This is a rush transcript from "The O'Reilly Factor," January 18, 2008. This copy may not be in its final form and may be updated.

Watch "The O'Reilly Factor" weeknights at 8 p.m. and 11 p.m. ET and listen to the "Radio Factor!"

BILL O'REILLY, HOST: In the week in review from the "Ingraham Angle" segment tonight, three topics for Ms. Laura: is America a good place, Latino gangs and girls beating on each other. I spoke with Laura last night.

(BEGIN VIDEOTAPE)

O'REILLY: Laura Ingraham, a new Gallup poll just out this month says that 73 percent of Americans are dissatisfied with the direction of the United States. Twenty-four think it's OK. And three percent do not know what country they live in. Why do you think so many people are dissatisfied?

LAURA INGRAHAM, RADIO TALK SHOW HOST: Well, look, Bill. I wrote a whole book about this called "Power to the People." And I focused on the fact that so many Americans that I meet coast to coast, when I travel to give speeches, they come up to me and they say: "What's happening with our media? What's happening with business? What's happening with these government leaders who keep taking more power away from us and empowering faceless, nameless bureaucracy that just take our money and aren't really responsive to our needs?"

So this problem of dissatisfaction has been going on for some time.

O'REILLY: All right. So you don't think it's a specific issue or two like the economy or Iraq?

INGRAHAM: No.

O'REILLY: You think it's a general belief that people are powerless.

INGRAHAM: Yes.

O'REILLY: That the nameless people are exploiting them, taking their money. How about you? Are you satisfied with the country or dissatisfied?

INGRAHAM: Well, I think there are some things that are going a lot better than they were a couple of years ago. Obviously, the situation in Iraq, with many challenges ahead, is improving. And that's a great sign.

O'REILLY: But Bill Maher says it isn't. He went on the "Leno" show this week and said no, it's not.

INGRAHAM: Did he get that information from the Playboy mansion? Or is that...

O'REILLY: I don't know where the dispatch came into Mr. Maher from. But it was interesting because he said it to Leno, and then the audience erupted in applause, that Iraq isn't improving because we lost by invading.

INGRAHAM: Well, I don't believe in the Never-Neverland of Lala-land politics. And that's just tedious. I mean, what real world people, people outside the L.A. bubble, the Washington bubble and the Manhattan bubble, are feeling is a lot of anxiety.

And in Iraq, Bill, the reason the same poll showed that people are still very concerned about Iraq is I think they know it's getting better there, but they don't know how it's making our lives here at home better. And that's been a failure of communication.

O'REILLY: That's a brilliant point. Laura Ingraham has made a brilliant point, everybody.

INGRAHAM: Thank you.

O'REILLY: I can hear the applause all the way to Oregon, OK? They don't know, OK. So the surge is working, what does that mean for me on Main Street here? We spent a lot of money there, and we lost a lot of people. So what?

And the Bush administration has not been able to make the point. In fact, we called Dick Cheney a number of times over the last three months and said, "Look, you need to come on, articulate why this is a good thing for America."

INGRAHAM: Main Street, yes.

O'REILLY: Wouldn't come on. Wouldn't come on. He's shooting quail. He can shoot a lot. He's gunning them down, but he won't explain it.

INGRAHAM: Well, I think that the problem is like the subprime crisis, the consumer confidence crisis. This does not make people feel good about where this country is going.

O'REILLY: Look, The New York Times is telling you, did you know on the sports page before they get to the Giant-Packer game it's, did you know there's a recession in Green Bay, too? It's like on every page in every headline. That's what the people are feeling.

INGRAHAM: But Bill, I do think, also, that people, from gas prices to health care prices to what's happening in public schools...

O'REILLY: Yes, there's a squeeze.

INGRAHAM: It's an onslaught against regular folks out there, just working really hard. And I think politicians, Republicans or Democrats, who kind of pooh-pooh this and say, "Well, we just need to keep on the same path." Well, good luck with that.

O'REILLY: OK. Now, on your program you have been discussing Latino gangs. Should I be afraid, very afraid?

INGRAHAM: Well, there are things going on in Fort Worth, Texas, also L.A., Chicago. I know you've heard of F13. It's a violent gang that is controlled by the Mexican mafia, actually, in Mexico. Then there's MS-13. That is a Salvadorian gang.

But I think the untold story here, Bill, is that if we continue to see this rise and politicians don't want to address it, they don't want to talk about it, it would be very bad for us as a people and for Latinos living here peacefully and law abiding, for people to equate gang activity with Latinos in general.

O'REILLY: Do you tie it into the illegal immigration debacle?

INGRAHAM: No doubt there's a correlation, especially with MS-13, and it's populated mostly by illegal gang members, illegal immigrants. There's no doubt about it.

Our failure to control our borders, Bill, has resulted in all sorts of horrific criminal problems in this country. And we're talking about courting the Latino vote, but we're not talking about this problem that's hurting law-abiding Latinos in this country.

O'REILLY: All right. And finally, girls beating each other up, posted on the Internet. And we have done this story a couple of times. What's your take on it?

INGRAHAM: Well, I think that we — and I say we, the media — we're all kind of culpable in this, because the more we put this stuff on the air — and I know you have to explain stories and so forth — but the more you put the guy beating the girl up behind the bar, the store clerk getting hit in the head with a baseball bat, girls pulling each other, kicking each other, pulling each other's hair, I think that does...

O'REILLY: Copycat?

INGRAHAM: ...cause some of these people to — yes, start doing this for celebritification of their own lives and their own...

O'REILLY: You can't censor the news. You know, if it happens and the tape is there, I mean, you've got to present it to the American people. And maybe people get so outraged that they'll raise their kids better.

INGRAHAM: Well, maybe. I think we have a responsibility not just to report everything that happens but realize what goes on television does affect young people's minds and does have a greater socio, you know, sociological effect.

And I think some things — we can just say a girl was pulling another girl's hair and kicking her on the ground without showing the constant loop of the video 50 times.

O'REILLY: Yes, I mean, I think you have to do it responsibly, but the impact of the pictures...

INGRAHAM: It makes them famous, Bill. It makes them famous.

O'REILLY: For about 14 seconds, though, and it — but it leaves good people with a mandate to change a society that has led to this. See, the culture war is important. And people get mobilized, and they galvanize.

INGRAHAM: Why do you think they're videotaping? Why do you think they're videotaping themselves?

O'REILLY: Because they want attention.

INGRAHAM: Yes. They want to put it on YouTube, and they want us to talk about it.

O'REILLY: I'm going for the greater good thing here, Laura. You know what I'm talking about.

INGRAHAM: I know you are.

O'REILLY: I'm all about the greater good, and that's why we have you on the program.

INGRAHAM: I appreciate it.

O'REILLY: All right. Laura Ingraham, everybody. See you next Friday.

INGRAHAM: All right.

Copy: Content and Programming Copyright 2008 FOX News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2008 Voxant, Inc. (www.voxant.com), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, LLC'S and Voxant, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.