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Glenn Beck
How Will Fed`s Latest Move Impact Americans?
Aired October 07, 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, only two stories Americans care about. The economy, who`s going to fix it? We`ll have the latest on the financial meltdown.
Plus, a closer look at the politics of intimidation and potential for voter fraud.
All this and more, tonight.
(END VIDEOTAPE)
BECK: Hello, America.
I`ve got good news, and I`ve got bad news. Let`s get the bad news out of the way first.
Today the government spent more of your hard-earned money, and you lost even more on Wall Street. The good news -- actually, there`s no good news. I was bluffing. Let`s get right to "The Point" tonight.
There are two sides to every story. I`m sorry, but I`m just telling it like it is. Two sides to every story. And when it comes to the tail of our financial crisis, there is the side of money, and then there`s the side of politics. Let`s start off with the money first.
Not only do you have less today, but tomorrow ain`t looking too great either. According to AARP, one in five middle-aged workers stopped contributing to their retirement plans in the last year. I mean, honestly, why put money in a 401(k) that`s tenting? One in three is considering delaying retirement.
Well, what about my Social Security benefits? Yes, yes. Most Baby Boomers, about 25 percent of the country, you can expect those to be sprinkled with fairy dust and delivered by Santa Claus riding a unicorn. It looks like you and me are going to be having our retirement party at the funeral home.
Tonight, here`s what you need to know. Not only is your retirement in the toilet, especially if you`re somebody who`s 59 1/2, but today it was just announced that the Federal Reserve has created the commercial paper funding facility. It`s an entity that will, quote, "complement the Federal Reserve`s existing credit facilities to help promote liquidity to terms funding market." It took me about an hour to find -- can you tell what the hell that means?
Finally, I found somebody, and they told me, basically, the Fed is now lending directly to businesses. That`s fantastic. The government`s becoming a giant ATM. And if you put a dollar really close to your ear, you can almost hear them running out of ink.
Joining me now is John Tamny. He`s the editor of "Real Clear Markets" and senior economist at H.C. Wainwright Economics. And Ali Velshi, he is a CNN senior business economist. And James Stewart writes the "Common Sense" column for "Smart Money" and SmartMoney.com, is a professor at Columbia University.
May I call you Jimmy?
JAMES STEWART, PROFESSOR, COLUMBIA UNIVERSITY: Well, Jim. Not many call me Jimmy.
BECK: I mean, it`s just -- I mean, it`s cool we`re talking about this. And I`m talking to somebody who could be called Jimmy Stewart.
STEWART: That`s right.
BECK: Let me ask you this, Jim. Isn`t -- to use the Jimmy Stewart thing, isn`t the government basically bailing out Mr. Potter while the Bailey Building and Loan is going to hell in a hand basket? I mean, they`re going -- they`re going for all the big guys. They`re too big to fail. What about the little guys?
STEWART: Well, you know, the little guys hasn`t failed so much yet. Everybody is waiting to see this happening. I think raising the rate on deposits is meant to try to stop a run on the little guys to get people to calm down. I`ve been hearing about people pulling a lot of money out of banks all over the place, sticking it, literally, under the mattress, putting it in safe deposit boxes. This is a panic. This doesn`t make any sense. That was meant to calm -- to help the small banks.
But there`s no question, we`re in this big -- too big to fail arena. We saw Lehman go under. They said, "OK, let`s let one go." And chaos ensued.
So, you know, I don`t like the big guys. I`m not one of them. I`m furious at all that they`ve done. But let`s separate these issues. Punishment is one thing. We need to pay attention to that. Justice needs to run its course. But meanwhile, let`s not sacrifice the entire system just to punish the big people.
BECK: John, can I ask, have you seen anybody punish? I haven`t seen a damn person punished for this yet. Have you?
JOHN TAMNY, EDITOR, REALCLEARMARKETS: No, not too many have. And I`m not so much for punishing people. But what`s unfortunate here is we`re going to compound one error with another. What we need right now is clarity in these markets, and when the Fed proceeds to loan, in an unprecedented move, to business, what it`s doing is retarding the process whereby we set a real market rate on commercial paper. If the Fed did not loan this money, eventually market rates for commercial paper would rise, and they would explain.
BECK: Explain commercial paper. Who`s getting this? It`s $900 billion. Who`s getting this money? What is commercial -- it`s -- it`s like loaning to businesses, right?
TAMNY: Yes. Well, in many ways this is -- you can say in theory, it`s helping Main Street in that these businesses have daily operations that they need to fund.
But what`s left out here is if the Fed did not step in, eventually, business would have to raise the rate they`ll pay for short-term cash in such a way that investors would say, "Hey, wait a second. This is a pretty good deal at this point." And we would have a normalized market.
What the fed is creating is yet another unnatural market which is going to create more problems down the line.
BECK: Ali, why no vote on this? I mean why -- this is just another one of these things like there is now a new opening for a new carbon tax in this bailout bill. You know, we`ve got the wooden arrow thing. Why was -- how could they take almost a trillion dollars and just do whatever the hell they want?
