5p>This is a rush transcript from "Hannity & Colmes," November 21, 2008. This copy may not be in its final form and may be updated.

ALAN COLMES, CO-HOST: Welcome to "Hannity & Colmes". Michael Steele sitting in for Sean tonight.

Nice to see you, Mike.

MICHAEL STEELE, GUEST CO-HOST: Good to see you.

COLMES: Nice to see you once again.

We get right to our big political story tonight. It's just about as official as it gets. Hillary Clinton has apparently agreed to be President Obama's secretary of state with an official announcement expected sometime after the Thanksgiving holiday.

Now we have complete coverage, but we start tonight with former Clinton advisor, author of the book "Fleeced" now on its 18th week on "The New York Times" bestseller list, Dick Morris.

Welcome back, Dick.

DICK MORRIS, "FLEECED" AUTHOR: Hey, Alan. Good to be here.

Videos: Watch part 1 of the 'H & C' interview | Watch part 2

COLMES: What do you make of the choice?

MORRIS: Well, I mean there are so many levels which I don't like, obviously. I don't think she's experienced and I don't think that — and what was the change Obama ran on?

But my most specific concern here is how this is going to work between Obama and Hillary. You can't have a secretary of state who has one eye on running for president.

Let's say Obama becomes unpopular. Let's say the war in Afghanistan turns unpopular. Let's say that the economy doesn't recover. Hillary might run a primary against him in four years.

Let's say that the — that there is a war in the Middle East. Let's say that Obama doesn't strongly support Israel and hedges a bit on that support. What's Hillary going to do with her New York political base pulling her in the other direction?

Let's say there is another 9/11 attack and there is a blame game going on. Hillary is going to be out to preserve her own image. You can't have somebody who is a practicing politician with their eye on the White House as secretary of state because they are in business for themselves.

And I think this is why this is a horrible choice.

COLMES: Well.

MORRIS: . forget for the country or for the world but for Obama.

COLMES: There's a lot of let's says there, Dick, that have to come into play to make all that time to fruition. And didn't George W. Bush.

MORRIS: Those could all happen. Those are all pretty reasonable options.

COLMES: Did George Bush take out a rival — potential rival when he put Colin Powell in as secretary of state?

MORRIS: No. Powell had already pulled out of presidential politics. If Clinton had put him in in his first term, then you're talking about something. But we have not had a candidate for president of the United States, a future candidate as secretary of state since John Quincy Adams.

COLMES: Well.

MORRIS: And that goes back a ways.

COLMES: Not a bad thing.

MORRIS: And the reason you don't have it is precisely that.

COLMES: Well, the idea that a potential president, if she ever does run again, will have had X number of additional years on the world stage, traveling the world, talking to world leaders if either wants to be president.

And what about this team of rivals idea that you bring in people with whom you wish to make amends, partner with perhaps former rivals, harmonize the party, bring people together.

Isn't that the Obama way of doing business?

MORRIS: Well, it's a pretty ridiculous way of doing business. Bill Clinton had to do that because he was basically — Cuomo was the party's first choice and he only got 43 percent of the vote. So he had to put guys like Stephanopoulos who was really Gephardt's person or he — was organized labor's person or Ron Brown who was the black community person.

Lincoln had to do it because he was the dark horse and he was elected with 40 percent of the vote. But Obama doesn't need to do that. He was convincingly the choice in the party and overwhelmingly the choice of the electorate. But instead what he's done is to put in his whole administration people whose first loyalty is not to him but to themselves because they are active, practicing politicians.

COLMES: Wow.

MORRIS: Be they Richardson or Hillary Clinton or Janet Napolitano. And on top of that, he's put Bobby Kennedy right in the middle of his administration in the person of Hillary Clinton.

This is just like what Johnson faced after the Kennedy killing. To come in and govern with all Kennedy people and Bobby was in the Cabinet and they were all following Bobby.

He's now recreated that situation and it's nuts.

STEELE: Hey, Dick, welcome to the program. Hey, congratulations on the book.

MORRIS: Hey, Michael.

STEELE: It seems like it's going.

MORRIS: Thank you.

STEELE: . gangbusters. I love the way you put.

MORRIS: It's having a second and third life, Michael, because what's happening is earlier people wanted to buy it to find out why not to vote for Obama. Now they are buying it for a crib sheet as to what this guy is going to do to us.

