Return to Transcripts main page

Glenn Beck

Who Won the Debate?

Aired October 16, 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, as ordinary Americans struggle to survive, the candidates play tug of war over Joe the plumber.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: Joe the plumber. I want Joe the plumber.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: I`m happy to talk to you Joe, too.

BECK: Can we maybe look at an issue or two, guys?

Then Sarah Palin goes shopping. That trip into the store to get a bag of diapers makes me want her as the president of the United States.

And as the market continues the slow-motion crash, Americans ask how long will it last, doc? Tonight, some answers.

(END VIDEOTAPE)

BECK: Hello, America. Last night the -- was the last debate for the president, you know, before the election. All throughout the debate, I mean, I just -- I like to watch it with the sound off. All I could think of the whole time was diapers, because a few times, I thought they were both full of it, but those aren`t the diapers that I was actually thinking about.

While these two were yammering last night, they were spending the day just memorizing their talking points and political posturing, vice- presidential candidate Sarah Palin popped into a Wal-Mart in Ohio to pick up a few things, including diapers for her youngest son.

Here`s "The Point" tonight, America. That is my candidate. Here`s a regular woman doing the same things that people like you and I do every single day, a politician who lives in the real world. And here`s how I got there.

While McCain and Obama love talking about Joe the plumber. I don`t know about Joe the plumber. By the way, Joe, you should change the name of your company to Joe the plumber like right now. When`s the last time you think either one of these clowns lived like Joe the plumber or felt Joe the plumber`s struggles or shopped like Joe the plumber? Which -- which one of them do you think -- how long ago was it when they went, "Yes, my toilet`s all backed up, and I got crap all over the floor." Do you think either of them have done that lately?

Let me keep this brief. Tonight America, here`s what you need to know. I think we`re all feeling disconnected from our government and that`s a spooky thing. And that`s the leaders in Washington are out of touch. You know, they don`t have any idea what it`s like to be an average American like you. But before you throw your hands up and think nobody gets it, think back to yesterday when a mom had a little boy who was out of diapers and she said to the Secret Service, "Pull the bus over for a second. We`re going to Wal-Mart just to pick up a few things." She just happens to be running for vice president at the time. That`s my candidate. It may not be this time, but I`m going to be watching her for the next four years.

Joining me now to talk about this and more on last night`s debate is Julian -- I`m sorry, Julian, how do you say your last name?

JULIAN ZELIZER, : Zelizer.

BECK: Zelizer. I`m sorry. He`s professor at Princeton University, editor of "Rightward Bound: Making America Conservative in the 1970s." Princella Smith, she`s the chief advocate for American Solutions, and Michael Reagan, radio talk show host and GOP strategist.

Michael let me start with you. Eight points, did John McCain do enough to turn this around? He`s eight points behind.

MICHAEL REAGAN, RADIO TALK SHOW HOST: Well, I could use the old line, you know, Reagan was a friend of mine, and John McCain ain`t no Ronald Reagan. Ronald Reagan was actually eight points behind about this same period way back in 1980.

BECK: But he was no Ronald Reagan.

REAGAN: But -- but John McCain is no Ronald Reagan. I think one of the problems, and you bring it up, is people watch the debate and say, "But I don`t trust Washington. Do either one of these guys really get it?"

BECK: Neither one of them. Princella, do you think either one of them reached out and said, "Look, America, I get it. I get it." And you don`t trust -- there`s a reason why we`re so close and we`ve been campaigning for two years. Because you don`t trust either one of us and just speak to the American people.

PRINCELLA SMITH, CHIEF ADVOCATE, AMERICAN SOLUTION: You`re right. This race was essentially tied until the big crisis with the economy, and that`s really just a backlash against the sitting party. You`re exactly right, at American Solutions, we talk about this all the time. They`re completely out of touch.

I like what you said about Joe the plumber. What they -- what they -- it did sound a bit ridiculous. But what they should have said -- what Senator McCain should have said was, "Look, Joe the plumber, we get it." They need to have bumper stickers that say, "Joe was right," in the sense that you have to make this simple for the average American.

OK. Either we`re going to redistribute your wealth or we`re going to give you an opportunity to grow your own wealth. Which one makes more sense long-term? That`s what America is looking for. And right now neither candidate has truly answered the question.

Barack Obama`s rise is just simply a bounce from just people -- a backlash against President Bush.

BECK: Julian, I can`t figure out. You`re a historian. You are a history professor at Princeton University. And I`m interested in talking to you on a couple of things, and I`ve heard some of your viewpoints. But one of them I really want to hit is I don`t -- I don`t know of a time where we have had -- I mean maybe you have to go back to FDR or Woodrow Wilson, where it is -- where we are talking about progressive, leftist Marxist kind of ideas, where unabashedly, we`re going to move wealth from here to over here.