ALI VELSHI, CNN CORRESPONDENT: I`m very surprised at the extra stuff that got added to this bill to be a sweetener. I think America had to come down on one side or the other of this bill. Glenn, you and I both thought that the bill should go through. Neither of us thought it was a great idea. Nobody, I thought, wanted it to...
BECK: I didn`t want to go through the way it is.
VELSHI: Right. And we certainly didn`t need the extra stuff. So that`s very troublesome. And one of your producers actually put it very well. When I was speaking to her this morning about this, the Federal Reserve decision to loan money directly to -- to companies.
Basically, it`s like you`ve got a clog in your drain. And it`s like putting Drano in. You`re not fixing the clog. You`re still going to have to have the plumber over, but it will maybe get you through the day. And that`s the problem. It`s none of these problems.
BECK: How much is -- anybody want to say, Jim, how much risk are we taking with another almost billion dollars?
STEWART: Well, obviously, we`re taking some risk. But I think the important thing to recognize is that nobody likes this. Nobody wants to have to do this. We`re in a crisis.
I think the Drano analogy is good. I likened this -- this is like a heart attack victim that the heart is not beating.
BECK: But you know what?
STEWART: We don`t have normal markets.
BECK: This is what we did -- this is what we did in the Great Depression. This is -- this is Russia has been doing this recently.
STEWART: No, no, no. We did...
BECK: They -- yes they have. They have been -- no, what they did do in the Great Depression was try something, try something else, try something else, try something else. It doesn`t work.
STEWART: Yes, but no, eventually it got -- the reason we got into the Great Depression is we didn`t do anything. We had Hoover as president.
BECK: That`s not...
STEWART: He raised tariffs.
BECK: You are an economics professor at Columbia. I`m a self- educated man. Are you really telling me that -- you`re trying to tell me that Hoover did nothing? Hoover threw a lot at the system. He just wasn`t willing to go to damn near full-out socialism, as FDR did.
STEWART: Well, look, I`m not advocating socialism. I don`t think we`re there yet. Yes, we`ve had key (ph) government intervention here. I think that`s tragic. I think it`s terrible that we`ve gotten into this position. But not doing it, what do you think the alternative would be? Do you want to see -- talking about the commercial paper.
Let`s say let`s let the commercial paper market go down the drain. Businesses would not be able to make their payroll. They want to see people lining up Friday to get their paycheck, and then they don`t get it.
BECK: No. Do I want to see that? I don`t want to see that. But as a recovering alcoholic, as a guy who -- who is on the fetal position -- in the fetal position on my floor, you have to sometimes fail to be able to rise up. Ali.
VELSHI: This may be -- the only reason this particular deal today with the Federal Reserve loaning money might be good is because it is short-term money with an interest rate that gets paid back within two months. In other words, it`s finally something that has a little accountability attached to it.
BECK: I`ll believe accountability when I see it.
VELSHI: But at least it`s something. I think the problem is, you were saying, what`s with the big bailout bill, where we can`t -- we don`t know where they`re spending this money.
BECK: I don`t trust any of my clowns with our money.
VELSHI: This is the -- this is the one transaction I can keep track of, staring today.
BECK: OK.
VELSHI: And tell you in 30 days and 60 days whether that money`s getting paid back to the American people, who are loaning it out, by the way.
BECK: All right. Let me take a phone call here from Dave.
Dave, you`re on the Glenn Beck program.
CALLER: Hi, Glenn. I`m a 44-year-old man from San Diego County, California. I just bought my first house. I have -- God has blessed me with the most beautiful wife and daughter you could imagine.
We were responsible. We didn`t buy a $700,000 house. We didn`t take out an exotic loan. What`s frustrating is we did that because we were responsible. When are the politicians going to take responsibility for enabling Wall Street? When are the big fat cats going to take responsibility for what they did? All I hear is the talking heads defending bailout, bailout, bailout in a condescending manner.
BECK: Jim, I think -- I think, Jim -- I think this is the point that I`m frustrated. And I`m sorry. Sorry I wigged on you there for a second, but I`m so frustrated because, look I played by the rules. I knew -- I didn`t run up my credit card. I didn`t buy a house that was too big. I was responsible.
And now, this burden is put on my shoulders and your shoulders and Dave`s shoulders. And everybody -- at what point do we say, "What the hell am I doing here? I played by the rules"?
STEWART: Well, look, I totally sympathize with that. I don`t have a big mortgage. I don`t have any leverage. I haven`t borrowed. I`m paying my taxes. I`m not happy on either end. I`m not happy about the rich people on Wall Street who have gambled with enormous amounts, taken out millions that are now getting bailed out.
I`m not also happy about, you know, these home owners who went and borrowed beyond their means, many of them quite affluent as well, I might add, who now want to be bailed out on their mortgage things.
