the factor begins right now. ♪ >> bill: hi, i'm bill o'reilly, thanks for watching us tonight. another big battle between democrats and republicans. this time over your money. that is the subject of this evening's talking points memo. on the heels of the divisive health care debate now comes proposed financial reform. i know, it sounds boring. but it's very important to your life. so let me break it down in terms that even i can understand. most americans understand that the current vicious recession was caused in part by greedy wall street companies who trafficked trafficked in bad mortgage deals. that is they irresponsibly a lot of money in hopes of getting high interest payments back. as we all know that caused layman brothers and other financial institutions to collapse and the economy went right down with them. most americans got hurt. some big time. so now president obama wants to regulate the financial industry and there are three big things the democrats are trying to pass into law. number one, big financial companies would have to tell the feds about their investments as the guy said in the movie jerry mcgwire, show me the money. that way the feds can see if risky investments are being made. number two, new federal agency would be created to discipline private companies that the feds think that they are not acting responsibly. and number three, a 50 billion-dollar fund would be set up so the government could liquidate failing private financial companies. the feds would ask a bankruptcy court to make the call. most republicans hate that they don't want the federal government controlling the financial industry and they don't want federal funds used to pay the debts of irresponsible companies. talking points believes that new federal laws are needed to punish financial companies that take our money and invest it fraudulently. but we also do not want, do not want a 50 billion-dollar slush fund because it's simply not necessary. if new laws are passed, the feds can simply suspend the company's right to do financial business with the court's approval. there is no question that president obama and most democrats believe the federal government must right wrongs in the country. while the g.o.p. wants less of that, allowing the private sector to sort that out. thus, financial reform is the new health care. let the battle begin. and that's the memo. now for the top story tonight. reaction. joining us now from austin, texas, the author of the big, big, big best seller "courage and consequence." karl rove. now, would it be fair to say, mr. rove, that the bush administration could have avoided all of this if they would have watched these wall street gangsters more carefully? >> no. what it would be fair to say is we could have avoided this had the democrats not blocked for four years the effort begun in 2008 by the bush administration to regulate fannie and freddie. that bill took four years to get through the senate finance -- excuse me, senate banking committee. it was on a straight party line vote. blocked by senator chris dodd and every democrat, including the newly elected senator from the state of illinois, that kept us from regulating fanny and freddie as you pointed out in your introduction it was their that plunged us. >> bill: fannie and freddie were a certain part of it? >> they were the accelerant that brought down a lot of firms. >> bill: that was what the barney frank interview was all about. it was absolutely true. >> right. >> bill: had you a guy chris cox, former congressman from california, who was the head of the sec. and by all accounts, mr. cox did not know anything about these derivatives, phone loans, phony pieces of paper, fanny, freddie, layman brothers, merrill lynch, all these guys, and they didn't do jack, they didn't do anything about it? >> bill, bill, bill, it wasn't his job. the guy in charge of regulating fannie and freddie was the head of o fayo who didn't have the authority to go in and say stop making these loans. that's what the battle was all about. no, no, no. you are right. but on derivatives the securities and exchange commission in a law signed by president bill clinton had no regulatory authority over them. derivatives are not regulated at the fec. dririves for agricultural commodities and currency future are regulated by the commodities future trading commission. bill clinton signed a law saying that the kind of derivatives that we are talking about here credit swaps and other derivatives would not be regulated at the cftc. that's where they ought to be regulated. the big battle is whether or not they should be regulated and if so should they have the same kind of regulation -- >> bill: democrats mistakes. now they want to correct them. now they want to have the big government come in and watch all these people and know, the folks are saying what's wrong with that? what's wrong with having the big federal eye on these people so it doesn't happen again? >> two issues. one is are we going to regulate them in a way that works? for example, are we going to subject derivatives, financial derivatives to the same kind of regulatory scheme -- >> bill: let's do that. whatever works, let's do. >> that's the point. this bill goes way beyond that and may actually derive these financial derivatives, the trading of them out of the u.s. and to overseas markets, you know, reducing our impact on the capital markets and reducing the access of americans -- >> bill: sleazy pieces of paper here, they will trade them overseas but they will still trade? >> they will still trade them. the question is do you regulate them the same way we regulate others? if we do, we have got a good case for it and probably will work. if you go overboard, it will drive to singapore, frankfort, and london. that's not the big problem. the big problem is embedded in this bill is a $50 bailout package. you left out one of the big problems with it and why the big companies may actually like it. it's because, look, if you are these big financial institutions and you have got a 50 billion-dollar bailout back stopping you, then you can go to the credit markets and borrow money cheaper. we saw it with fannie and freddie. they borrowed money at 50 basis points less than private competitors. we have a 50 billion-dollar bailout fund, goldman sachs and other big financial