Have you ever seen this in the recent history? This is a pretty radical kind of place that we find ourselves in now, isn`t it?

ZELIZER: Well, the last time liberalism was strong was in the 1960s with the Great Society. After that it was really in Congress rather than the White House that you had strong feelings for liberal views.

I`m not sure it`s Marxist, but certainly, Barack Obama has a set of prescriptions that involve around government intervention to help out with the economy. That said, so does President Bush.

BECK: Oh, I know.

ZELIZER: And that`s what makes it a little different, this debate.

REAGAN: If I can jump in for a moment...

BECK: Yes.

REAGAN: ... because one of the issues, I mean, if you`ve been reading the papers lately. End of the Reagan era, it`s all over. It`s all done with. And somebody called from Washington, D.C., the other day and said your father would have supported the bailout. My answer was with my father we never would have been in that position to have to get a bailout from Washington D.C.

People need to understand conservatism works. The Republican Party walked away from it and because of that we`re in this trouble.

BECK: Yes. Yes. OK. So Michael let me go back to you. Julian just said that he doesn`t think what we`re seeing now is Marxism. Well, what the hell is it? Corporatism at least, but how do you define Marxism if it`s not taking the wealth from one person and giving it to another and leveling the playing field so everybody is equal here, and the government coming in and controlling everything?

REAGAN: Goes back to Plumber Joe and that whole answer, you know, that Barack Obama gave him about sharing the wealth, grab that person below and get up there and be with -- be with the plumber.

But you know something, one of my colleagues said last night the best way John McCain could have ended the debate was very simple. You say, if you want socialism, vote for him. If you don`t want it, vote for me. Because that`s the big argument going on right now, is you want to be a socialist society or not. And of course, my problem is that John McCain also creeps down that path. Only you and I can bring him back.

BECK: Oh, yes. Yes. Princella, I don`t know if you can bring him back on that. Princella, if you look, you know, it`s not just a one-guy movement here. We -- I`m just, I may be more afraid of Congress than I am of Barack Obama. I mean, if there was any kind of balance in Congress, it wouldn`t -- you know, it wouldn`t be as terrifying.

But if you look at who we are putting in charge of this country, assuming Barack Obama would win, you have Pelosi, Dodd, Barney Frank, Harry Reid, Murtha, Biden, Kennedy. My gosh, this is not where our America is. This is where San Francisco is.

SMITH: Glenn, I`m going to quote my boss now, and I hope he`s watching. Former speaker of the house, Newt Gingrich, in our last news letter, he said if you think, obviously, the Bush-Paulson version of economics has failed us, unfortunately, but if you think that was bad wait, just wait until the Barack Obama, Chris Dodd, Harry Reid, Nancy Pelosi group gets in there.

BECK: And we`ve left out -- we`ve left out unions.

SMITH: And Barney frank.

BECK: Environmentalists.

SMITH: I`m getting there.

BECK: Al Gore.

SMITH: Exactly right. You`re going to have more litigation. You`re going to have more government, higher taxes. And what I don`t think that many people in the American electorate are fully getting and grasping this message, because Senator McCain has to do a better job of giving this to them.

He needs to do exactly what Reagan said, which is, "Look, the reason why you`re upset is because Republicans weren`t governing as conservatives." That`s why everyone`s upset. That`s why we lost so much money.

BECK: You know what? I don`t want to hear it from somebody who doesn`t actually believe it. And I`m not convinced he believes it.

Do either one of you guys look at John McCain and actually say, you know what? He really -- I do believe he will do what he believes is right. I believe he`ll buck his party. I`ve seen him do it over and over. But do any of you guys, all three of you, any of you actually believe that John McCain is a true blue fiscal conservative?

ZELIZER: I think it`s hard to know exactly what John McCain stands for. I think kind of the negative attacks are not going to work. I mean, I think what John McCain is lacking is what Ronald Reagan offered. He offered a very coherent version of what conservatism was, how it would renew the country, how policy such as tax reform or tax cuts, in his mind, could restore economic growth.

I don`t think we really know what McCain stands for, and I think last night`s debate didn`t help him.

REAGAN: Well, I think John McCain -- I think no, he`s not a fiscal conservative. But he`s a far cry from Barack Obama, who will never get there at all, especially if he has a 60-vote majority in the Senate of the United States of America, along with of course, Pelosi and all the people in the House of Representatives. That`s what`s scary.

