
When they`ve first started dating, remember she described that first date in their own campaign video. Maybe it`s just me, and you know, what do I know? I`m just Glenn Beck, owner of a completely unfunny name.
Don`t forget, my free email newsletter comes in everyday for free. Sign up now at glennbeck.com.
From New York, good night, America.