firms on wall street will be able to get access to capital cheaper than your bank or your savings and loan or another local or state or regional financial institution. it's going to give these guys unfair advantage and it's going to be this incestuous relationship between big government and bill wall street that frankly is not healthy for the country. >> bill: this is so complicated that even neil cavuto couldn't understand it. your head is going to blow off. >> it's really simple. >> bill: it's important. >> yeah, guess what? this is simple to understand. why are we doing this now when the number one issue is jobs? why is the president so intent upon getting this done in a rush? >> bill: because he knows he is going to lose congress next november. that's why. >> no, no, no, no, no. he wants to diminish how much he loses congress by. he wants to set up this dynamic. he wants the dynamic to be the democrats say we are against wall street. but his political opponents republicans and independents say we didn't want a 50 billion-dollar bailout of the big institutions. this should north be done in a rush it should be done carefully and bipartisan fashion. i was taken aback -- >> bill: obama won health care. are they going to win this? who is going to win this. >> i don't know. because there are a lot of democrats who say people like dodd and others who say, you know, wait a minute, let's not go overboard here because it's going to be a -- we're going to spend months talking about this. >> bill: no, we are not! >> we should be talking about jobs and the economy. >> bill: i'm taking a risk talking about it at all. now, coming up and mr. rove, thanks very much as always. we have a really, really hot debate coming up. something that everybody can get involved with. president obama talking about america's power. did he run the u.s.a. down again? later, dennis miller on some left wing, left wing army veterans pushing global warming. upcoming. hi, we're the campbells. here's what we can do with 4g from sprint. using the overdrive 4g mobi hotspot, jimmy's playing some video game online, jenny's video-chatting with a friend, nd i'm downlding a huge presentati. and while that's happening, we'll enjoy some family time. 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[ male announcer ] be sure to talk to your doctor before you begin an aspirin regimen. see your doctor. simple. would you like to make a commute that's a little more worthwile? then you belong at bass pro shops. right now redhead bass tournament shirts are only $14.94 and this humminbird piranhamax fishfinder is only $99.99. your adventure starts here. >> bill: impact segment tonight, speaking at the nuke summit yesterday, president obama said this: >> whether we like it or not, we remain a dominant military super power. and when conflicts break out, one way or another, we get pulled into them. >> bill: whether we like it or not? why shouldn't we like being a super power? joining us now from detroit radio talk show star nancy skinner and from washington, d.c. sally quinn. so, what's not to like, ms. quinn? you know, we are super powers. we like to strut our stuff and that's good and america is powerful. what's not to like? >> well, you know, i read this quote three times trying to figure out what was wrong with it. because i think what he is trying to say is nobody wants to have to be a military super power, nobody wants to have to be the leader and in the nuclear world but that's a given. that's the kind of world we live in and, therefore, we have to be. >> bill: when you say. >> if we are going to be, we have to be number one. >> bill: i'm very confused though. >> it's not something to like about being a major military power. >> bill: i like that. >> it implies. >> bill: i like that. you say nobody likes it hey, teacher, i like it. it makes me feel safer. i want to be the big super power. i like being the big dog, which is why the factor is number one on cable television, nancy. i like being number one. i like being the super power. now. >> we know you do, bill. >> bill: you guys are. >> that's not what he saying, bill. i will tell you where he is wrong. we don't want to be drug into conflicts and provide all this leadership and cut these superb deals with russia and china instead of the old bombing versus sanctions with iran. >> bill: we have to do it? >> he is doing it that's what he is saying here is what we are going to do. we don't like being drug into iraq and afghanistan, but the fact is is that we are going to have to do it. just like you love being a tv star he is not saying he doesn't like being a military power. >> bill: i think, ladies, he doesn't like being a super power. i could be wrong. this is total speculation. >> you are wrong. >> bill: i think president obama feels comfortable. let me back it up and you can reply. i don't think president obama feels comfortable heading the most powerful nation on earth for one very, very clear reason. he is a liberal guy. liberals like the underdog. they often see power as oppressive. his whole background is fight the power as a community organizer in chicago. the power is oppressive. the power holds people down. now he is the power. and i don't think, ms. quinn, that is he real comfortable with that. >> well, you are talking to an army brat. so obviously i think that being a military super power is necessary, given the world that we live in. and i agree that we get because of this, like it or not, we get drawn into these conflicts around the world. >> bill: but does mr. obama feel the same way that you do? i don't think he does. >> i think he does. i think that he absolutely resonates power right now. >> bill: really? >> well, look at what he has accomplished recently on getting back to the financial thing. i think that he has gotten a grip on the financial situation in a way that i can't imagine anyone else having done in a short period of time. >> bill: wait a minute. that's not about -- >> -- military, nuclear, the health care. i think everyone one of those things has given him more. >> bill: personal power, maybe. and i think he does like -- you don't get into that game if you don't like personal power but, look. >> i don't think he is a megal maniac. >> i don't think he is either. he is either comfortable or not being the most powerful man in the