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GLENN BECK

Press Unfair to Romney?; Is GOP Conservative Enough?; Ted Kennedy Endorses Obama

Aired January 28, 2008 - 19:00:00   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, John McCain. "TIME" magazine calls him the phoenix, but oh, how this bird has changed its feathers. Why won`t "TIME" and other media outlets label him a flip-flopper?

Plus, more trouble for Hillary? Ultra-liberal Ted Kennedy backing Obama, despite pleas from the Clinton campaign.

And Walker Texas Ranger Chuck Norris puts the pain into campaign. Chuck will be with me tonight to explain why he hit the road for Huck.

All this and more tonight.

(END VIDEOTAPE)

BECK: Well, hello, America. The Florida primary is almost here. It`s hours away. It now looks like Mitt Romney and John McCain are running neck and neck for the lead. So while it may seem these two candidates have similar appeal in the Sunshine State, don`t trick yourself. They are getting treated differently by the media in the first place.

Yes, John McCain is now starring in his own little love story with the American press, and forget about it being unfair. What is being said in the press is actually untrue. So, tonight here is "The Point."

John McCain is many thing. But he is not a conservative. I mean, the guy is barely a Republican. He does not represent the party or its core values and should not be the candidates for president of the United States for the Republican Party.

Do I need to tell you this is an opinion show? Here`s how I got there.

From the early day of this election the press was all over Mitt Romney for having views on some issues that differed from earlier in his political career. One of the nicer things that they called him was a flip-flopper. They said Romney`s new positions were not genuine, because he`s adopting new, politically advantageous ideas.

While talking extensively with him on my radio program and him on this program, as well, he told me and you about his pivot points, which I think are important: how he came to believe what he now does. I believe him. I believe he`s telling the truth. It`s up to you to decide, however. But, you know, the truth rarely sells newspapers, especially if you have an agenda.

Now, let`s take a look at the royal treatment that John McCain is getting. First of all, he got a love letter -- now, I think they actually called it an endorsement, but I believe it was a love letter -- from the "New York Times". I pondered that darn thing all day Friday. I did. I looked at it and I thought, is the "New York Times" stupid enough to endorse McCain, or are they smart enough that the "Times" endorsing McCain really ends up being an endorsement for Romney? Maybe they really want Romney. I mean, I can`t believe it.

Then "TIME" magazine called McCain a phoenix, rising from the ashes. While other articles praise him for having grown in his views, not flip- flopping.

So tonight let`s translate bull crap into English. Here`s what you need to know.

A double standard is one thing, but trying to sell a fairy tale as gospel truth is something entirely different. In this race, this close, candidates will say and do almost anything to give themselves the edge. And they`ll get elected. However, whether you support McCain or Romney, whether you`re a Democrat or a Republican, you need to think hard about the choice you`re about to make.

I`m asked all the time if I plan on endorsing a candidate. No, I don`t think you care that much who I support. I will tell you that I support Mitt Romney. Rudy Giuliani is my No. 2 guy. But I`m not going to throw my support fully to anybody because you know what? I don`t trust a single one of them. I`ve been burned before, and so have you.

So I`m listening to some good old advice I got from parents growing up. By their fruits you shall know them. Where have I read that before? Watch what these guys do, not what they say. All of them.

Jim Geraghty writes the campaign spot blog on "National Review" online. And Michael Reagan is a talk radio host, and gosh, I think his dad was famous in something or another.

Jim, let me -- let me start with the Straight Talk Express. Let`s just start with the surge. Give me the straight talk on he`s always been with the surge?

JIM GERAGHTY, "NATIONAL REVIEW" ONLINE: Yes. I think this weekend it`s safe to say that team McCain tried to advance for a bridge too far. There`s nothing wrong with saying now, you know, John McCain was out there and wanted to support the surge as loudly as possible. And I think it`s safe to say that Mitt Romney was a little more circumspect in his support of the surge and definitely wasn`t sticking his neck out as much.

BECK: Sure.

GERAGHTY: But it`s not fair to say that Romney didn`t support the surge. And in fact, it`s a direct mischaracterization of his -- his position.

BECK: But where was -- where was -- where was McCain when the generals were losing their jobs because they were saying bigger footprint, bigger footprint, bigger footprint? Where was he then?

GERAGHTY: Glenn, that`s a perfectly fair question. I think what`s even more egregious about McCain`s campaign`s efforts this weekend was that he doubled down. And people said no, Romney says this isn`t true. They want you to apologize. And McCain said no, Romney is the one who should apologize. He should apologize to the troops.

BECK: How?

GERAGHTY: For apparently not supporting the surge. Now I want to observe, I don`t think John McCain has ever called on any Democrat who has flat-out opposed the surge to apologize to the troops for not supporting the mission or something.