But look, I accept that there are times when we have to stand together and we have to put aside these particular issues and to save the vast majority of people like you and like me, who have been playing by the rules. And if we don`t something, we`re all going to be hard hit. Look, we`ve already suffered in the stock market, if you have any exposure to that. It could get a lot worse.
BECK: Right. Jim, I -- I understand that. But is there going to be anything that resembles capitalism on the other side of this nightmare?
STEWART: That`s a good question. But you know, if you thought we had completely unfettered free market capitalism to begin with...
BECK: I didn`t think we were living in France.
STEWART: I think yes, look, I believe in the history of this country. I believe in the free market. I believe in free market democratic institutions. They have survived. They came back. We came out of the Great Depression. We -- look, it ebbs and flows. We`ve had experiments with socialism. We`ve backed away from it. That`s why we have elections. We get to vote people in and out...
BECK: Right.
STEWART: ... who espouse different theories. I do believe in the future. I think we have a bright future. And the market will return.
BECK: Hey, your name is Jimmy Stewart, so I mean, of course you have a bright -- bright future that you`re looking at. But I do, too. The question is, what do we have to do to make sure that we arrive at the other side with something intact?
We`re going to come back after a quick break. We`ll take more of your phone calls. We`ll take a closer look at the struggling U.S. housing market. You know, when is this thing going to turn around? When are you going to be able to sell your house? What happens to all those bad mortgages that the government bought with your money?
And with 28 days until election day, the gloves have come off permanently. I`d love to get to the mud with these guys, knock their heads together. But instead, we`ll talk about their policies. If issues, not mud-slinging, matter to you, hang out. Coming up.
(COMMERCIAL BREAK)
BECK: Let`s be honest with each other. There`s only two things people want to talk about right now. Economic mess and who`s going to clean it up? Well, sex is always a good topic, but that`s a different story and probably a different show.
I`d like to think our presidential candidates have a plan that they`d like to discuss with us. But apparently, politics as usual, the mud- slinging is the way they`d prefer to go. How about you and I just stick to the issues that you care about and I care about? Those are coming up in just a second.
But first, let`s return to the latest on the financial crisis with tonight`s panel. John Tamny is the editor of Real Clear Markets and senior economist at H.C. Wainwright Economics. And Ali Velshi is CNN senior business correspondent. And James Stewart writes the "Common Sense" column for "Smart Money" and SmartMoney.com, is a professor at Columbia University.
John, let me -- let me go to you, because you said earlier in the first break, you said, this is a bogus market. Could you please explain to me how the government is gobbling all of these houses and sitting on these houses and then they expect that the housing market is going to find a bottom? It`s a fake bottom. It would be like me, saying, "John, I`m sitting here with a Strategic Oil Reserve. Wait until it gets to 89 dollars a barrel. Go ahead and buy your oil over there." And then when it hit 89, I just dump all this oil out. Is it like that, or am I misunderstanding it?
TAMNY: That`s what it is. The government at present is creating an unnatural market. In a normal market, these toxics assets would reach their natural level. Instead, what the government`s going to do is insert money that they took from the private sector very irresponsibly into this market.
And what`s remarkable to me here is they -- is those in the federal government say that these are frozen markets. What could freeze markets more than unnatural money coming in from the government and throwing all sorts of price signals out of whack? They`re just going to make one problem worse.
I liken it to the government chasing its tail. Each time they come in and try to save something, markets cheer for a couple of hours. Then reality sets in, and then more mayhem sets in. The government has a bigger problem to solve in the future. It`s not working, because governments can`t fix economies.
BECK: OK. Let me go to -- let me go to Jeff.
Hello, Jeff. Welcome to the Glenn Beck program
CALLER: Hi, Glenn. My question is about private mortgage insurance or PMI.
BECK: Yes.
CALLER: I have to believe that subprime mortgages had PMI. So what happened to all those insurance premiums? And why isn`t PMI covering at least some of the cost of the foreclosures?
BECK: What a great question. Anybody have -- anybody have an answer for that one?
STEWART: Yes. I`ll just say that, you know, there was a lot of insurance out there. But part of the problem now is that nobody entrusts the insurance industry to step up if they have to do it.
After AIG failed, all these institutions lost confidence that any of the institutions providing this insurance would actually pay up if they`re in default. And so that`s created the...
BECK: What happened to the money, Jim? What happened to all that money that we`ve been paying on?
STEWART: AIG took the money and invested it in -- guess what -- mortgage-backed securities and other toxic assets that have now lost their value. So you know, look, assets disappear, especially with their financial assets. And we`ve had -- we`ve lost trillions in the last, probably nine months.
BECK: Let me -- let me give an e-mail here we got in. "Glenn, please ask your guests this question. This -- the root of the problem that no one seems to be focusing on is the gold standard. Why is no one pushing a return to the gold standard?"
VELSHI: Well, you had -- you had Peter Schiff on last night. That`s -- that`s one of his mantras and Ron Paul`s mantra. And I must say, every time they do talk about it, my inbox gets full with people talking about getting back onto the gold standard.
