• With: James Carville

    This is a RUSH transcript from "The O'Reilly Factor," February 19, 2013. This copy may not be in its final form and may be updated.

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    O'REILLY: "Personal Story Segment" tonight. We continue our analysis on "What the biggest problem in America actually is?" Joining us from New Orleans, Democratic strategist James Carville.

    So you've heard the bloviating so are far on the program?

    CARVILLE: Right.

    O'REILLY: First you define what you say is the biggest problem and then where I'm going wrong and perhaps the other guests, as well?

    CARVILLE: Well I think the biggest problem is a long range problem. Since the 70s we've not been able to grow income in this country so between the end of World War II in say 1973 and 1975 everybody in America got a pretty consistent raise. Since around 1975 or so until now there is basically not been a raise for 65 percent or 70 percent of the people in the country and we're just having a very, very hard time figuring out how to deal with this.

    Right now currently the biggest problem we have is we've had too much -- too much -- to many people unemployed for too long a period of time and this is human tragedy of the first order that you know we need to be looking at very closely to see what if anything that we can do about this. I think those to my mind that's what's really bothering us.

    O'REILLY: All right. Now the first problem about wages being stagnant and actually falling for African-Americans under President Obama, how does the leadership in America deal with that? Does the federal government take over the private economy? But how do you deal with that in a system -- in a capitalistic system where competition drives wages?

    CARVILLE: Well, again, its long term problem has been going on since the `70s. We've just been through a -- in my opinion we're probably still in a recession. Technically we're out of the recession but we're still in very difficult times in terms of unemployment.

    As a result of the housing crisis, most people lost 40 percent of their wealth. And obviously, African-Americans have been hit hard with this. There is -- there is no doubt about that. But you know on the upside we're -- we're starting to come out of it. Economic numbers are looking better the healthcare costs are still out in flat and it looks like we have a chance of having an abundant cheaper clean source of energy coming online. So -- I mean we've got some things here that -- that we can look forward to too.

    O'REILLY: Yes but you are avoiding my question. What's the solution to the wages?

    CARVILLE: No.

    O'REILLY: Does the -- look, the Obama administration wants to control the private economy, the marketplace, all right. And they are doing a lot of things to make the marketplace responsible to Washington, not to competition.

    So is that the right way to go, or do you allow the free marketplace to take it where it wants to take it?

    CARVILLE: Well first of all, I think we have a pretty vibrant free market in this country. Second I tell you what not to do, not -- let's don't cut Social Security, let's don't -- let's don't cut unemployment compensation, let's don't cut these kinds of things which are keeping people or Medicare which is keeping people to the extent that they can stay in the middle-class. These are the kinds of things that they're depending on --

    O'REILLY: Well nobody is -- nobody is talking about cutting Medicare or Social Security.

    CARVILLE: Well sure they are talking about it -- they are talking about it today.

    (CROSSTALK)

    O'REILLY: They are not talking about, because we paid into it.

    (CROSSTALK)

    CARVILLE: But no, but people are talking, Paul Ryan is not talking about cutting Medicare?

    O'REILLY: No they are talking about creating another system where you would have the option. Ok not forcing anybody to do anything.

    CARVILLE: Bill everybody is -- I'm sorry but everybody is talking about cutting Medicare. The Simpson-Bowles people came out with a new proposal today. The President himself has even said that's he's open to cuts in Medicare.

    O'REILLY: The only -- the only cuts in Medicare would come from people who are wealthy over a certain threshold. So let's not propagandize the issue.

    CARVILLE: Ok but the people -- ok.

    O'REILLY: All right? Ok. Now let's get back to the vision that President Obama has as compared to your former boss Bill Clinton. Clinton had a very responsible fiscal policy, all right. In fact he ran a surplus in some of the years that he was president.

    CARVILLE: Right.

    O'REILLY: He didn't attempt to micromanage the private sector and he had a couple of economic bumps in the road. Whereas President Obama is the biggest spending president in history by far and much more of a -- you know, I don't really give too much of a -- I don't really care much about the debt. Whereas Clinton kind of did or am I wrong?

    CARVILLE: Well first of all, when President Clinton took office the economy was growing, we're starting to grow. When President Obama took office the economy was shrinking.

    (CROSSTALK)

    O'REILLY: Yes all right they are in a different frame.

    CARVILLE: You've got to be fair. And you're a fair guy, so we've to be fair. Ok? That is one thing about you're a fair guy. So let's be fair here. I want to be, although I'm a Clinton person.

    Secondly, you know, I think that some of them -- both of them raised taxes on the wealthy. Both of them tried to deal with healthcare. Obama much to my chagrin was a little bit, was more successful than President Clinton was. So both signed free trade agreements which a lot of people dispute whether that helps or -- or hurts.

    (CROSSTALK)

    O'REILLY: Right so you don't see a big difference between the two?

    CARVILL: I think that well, not so much. I see a different sentiment in terms of like style. I think President Clinton is a much more outgoing guy.

    O'REILLY: Oh yes, yes but that's not what I'm talking about. I'm talking about economic philosophy. I'm firmly convinced that President Obama wants to create a western European style nanny state? I didn't see that with Clinton.