BECK: Here`s what I want to do. I want to take a break, and I want to come back with you guys. And -- and I want to talk to you a little bit about -- and Julian, maybe you can start us on the last times that we`ve had a filibuster-proof Congress lead by liberals and what that means. And what do you guys thing is going to happen in the first 100 days, you know, the first, what are we going to look like in four years from now? Coming up in just a second.

(COMMERCIAL BREAK)

BECK: Coming up, as every economy on the planet seems to be crashing in slow motion, the price of a barrel of oil -- yay -- has been managing to fall to a 14-month low. So why are we still paying all those high gas prices at the pump? And why is everybody celebrating? This actually, believe it or not, counterintuitively, is not good news. And I`ll explain, coming up in just a bit.

First, let`s talk a little bit about politics and what`s to come with tonight`s panel. We have the author and professor of Princeton University, Julian -- I can`t say it again, Julian.

ZELIZER: Zelizer.

BECK: Zelizer. And also, Princella Smith, the chief advocate for American Solutions. I mean, I suck as a host, don`t I? Michael Reagan. You guys don`t have to just nod your head and agree. Michael Reagan, talk radio show host and GOP strategist.

OK. Julian Zelizer, let me go to you. Last time we had a filibuster I believe the only times that we`ve had them in the last century was during the Great Depression and in the 1960s. True or false?

ZELIZER: Yes. I can`t remember with Carter what the number was in the Senate. There, you know the divisions in the Democratic Party were more important than whether you had a filibuster-proof Congress, and the tensions between the executive and legislative branch were so severe the filibuster didn`t matter. You couldn`t get a lot of legislation through.

BECK: OK. But when we did have a filibuster-proof Congress, we got the Great Society and the New Deal.

ZELIZER: That`s true. When you had large Democratic majorities, you did have a burst of social reform. That was a different era, though. I think we`re in something of a fiscal straight jacket right now, and it will be very hard to do with government what we did before.

BECK: Is that why Nancy Pelosi is proposing a $300 billion stimulus package?

ZELIZER: Well, I mean, we just had a much bigger package through President Bush.

BECK: But that`s -- but that`s the problem. Everybody is like yes, but that`s nothing compared to what we`ve already had. We`ve got to go in the opposite direction. All right, Princella. Tell me what you think is coming in the first 100 days.

SMITH: I think you`re going to see an overwhelming amount of big government push, I think you`re going to see a big bailout and big amounts of funds going to extreme leftist groups such as ACORN, who already got money this summer, didn`t get much coverage but they got a lot money out of the first bailout that we had.

I think you`re going to see what I`ve called on this program, predatory politicians. And the problem with them versus predatory lenders is that they have the power of government behind them. And that`s what`s - - exactly what is scary and what`s going on in America. When you say the term socialism, I`m not sure people realize, really, what`s going on here. This is a very serious time for America. So that`s what`s going to happen the first 100 years.

BECK: Let me say something.

SMITH: Days, days.

BECK: Let me say something crazy here, and you guys take -- anybody who wants to jump in. I said right after September 11 on the radio I was concerned that the country was swinging so far to the right with, you know, the flags and everything else. And I said, "Look, you`ve got -- we have to be careful that you don`t just fall in line just as zombies. You have to know these people have the right values, these people reflecting you, et cetera, et cetera, because that is a pendulum. And it will always swing back the other direction just as far if not farther."

And in these times you have to be careful of this, because at some point any event that could happen that could be catastrophic, where the government, either extreme left or extreme right, will seize the pendulum and stop it there. Do any of you guys feel that we`re entering this kind of territory?

REAGAN: I think we`re in that territory, to be honest with you, and I think you`re in that territory, Glenn, because there is no leadership. There`s no leadership at all in Washington D.C.

You wonder why the market is going the way it is, why America feels the way it does, because we look to Washington for leadership, and when they panic like they have, America panics.

I go back to 1987 with my father. The market dropped 508 points, 22 points, 6 percent in one day. What did the president do? Nothing. He went to Camp David for the weekend and said, "What goes up must come down." And he stayed the course and he gave us leadership.

Right now there`s no leadership at 1600 Pennsylvania Avenue nor in the Congress of the United States of America. When you have a leadership you don`t have the swings. Right now, we don`t have leadership.

BECK: People say, and I`ve been saying this for a while, look, you could have a fascist overnight. You could have somebody that just seizes power overnight and people say that`s crazy; it will never happen in America.

I mean, we were damn close to one with Woodrow Wilson. Were we not? Woodrow Wilson 00 I know you`re at Princeton, so maybe you just have to whisper it to me. But Woodrow Wilson put people in jail for speaking out against the war. He totally changed the way this country was operating.