What that would do is establish that you can`t print more money. You have to against it. Right? You have to have enough gold to print money against it. We have -- long ago the world has abandoned the idea of having a standard. So when we want more money, we print more. And it...
BECK: Why isn`t anybody pushing to get back onto that?
VELSHI: Well, because you`ve got to -- you`ve have to get the whole world back onto it. There`s nobody who believes that. It`s given us some -- it`s given us some financial flexibility, but it does cost us. It makes our dollar worth less when we do print more money.
And that`s the question that`s not being talked about. And that is we just printed a whole lot more money, or we`re going to, to cover this bailout and everything else that we do, to keep throwing money at it. And that means, it`s going to be more expensive for us to buy the goods that we buy from all over the world.
BECK: Which one of you guys -- which one of you guys can explain the difference between inflation and deflation?
TAMNY: Inflation is when the unit of account loses value. Deflation is when the unit of account rises too much in value. And the important point...
BECK: I don`t -- I don`t even know what that means. So wait a minute. The unit of account, that`s a dollar?
TAMNY: The dollar.
BECK: OK.
TAMNY: So if we want back to a gold-defined dollar, first of all, the rest of the world would follow, because the dollar would suddenly be the most credible currency on earth. And you would solve this problem a lot more quickly in a costless way.
Because for one, you`d give every American a raise. All commodities like gasoline would drop in price. And so the balance sheets of Americans would become better, such that they could pay off their mortgages.
It would also lead to investment in the entrepreneurial economy, rather than the hard asset economy, such that their wages would rise and they`d be able to pay these mortgages off more. A stable dollar defined in gold is exactly what we need right now, and the rest of the world would follow.
BECK: Jim, let me ask you this. I`m concerned that we are -- the rest of the world, whether we caused this or not, is -- is blaming us. They`re looking at us and saying, "It`s those Americans that did this to us." You should see the stuff that`s, you know, happening overseas and the way they are approaching this. This is an American problem. America destroyed the world and the economy, et cetera, et cetera.
Did we start this fire? Is this our fault?
STEWART: Well, there`s plenty of blame to go around. I agree with you. It`s pretty galling to see somebody like Putin absolutely gleeful at being able to point the finger at the U.S. and saying they`re the problems of the Russian market. I don`t think so.
You know, yes, in the very narrow sense, the subprime lending boom, the process of mortgage-backed securities, started here. But these foreign institutions, believe me, they were only too happy to buy these things up. This was not limited to U.S. financial institutions.
And now, you`re seeing these sovereign issues cropping up, like you have Iceland going bankrupt. You have a lot of countries, the Latvian countries, Indonesia, India, who are sucking up capital, who are, you know, drawing it in (ph) with high interest rates. They participated. Believe me. They got right up to the trough.
BECK: Is your kid going to be able to go to college next year and get a loan? A quick break. Back with that answer, next.
(COMMERCIAL BREAK)
BECK: All right. With the job market not so good, retirement fast becoming a crazy dream, staying in college has never made more sense, that is, if you can get a loan to actually go to college. Once again, enter the government to make things just a little bit more messy.
Let`s bring back our panel. We have John Tamny, Ali Velshi.
Ali, yesterday, Chuck Schumer said that he wanted a wall around these loans that apparently no one`s going to be able to get...
VELSHI: Right.
BECK: ... to be able to send your kid to college. And I`m thinking to myself, well, wait a minute. That`s the opposite of the way the capitalist system should work. If you can`t afford to go, the colleges will lower price until kids can afford to go.
VELSHI: Doesn`t happen. College enrollment`s been going up. There`s no -- the logic of the college education system doesn`t make any sense. It`s been going higher and higher and higher.
Now, the bottom line here, Glenn, if you are going to have government involvement, if you are going to encourage people to take loans that might be slightly beyond their immediate means, education might be one of those areas that you might want to think about.
BECK: I mean, it`s universal education, then.
VELSHI: I agree.
BECK: It`s socialism.
VELSHI: But the bottom line is, what do we do? We now -- we know we have messed up on the current environment. It`s causing people to take loans that they couldn`t afford on their loans.
BECK: Look at America...
VELSHI: Should the investment be in education, because at least there will be some payback for that.
BECK: Look how far we keep going. We just keep taking another step and another step. Let me show you this, America. Let me show you how things -- you`ve heard about the evil oil companies. OK? And how much money they`re making.
Since 1985, the evil oil companies for energy, the cost of energy in America, have gone up 108 percent. There it is. Health care, you keep hearing about how awful health care is. The evil insurance companies have made the rise in health care, 251 percent.
College? Four hundred and thirty-nine percent increase. What the hell is -- besides the five-billion-dollar books -- where is this money going? Where is -- how is education going up 439 percent?
VELSHI: It`s become associated with the value that you get for paying that kind of money. It doesn`t make sense. But what do you do about it? What should we do?
BECK: John, John, John -- it`s coming from -- because the government is giving out loans so people will play it.