world. >> i think he is. >> liberals uncomfortable in tower. look at fdr and truman and military power. let's not rewrite history here. what he is doing is he is exerting leadership on a level that is working and whereas president bush talked tough with all this language and then what we ended up too long is getting involved in an eight year war and it cost $2 trillion. obama is exert ago different kind of leadership. is he actually working with. this is the difference. is he cooperating with the world communities strategically to avoid major military incursion. and that worked. >> bill: nancy, here is the problem with all of that that is certainly pro-obama spin and you are entitled to it. he hasn't solved the iran situation. that's coming down the pike and he doesn't know how to solve it and afghanistan is still up in the air. we don't know whether we are going to be victorious there for, you know, a number of reasons. so you can put a lollipop on it but to me, he has -- he is the most powerful man in the world but he looks uncomfortable in that role. i'm going to give sally the last word, go. >> bill, the iran situation at least he has managed to get the chinese and russians talking about. >> bill: yeah, after a year and a half. that's not a lot of progress. >> no, but i mean he did make an effort with the iranians to begin with. and now he is going at them. they are outliars, and he said so. he is putting them on warning. >> bill: do you think they are real scared about that sally? outliers? >> i do. i think the iranians are in real trouble. i think they are supposedly the word is supplying scud missiles to hezbollah. >> bill: that's syria do that. >> through syria. >> bill: we appreciate your point of view. you know, but, i don't know, something about the power thing. but i could be wrong as always. coming right back with dick morris. something he said was used in the eric holder senate hearings today. morris getting really involved. then author kitty kelley says everybody is afraid to interview about the new oprah book. we are not. she is ahead. @ç@@÷ç@c ♪ raymond james financial advisers understand there's no one exactly like you. with a culture of independence they have the complete freedom to offer unbiased financial advise that's right for your goals. no matter how often. raymond james. individual solutions from independent advisers. >> bill: unresolved problem segment tonight. a few weeks ago dick morris and i debated where should be denied security clearance. morris said they should be denied. i dissented. when eric holder and at a senate hearing the argument was wrought up by dick durbin. >> the argument made by other side of the aisle and inspiration at fox news if anybody decides to represent quantity detainee they disqualify themselves from future service they can't be trusted. if that is the premise that legal representation or possible inclinations toward one party over another disqualify you, where does it end? >> bill: here now to comment, the author of the big best seller "2010 take back america, very hot read, dick morris. before we get to durbin and all of that was was just to take a shot at the republicans and fox news. even though mr. durbin, if you watch the program, if you don't do, you would know that i was actually -- you were agreeing with me. i'm not agreeing with you because i said it first. don't give me fox news b.s. holder was there and nobody grilled him. republicans gave him a pass. we were waiting for well, let's get holder, you know, he wants to give all these guys civilian trials. got nothing out of that. >> nothing on that. durbin was wrong. i never said they shouldn't work for the government. i said they shouldn't work for the government prosecuting terrorists. >> bill: yeah, in the holder justice department. >> yeah, prosecuting terrorists. they can prosecute drug dealers all they like. my point was two things. first of all, you represent a dug dealer, you can work for the d.a. there are millions of drug dealers. not every criminal lawyer has to represent drug dealers. if you are one of the very few lawyers that went out of their way to represent one of the 250 guys in guantanamo who rumsfeld called the worst of the worst, you had to want to do that. and i believe that those people shouldn't work prosecuting terrorists because they can't be trusted. you know what, bill? the fbi wouldn't even give them security clearance. >> bill: okay. i disagree with you. and i don't want to rehash the debate. i think that you can represent these guys for a number of reasons. it shouldn't disqualify you. i do believe like everybody else you undergo a background check. if you have a history of anti-american activity. not that that is anti-american. if you have a history of this like the lawyer who represented the blind sheik. she is in jail now. she was helping the blind sheik. >> i believe that the fbi on the basis that you went out of your way to hire guantanamo terrorists wouldn't give security clearance. >> bill: maybe, maybe not. it's a different world now. you know that. okay. now, why, why are the republicans backing away? i thought they could have made a big deal out of holder today. why? >> well, i thought. >> bill: tired? >> one was the civilian trial. the miranda rights. >> bill: all of that, right. >> the other thing i think there -- and i write this in my book, there are serious constitutional issues in what obama obama done over the past year, particularly in the health care bill. and since the attorney general is charged with defending the government, they should have put him on the secure. >> bill: like who is ---somebody doesn't sign it? >> exactly. >> bill: they didn't do either of that what's going on? >> i don't know. >> bill: tired? >> republican senators, sometimes don't rise to the occasion. >> bill: we would have levied with it if there had been any fireworks. >> that's right. >> you got this book "take back america" do you consider yourself conservative because at one time you were a democrat. >> i'm extingted i used to be a conservative democrat. we don't exist anymore. you are either a liberal obama democrat or you are a republican. and i'm a republican. >> bill: so you are a full blown, flat out republican g.o.p. guy? >> yep. >> bill: and the book is written to help the republican party? >> take back congress.