• This is a rush transcript from "Your World With Neil Cavuto," September 30, 2008. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST: Now, as I said, first on FOX, Dick Grasso and Ken Langone for their first TV interview ever and together here. I'm very happy to say that. Grasso of course the former head of the New York Stock Exchange and the man whose eye-popping pay package created a multi-year legal saga that Grasso only recently ultimately won. Furthermore, he was completely vindicated on every single point.

    Next to him, Ken Langone, a former Big Board member who stood by his friend and argued successfully nothing was done in secret and Grasso deserved every penny of that compensation, New York's highest court agreeing on every point.

    Video: Watch Part 1 of Neil Cavuto's interview | Part 2

    Gentlemen, welcome.

    Good to have you.

    RICHARD GRASSO, FORMER CEO, NEW YORK STOCK EXCHANGE: Thank you, Neil. Good to be here.

    KEN LANGONE, CO-FOUNDER, HOME DEPOT: Thanks for having us.

    CAVUTO: It's like a bad "Sopranos" we have got here, three Italians, and we don't know where we're going here.

    GRASSO: Who has got the cannolis?

    CAVUTO: I know. I have them. And I'm not sharing them.

    Now, Dick, to you first. I was thinking of you in the Big Board days. And you were there at the '87 crash. And a lot of people say, this volatility, what happened yesterday, '87. What do you say?

    GRASSO: I say that we have to put aside what happened yesterday in the Congress and go back to basics, Neil.

    The American people cannot afford for a solution to this financial crisis to be driven by partisan politics. We have got to look at what is right for the country, both sides of the aisle taking off their jerseys and saying, let's see what the problem is. We have got bad assets on the books of banks. They have got to come off. And they have got to shepherded by the government.

    CAVUTO: So, you are for this thing?

    GRASSO: I'm for not only what we talked about over the last week or so. I am for extension of insurance from the FDIC to protect small saver accounts. I'm for a...

    CAVUTO: So, sort of what Barack Obama and John McCain were advocating?

    GRASSO: Both — both senators, Obama and McCain, have said, let's lift the limit from $100,000 up to $250,000. I say, let's lift it unlimited. Let's let above $250,000 be paid for by the depositing institutions and by the savers themselves.

    CAVUTO: Well, that would be good for the two of you guys, right?

    GRASSO: No reason we could not do that, Neil.

    But, importantly, it sends a message of confidence to the American public. They do not have to run to the bank.

    CAVUTO: But are you saying, Dick, that this $700 billion package — and you were the king of capitalism — you ran the bastion of capitalism, the New York Stock Exchange — that it needs big government to get back on track?

    GRASSO: Neil, there is a difference between free market principles and free-for-all markets. And the latter is what we are experiencing right now.

    The credit markets are frozen. The local business has been unable to finance their ongoing operations. I think, in a few weeks, if this continues, corporations will be unable to roll their commercial paper. This is going to wind its way throughout our economy.

    I'm the, as you say, the captain of the free market, letting that free market do its just. But government must step in when the free market does fail. And I think that a balanced approach of asset recovery to the government, insurance for the investor, the investor and the depositor at a local bank, and a recognition that we need totally new regulatory apparatus to deal with the instruments...

    (CROSSTALK)

    CAVUTO: You sound like Barack Obama.

    GRASSO: No, I'm not. I'm not. I'm apolitical.

    CAVUTO: OK. All right.

    GRASSO: As you know, I was always a champion that the markets are the markets of the people.

    CAVUTO: All right.

    Well, Ken, first off, pipe down. Your view of this. I talked to Jack Welch. I talked to Jack Kemp, Warren Buffett. All these guys are saying, we have got to do this thing.

    And they're the kings of capitalism. When the market does not go your way, is the feeling that, look, we have got to do this maybe to save it?

    LANGONE: Look, let's, first of all, understand this is not a bailout. This is anything but a bailout.

    Yesterday, you had a vote down on $700 billion, and the market went down $1.2 trillion. By my math, people, the owners, the investors — that's all of America — lost $500 million. I think that these are good assets. I think it is an issue of time. If we are given the time to liquidate or liquefy these assets, we will do that. But there is a lot of blame to go around.

    CAVUTO: But you know what they are going to say, Ken, about that, is Ken Langone, successful capitalist, billionaire, this is a fat cat relief, and that's not fair.

    LANGONE: I don't know how I missed this one, but I did.

    I have absolutely no horse in this game at all. I'm a stockholder. I own a lot of stocks. The irony of what we're going through right now, if you look at corporate America, corporate America is in good shape. Balance sheets are good. Cash flows are good.

    This is — the irony is, here were all the masters of the universe going around advising people on their balance sheets, while their own balance sheets were rotting.

    CAVUTO: And you guys would welcome Uncle Sam, not exactly great at balance sheet stuff, coming in and policing?