TAMNY: When the government makes it easy for you to borrow at low interest to go to college, that`s a signal to universities that we don`t live by the pricing pressures of other business. So let`s keep jacking up tuition, because we know the government will step in.
VELSHI: But John, what`s the transition point? What do you do? Do you say, "We won`t give these student loans, and we`ll teach these colleges to stop things"?
So what generation do you lose that can`t afford to go to college?
(CROSSTALK)
VELSHI: ... we could impose a really good clean economy right now that didn`t have too much leverage and didn`t have people over-borrowing. I would support that. I think most Americans would. But how do you get from where we are to there without dislocating?
BECK: I went to -- you know what, Ali?
TAMNY: I don`t think you lose people with this.
VELSHI: You don`t. I -- I went to college when I was 30 because I couldn`t afford it.
TAMNY: But Glenn, you know, 30...
VELSHI: ... back then. I mean, we`re in a different world right now. We did have cable. It was in 1995 that I went.
I mean, you know, sometimes, it`s the same idea that we used to have. My grandparents used to say, you want a house, you save for a house.
VELSHI: Right.
BECK: And you scrimp and you save, and you might be 30. You might be 35. But you buy it when you have the money to do it. I mean, we are tiptoeing -- we`re not even tiptoeing. We`re running full-out, right to socialism.
VELSHI: And you could impose that rule of not buying a house, unless you have a 30 percent down payment. You can impose that today. What do you do about college? Because the costs are there.
BECK: I`m not imposing any rules.
VELSHI: But you could. It wouldn`t be a bad one. You said it. The government actually said, no bank loans to people who want houses unless they have 30 percent down, starting today, you`d actually solve a lot of that...
BECK: Back in a minute. Back in a minute. Back in a minute.
(COMMERCIAL BREAK)
BECK: Well, no election season is complete without a little controversy and the pigs are squealing. Both parties have made accusations over voter fraud at one point or another over the course of the presidential election history. However, it usually happens after one of them loses.
This year, we`re starting early. Ladies and gentlemen, start your attorneys. Stay tuned as I talk to a few people who say voter fraud is already well under way all across the country.
But first, as much as John McCain has been trying to take the focus off of the economy, I have a nagging suspicion that maybe some of the audience members asking the questions at the town hall debate tonight might not let either candidate change the subject so easily.
Senator, let me give you a piece of advice, you can`t avoid talking about the number one issue that`s on everybody`s mind. So here`s my free advice and it`s worth exactly what you`re paying for it. On how you can turn this into a strength and it`s actually quite simple; personal responsibility.
No, Mr. 19-bed McMansion. We`re not reworking the terms of your mortgage until you sell your Mercedes and cancel you`re lasting cruise and pick up a part-time job. No, sorry Mr. Politician we`re not allowing you to spend another dollar of our money while you point fingers and pretend that you had nothing to do with all of this.
Admit you`re party missed, admit you`re failure. Take responsibility for your actions. And then maybe, we just might consider lending you some of our trust again.
And no, Mr. California, we`re not going to bail you out while you sit there whining about drilling offshore for oil. Drill, make some money, that`s a crazy idea, we`re not going to sit there and bail you out while you`re allowing your cities to agree and give free health care and education to illegal immigrants.
Make some sacrifices. Make some hard decisions. Take some crazy personal responsibility. Yes, take personal responsibility for your actions. And then call me. And maybe I`ll pick it up. And maybe then, I`ll talk to you about helping.
That may not be a message embraced by Barack Obama or honestly John McCain. But it is one that`s embraced by America. That`s why one of these clowns should start preaching it. But please, only if you actually believe it.
John Fund is an editorial writer at "The Wall Street Journal" author of "Stealing Elections and How Voter Fraud threatens our Democracy and Princella Smith, is the Chief Advocate at American Solutions.
Princella, let me start with you.
PRINCELLA SMITH, CHIEF ADVOCATE, AMERICAN SOLUTIONS: All right.
BECK: I don`t understand, I mean, I saw the debate with Palin and Biden. And when they were talking about, oh yes well you know it`s this predatory loans that are going on. I saw the audience, and nobody was tracking up. All of a sudden she said personal responsibility. And America connected, both Democrat and Republican and it went right off the top of the screen. Why are we not hearing this?
Well, the message is really simple Glenn. And it`s interesting that you used the predatory analogy because that`s exactly what we talked about in our newsletter today. Look, you get a lot of talk about predatory lending. But I tell you who`s going to win -- it`s going to be the group that comes out and says, let`s talk about predatory politicians, let`s talk about these people who think that big government is the answer to everything.
And let`s talk about these people who don`t want anyone to take any responsibility for anything. And I`m saying that includes Secretary Paulson and the Bush administration. No one wants to take responsibility for anything. Everyone wants to bailout everyone with everything and that is precisely the problem. And you`re exactly right. We need to move from talking about predatory lenders to predatory politicians.
BECK: Thank you and you know what? And people who are taking the -- I mean who thought that you should take 110 percent loan. Who thought that was a good idea? You`re too stupid to own a house, I`m sorry. The American Dream is the American Dream that you have to earn, and not what Obama is trying to turn it into, in the America promise.