STEELE: Right. To keep track of what's going on. But I love the way you put it in your recent article with Eileen. You put it in the form of a dance. This whole thing between Barack and Hillary. Step one.

MORRIS: Right.

STEELE: . move one, Obama makes an offer. Move two, Clinton leaks the offer. Move three.

MORRIS: Right.

STEELE: . Obama puts Mikva to throw cold water on the appointment. How is the dance now? I mean it looks like Hillary's stepping on a few toes here.

MORRIS: Well, if there is ever a reason not to appoint Hillary Clinton, it's how she has handled this appointment process. He meets with her and says hey, I'm thinking of naming you secretary of state. And bang, the next thing it's on the front page of the newspapers.

That obviously wasn't Obama's leak. It was obviously Hillary's leak so that he'll be boxed into making the appointment. Then Mikva comes out and say, well, we're worried about the conflict of interest with Bill. And then, bang, Bill Clinton tells everybody he's negotiating over the — over his ethics situation.

And by the way, that has to be a heck of a negotiation. On one side of the table was Bruce Lindsay, Bill's best friend. And on the other side is John Podesta, Bill's former chief of staff, who represents Obama.

STEELE: Right.

MORRIS: And this guy has literally gotten himself into a situation where he could be little more than a figurehead in his own administration.

STEELE: And that takes me to the team of rival s model that President- elect Obama seems to be using. I mean do you think that this kind of dilutes his ability to really control the flow of his administration when he's got so many pockets that are.

MORRIS: Absolutely.

STEELE: . sort of misaligned, if you will? Because they are not really aligned with him because these are all second and third-hand individuals in terms of they've been with somebody else first. And now they're with him.

MORRIS: Absolutely.

STEELE: How does this work out?

MORRIS: And — and it's not just that. It's that they are in business for themselves. Richardson has not given up running for president. Hillary has not given up running for president. And even people that are not elective office, Napolitano, obviously, has her eye on a future career.

Daschle wants to make it as a lobbyist in the future. These guys all have motivations that don't have Obama's interests at heart.

STEELE: So, so.

MORRIS: And the team o f rivals was necessary when you had a president who really didn't control his own party like Abraham Lincoln or Bill Clinton, but you have Obama. He doesn't have this problem. This is all a self- inflicted wound.

STEELE: So how, how politically dangerous is Hillary Clinton should she become secretary of state? How politically dangerous is she? Can she carry the water for this administration on a war that Obama clearly wants no part of and wants to get out of as quickly as possible?

When you look at what she said during the campaign which I'm sure has not changed much since that time.

MORRIS: Right.

STEELE: . and what he said, how does this reconcile itself?

MORRIS: Yes. Well, it's not so much Iraq that worries me, let's just take Afghanistan. Let's say that this war goes south. Let's say that it's unresolved, the death toll multiplies and you have a new Iraq on your hands.

How is Hillary going to play this?

STEELE: Right.

MORRIS: Is she going to be a loyal supporter of the president, laying down the party line, or is she going to be thinking of her own candidacy, possibly in a primary against Barack Obama in four years? You know, like Bobby ran against Lyndon Johnson after four years.

STEELE: Exactly.

MORRIS: You can't rule that out.

STEELE: Hold that thought, Dick. We'll come back right back to you.

(COMMERCIAL BREAK)

STEELE: Welcome back to "Hannity & Colmes". I'm Michael Steele sitting in for Sean Hannity tonight. We continue now with Dick Morris.

Dick, I wanted to sort of pick up on where we left off and talk about the Clintonistas who are back in town. I mean this is — if this is not the third version of the Clinton Cabinet, I don't know what is.

MORRIS: Yes.

STEELE: I mean, how has this changed? How does what we see unfold really amount to change in this administration?

MORRIS: It's even more cynical than that, Michael. This guy ran on foreign policy. The economy was an afterthought. The whole reason he challenged Hillary Clinton for the Democratic nomination, because it was hers and he took it away from her, was because he disagreed with her on foreign policy.

And now he puts her in charge of foreign policy. Was this whole thing just a cynical, personal ambition to be president? Sure looks like that.

STEELE: Well, that leads to the next question. How does this, how does this dramatically impact downstream in terms of foreign policy? When you look at some of the appointments that he's made, what impact does it have on Gitmo, what impact does it have on Afghanistan, Iraq, given the crosscurrents that we're seeing here?