ZELIZER: Well, Woodrow Wilson abused civil liberties during the war, like many presidents have, including FDR and including, some would say, our current president. I don`t think he was a fascist.

BECK: Close.

ZELIZER: But during war --during war you do see an extension of federal power that bothers many Americans. I think you`re absolutely right.

BECK: what we`re not talking about -- now we`re not talking about, I mean Princella, tell me the event that -- all the event needs to be is another giant shock to the system, and the government will say, "I`m here to save you. I can do" -- they`re already doing it.

SMITH: They are already doing it. But I do want to point out, going back to the point you just made is that what`s going to have to happen is the American people themselves are going to have to demand change. They`re going to have to demand an active citizenry. They`re going to have to talk to their elected officials.

They`re going to have to say, "Look, we`re not going to vote for you unless you have a comprehensive energy plan, unless your health care plan makes sense, unless you cut government spending and unless there`s less government." The American people have to make this decision. That`s what`s going on here.

REAGAN: But one of the problems -- one of the problems is you talk about civil liberties, Glenn, your business and my business. You know, there`s been a lot of talk about the Fairness Doctrine. You give a 60-vote majority in the Senate of the United States to Barack Obama.

And you might see what you do on radio or what I do on radio...

BECK: Oh, God.

REAGAN: ... or other people on radio absolutely go by the wayside, talk about civil liberties done. Now you`re back to the big three telling everybody what to think.

BECK: I think, you know, and we`ve been watching -- I`ve been asking my staff to watch these extremist groups here in the United States, just to keep our eye on them, make sure we know what`s going on. I mean, I think somebody could do something just stupid and un-American and you could have the Second Amendment gone overnight, because it would be something that we would have to do to save our country. I mean, we are just so close to the edge.

And when you -- Princella, you were talking about oil companies. Oil is falling down through the floor right now. Well, gee, why is that? I mean, stock-wise?

Hang on. Hang on just a second. We`ve got to take a break. Let`s answer that here in a sec. America, you`ve got to understand why is oil all of a sudden falling through the floor as a stock? Next.

(COMMERCIAL BREAK)

BECK: Tonight`s political panel, Julian Zelizer -- I like to call him Z. Money -- author and professor of Princeton University. He`s regretting his appearance on this program, I believe. Princella Smith, chief advocate for American Solutions. And Michael Reagan, radio talk show host and GOP strategist.

OK. We were -- we were talking about the price of oil, the stock price of oil. Anybody have an opinion on why that seems to be falling out of the sky, 50 percent drop?

SMITH: Well...

REAGAN: A lot of it...

SMITH: Go ahead.

REAGAN: No, I was going to say, there`s a lot of things to play into it, the fact that people are taking public transportation. The dollar is stronger than it was.

And of course, the other side of the coin is people looking at the future see the Democrats taking over and the oil companies going in the tank, and there`s a lot of things that are playing into the dollar -- into the oil price going down.

But what`s interesting is, it is going in fact down, which is exactly where I thought we wanted it, but now that it`s going down people want it to go back up again. It`s very confusing.

BECK: Well, Princella, I mean, did you notice last night during the debate Barack Obama made a point of saying that, hey, he`ll look into drilling. These guys have no intention on drilling. They have made the oil companies into a boogie man. If I had stock in an oil company I don`t know -- I`d be like what happens to them if these guys get in? I mean, FDR did this. He made bogeymen, and he went after them.

SMITH: Look, they have no intention of drilling. They made -- they passed some fake Bill that basically said we`re 12 percent for drilling. And then Steny Hoyer has said openly that he wants to reinsert the ban for drilling, so they don`t plan on doing it.

It doesn`t make sense to me when we have 800 billion barrels of oil here, which is three times the amount we have overseas. And we could use that as a bridge to get to the point where we`re free of fossil fuels, but right now we need to use the resources here. So no, they`re not -- that`s another danger of having this Congress in power.

BECK: Julian -- Julian, I saw Sarah Palin at the Wal-Mart, and whether that was a staged thing or -- I don`t know, but she seems real to me. When was the last time -- I think this is what America is missing, is someone that they think, "Oh, she`s like me or he`s like me and, oh, he can relate to me." I don`t relate to either of these candidates. I don`t think most people really directly connect with either of these candidates.

When was the last time we had a candidate like that? Was it Reagan?

ZELIZER: It depends on your partisan perspective. I mean, some would actually say Bill Clinton resonated that way. Some did say Reagan, although Reagan had a, you know, much better background by that time. I mean, he had been in Hollywood. He had been a governor. He had been a very accomplished man. My fellow panelist knows.