John Fund, why doesn`t John McCain actually come out and say, you know what, the first thing we`re going to do -- because this is what I would do at my house -- is cut spending across the board; 10 percent cut everywhere. That would be popular in America. Wouldn`t it?
JOHN FUND, WALL STREET JOURNAL: Well, he`s proposed a form of that except that he`s ruled out any cuts in veterans programs, entitlement; most national defense. So what`s left of the budget is a shrunken cinder compared to the entire bonfire that we`re dealing with. So I have to say, he`s on the right idea. He`s just already negotiated with himself most of the benefits away.
BECK: Yes, and that`s what not -- and nobody wants to hear that. And here`s another thing. Again, I know we`re playing the why isn`t somebody doing this game? But I just took some clips. And we just took a clip and we just went back into the archives and we just took people who claimed that they`re on our side. They`re the ones, they`re going to be the watchdogs now, and make sure that nothing goes wrong, why is this not a John McCain in the commercial right now. Watch this.
(BEGIN VIDEO CLIP)
REP. MAXINE WATERS, (D) CALIFORNIA: Mr. Chairman, we do not have a crisis at Freddie Mac and in particular at Fannie Mae under the outstanding leadership of Mr. Frank Raines.
REP. BARNEY FRANK, (D) MASSACHUSETTS: But I have seen nothing in here but to get of the safety and sound as your issue. And I think it serves us badly to raise safety and sound as this is a kind of a general Chevrolet --
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES OF AMERICA: It`s really hard for many, many low-income families to make the high down payment. And so that`s why I propose and urge Congress to fully fund the American Dream Down Payment Fund.
UNIDENTIFIED MALE: These are very strong viable entities today. The capital they have is good as in excess of what`s required under federal law. This is not a time to be panicking about this.
(END VIDEO CLIP)
BECK: So the last one was from July. Why are we not seeing these everywhere? I think it`s the good old buddy -- the good ole boy network. Where they are out and nobody wants to throw anybody underneath the bus because they all got their hands dirty. Princella --
SMITH: I`ll tell you what Glenn, they need to throw both parties under the bus. I`ll tell you what -- I`ll tell you what it is absolutely asinine that we spent that much money for that ridiculous piece of bailout that was passed.
Let me tell you something, for that argument that more regulation is needed. I want everyone to hear this loud and clear, including the McCain and Palin campaign. The board that oversaw that had over 200 people that were supposed to be controlling that. And we still got put into this mess.
BECK: Yes.
SMITH: I don`t understand, I`m with you, Glenn. The American people don`t understand.
BECK: Then tell me this again, why doesn`t he say this. Why doesn`t he get on tonight and say, America, we can`t afford more taxes. We can`t afford it. We can`t afford more spending.
And Barack Obama says that he`s going to cut for 95 percent of the people. That includes 45 percent of the U.S. population that pays zero income tax. For the first time in American history, people who pay zero income tax, every year, will get a check from the federal government and that is not a tax cut.
That is a handout. Right or wrong, John?
FUND: Well, I think it`s a dramatic expansion of the welfare state. And you know, economists and political scientists have long warned that once the country reaches the point where more people are getting an income from the government than earning income on themselves -- by themselves, then you have a tipping point because people will always vote for more politicians to give them goodies because that is the natural progression of the decline of a welfare state.
BECK: Do either of you guys believe that about America? Because I have to tell you, I have so much more faith in the America people that if we had somebody who was shooting straight, if we believed that our government would actually cut the funding and actually pay down the deficit and not rule the government, if we believed those things, I think people would do the hard thing for their kids.
FUND: Glenn, Glenn there are a lot of people who want to do this. But let me explain I think one of the reasons why John McCain and some others are not going after Fannie Mae and Freddie Mac.
Let`s be clear, if you went after them, you`d have to look at the Community Investment Act of 1977, which was expanded by Bill Clinton and expanded by George Bush. And this was basically saying banks are not making enough loans in low-income neighborhoods.
And if you don`t make enough loans -- we`re going to prevent you from merging, we`re going slap sanctions on you. And there`s a racial component here because not all but some of the people were racial minorities you`ll get the charge of racisms for all of these --
BECK: Princella, they did it yesterday with Barney Frank. Am I a racist to say that there are some people that shouldn`t get a loan and those it doesn`t matter what they`re skin color is if you can`t afford it.
SMITH: You`re absolutely right and I tell you another point that I want to bring up here. And that`s how much money went to ACORN. People are looking at what immediately just happened. Think about that $300 billion housing bailout that happened this summer; $500 million of that money went to the far left-wing crazy, radical group, ACORN.
BECK: Ok, all right, when we come back, Princella and John stick around for a bit because I want to get into ACORN and people stealing the election. Voter Fraud is it actually taking place weeks before the election?
Oh stick around and blood will shoot out of your eyes. Like you got any blood left after this week. It`s coming up next.