So in other words, McCain has really found his ferociousness, and it`s against another Republican, which is, you know, I realize in a primary you`re going to get some headed tempers and such. But you know, you`d like to see a little more of this fire heading out at the other side, the Democratic side.

BECK: Michael, let me move quickly here to taxes. Here`s a guy, we`re facing real trouble in the economy. Here`s a guy who doesn`t understand Reaganomics, who doesn`t understand tax cuts actually help raise more revenue. You grow the economy with tax cuts. He`s been against them.

Now all of a sudden that he`s running, he`s like, "Oh, well, of course I said they were wrong and they were all for the rich, but I want to make them permanent." Well, if they`re wrong, why would you make them permanent?

MICHAEL REAGAN, RADIO TALK SHOW HOST: Well, welcome to campaigns. This is what goes on in campaigns all the time.

And I might remind you also, Glenn, I was the one who had the hang-up with John McCain in 2000. When he starts to loose and go south on you, he can go south very, very quick. And that`s the side starting to come out on John McCain.

But you`re right. Here`s a guy who, in fact, is not so consistent anymore. Now he`s saying what he believes people want to hear instead of saying what he`s always believed. But I don`t believe for a minute he would put taxes -- in fact, it`s a myth that he would lower taxes if he became president of the United States.

BECK: But, Jim, how do you -- how do you win when -- in fact I wrote this one down. I wrote -- because I mean, I`m sure you guys saw both saw on Friday the editorial from the "New York Times," where it was just glowing. Everybody else was a flip-flopper, but he had grown in his viewpoint.

Today there was a story that I read that called Romney the Mormon that`s running for president and McCain was, quote, "the maverick war hero." How do you win when all of the press is just in bed with the other guy and just won`t question him?

GERAGHTY: That -- that -- probably the single most damaging thing that`s happened for McCain was being endorsed by the "New York Times". And I noticed that Rudy Giuliani released an ad today that touted that he was not endorsed by the "New York Times" and several other Florida papers. So it`s one of those things where he`s not endorsed, and he`s proud of it.

REAGAN: Glenn?

BECK: Yes.

REAGAN: The other side of that is Huckabee hasn`t said a word against John McCain. You`d think Huckabee is running for the vice presidency of the United States...

BECK: Yes.

REAGAN: ... along with Lindsay Graham, of course, in a McCain administration. He`s never said a word about John McCain. He`s never questioned anything he`s ever said.

BECK: But I think Mike -- I think Mike Huckabee is -- is cut from the same cloth in some ways. I think his -- his compassion leads him to be more liberal instead of understanding that that`s when we all, as individuals, take into our own hands and help each other. I think that`s where he leads to bigger government, but maybe I`m wrong.

Let me ask you this, Michael, because I have said this on my program. Rush Limbaugh is getting all kinds of heat. I`m a conservative. I don`t care about the elephant. I don`t care.

Rush has said if McCain gets it, he doesn`t know if he could vote for a Republican. I`m in the same boat. I don`t know until I`m actually in that booth, but this may be my first election in my life, if it`s between Clinton and McCain, that I don`t vote. How about you?

REAGAN: Well, let me tell you this. I go back and I look at my father. You mentioned him coming into this segment. What is one of the legacies of Ronald Reagan? One of the legacies of Ronald Reagan is that you fight it out in the primaries. Whoever comes through it and wins in the primaries gets the nomination of the party. That`s the person you coalesce behind and you support for the presidency of the United States.

My dad had to do it. My dad had to do it with Gerald Ford back in 1976. Do you think it was easy going out and campaigning for Gerald Ford? It was the Ford people, in fact, didn`t want us out until the last two...

BECK: At some point don`t you have to stand for values? Don`t you have to say, "I can`t do it, it`s the same thing"? Hasn`t that kind of thinking got to where we`re now, to where you don`t know who stands for what?

REAGAN: Well, then, if you don`t vote, Glenn, then you do get Hillary Rodham Clinton. Is that really...

BECK: Might be better -- might be better for four years to be able to then...

REAGAN: And the other thing, might be the very reason that Obama is looking so good because he is the change.

BECK: OK. Guys, thank you very much.

Coming up, with Democrats in control of the House and the Senate, some in the GOP finally recognize it`s time that they, you know, make some change. We`ll find out what they`ll sacrifice in order to make an impact this fall.

Then the economy has a major hurdle to jump this week. Interesting that no one is talking about that hurdle except here. You`ll find out what it is in tonight`s "Real Story."

Oh, and Chuck Norris will join me. Oh, I`m going to give him such a karate chop to the neck. You -- don`t miss it. I mean it. Chuck, don`t mess with me. I`ll take you down. Forget I said that.

(COMMERCIAL BREAK)

BECK: Well, voters are saying now the economy is the most important issue they`ll consider before pulling the lever this fall. So you`d think as the rest of the world watches our economic angst, they would try to avoid it. No, no. You`re not going to believe this story. We`re looking at a possible global recession. Wait until you hear what the rest of the world wants to do to solve it. Details in tonight`s "Real Story."