But those are two examples where people did feel that connection. And I don`t think either candidate has established that. I think you`re absolutely right.

BECK: After two years. After two years.

ZELIZER: That`s been a lot of campaign time. A lot of campaign time.

REAGAN: Glenn.

BECK: Yes. Go ahead.

REAGAN: Do I have a second? Let me take you back on oil for a second. USS Ronald Reagan, which is now serving in the war, the lifetime that we will save in dollars over the lifetime of nuclear engines on that ship will save the American taxpayer $579 billion. Billion dollars. Because it went nuclear, not gas.

BECK: Michael, thank you very much. Guys, thanks. Appreciate it. We`ll talk again, coming up.

No matter how much you money -- of your money the government spends, it`s not going to be enough to avoid the coming recession. No matter how much they spend. They could take it all. I`ll explain next.

(COMMERCIAL BREAK)

BECK: Given that the DOW had its biggest drop in 21 years and it happened on the same night as the final presidential debate you knew that we were going to be privy of your asinine ideas about how I can fix this economy. How about by staying away from it?

While Joe the Plumber got most of the attentions it was the first step in Obama`s plan that really America should be talking about, listen to this.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D) PRESIDENTIAL NOMINEE: Number one let`s focus on jobs. I want to end the tax breaks for companies that are shipping jobs overseas and provide a tax-credit for every company that`s creating a job right here in America.

(END VIDEO CLIP)

BECK: Ok. That feels really good doesn`t it? Sometimes it`s hard to dissect them because you`re just like that`s so smooth silky voice you can`t even think straight but let`s take a second and try to think this one through.

He said we should end the tax breaks for companies that "ship jobs overseas." Ok I`m in. That sounds good.

But wait a minute, have you thought to think why, why is somebody in India answering your tech support call in the first place? It`s easy if you think it through. It`s because we already penalize our companies with a second highest corporate tax rate in the world. And then we add in an 800-page union contract arbitrary minimum wages and so much red tape that hiring or firing somebody is harder than putting them on the moon and you still wonder why jobs are leaving America? Here`s a tip.

Stop using taxes to penalize and start using them to incentivize which brings me to Obama`s idea to give tax credits to the companies creating jobs here in America. I mean I hate to nitpick, but isn`t that what every company with American workers are already doing?

Let`s just try to summarize Obama`s plan. He thinks that companies that create jobs here should get a tax credit, cool. But then the same companies if you make over $250,000, then you`re evil which means you can hire people more workers, they`re evil and so they should pay more in taxes so we can spread the wealth.

I`m a little confused here. I`m not Joe the plumber but I am a thinker. Aren`t those two ideas completely opposite to each other? Fortunately later in the debate Obama did announce a tax plan that actually made some sense. Here it is.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R) PRESIDENTIAL NOMINEE: Nobody likes taxes. Let`s not raise anybody`s taxes, ok?

OBAMA: Well, I don`t mind paying a little more.

(END VIDEO CLIP)

BECK: Ok, there he said, I don`t mind paying more, he doesn`t mind that`s great. Here`s a crazy idea, then do it. No one is stopping you. If you`re really think that the best run charity on earth is the Internal Revenue Service then A, I got to question your judgment again, and then B, tell you by all means, Senator, write that check.

Just don`t force the rest of us, the ones who think our extra money is better off with our Church or Red Cross, or the Cancer Society -- or here`s an idea -- with our own company, don`t force us to write a check along with you.

Stephen Moore is the economics editorial writer for "The Wall Street Journal" and co-author of the "End of Prosperity." Bob O`Brien is the stocks editor for Barrons online and Peter Schiff is Dr. Spooky, I think I want to call you that from here on now Peter, the president of Euro Pacific Capital and the author of the little book of "Bull Moves in Bear Markets."

Ok Peter, Dr. Spooky, let me start with you, we saw in the paper today that Social Security the, it is raising now five percent, the Social Security checks that are coming in and a lot of people are like oh good that helps. That`s $60 a month per person in increase. We have a $300 billion stimulus bill that is getting ready to pass through. We have a war. We have all of the stuff we`ve already done in the financial sector.

I didn`t hear either one of the candidates really take a hard stand and say we`re out of money, cut, cut, cut. Did you?

PETER SCHIFF, PRESIDENT EUROPAC: No. Well, the way they look at it, we`re not out of ink and they`re just going to keep printing but the thing is these guys don`t understand that this is not a free lunch.

