This is a partial transcript from "The O'Reilly Factor," October 31, 2006, that has been edited for clarity.

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BILL O'REILLY, HOST: In the "Culture War" segment tonight on this Halloween, making money from brutal, sadistic movies. Right now, the highest grossing film in America, and gross is the right word, is called "Saw III," distributed by Lions Gate Films. It features a maniac torturing people in the most graphic ways humanly possible.

This is a sickening spectacle that could have never happened in America, even 10 years ago. So why is it happening now and what harm can these films cause to people who see them?

Joining us now from Los Angeles, James Hirsen, the author of the book, "Hollywood Nation." And here in the studio, Dr. Virginia Klein, a psychotherapist.

All right, Doctor, I'll begin with you, what kind of — I asked just before the segment. I asked everybody on the crew here on the floor, does anyone go to see these movies? We're not going to go see these movies. OK, who goes?

DR. VIRGINIA KLEIN, PSYCHOTHERAPIST: People with a great deal of need to see rage and identify with power and angry power. Because nobody is listening to feelings.

O'REILLY: All right. So people who are angry themselves? Is that what you're saying?

KLEIN: Well, people who have suppressed their anger, either through tranquilizers or getting their new toys. And nobody listens to feelings, so they get pent up inside.

O'REILLY: So they have no outlet for their anger?

KLEIN: Right. So they identify with the great power, to cruelty to other people.

O'REILLY: All right. So not everybody. Obviously, there's some people just go in for a cheap thrill. But you believe that a lot of people who go to these things are angry. They have no way to vent their anger, and yet seeing images on the screen of people suffering gives them relief?

KLEIN: Well, some people feel the terror they can't feel otherwise. So they do it in the theater. Some people feel the power that they don't dare to express, the rage and the power.

O'REILLY: So the power of the maniac torturing people?

KLEIN: Yes, yes.

O'REILLY: But why do people want power to hurt other people? What is that all about?

KLEIN: Because there's a kind of omnipotence that we imagine when we're children and we are powerless. And that is a different self, and it sinks into our unconscious and hates you.

O'REILLY: Does everybody have that?

KLEIN: Everyone has a different kind. It's an imaginary idea of yourself that you dream up when you're two, because you don't have any real power.

O'REILLY: So all human beings want some expression of power over others? Is that what you're saying?

KLEIN: No, some want to be the perfect saint. They want to love — if I could love good enough, my mommy would be alive.

O'REILLY: All right. So some people want to be accepted and loved and other people want to do damage.

KLEIN: They want the power to damage others, because they feel like a powerless child with no power to defend themselves.

O'REILLY: All right. Is there any danger that people who go to see these will act out in any way, shape or form the sadism that they're ingesting in the theater?

KLEIN: Yes, because the ones who are really, really troubled are not aware of their own rage. They just want to be the hero on the screen and they go out and they have a copycat.

O'REILLY: But he's not a hero. The guy doing this is a horrible villain.

KLEIN: In their head, the guy with the greatest power to compensate for their powerlessness as a kid, that's the one that they admire on the screen.

O'REILLY: All right.

Now, James, this stuff is just sickening and you've been in Hollywood a long time watching this kind of thing. When I was a kid, when you were a kid, it was "Dracula" and "The Mummy" and, you know, harmless. And they cut away. They never showed you the graphic things.

And now it's so over the top that the eyeballs are being gouged out, chainsaws are cutting off limbs, women are being defiled in every way, shape or form. Is the industry proud of this?

JAMES HIRSEN, NEWSMAX COLUMNIST: Segments of the industry are proud of it, and as you point out, it's not your daddy's horror film. It's different in three ways, Bill. I mean, the first way is, there's a technological capability that just didn't exist in the past with the computer graphics that can make things so graphic.

And the second thing is the context. We have basically this ultra violence, and that's what they call it, this sort of sickening ultra violence, that takes the place of the star in the story.

And thirdly, as the doctor pointed out, this takes place in an amoral universe. You can't tell who the good guys are and who the bad guys are. It's very different from the horror films of yesterday.

And the people involved — by the way, you know, remember, we had the Rat Pack, and then we had the Brat Pack. The entertainment community is calling this group of seven directors that puts this stuff together the Splat Pack.

O'REILLY: Are these guys celebrated? Are they celebrated in the industry? Are they in demand? Are they getting good seats at Mr. Chow in Beverly Hills? Is this what's going on?

HIRSEN: Yes, unfortunately, they're celebrated in segments because of money. The first "Saw" film cost a little over a million to make, and it grossed $100 million, and the latest "Saw" cost $10 million. And the last weekend it did $34 million.

BECK: Right.

HIRSEN: And the "Saw" franchise is over $250 million and rising.

O'REILLY: OK. Now a big company...

HIRSEN: So that's the kind of profit margin that gets attention.

O'REILLY: A big company like Time Warner puts out "The Texas Chainsaw Massacre" stuff. Does Time Warner ever explain it, or they just cash the check?

HIRSEN: Well, you know, Time Warner does that, and probably the center of the Splat Pack is Lions Gate.

O'REILLY: But that's a little company. And I must say FOX distributed "The Hills Have Eyes," a cannibalistic, sadistic thing. FOX did that, but I never hear the executives explaining it. They just throw it out there, and then they run for cover.

HIRSEN: What's important, Lions Gate used to be little, but the CEO, Jon Feltheimer, has taken it from $150 million a year to a billion a year. They own Tristar. They own Artisan. They're a big player. And they're making all this money, and a lot of it they're making because, remember, when we talk about the three "Saw" films, we talk about "Hostel," we talk about "The Devil's Rejects," all of these kinds of films, they're all distributed by Lions Gate.

O'REILLY: All right. So these guys, do they ever say, "We're sorry we do it. We know it's garbage. We just want the money?"

HIRSEN: Obviously, not, and something has to happen. And you mentioned Time Warner, and you remember years ago when Charlton Heston went into the shareholder's meeting, and he read the lyrics to Ice T's "Cop Killer".

O'REILLY: Yes. We're going to start investigating this. Absolutely. Americans need to say, enough of this, and if you do it — but it's hard to get these movie companies, unless they have other places, because these people are always going to go.

Doctor, thank you. I've got to run.

James, as always.

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