Now, I said it before; I`ll say it again: I`m a conservative, I`m not a Republican. This is an opinion show. Back in 2006, I felt betrayed by the party, because they abandoned the sound values that I feel, you know, were used to define the Republican Party. Things -- crazy things like small government, low taxes, national and economic security, fighting a war to win.

I told my listeners on my radio program back in 2006, get the hell away from both of these parties, because they`ve been hijacked.

Well, according to minority leader now John Boehner, the Republicans have learned their lesson. How convenient, just in time for the election.

It`s like this. If you`re going to go out with somebody who only showers on date night, that relationship is not really going to work. You deserve somebody who showers every night.

Republicans, I fear you`re only showering now because it`s a really big date night right around the corner. I don`t trust that you`re cleaned up enough for me. I don`t feel like risking it, because our history proves you stink.

Mary Matalin is a conservative strategist and a former White House advisor and also the publisher of one of the most amazing books I`ve ever read.

Have you read -- what`s the name of it? "An Inconvenient Book"?

MARY MATALIN, CONSERVATIVE STRATEGIST: It`s still on the list.

BECK: Still crazy, isn`t it?

MATALIN: Still cranking out there. Congratulations.

BECK: Thank you very much.

OK. So, Mary, this weekend the Republicans all got together, and they had a meeting. They had a "come to Jesus" meeting, except I don`t think Jesus was actually there. This was a "come to the polling booth" meeting. Please come to the polling booth. Why should we believe any of these weasels?

MATALIN: Well, in this case, John Boehner, who is our leader, is credible on earmark reform because that`s how he -- he never took any earmarks in his district ever. And he ran for a leadership position on earmark reform, and then, because it was too little too late, that`s why the Republicans lost, as we well know.

BECK: Right. So...

MATALIN: So go back to -- this is not change. This is to go back to what essential conservativism is.

BECK: But wait. But Mary, I know that and you know that. We`re talking politics, and we`re talking the parties. Let me just -- let me lay out a crazy scenario.

MATALIN: All right.

BECK: You put Republicans in, and they say, "We`re for small government, and we`re not going spend an awful lot of money." And then all of a sudden, when they get the power, they`re for huge government and they spend a lot of money.

And then the Democrats say, "We need change. We`re going to go in there. We`re going to stop all this spending, because it`s out of control." Then they get in and they spend all this money. Then the party that was saying, "We`re for small government" but was really for big government now says, "We should be for small government." How do we trust them? It`s the same thing over and over. This is what Nancy Pelosi said she was going to do.

MATALIN: Except that conservatives had a record for some period of time. It took them too quickly to be corrupted, but they were and they lost, and one presumes they learned something from that experience. Boehner -- I`ll say again, Boehner never was an earmark guy, and what he`s proposing here is that there be complete transparency.

This is how you get your -- convince your wife that you should be able to buy something or your kids convince their mother, whatever.

BECK: Right.

MATALIN: You want it, then you tell me -- you know, tell me what it is. Justify this expenditure to me. You know, constituents are not idiots. They don`t want to spend a bunch of money on, as he said today, hippie museums or whatever.

BECK: You know what? Mary, they also don`t -- they see through this stuff. For instance, the spending package that both people are for, this stimulus package. Here`s the Republicans` stance, and I love this: $150 billion, but it`s got to pay for itself.

So we`re going to cut $150 billion from the budget. Well, now you`ve just eliminated the stimulus, because you just said, "We`re not going to spend the $150 billion; you`re going to spend the $150 billion."

MATALIN: There -- I don`t know what`s going to come out in the end. You`re exactly right. This is redistribution and deficit spending. But it would have a psychological effect, and it would have a good measure of growth, if the business depreciation got in there.

But the notion that anything is stimulative (ph), even tax cuts, other than cutting the marginal rate, which is why there`s productivity. And those sorts of -- not all tax cuts are equal here.

But what I do love is to hear Democrats talking about any kind of tax cuts at any time. So now they have -- they`re on that slippery slope. We need to get off the slippery slope and understand the difference between redistribution and real stimulative (ph) policies.

BECK: Oh, yes. And that`s what we are. I have listeners on my radio program who say, "Look, I`ve got four kids. I`m struggling to make things meet. I don`t pay taxes."

MATALIN: Right.

BECK: "I`m sending my money back because it`s immoral. It`s wrong. It`s a redistribution of wealth." And it is. I mean, I`ll watch for those four checks that will come back. I`m not holding my breath for it. But there are some people who -- my grandfather would have slapped me across the face if I would have said, "Hey."

My grandfather sat me down, Mary, and I bet you grew up in a similar household. My grandfather and my father sat me down when I was a kid and said, "We don`t take welfare. We don`t take government handouts. We work for our money. Period."