MORRIS: I'm terribly — I'm terribly concerned about the war on terror. Under Obama, it looks like there won't be any. He has homeland security and who does he put in charge of it? The governor of Arizona, somebody whose only expertise is the border. And INS, you know, is now — or ICE now — is under Homeland Security.

STEELE: Right.

MORRIS: So forget about terrorism. Who does he put as attorney general? Eric Holder, the guy who approved the FALN pardons of the homegrown terrorists who blew Fraunces Tavern. And on top of that, he announces he is going to close Guantanamo.

And as I pointed out in "Fleeced," we have 50 men who we have in Guantanamo released and they took up arms against us, began shooting at our soldiers again, killing a bunch of them. And now he is going to release the other 275.

It really scares me. But you know all of this is relevant only if he can do anything he wants. And I know you're going to touch on Minnesota later in this program. We can't do anything about Minnesota. But Saxby Chambliss is only four points ahead in Georgia.

If we lose Georgia, the Republican Party has zilch influence because the Democrats are going to get 60 votes. And that's why I'm urging people who care about that to go to an independent expenditure, GOPtrust.com, GOPtrust.com, and fund the effort to re-elect Saxby Chambliss.

Because if we lose that seat and we lose 60 votes, forget about it.

COLMES: Hey, Dick, in terms of Gitmo, you know, a federal judge just ruled that to release five prisoners from Gitmo, overruling.

MORRIS: Right.

COLMES: . the Bush administration on habeas corpus. And that's — that was a Bush appointee judge. So, you know, maybe Obama isn't wrong constitutionally about Gitmo.

MORRIS: Well, I'm not arguing the constitutionality with a constitutional law professor like Obama. I'm saying that we had 425 people locked up in Guantanamo who we released, Bush released. And of them when they walked — we flew them to Afghanistan on our own nickel.

And when they walked down the runway, down that — onto the tarmac, instead of the little girl with flowers, there was the guy with the machine gun and a hand grenade who gave it to them and they went right out in the field and shot at us.

And I want to know from Mr. Obama what he is going to do to stop those 275 people that he's going to let go from shooting at our men and women again.

COLMES: The idea of putting a prison in Gitmo who can evade U.S. constitutionality will not work out for the Obama administration.

Let me ask you, what has Obama done right so far?

MORRIS: Well, I wonder what Obama is going to say to the mother of the guy that Gitmo detainee kills.

COLMES: What has Obama done right so far?

MORRIS: Right?

COLMES: Or left.

MORRIS: Got elected which sends a — which sends a signal about American inclusiveness. I think that his election helps the United States abroad. I don't think much of his appointments.

COLMES: How about Geithner?

MORRIS: He appointed a lobbyist to head HSS, for goodness sakes.

COLMES: He appoints Geithner. The market goes up 500 points.

MORRIS: That's after it's gone down by 3,000, Alan.

COLMES: Yes, not because of Obama.

MORRIS: It will continue to drop — and it will continue to drop until Obama announces he is not going to raise the capital gains tax. I predicted it in "Fleeced."

COLMES: All right, but Dick.

MORRIS: It's happening. And right now he's prepared to let pension funds go down to zero.

COLMES: Wait a second.

MORRIS: . rather than give up his beloved capital gains tax.

COLMES: The minute he makes an appointment which obviously is very accepted by Wall Street, the market which had gone down all day reverses, it goes up 500 points. Isn't that a signal that he made a good choice today?

MORRIS: Yes. It may be a decent appointment. But his basic policy, which is to raise capital gains tax, is creating the market catastrophe that's going on right now.

COLMES: You're blaming that on the market?

MORRIS: The market lost 3,000 or 4,000 points since Election Day, for goodness sake.

COLMES: The market's gone down because of job numbers. It's gone down because of retail sales, it's gone down because businesses can't get credit.

You can't blame Barack Obama for everything that's happened in the market. And the market started going down when McCain was on the upswing and people thought he'd be president of the United States. That's when the market started imploding.

MORRIS: It's gone down — it actually rose 1300 points in the three days before the election. But it's a very simple transaction, Alan. People don't invest when the government is going to tax away their profits.

COLMES: Well, you know that there are lots of indicators with numbers which have caused the market to go down having nothing to do wit h Barack Obama.

But, Dick, we thank you for coming on the program. Thanks very much.

MORRIS: Thank you.

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