If you print money to pay for government programs that doesn`t mean there`s no cost. That just means the cost is hidden. The cost is in inflation and it means that everybody`s paycheck is less valuable and everybody`s savings are less valuable. That`s all we`re doing.

BECK: And Bob, let me go back to you with the Social Security payments. We have these payments going up five percent which is the highest jump when was it 25 years I think. Does anybody believe? This is the problem with government statistics. Does anybody believe really that we only have a little move in inflation? I mean this isn`t even covering the cost of inflation. These are government numbers that have been crunched to make sure that they don`t pay out more than they can possibly get away with.

BOB O`BRIEN, STOCKS EDITOR, BARRON`S ONLINE: No, anybody who`s taking government statistics at face value under the current environment is really kind of living in Lala-land right now. These numbers have been effectively gained and ginned up and twisted into all sorts of cute little balloon animal shapes so they don`t look quite as frightening as possible.

But the market`s still reacting as though they are frightening. I mean we saw that retail sales number yesterday. It was about twice of the decrease that we expected to see and look how the markets reacted.

We had the worst day we`ve had since the sell-off back in 1987. Was there anybody out there who really thought that retail activity was going to look pretty bright in the month of September?

BECK: I think there are some of these dopes that did.

Steve let me go to you with the statistics. I asked you a couple days ago because I don`t believe the government statistics. They`ve conveniently lost some of our ways to measure how many dollars have actually been printed. They did it about two years ago and I said at the time, wait a minute, it`s almost like you want to print money and not have people easily be able to find out how much.

Tell me about these charts that you brought in and what it means on printing of actual dollars?

STEPHEN MOORE, WALL STREET JOURNAL: Well, you know what Peter said that the only constraint is that they won`t run out of ink. If they keep printing money like they are Peter they`re going to run out of ink too. Because we can see by this chart I don`t know if we have out on the screen there. As you can see these massive increase in the amount of dollars that the Federal Reserve has created so the printing presses are literally going 24 hours a day, seven days a week to try to keep up with these demand.

When you talk about the increase in Social Security Benefits, if you add up all those wonderful new government programs that Barack Obama talked about last night that he`s going to create to help to solve this problem, the only way they can possibly do that is either print a whole lot more money or take away that big tax cut that he`s talking about for 95 percent of the people which I don`t think, if anybody out there thinks they`re getting a tax cut next year, it isn`t coming folks because there`s no money left.

BECK: All right, now Peter, I believe Stephen is right that there is no tax cut coming because there is no money left. There`s no tax cut coming especially from these guys. I mean it will -- maybe they`ll shift it from one place to another, they`ll tax somebody much, much more and give it to somebody else but it`s just going to destroy us faster.

The other thing that`s not going to happen is higher interest rates because that would collapse the economy as well. But if that`s the only way to pull this money that`s being printed back in, there`s no way to stop this now right?

SCHIFF: No but higher interest rates are in fact coming. The government is not going to be able to stop it. Right now interest rates are rising for everybody but the federal government.

So Treasury rates are low and every time the government guarantees more debt, like they guaranteed Freddie Mac and Fannie, now they`re guaranteeing all these bank debt, they are creating more and more supply of Treasury debt.

So the only way you can borrow money right now is with a government guarantee. But pretty soon the world is going to wake up that it`s not default risk that they have to worry about, it`s inflation risk and we`re going to get much, much higher long-term interest rates. That`s coming and that`s just going to compound the problem.

MOORE: Yes, Peter is right about that. That`s the reason why right now we have a situation; the Federal Reserve Board has become the biggest bank commercial bank in the world. It`s the only place that`s lending right now.

BECK: And they`re not going to jack up the rates per se to try to control it. It`s just out of control now.

SCHIFF: But eventually the market will jack up the rates because somebody has to be willing to buy the paper.

BECK: Ok.

SCHIFF: And when no one wants it the price is going to collapse and rates go up.

BECK: Bob I want to talk to you a little bit about oil because if I hear this one more time from one more pinhead I think I`m going to scream. They keep saying, oh my gosh look at the price of oil, well, that`s good news at least the price of oil is down.

I said when things really start to spin out of control you watch the price of oil because that`s when we`re in real danger when it just starts to go down and everything else is going out of control. This is bad news is it not?

O`BRIEN: It`s absolutely bad news, Glenn. I mean, if anybody thinks that this is something that`s a reflection of some improvement in the economy they`re deluding themselves.

Basically what`s happened with the price of oil is a referendum on global economic conditions. $70 a barrel for crude which is where it`s trading today now at a 14-month low is basically the way the oil market is saying we think China`s economy, we think India`s economy, we think the whole global economic picture that looked so bright just a couple months ago has suddenly retrenched here. And we`re about to go into a worldwide global recession that began here in the United States, got exported around the globe and is now affecting those economies in every part of the globe.