MATALIN: Well...

BECK: We`re not that society any more.

MATALIN: We -- but, we also come from a time where my grandfather paid cash for everything. If you didn`t pay cash you couldn`t get a car. I mean, they practically paid cash for their homes. And my dad was pretty much like that right up until the end. So it is a different time.

And -- but I think in the same time period that all of this has been going on in Washington, voters have been getting smarter. And they may not know the ins and outs of fiscal and monetary policies, but they do understand what you just say, which is none of it makes sense. Just tell us what you want to spend our money on, and we can make a collective judgment on whether that`s for the common good or if we could do it better here.

It gets back to what we`ve been talking about this entire election cycle. What is the scope of government, which -- what is the role of government, what level of government? And can any level of government -- government, whatever you`re talking about -- do it better than the private sector or individuals?

BECK: No. No.

MATALIN: ... they can do better. But this redistributing -- redistributing wealth is not one of them.

BECK: Mary, I just -- my message, can you deliver this to any Republican you see down in Washington? You can`t fool an alcoholic. I`m onto them. I`m onto them. By their fruits we will know them. Not around election time.

MATALIN: We have a political corollary for that. It`s you can`t spin a spinner.

BECK: That`s right.

MATALIN: I`m with you, Glenn.

BECK: Mary, thanks a lot.

So America, where am I wrong? Democrats and Republicans, Americans have wised up. All of these promises of change that they`re making, we know it`s just about the election. We`ll actually believe it when you actually do it and we actually see it.

Agree or disagree? Go to CNN.com/Glenn right now and cast your vote.

Coming out, Obama scores a knockout victory in South Carolina and gets an endorsement I`m not sure I would really want, from Ted Kennedy and Toni Morrison. But is it enough to win the Democratic nomination?

And a battle royale between a man of action and a man of inaction. That would be me. Chuck Norris joins me. And who knows? I might kick his butt.

(COMMERCIAL BREAK)

BECK: Well, in the history of American politics, there is nothing quite like the Kennedy mystique. JFK made such a large impression on many people, especially young women, that even his relatives, as unimpressive as they may be, still -- still wield a certain amount of power, surprisingly enough.

So it`s big news today when Ted Kennedy, heir to the liberal monarchy, threw his full support behind Obama, even though Hillary apparently practically begged him not to. But exactly how much weight does an endorsement from Ted Kennedy carry? Wow, that was a cheap joke.

For answers now, let`s check in with CNN contributors Amy Holmes.

Amy.

AMY HOLMES, CNN CONTRIBUTOR: Hello.

BECK: How are you?

HOLMES: Good. How are you doing?

BECK: Good.

HOLMES: Good.

BECK: Have you ever -- if you`re trying just to get through something, have you ever just pictured Ted Kennedy naked?

HOLMES: Is that when you`re supposed to be talking to a crowd? I thought you were supposed to picture yourself naked.

BECK: Don`t know when but sometimes, you know, that picture with him with his shirt off just kind of pops into your head. And you`re like, OK, don`t have children now.

HOLMES: I try not to think about that.

BECK: OK. Is Ted Kennedy -- I tried to figure this out on Friday with "The New York Times." When they endorsed John McCain, was it kind of like an actual endorsement for Mitt Romney? Were they like, "I know this will piss them off, so we actually want Mitt Romney to run."

HOLMES: Right.

BECK: Same with Ted Kennedy. Is there anyone -- is there anybody that goes, "Oh, Ted Kennedy is for Obama. Sign me up."

HOLMES: Sure, in the case of Ted Kennedy, the Democratic primaries -- the Democratic Party members who elect him.

BECK: Come on, the Democrats don`t really like him. They just tolerate him.

HOLMES: On, no, no.

BECK: A Kennedy. Never.

HOLMES: Glenn, you have to remember that Ted Kennedy is chairman of the very powerful health, education and labor committee.

BECK: Because he`s a Kennedy.

HOLMES: And so throwing his weighty support, as you put it, behind Barack Obama is actually meaningful in a practical sense.

BECK: I love -- I love the fact that Ted Kennedy, like anybody is surprised he`s involved with the unions? Ted Kennedy? No.

So -- so, how is it, because the two most powerful liberal families in America besides George Soros would be the Kennedys and the Clintons. Have we created the Hatfields and McCoys?

HOLMES: I sure hope so, because this is a lot of fun watching these two clans go after each other. And one thing I would point out to you, Glenn, that was sort of revealing in the "New York Times" today, was that when Ted Kennedy called the Clintons to explain his decision, he called Bill, not Hillary.

Now I wonder if that`s because, you know, he -- Bill is really the head of the party and head of this ticket or if it`s he`s more scared of Hillary and all those flying ashtrays.

BECK: But President Clinton -- President Clinton is really -- he`s in a way really hurt her, hasn`t he?

