• This is a rush transcript from "Your World With Neil Cavuto," January 21, 2010. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST: All right, flyers nervous today, after the nation's intelligence chief doesn't make any promises about stopping future bombing attempts.

    (BEGIN VIDEO CLIP)

    DENNIS BLAIR, DIRECTOR OF NATIONAL INTELLIGENCE: We will make a new mistake. We won't make that one.

    (END VIDEO CLIP)

    CAVUTO: That was reassuring.

    My next guest says that the American deserve better than this, former Deputy Assistant Secretary of Defense K.T. McFarland joining me right now.

    He might be right, for all I know, K.T., but, man, oh, man, that doesn't really instill...

    KATHLEEN TROIA MCFARLAND, FORMER DEPUTY ASSISTANT SECRETARY OF DEFENSE: That doesn't give — you know what that indicates to me? They're in freefall, that, eight years later, tens of billions of dollars later, they don't have a clue.

    When that Christmas Day bomber happened, that took them totally by surprise. They realized all the mistakes they made. And I think what they realize now is tweaking it isn't going to help, but I'm not sure they know what to do next.

    CAVUTO: But, K.T., how are his comments different — I'm trying to give the benefit of the doubt here, because it was such a crazy remark, but I'm trying to make sense of it — from...

    MCFARLAND: Right.

    CAVUTO: ... from a Bush administration official saying, look, we're going to get hit again; we don't know where or when?

    MCFARLAND: The difference is, these guys — I mean, if you listen to what he said just prior to that, he and the other three homeland security chiefs, Janet Napolitano, the head of the counterterrorism unit, the head of the FBI, they all — they were asked, point-blank, when that Christmas Day bomber got off that plane, did you know that he was going to be read the right to remain silent and you were not going to be able to interrogate him?

    And they all said, no. That was a Justice Department decision. That wasn't us.

    Whoa. What's going on here? These people are supposed to protect us, and they have just let that guy get — not be interrogated. When he got off that plane, Neil, he was babbling like a brook, according to the former attorney general. And you know what happened? He got read Miranda rights. He got lawyered. And he clammed up.

    CAVUTO: He clammed up...

    (CROSSTALK)

    MCFARLAND: Clammed up.

    CAVUTO: So, you think that — that obviously was a mistake, and you think, if they continue doing that sort of thing, it's just a matter of time?

    MCFARLAND: Sure.

    And the other thing that they're doing that is huge mistake that we have got to change is, they're treating everybody the same. In political correctness, we're not profiling anybody. We don't need to racially profile, but we should profile for certain behavioral traits.

    Right now, what we're doing, we're still patting down granny from Grand Rapids, while we're letting some guy...

    CAVUTO: Well, we have folks like Ed Koch here saying, yes, we do need to racially profile.

    MCFARLAND: I don't think you racially profile, but you could profile for certain characteristics.

    CAVUTO: Well, let's say all Muslim men on the line, that's, I guess, racially profiling, but since — the mayor's argument was, they're the ones behind all the big terror attacks on us.

    (CROSSTALK)

    MCFARLAND: That's — well, that's — there are certain characteristics.

    CAVUTO: Like what?

    MCFARLAND: You know, a cash ticket, OK, no return ticket.

    CAVUTO: I always wonder why the guys who do that, why not pay for a round-trip up front, because you're not going to pay for it anyway?

    MCFARLAND: Well, right. Oh, you mean because...

    (CROSSTALK)

    CAVUTO: No, because it always seems one of the dumber things that they do.

    (CROSSTALK)

    MCFARLAND: Well, it's penny-wise and pound-foolish.

    CAVUTO: I guess. I guess.

    MCFARLAND: But the whole approach is wrong. And this is what the Christmas Day bomber showed us, the Fort Hood shooter showed us. We're blinding ourselves, when we don't need to. And we — we are not any safer now.

    CAVUTO: Wow. K.T., good seeing you again, my friend.

    MCFARLAND: Great to see you.