• This is a rush transcript from "Your World With Neil Cavuto," January 5, 2010. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST: K.T. McFarland joins me right now. She's a former assistant secretary of defense, all of this on the same day the president is coming up with a plan to deal with this sort of stuff.

    KATHLEEN TROIA MCFARLAND, FORMER DEPUTY ASSISTANT SECRETARY OF DEFENSE: Yes.

    And I think that's why his address is late. He's probably waiting...

    (CROSSTALK)

    CAVUTO: Probably waiting. Very good point.

    MCFARLAND: He does not want to make a speech and then, two minutes later, have it be overtaken very events.

    CAVUTO: What does he have to say?

    MCFARLAND: Look, the biggest problem that the president has, it's not — don't just fire one or two people and think that solves it. That doesn't solve it.

    We have — we have looked the wrong way on this whole terrorist issue from the very beginning. And both Presidents Bush and Obama have done it. They have been looking for the weapons terrorists might use. Now, that's useful, but we are still taking off our shoes, long after that shoe bomber has gone off doing something else. We need to start looking for terrorists.

    CAVUTO: It was because of that guy that we had to take off our shoes.

    MCFARLAND: Yes. Well, we need to look at terrorists.

    We need to not racial-profile, but we need to terrorist-profile. We need to, because, if we look just at the weapons that they might use, take off your shoes, don't use that bottle of water, don't take that toothpaste tube on the plane, we are always going to be a step behind.

    These guys are clever. They're adaptive. They have now moved on. For example, they're not in Afghanistan. They're in Yemen. But they're not even in Yemen. They're in cyberspace. If this announcement that Catherine Herridge was talking about, it appeared on a blog, that means Al Qaeda has moved on to cyberspace.

    We don't — we're always looking for them where they used to be. We are always looking for the weapon they used before. We have got to look ahead of this.

    CAVUTO: And you pointed out be careful what you think you see...

    MCFARLAND: Right.

    CAVUTO: ... that this could all be an elaborate head-fake, this entire incident. What do you mean by that?

    MCFARLAND: Well, it might be a head-fake, but you have to make sure that it's not.

    But, on the other hand, what are we looking for? We're still looking at airplanes. We're still looking at shoe bombers. We're still looking in suitcases. Where else should we be looking? We should be looking at ports. One of the things that is a very vulnerable part of the United States infrastructure is ports.

    What if a ship comes in, a pleasure craft comes in to Manhattan, and it has got an explosive device on it and it parks underneath the 59th Street Bridge, it blows it up? Then what happens? Well, Manhattan shuts down. But every other city in the United States, every mayor says, gee, I might be next. We shut those down.

    We're looking at this in a very after-the-fact catchup ball kind of way. And we need to look proactively, what is our port security?

    CAVUTO: You might be right.

    (CROSSTALK)

    CAVUTO: A statement out one of the Al Qaeda operatives who was saying, we're going to hit you by water next and all that.

    MCFARLAND: Right.

    CAVUTO: Nevertheless, as we look at this scene in Minneapolis/Saint Paul, where they have a partial shutdown because bomb sniffers are looking for a bomb that might have come in and luggage from abroad, but, nevertheless, everything always goes back to the airports. Everything always goes back to the planes. Why is that?

    MCFARLAND: Yes. Well, I think they have found that the majority of the American economy flies, one way or another.

    And American — that's where we are the most vulnerable psychologically.

    (CROSSTALK)

    CAVUTO: So, they know this could have an economic effect?

    MCFARLAND: You know it could have an economic effect and you know it could has a psychological effect.

    The other thing I think that is very important in this whole debate is, why are we treating these guys like citizens? Why are we giving potential terrorists or suspected terrorists the rights of citizens and putting them in our civilian courts?

    CAVUTO: Well, now, on this news, we have talk that these Yemenis who were going to back home from Gitmo might be resent to Illinois.

    MCFARLAND: They're heading back.

    CAVUTO: What do you make of that?

    MCFARLAND: Yes, right.

    Well, why are we endangering Illinois? Why are we endangering New York City? They have a trial of the sheik in New York City. When we take — for example, when the Nigerian, when the Christmas Day bomber got off that plane, he started talking right away to the FBI.

    But — and what he said was, they're more like me. There are more coming.

    But then what happened? He got his Miranda rights read to him. He's not a citizen. He doesn't have Miranda rights. He then got lawyered up, and then he clammed up.