HOWARD: I think he has, and I think he`s hurt himself. And we know that part of Ted Kennedy`s endorsing Obama, and Caroline, as well, were the tactics that they were using against Obama in South Carolina. That was an ugly, nasty episode for Democrats.

Now, of course, as a conservative watching the Clintons do it to Republicans for 15 years, you know...

BECK: It just -- I`ve been watching news with popcorn. They`re cannibalizing -- they`re finally figuring out, "Wait, wait, honey. Quick, turn on the TV. The Democrats are about to admit that Bill Clinton is less than honest." It`s really been amazing. Hasn`t it?

HOWARD: When the shoe is on the other foot, all of a sudden, they recognize what we`ve recognized for quite a long time. But I do think that this has hurt the Clintons and hurt the Clintons with their own party.

But you know, you -- for months now you look at the Hillary Clinton campaign, and it has been a grim, joyless grind. All the passion, the energy, the hope, all of that is behind Barack Obama. We saw it today with Ted Kennedy.

BECK: Amy, we`ll talk to you again. Thanks so much.

HOLMES: Thank you.

BECK: Coming up, financial picture may be getting a bit brighter, and that`s coming from me. Yes, coming up in tonight`s "Real Story." That`s next.

(COMMERCIAL BREAK)

BECK: Martial artist, actor and Mike Huckabee`s number one fan, Chuck Norris, stops by. And trust me, I`ll have him in a headlock by the end of the break. Oh, yeah, I will. That`s coming up next.

But first, welcome to the "Real Story."

With the government announcing today that 2007 was the worst year ever for new home sales, and the banks already having written down $130 billion as a result of the credit crisis, you might think that the worst is already behind us. And you may be right. But you also may be wrong.

The real story is nobody really knows. And we`re coming to a fork in the road, and you need to understand it. Now, this isn`t something that you`re going to hear much about on television, but real financial professionals are all completely focused on one issue this week, and it is bond insurers.

I know if you watch this show regularly you`re probably thinking, why is it at this time he always tries to put me to sleep? Give me 60 seconds and I`ll explain why this matters to your family.

When cities raise money for special projects they issue bonds. These bonds are then insured by an outside company so the town doesn`t -- you know, if it doesn`t pay, then the insurance company does pay. It`s almost like your mortgage insurance in a way.

Because of that guarantee, the bonds they insure are given the highest credit rating. It`s called AAA. It makes those bonds one of the safest investments you can buy.

Financial institutions use them as assets. They`re like having gold in the bank. But the insurance companies have run into some trouble recently. Who would have thunk that?

And now the rating agencies -- you might have heard of, like Standard, & Poor`s or Moody`s -- they are taking another look at the credit of these companies. If they decide to downgrade that credit, say, from AAA to AA, then every single bond these companies insure will be downgraded as well.

Here`s why it matters to you.

A lot of the investors who own these bonds are entities like pension funds. Maybe even your pension fund. These funds are usually required to only hold bonds with AAA ratings because they want to make sure it never goes away.

If a rating of a bond they hold goes below that, then the funds are forced to sell those bonds, and it would flood the market. Since estimates say that it`s upwards of $2.5 trillion in debt that could be impacted by a single credit downgrade, the results could be a little a catastrophic.

Now, that`s not some number that I`m just trying to throw at you to scare you, although it would be good if I made it up, wouldn`t it? Merrill Lynch just wrote down nearly $2 billion as a result of one small insurer being downgraded recently.

So, this week, as the government tries to distract you with stimulus package nonsense, or the Fed distracts you with talk of yet another rate cut, try to remember that the real financial professionals, not like me, are actually watching the bond insurers. If they keep their credit, we might be able to say the worst is behind us.

Edward Grebeck is the executive -- chief executive of Tempus Advisors.

Edward, what are the odds that this is -- these bonds are devalued?

EDWARD GREBECK, CHIEF EXECUTIVE, TEMPUS ADVISORS: I don`t believe that -- I presume you mean that the rating agencies downgrade the bond insurers.

BECK: Yes. Yes, yes, yes. I`m sorry.

GREBECK: I think that is unlikely. Three weeks ago I would have said that it was impossible. I`m not so sure now.

BECK: The problem is, nobody really knows what`s going on. We`re entering territory where we`ve never been and everybody is kind of connected to each other, and so you don`t really know, right?

GREBECK: That`s quite correct. As I see it, this whole issue of structured credit, the rating agencies` role in that, and the rating agencies` role in rating the bond insurers, the AAA bond insurers, all those issues are related.

BECK: OK. So, the problem is, is nobody can afford for this to happen, but yet nobody really can afford -- I mean, I`ve heard numbers from $25 billion to $200 billion to just put a Band-Aid on this thing.

GREBECK: Yes, those would be the numbers that some analysts have said would be necessary to properly recapitalize the bond insurance industry.

