This is a rush transcript from "The O'Reilly Factor," October 11, 2007. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: Now for the top story tonight, an analysis of the Carter situation. Joining us from Seattle, presidential historian Richard Shenkman who teaches at George Mason University.

Professor, look, I want everybody to know, President Carter is an American, and he can say what he wants. I respect his public service. I respect his military service. He was a naval officer.

This is outrageous. This is absolutely dishonest and absolutely outrageous, and CNN should be ashamed of itself, and so should President Carter. What say you?

RICHARD SHENKMAN, PRESIDENTIAL HISTORIAN: Well, he's not in a particularly good position as an ex-president who had a failed policy with Iran. The problem is, not just the hostages, but he was giving real support to the Shah right up until the point where the Shah was forced out of office. And that's, in part, one of the reasons why we have had so many problems with Iran ever since.

O'REILLY: All right, well, I don't even want to get into the Shah, but let's just pick it up with President Carter failing to do anything. Do you remember Walter Cronkite every night on CBS News, Professor, going, "Day 58, Day 112" of the hostages being held in Iran? It was an embarrassment for this country. Iran was laughing at us.

And I'll submit to you that the kind of weakness President Carter showed vis-a-vis Iran lit the fuse in the beginning for the Islamist terrorist movement we have now, sir. And — and it's like Carter has amnesia. I know he's 83 years old, but come on.

SHENKMAN: Well, an argument has been made by some historians — Stephen Kinzer in particular wrote a wonderful book about Iran, in which he argues that, if you take a look at what happened in '79, the revolution of '79, where Khomeini comes to power, and 9/11, there is a definite line between those events, and — and that's troubling.

With Jimmy Carter, he didn't just sit there and do absolutely nothing when our hostages were taken, but the problem was he was paralyzed. He had a government that was divided. The secretary of state wanted to take one kind of action. The National Security Adviser, Brzezinski, wanted to take another kind of action. The ambassador to Iran had another policy. And Jimmy Carter, and this was true to form all of the time with him, which was his real, big problem, he waffled. He couldn't decide which person he was going to go for.

O'REILLY: Yeah, he wasn't a strong leader. Well, here's what makes me angry.

SHENKMAN: He wasn't a strong leader.

O'REILLY: Carter implies in the conversation that we're not talking to Iran. We are. We have been talking to Iran at a high level for about a year in Switzerland, mostly. OK? So that's a lie. He knows it's a lie. Carter knows. So now I'm teed off on that.

And you're absolutely right. Carter was a weak leader, and it was taken advantage of by Iran. And as soon as he got out of there and Reagan came in, Iran let the hostages go, as soon as Reagan came in, because they knew there was going to be a big change in this country. Now, the other thing is...

SHENKMAN: Well, can I argue with you on that just a little bit?

O'REILLY: Sure.

SHENKMAN: There have been serious negotiations beginning in September, and then what happened was there was the Iran-Iraq War. Iraq attacked Iran, and that gave Iran a real incentive at that point to try to wrap up the hostage problem, because they had to focus their energies on fighting Saddam Hussein.

O'REILLY: All right, I understand that, but they also knew that Ronald Reagan was a different animal.

SHENKMAN: That's the context there.

O'REILLY: He was a different animal that Jimmy Carter.

SHENKMAN: Absolutely they were worried about Ronald Reagan. They were worried about Ronald Reagan, no question.

O'REILLY: Just like Iran — just like Iran right now is worried about Bush. And if Carter were president, it would be like, you know — all right, I don't want to denigrate Carter, because I do respect his service, but I think this is flat-out dishonest. I mean, when he says that, under Clinton, we didn't have any problems at all with terrorism — I mean like, what is this guy? What is that all about, Professor?

SHENKMAN: Well, he's factually wrong, of course. Subterraneously, George Will, you know, calls what happened in the 1990s us taking a holiday from history. History was happening. We just weren't aware of it. It has — it was going on subterraneously.

O'REILLY: Yeah, I mean, it was part of — I was so outraged. And, by the way, I want everybody to know, we've invited President Carter on this program for 11 years, but he would never get away with that. And he knows it, and that's why he doesn't come on.

Professor, thanks very much.

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