This is a rush transcript from "The O'Reilly Factor," November 19, 2008. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: In the "Culture War" segment tonight: As we reported last year, the legalization of medical marijuana in California was a giant ruse to make the drug available to just about anyone over 18. Now the feds say there are more pot shops in the city of San Francisco than Starbucks, and the pot stores are scattered all over town, causing major problems as users gather in the neighborhood, some of them selling the pot to kids so they can buy harder drugs with the money they make. That's the scam.

With us now, syndicated radio talk show host Michael Medved, the author of the brand-new book, "The 10 Big Lies About America."

Now in your book, "10 Big Lies," the last chapter is that America is not in the middle of an irreversible moral decline.

Click here to watch the segment.

MICHAEL MEDVED, AUTHOR, "THE 10 BIG LIES ABOUT AMERICA": That's exactly right.

O'REILLY: Irreversible is the key word there, because your home city of Seattle in San Francisco...

MEDVED: We have more Starbucks than pot shops.

O'REILLY: But it's close. I mean, the pots are getting a gain. If you want a franchise, where are you going, OK? You're going with the weed. But what I'm trying to say here is that there have been tremendous changes in this country, and many people feel I don't want a marijuana shop on my street.

MEDVED: No, we don't. But you know, the one thing I would say, Bill, is look back at the 1970s — and that's one of the things I've tried to do in my book. Every single generation in history, we've had people who've said this is the worst generation we've ever had. We can't come back from this. I have quotes in the book from 1645, people saying that, the very beginnings of America. And the truth is it can't — every generation can't be the worst one. We've had periods of economic and of moral rise and decline, and the truth is there is evidence, even regarding marijuana, that we may be moving in the right direction. Fewer kids say they use marijuana today than 30 years ago.

O'REILLY: Yes, but if there are pot shops on every corner, that's going to change fast. But here's the difference between the '60s and 1645, OK, which was a very good year.

MEDVED: You remember it well.

O'REILLY: The courts are now on the side of the people, the secular progressives, the SPs who want to change the country in a secular way. The courts weren't on their side before. Now they are. Barack Obama is the new president. If he appoints Supreme Court justices, you know who he's going to — Ruth Bader Ginsburg will have friends.

MEDVED: Right. You're exactly right.

O'REILLY: That's the difference.

MEDVED: I would just mention two magic words: Ronald Reagan. We did have morning in America. Everything began to look better briefly in the 1980s. Divorce started going down in 1981, believe it or not. And lots of other indications. The truth is you're right about the judges and to be fearful of them but partially because they believe — what I write about is Big Lie No. 3, which is that our country was set up as a secular nation.

O'REILLY: Yes, they believe that.

MEDVED: Which is absurd, of course. Because our Founding Fathers, even the ones...

O'REILLY: But they don't care. Michael, you could write and deliver that book and read them a bedtime story from your book, and they'll look you in the eye and go, "I don't care what Michael Medved says. I want to believe that secular progressive policies are best for America."

But let's get back to the marijuana in San Francisco, because it's significant there because it impacts the folks. It's the folks, OK.

Now, the folks, they said medical marijuana. Somebody has leukemia, somebody has an eye problem, and yes, I want to be compassionate. But all of a sudden the ruse — and this is a George Soros deal; he's behind this — says anybody can get it now. So the hardcore drug addicts go in; they get the weed. The only people who can't get it are under 18. They go out, they sell it to the 16 year olds, so they can buy the meth and the heroin.

Now you have a problem in San Francisco that's citywide. It's — it's not — what are they going to do now? The feds are screaming, "Hey, it's out of control." And I think that the board of supervisors of San Francisco, they're all high so they don't care.

MEDVED: Two things. First of all, San Francisco isn't even representative of California.

O'REILLY: Well, in Seattle — you live in Seattle. It's the same craziness.

MEDVED: And Seattle isn't representative of the whole state of Washington. San Francisco voted 90 percent against Proposition 8, which defines marriage as between a man and a woman. The state of California voted for it. The truth of the matter is that most Americans instinctively know what's right. They're instinctively on our side.

O'REILLY: Of course. Don't you see the encroachment company?

MEDVED: That's why you've got to rebuff the lies that are out there, and they're lies about America. They're lies that are meant to make us believe on the eve of Thanksgiving that we have nothing to be thankful for, we should feel guilty and embarrassed.

O'REILLY: And they were bad. They were bad. One of the good chapters — and the book is good. I'm enjoying — I told Mike before, I'm enjoying reading it. But one of the real interesting parts of your book is that there is a segment of the population that thinks America is an evil country.

MEDVED: Absolutely. That's Big Lie No. 7, is that America is an imperialist power and a constant threat to world peace. Now, the truth is, Americans know in our guts, we know that's not true. But people have to have the information and have to have the arguments to answer this stuff.

O'REILLY: But they also understand...

MEDVED: They have to stand up.

O'REILLY: I mean, I knew this medical marijuana thing was a ruse. Anybody would know it was a ruse. But they sold it to the folks.

MEDVED: It's so typical, because it's using compassion to try to get your way against people's common sense.

O'REILLY: The gay marriage thing, the same way. And listen, gay marriage, I don't care. I really don't. But this thing, you know, selling the marijuana stuff to the 14-year-olds?

MEDVED: Well, I'll tell you something else. You talk about misuse of compassion. Big Lie No. 6 that I write about is the idea that the only way to help people who are poor or to deal with an economic downturn is a big new government program.

O'REILLY: Sure, Barney Frank. We just had it.

MEDVED: And that's complete garbage. Our history shows those government programs usually do damage for the people they are intended to help.

O'REILLY: All right. I want everybody to read "The 10 Big Lies About America." Michael Medved, thanks for coming in.

MEDVED: Thanks, Bill.

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