(COMMERCIAL BREAK)
BECK: I have to tell you, I am a conservative, but I`m just like you. I don`t care what your politics are. Americans are fair. That`s what we are. We`re fair. Just play it -- the game the way it`s supposed to be played. Now imagine this horrifying scenario.
You make minimum wage, you bought a McMansion which you now can`t afford, your mortgage company forecloses on you, so you leave the house, move out of town. Election day comes, you go back to your town to vote for Obama, of course, but the poll workers turn you away saying that you no longer live in that voting precinct. Oh the humanity. No, no, oh the racism.
Wait a minute, I`m pretty sure that`s the law, isn`t it? You can`t vote in a precinct you no longer live in, even if you`re going back to vote for the very first black president ever.
Well, somebody better give this information to a group called Creedo Action, because they are working behind the scenes right now in an insidious way to protect voters from, quote, "despicable tactics like these." It`s the law. Although I wonder -- I wonder if they think it`s despicable if those tactics were being used on people who try to vote for John McCain.
John Fund is back with us he`s an editorial writer for "The Wall Street Journal," author of "Stealing Elections, How voters Fraud threatens our Democracy" and Salena Zito is a political reporter for the "Pittsburgh Tribune Review." Hi Salena.
SALENA ZITO, POLITICAL REPORTER "PITTSBURGH TRIBUNE REVIEW": Hey Glenn how are you?
BECK: I feel very good and good to see you again and you have a -- you got something in the mail. Tell me about it. And let me bring it up on the screen here, what is this?
ZITO: Well, it was an email that came from something for democracy, Poll Workers for Democracy, which was from Creedo Action, and if you dig a little further, it`s a group called Working Assets.
BECK: Ok now, this is -- I just want to want to show the picture here -- this is a picture of Black Women United and it looks like a shot from the 1960s.
ZITO: Yes, it is a exactly that --
BECK: And what are they saying?
ZITO: They`re basically saying, the email starts with the line in bold, imagine being told that you lost your home that you`ve also lost your right to vote, and I`m paraphrasing, but something like that.
And it goes on to say that Poll Workers will be at your local precinct, there to watch, to make sure that everybody is there that is allowed to legally vote.
Wow, aren`t you -- is that the way it`s supposed to work? I don`t know. I wanted to check election law, but I`m pretty sure that`s how it works.
BECK: Ok but wait a minute -- but they say here -- that they ask you to volunteer, right?
ZITO: Right.
BECK: And what are they asking you to volunteer for?
ZITO: They`re asking you to volunteer to be a poll worker at the elections, and they`re telling you that you can get paid. If this is true, it`s called a paid volunteer.
I called the County Election Bureau in the local county here in Pittsburgh, Allegheny County, and there are five people that sit at each precinct, there`s the judge of elections, inspector of elections and a couple other titles.
BECK: Ok.
ZITO: Most of those are elected positions. But most of those positions are filled. There`s a lot of gaps and a lot of open spaces.
BECK: All right. Here`s what concerns me, and John, I want to bring you in on this. It`s not that, you know, go volunteer your time, go get paid for elections, whatever, you want to do that.
What bothers me is, again, the cry of racism when it is the law. I lose my house, I move from my district, I have moved from my district before, and I couldn`t vote. That`s not racism. This is planting the seeds that are -- we do not want these seeds to take root. John?
FUND: Well, there are going to be lawsuits filed this year, saying, you can cast a provisional ballot in any precinct in the state of Ohio, for example. They litigated this in 2004, too. And, of course, you can`t do that, because you have local races in one precinct that aren`t the same as the local race in another precinct.
And I`m confused about this foreclosure issue. If you`ve lost your house and you`ve had to move, it means you moved somewhere else. You moved to another precinct, but you have a new address of some kind.
BECK: Right.
FUND: And even if you`re homeless, you have the right to vote, so why would you go back to your old precinct where you no longer live? I don`t get it, unless you`re voting twice, maybe.
BECK: There is an effort afoot to steal elections here in America, especially in Ohio. No president has ever won without Ohio. And they are targeting Ohio. Is there any evidence of the other side targeting Ohio?
FUND: Oh, yes, both sides are going to spend millions of dollars in advertising.
BECK: No, no, no, targeting in fraud.
FUND: Oh, well, the other side of this battle will say, voter intimidation, voter suppression, such as is being discussed there. But ACORN, which is the activist group that was mentioned in the last segment is a notorious organization, it had its offices raided this day in Nevada, this day. Because investigators are looking all over the thousands of voter registrations they`re turning in that are completely fraudulent.
I believe voter registration, Glenn, is like the tip of an iceberg. One tenth is above the surface, nine tenths below the surface.
BECK: All right.
FUND: Voter registration fraud we see is only the tenth -- the part above the surface.
BECK: Hang on just a second both of you for just a second. I want to bring a momentary distraction here from our outrage, time for this week`s "Real America" brought to you by CSX. They got to pay the light bill, you know what I`m saying? Daddy needs a new pair of underpants.