BECK: Right. And how much is the real money, do you think? And that`s pretty widespread. And who has the money to do that?

GREBECK: I would say that the proper amount is more to -- is more on the level of the $200 million. Sean Egan of Egan-Jones Ratings, has estimated that as the amount. I think part of the problem, though, is that that assumes that the bond insurance industry is commercial in its own right.

BECK: OK.

GREBECK: And I think there are issues regarding that.

BECK: Who -- or, I`m sorry, let me rephrase that. When do you think we will know?

GREBECK: That`s impossible to say. Simply put, the bond insurers themselves, as you probably are aware, their shares have been cratering since August. Right now the economic leverage in the bond insurance industry is something north of 300-1, and that`s clearly not a AAA rating by any standard.

BECK: All right, Edward. Thank you.

Now, if you`ve watched this program for a while, you know that I`m not really a fan of the government trying to swoop in and rescue us from any of our problems that we have created. I think we need to take our licks.

I think these companies screwed up. They need to feel the pain, come out stronger on the other side. But the real story is that plenty of smart and very influential people disagree with that theory, and now you can add another one to the list.

It`s the new Frenchy Frenchman who heads up the International Monetary Fund, the IMF. He gave a speech over the weekend in which he warned countries around the world that lowering interest rates will not be enough to "get us out of the turmoil we are in." That, by the way, is kind of big news because it shows real fear over the dark clouds that may be ahead, clouds that are so far above the horizon that they can only be seen by someone at a global level.

He goes on to recommend -- and this is what made blood shoot out of my eyes -- he said the foreign governments need to start spending more and running up deficits. What? He says that countries should follow our lead and use big government welfare stimulus packages as a model for what the rest of the world should do.

I have to tell you, I know I`m just a rodeo clown who doesn`t know anything really about international finance, but when a patient gets sick you isolate them at work to cure the disease. Rarely, if ever, does the doctor say, hey, let`s give every patient in the hospital the disease.

You don`t cure a disease by giving the disease to everybody else. But who am I kidding? I mean, if people actually used simple logic and common sense then we would never be in the position that we`re in to begin with.

Peter Schiff is the president of Euro Pacific Capital and author of "Crash Proof: How to Profit From the Coming Economic Collapse."

Always a happy title and always good to have you on the program, Peter.

Last night I`m in bed and I`m doing what I usually do in bed -- my wife is snoring and I`m reading about the coming economic apocalypse.

PETER SCHIFF, AUTHOR, "CRASH PROOF": My book, no doubt.

BECK: And I read -- I read this bulletin from the IMF, and it took me like four times to read it because I couldn`t believe that their advice was to infect the rest of the world with our disease.

SCHIFF: Yes. You know, it`s like, you know, a lot of teachers grade on a curve. So they have one student, the American kid in the class, who is smoking dope, cutting class, he`s not studying, so he`s flunking out. And rather than talking to that student to improve his study habits, he`s encouraging the rest of the class to smoke dope and skip class so the whole curve can go down and then everybody can get a passing grade.

BECK: But it doesn`t -- I mean, honestly, I hate to sound like -- you know, like these conspiracy theorists that say the bankers are all in it together, but it`s so stupid, it`s almost like they are intentionally designing a collapse.

SCHIFF: Yes. You know, especially coming from the IMF, because for years these guys have been warning about the big imbalances, the current account and trade deficit in the United States. They`ve been warning about the consequences.

Well, here they are. And instead of saying suck it up and do the right thing, they are trying to put more Band-Aids on it, they are trying to encourage the Europeans to be irresponsible to take the pressure off our currency and our economy.

But, you know, I don`t think it`s going to happen. You look at the ECB, they are talking tough, they`re talking about inflation. They are not going to let European governments start deficit spending because they will reign them in. They will raise interest rates and they will undercut it.

BECK: True or false, Peter, that this is -- I read some place last night that these guys -- this was a real sign of how much trouble they think we`re really in.

SCHIFF: Well, they know because they have been warning about it. Again, you know, we`ve got to suck it up. America has to suffer through this recession.

We can`t look for ways to postpone it like we did before. That`s how come we got the housing bubble, because we didn`t want to face the music four years ago.

BECK: Last night, Peter, on "60 Minutes" they were talking about, you know, oh, look at this, what a surprise. Look how bad it is.

This is something we`ve been talking on this program for a long time. You`ve been talking about this particular scenario for three years now.

SCHIFF: Sure.

BECK: So let me ask you what`s coming in the next three years. What`s it going to look like in three years?

SCHIFF: Well, you know, our whole phony economy, which is based on borrowing money from the rest of the world to consume, is going to fall apart. You know, American consumers acted as if they won the lottery when they owned a home. They were borrowing and spending trillions of dollars because they believed that this home equity was real.

Well, now they`re waking up to the fact that it was an illusion. The only thing that is real is the mortgages that they have, and now they`re walking away from them.