SCHIFF: When oil prices come down it`s still a lot more expensive if you don`t have a job. The relative price of oil hasn`t even come down because the price of everything on planet earth has come down.

Oil is just keeping pace with everything else.

BECK: We`ll take a quick break. I want to talk to you a little bit some more about what actually happened on the stock market yesterday and then unfortunately where does all of this end? Where do we go from here? How do we get control of it again?

That`s coming up after the break.

(COMMERCIAL BREAK)

BECK: I want to go to first of all -- well, first of all let me welcome back our guest, Stephen Moore from the Wall Street Journal, Bob O`Brien from Barron`s Online and Peter Schiff from Euro Pacific Capital.

I want to go to a hearing today and let me show you a little bit of audio from Christopher Dodd on the hearings on what happened with Freddie and Fannie in this whole mess. Watch this.

(BEGIN VIDEO CLIP)

CHRISTOPHER DODD: Mortgage market participants and brokers to lenders to investment banks to credit rating agencies formed an unholy alliance conceived in greed and dedicated to exploiting millions of unsuspecting hard-working American families seeking to own or refinance their homes.

This crisis was entirely preventable. It is clear to me that greed and avarice overcame sound judgment in the marketplace causing some very smart people to act in very stupid ways. But what makes the scandal different from others is the abject failure of regulators to adequately police the markets.

(END VIDEO CLIP)

BECK: Regulate? Isn`t he the head of the regulators? My gosh. I cannot believe the arrogance, the gall to be able and lecture everybody and try to stay on the good side.

MOORE: You know, Glenn, this is amazing. Talk about chutzpah. Here is a guy who got, remember Countrywide, he was one of the people who got the friends of Countrywide, he got the sweetheart deals from Countrywide.

He was the one who was supposed to be regulating Fannie Mae and Freddie Mac but he got so much money from the Fannie Mae and Freddie Mac he never blew the whistle. He never had any oversight of these agencies.

This is -- I don`t know -- I can barely restrain myself.

BECK: I know. If I hear this fact one more time that the Republicans wanted all kinds of deregulation, there hasn`t been any deregulation in the financial market. The Republicans were the ones pushing for more regulation. Can we please get under control?

MOORE: The Democrats said that they`re broke. What are we trying to do here? Fannie Mae and Freddie Mac aren`t broke.

SCHIFF: The entities that needed the regulation where Fannie and Freddie because they didn`t have market discipline because they had government guarantees. That was the one place where the government should have regulated but these politicians were too busy cashing the contribution checks from Freddie and Fannie, they didn`t care.

BECK: Peter let me interrupt you here because I want to take you here to some place I don`t think anybody in television will take anybody. But I think it`s the destination I keep seeing.

Steven you just said I`m so angry. Everybody in the audience is so damn angry and they look at these people. We all know where the problem is. We all know if you`re paying attention at all, we know it is both George Bush and the Republicans and a lot from the Democrats.

Hang on a second. So there, Peter, they are, they`re the disease. They`re the cancer. So how the hell do we cure the body here if we got the disease in control?

SCHIFF: We can`t. The cancer is getting bigger and bigger and bigger. And the sicker we get the bigger it grows. The one thing the government has to realize is if they kill the host the cancer is going to die too. If there`s nothing left to tax then the politicians are going to be out of work. The reason that it was obvious to a lot of people years ago that there was a problem here is because we understood the effects of government regulation and moral hazards on the market.

These politicians had every opportunity to stop this reckless lending but they didn`t want to rain on everybody`s parade. They didn`t want to tell their constituents that they weren`t going to get rich living in houses. They didn`t want to tell people that you can`t buy a house without money. And so they let it go and go.

MOORE: What`s worse than that, they were facilitating this. Without Fannie Mae and Freddie Mac you wouldn`t have had the subprime lending crisis and you know what? I think, I would love somebody like you to basically start a campaign for these politicians to give that money back to the taxpayers that they took from Fannie and Freddie. It`s outrageous. They still have this pile of money in their campaign chest that came from the taxpayers.

BECK: I have an op ed on this subject.

People are angry and unless Congress and our president and the new president whoever he may be, unless these damn Democrats start policing the Democrats and the Republicans start policing the Republicans and kick the bad guys out of there, the country is going to snap in half.

O`BRIEN: I`d also love to see somebody try to police CEOs and CEO compensation. One of the problems we had with the whole mortgage crisis was we had a program that basically inserted (ph) people who worked for either mortgage companies or lenders to do whatever they could to artificially inflate profit statements, lift their stock price, and capture the compensation.