So Jordan Urback is the violin virtuoso and he`s also the head of a non-profit organization, he`s an author. Oh, one more things, he`s 16 in high school from Long Island. Watch this.
(BEGIN VIDEOTAPE)
BECK: Jordan Urback is a child prodigy. He started playing violin at 3 years old, but it`s what Jordan did at the age of 7 that really set him apart from others.
JORDAN URBACK, CHILD PRODIGY: I started when I was 7 years old. I developed a strong interest in neuroscience which manifested itself in my doing a book report on the great pediatric neurosurgeon Fred Epstein.
Well, I went to Beth Israel North Hospital and interviewed Dr. Fred Epstein. And I was so touched by the interview and by his taking me to the ICU to see all the young patients suffering and I said, listen, I`ve got to do something for your kids.
And I would do bedside to bedside concerts for those who weren`t in ambulatory, a concert in the playroom, bring some friends in from the conservatory who`ll play with me.
BECK: And that`s all it took for Jordan to start "Children Helping Children." It`s a musical charity that raises money for pediatric wards and medical organizations.
URBACK: "Children Helping Children" is a turn key organization, and what that means is that an organization or hospital will contact me and say, we need X amount of funds to do X project. And I`ll say, ok, we`ll work on that. I`ll do the benefit concert, I`ll plan it, I`ll do promotion for it. And then all of the proceeds go to that organization.
BECK: Jordan has headlined benefit concerts at Lincoln Center and Carnegie Hall and in nine years "Children Helping Children" has raised $1.4 million.
URBACK: Originally, the concept of "Children Helping Children" was me and a bunch of friends from conservatory playing in hospital wards. It was as simple as that. And now there are satellite chapters outside of the country working to raise funds and awareness for neurological disease. It`s grown beyond my wildest dreams.
BECK: Next year, Jordan will be heading to college to try to study neuroscience and music and plans to run "Children Helping Children" out of his dorm room.
URBACK: The young professional artists today are so focused on their careers and making money and making it big that they lose sight of what`s important. There has to be more to the music than a career. It has to have meaning.
(END VIDEOTAPE)
BECK: Ever watched something and think, what the hell have I done with my life? That`s me right now.
November 22, Jordan is going to be playing another benefit concert at Carnegie Hall to raise money for Multiple Sclerosis Society.
If you would like to see more stories like this one, click on cnn.com/glenn and look for the "Real America" section. That`s tonight`s "Real America" sponsored by CSX; it`s how tomorrow moves.
(COMMERCIAL BREAK)
BECK: All right. We`re back with John Fund from the "Wall Street Journal" and Salena Zito from the "Pittsburgh Tribune Review."
John, we were talking about ACORN when went into the break and had to watch that kid who pissed me off. Tell me about ACORN. And why they haven`t been -- why haven`t there been any arrests?
FUND: Oh, there have been arrests.
BECK: Well, then how come we had -- what was it, 20 percent of the bailout bill, the profits that we were going to get, were going to be funneled to ACORN?
FUND: ACORN and other groups, to be fair. But ACORN has had prosecutions. Former employee indicted for identity theft in Pennsylvania, someone in Wisconsin indicted this week. Felons are registering people for ACORN all over the country, some with very disreputable records. In Nevada, a raid today, literally going in and taking out the boxes and the computers, looking for voter registration fraud.
ACORN always says every year, these are just a few employees, bad apples, we`re going to clean up our act. Every year they`re back with the same set of scandals.
Last year in Seattle they were fined and had seven employees plead guilty. I think this is part of a pattern. And here is what is most -- here is what most troublesome, Glenn.
BECK: Thank you, Sherlock Holmes.
FUND: Here`s what`s the most troublesome, Barack Obama used to be ACORN`s lawyer, he was a top trainer for them, he spoke at their national convention last year, saying we march arm in arm on all issues. I think ACORN is being so brazen because they think if they can get through this election, a Barack Obama administration just might look the other way.
BECK: So Salena, what happens to us? I started this half hour with, we`re fair. We`re fair. We have no problem losing, as long as it`s fair.
ZITO: Right. Exactly.
BECK: What happens to us when we don`t -- when we trust nothing? Even our elections.
ZITO: Well, I had my own ACORN experience. There is a bar conveniently located at the bottom of our news room. And a guy came out -- yeah, don`t ask.
A guy came out and he`s like, can you register to vote? And I said, yeah, and I said, why do you ask? Well, I`m from ACORN and I`m trying to register people to vote. And he said, who are you voting for? And I said, that`s none of your business, and he said, well, I`m for Barack Obama, but I`m not supposed to tell anybody that and then he literally stumbled back into the bar.
BECK: Look at it this way. He didn`t vomit on your shoes.
ZITO: Well, there is that, yes.
BECK: So you got that going for you.
ZITO: Right.
BECK: Guys, thanks a lot. We`ll be in touch again. And keep your eye on this for us, will you?
That`s it for tonight. From New York, good night America.
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