You know, that "60 Minutes" reporter was surprised that somebody didn`t want to pay $3,200 a month for a 1,200 square foot town home. And they said, well, why? You signed up for it. And they said, sure, we were willing to do it when real estate prices were rising, but now that they`re falling we don`t want any part of it, we`re walking away.

BECK: Peter, thank you very much.

That is the "Real Story."

Tonight on the program we continue with Chuck Norris in a second, but tomorrow, in our exclusive letter from our email newsletter subscribers, we have a letter from Mitt Romney to you.

If you would like to receive that, go to glennbeck.com and sign up. You have to do it right now.

We will also give you a link to the letter from Mayor Giuliani that went out to subscribers today.

So, that is in the free email newsletter at glennbeck.com. You can sign up right now.

And Mitt Romney tomorrow and Rudy Giuliani today. You`ll get both of them.

Chuck Norris, why he hearts Huckabee, next.

(COMMERCIAL BREAK)

BECK: Now your average Hollywood type, you know, dabbles in politics. They talk the talk around Election Day, and then they get bored and, I don`t know, smoke pot, or whatever it is they do. My next guest, besides being one of the most successful good guy action heroes of the last few decades, is passionate about his political beliefs and he has taken a serious role as a vocal supporter of Republican presidential candidate Mike Huckabee.

How are you?

CHUCK NORRIS, ACTOR: I`m great, Glenn. Good to see you.

BECK: Chuck Norris, good to have you on.

NORRIS: Thank you.

BECK: You know, I emailed Mike Huckabee on the night that he won Iowa because you were standing right behind him, and I was laying in bed and I emailed him and I said, "Congratulations, Mike, on your win," et cetera, et cetera. "Good to know Chuck Norris is behind you because I know he`ll kick your ass if you ever break any of your promises."

NORRIS: Well, that`s true. You know, the thing is...

BECK: You will kick Mike Huckabee`s ass if he breaks his promise?

NORRIS: Well, actually, truthfully, Glenn, these politicians are a lot tougher than me.

BECK: Yes.

NORRIS: I mean, what they go through speech after speech after speech, and then these debates, and if you say the wrong thing you`re going to be crucified.

BECK: Yes.

NORRIS: My skin is not tough enough for that. You know?

BECK: Yes.

NORRIS: But I have to say, you know, how I became a fan of yours is I was channel surfing a little over a year ago and all of a sudden I come to you, and I`m listening to you, and I was so impressed with your transparency and your passion about what you were talking about, that I started watching you regularly. In fact, now I TiVo you, and now I`ve got you taped so when I`m traveling I can go back and watch the show -- the past shows.

BECK: That`s crazy. You need to higher the bar. Your standards are a little...

NORRIS: No. Not really, Glenn.

BECK: You know...

NORRIS: I really -- I like the issues that you present to the people in America.

BECK: Thank you.

NORRIS: And they are -- you`re very transparent about that.

BECK: So, what is it about Mike Huckabee that made you say -- because you never met him, right? You didn`t know him.

NORRIS: No. I never met him. And actually, you know, I was watching the Republican debates, and really there wasn`t that much on Mike Huckabee. I mean, he got that much air time.

BECK: Yes.

NORRIS: And I`m thinking, well, what is this guy all about? So Gena and I went on his Web site, started reading what he stood for, and started researching, reading -- what`s it called, Hon?

"New Man" magazine, yes.

BECK: OK.

NORRIS: "New Man" magazine. And so anyway, I decided that this is a man I would like to back.

I haven`t backed anyone in 20 years, Glenn.

BECK: Yes.

NORRIS: Former President Bush is the first man I actually actively backed.

BECK: You know what? I have decided that I`m not going to back -- see, I don`t believe -- I think if you`re looking at me for an endorsement, you`re a loser. I mean, you`ve got to make up your own mind.

I`ve decided I`m not going to endorse anybody at all, because whoever it is, whoever I might vote for or say on the air, this is the guy I voted for...

NORRIS: Yes.

BECK: ... I`m not going to give them that much rope. I don`t trust any of these weasels.

NORRIS: Well, you know, the thing is, it`s the least of the evils. You know, the thing is, what sold me on Mike Huckabee -- and it`s something I`ve been against for a long time -- is the tax structure in our country.

You know, I think it`s been our cake (ph) for many, many years. And I think back of when I was working my way up, trying to make a living for my family.

I -- you know, I worked at Northrop Aircraft during the day, 8:00 to 5:00, and I started teaching the martial arts at night to supplement my income. And the more money I made, the more taxes came out of my check.

And I`m thinking, this isn`t fair. The harder I work, the more I`m getting penalized for it. And I said there`s got to be a better tax structure in our country.

Now, of course, I`m in the top 10 percent of the people, so I don`t have to worry. But I still think back when I was poor and what I had to go through and what the people today are going through.