Tell me if I`m wrong.

BECK: That`s the fault of the boards. That`s the fault of some of the larger shareholders that were managing other people`s money.

O`BRIEN: Now there`s an opportunity. We are inserting the government in a roll in these financial services companies. That could be a quid pro quo.

BECK: Wait a minute. Who`s the one? Why is it that the shareholders never really knew exactly how anybody was getting paid? Why were the giant bonuses? It`s my understanding it`s because the government inserted themselves and said well now wait a minute, hold on a second, so they had to find different ways to pay people. It became all kinds of convoluted.

SCHIFF: A lot of it has to do with the way people on Wall Street were compensated. A lot of the people who were managing funds, everybody was geared in on short term performance from the managers of the company to the managers of the money.

As long as short term performance was being goosed by all this, nobody cared because nobody was looking at long-term performance because nobody was running their own money. And this is something the market is going to purge from the economy if the government stays out.

BECK: The government`s not going to stay. Here`s where I want to take you, Stephen. Help me out on this one. FDR came up with the FDIC.

A bank fails, what happens? The government absorbs it, they pay out, but then they shut the bank down.

MOORE: That`s right.

BECK: We`re not doing that anymore. The government is just absorbing it, paying out and then rewarding the bad behavior by allowing that bank -- how does capitalism work without any failure?

MOORE: Good point. The people -- I just gave a speech yesterday to the Community Banker`s Association and they`re enraged too, because those are actually healthy banks. They`re the banks of Dubuque, Iowa and Newcastle, Indiana. And they say wait a minute, we have to compete against these big banks that now have this huge safety net and the pipeline into the Federal Treasury. Where`s the fairness in that?

SCHIFF: And you know --

BECK: Quickly.

SCHIFF: The big problem is the moral hazard. Whenever the government does that, whenever the government says don`t worry, put your money in any bank and it`s insured nobody cares about the risk that the bankers are taking with their deposit.

BECK: Guys thanks a lot.

We`re going to take a break from the gloom and doom.

I want to share a story with you that actually will make you feel good. It`s a "Real American" story.

I`ll give it to you next.

(COMMERCIAL BREAK)

BECK: So much of this election season has been about negative attacks on each side. Each side both doing whatever they have to, to drag the other one down, so I wanted to bring you this story at the end of program today.

It`s about another kind of election; only this one is incredibly positive and it`s managing to celebrate the very best that we can be.

Carol Cavo (ph), she`s from KTXA in Fort Worth, Texas, has the story.

(BEGIN VIDEOTAPE)

CAROL CAVO, KTXA, FORT WORTH, TEXAS: Friends say Kristen Pass (ph) never met a stranger she didn`t like and that she`s always hugging or text messaging someone.

KRISTEN PASS: I do, really bad.

CAVO: But she could only imagine becoming a homecoming queen.

Then Friday night the 18-year-old Aledo High School senior with Down Syndrome received the crown.

PASS: I like it.

CAVO: And hasn`t taken it off since.

CAROLYN PASS, KRISTEN`S MOTHER: Extremely special. This has been a wonderful community, very supportive community, great young kids here that are good friends to Kristen.

CAVO: 100 of those friends at Aledo High nominated her.

Kristen only wished her father could be there. He died two years ago so her grandfather, Dr. David Campbell escorted her down the field.

And then the moment.

KENDALL PASS, KRISTEN PASS`S SISTER: We were so excited. Everyone in our family started balling, even the guys. She`s like my best friend, too. When she got crowned it was really a blessing. It just made me cry a lot.

CAVO: For Kristen, it was a night she no longer imagined.

K. PASS: I`m happy.

(END VIDEOTAPE)

BECK: She hasn`t taken the crown off since she`s been crowned.

Stories like that help us reconnect with the values that we grew up with on being better people, on being the people that we really want to be, not the people that we`ve allowed ourselves to become. And we`re going to try to continue to look for some of those stories as we look for -- trying to reconnect with those things.

I`ve written a book called "The Christmas Sweater." I`ve been writing it for the last couple of years. It`s actually one of those stories; it`s a personal story based on my own childhood. But I think you will see a little bit of yourself in there, and I think you will also recognize the storm that the main character faces as a kid.

If you`re looking for a gift that the whole family can experience and connect with together, please consider "The Christmas Sweater." It`s not out in bookstores yet, but we are selling autographed copies and they`re available for preorder right now while supplies last. It`s at Glennbeck.com.

From New York, good night, America.

END