And the thing is, we`ve got to figure out a way to remedy this tax system in America. It`s archaic. And I really believe that Mike Huckabee is on to something with this fair tax concept, because I have, you know, friends that buy their yachts and their jets and they write them off as tax expenses and they pay very little taxes.

BECK: But you know what? On the flip side of that, the richest Americans pay almost 60 percent of all the taxes in America.

So, they are paying -- granted, they have more money, but they are paying such a huge share. It`s just got to be equalized...

NORRIS: Equalized, yes.

BECK: ... so it`s not -- so you`re not penalized for growing and you`re also not -- you know, these Merrill Lynch people who just walked away with $150 million and they lost all that money, that bothers me.

NORRIS: That bothers me too.

BECK: But you know what? It`s not the government`s place to equalize this stuff.

NORRIS: Yes, but the thing is, like, Warren Buffett, the third richest man in the world, pays no taxes. You know?

So the thing is, if you start looking at the people who don`t pay taxes...

BECK: But the government now looks at rich. I mean, you can see it with this refund.

This refund for the stimulus package goes -- does not go to rich people, which is $75,000 a year.

NORRIS: I know.

BECK: When did that become rich in America?

NORRIS: Yes.

BECK: I mean, I know people who live in New York City who scrape by on $75,000.

NORRIS: Well, if you pay taxes on $75,000...

BECK: Yes.

NORRIS: What is it? It`s $45,000 a year.

BECK: Yes.

NORRIS: So, I mean, that`s not -- you know, that`s not a rich person.

BECK: So, Mike Huckabee say he`s not going leave if he doesn`t win in Florida. He says he`s still in it for the long haul.

NORRIS: Yes, because the thing is, I want to squash these rumors here. You know, Huckabee is second in delegates.

BECK: Yes.

NORRIS: He`s number two. And he`s leading in the polls in several states. So, the thing is, it would be foolish for him to bow out now.

BECK: OK.

NORRIS: The thing is, I think his message -- you know, because the thing is...

BECK: If he does, will you sign a picture from you that says, "Glenn Beck kicked my butt and I`ll never screw with him again, Chuck"?

NORRIS: You`re too young. I`m old enough to be your dad. I`ll spank you, boy.

(LAUGHTER)

BECK: We`re going to -- if you don`t mind hanging around, I want to do a podcast with you, because we`re out of time now, but we`ll do something...

NORRIS: OK, great. OK.

BECK: ... on the Internet.

Chuck Norris, thank you so much.

NORRIS: Thank you.

BECK: What a pleasure.

NORRIS: A pleasure.

BECK: We`ll be back.

A deeply personal note in just a moment.

(COMMERCIAL BREAK)

BECK: I`m going to try really hard to not show my emotion in the next few minutes.

Once in a while there`s a person that comes along in your life that changes it, and they change it because they stand for something, they don`t compromise. They believe in something better, and you see it. They are, in effect, your personal shining city on the hill.

If you know anything about me or my history, you know that I spent a lot of my life as a miserable and callous guy. I know, you`re stunned.

But longtime listeners of my show, if they`re being honest, will tell you that they`ve seen a great change come over me over the years. Some of them don`t like it because I don`t call people "fat heads" as much as I used to. Believe me, this is a calm version of Glenn Beck.

I certainly have my moments where the old me shows up. But on balance, I`m a cuddly kitten in comparison to the old me. That is in large part due to one guy.

When I want to call somebody a pinhead or a fat head, I think of him and how he would handle the situation, because I wanted to be more like him. He stood for something, elevated, something transcended. And you could just simplify what he believed in just by saying he believed in, be kind to others, be a better person.

I realize that I`m a long way away from that. I think most everybody is.

Last night this gentleman, Gordon B. Hinckley, passed away. He was 97 years old.

You probably don`t even know who he is unless you share my faith. He was the head of my church. Obviously, he was an old man, 97. He lived a great life, most of which was just spent inspiring people to be better in a quiet way.

As he grew older and he became sick, I knew that last night would eventually come. I wondered how I would react.

Last night, when I heard a soft knock on my bedroom door, it was my daughter Mary. She told me the news that Gordon B. Hinckley had passed away.

I surprised myself. I wasn`t sad. It was a warm feeling. I just thought of a great man finally being reunited with his sweet, sweet wife.

One day when I -- it was actually the first time I met Larry King. He asked me, he said, "Gordon B. Hinckley, one of the nicest men I`ve ever met, an amazing guy. Have you ever met him, Glenn?"

I told him no. He very nicely offered to introduce me to him and I declined. I didn`t want to fell like I was a fan going to meet a celebrity. But now I wish I would have taken him up on that offer just so I could have shaken his hand and said thank you.

I didn`t know the man but I watched his example.

Whether you`re in my faith or another faith or no faith at all, we can learn a lot just by watching good examples from time to time.

From New York, good night.

END

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