This is a rush transcript from "Glenn Beck," April 1, 2009. This copy may not be in its final form and may be updated.

GLENN BECK, HOST: On Monday, on this program, I spoke with Connecticut's Attorney General Richard Blumenthal who is one of the many lawmakers and prosecutors who wants to take back AIG executive bonuses.

You know, that's fine if that's what you want to do. Is it legal to do that? I get the whole inspiring populist anger thing. But I'm still trying to figure out what those people did to break the law.

Here is former New York City Mayor Rudy Giuliani.

RUDY GIULIANI, FORMER NEW YORK CITY MAYOR: How are you?

BECK: Good, sir. How are you?

GIULIANI: Good to be back.

Video: Watch Beck's interview

BECK: OK. I want to start with Blumenthal. I've got a laundry list to go through. I want to start with Blumenthal and Cuomo here as well. I asked Blumenthal a question that nobody, even those, you know, hailed journalists have asked, "What law did these people break?" He had no law.

GIULIANI: That's, of course, critical to an attorney general or U.S. attorney. I was a U.S. attorney and this goes for a longer time than I was in politics.

BECK: Right.

GIULIANI: I always had to proceed on the violation of a statute, whether it was a criminal or a civil statute. So he and Attorney General Cuomo should be capable of saying what law it is that's being allegedly violated. If they got a bonus that was approved in the proper manner, even if it wasn't approved in a proper manner, it's a private company. That's a question for the stockholders to deal with.

BECK: So do you find it appropriate at all for somebody — if there is no crime, for somebody to come out? Because I think these people are getting way out of control on bullying people and demonizing them.

GIULIANI: Well, I think, first of all, they should operate within their sphere of authority to allege violations of the law, not to just to criticize.

BECK: He said that it's part of his job to get people to stand up and change the law.

(LAUGHTER)

That's what I thought, too. I don't know.

GIULIANI: It gets dangerous. It gets very, very dangerous...

BECK: Yes.

GIULIANI: ... if the U.S. Attorney or the attorney general decides. And then, if you want to do that, you do that generally, not on a specific case. You don't do it with specific people in mind.

The other problem that I find with the whole bonus thing — I know this is not very popular — within a company, even a company that's failing, you are going to have a certain number of people that are performing well. And if we make bonuses really bad, these companies are going to lose their good people.

BECK: We're killing entrepreneurship.

GIULIANI: It doesn't matter what company you are talking about — how bad it is. I mean, I've run companies and run one now. And you've got people that do well and you want to keep those people. And even when the overall performance — in fact, when the overall performance is slipping, that may be exactly when you want to keep your good people ...

BECK: Right.

GIULIANI: ... because they're the ones who are going to turn it around.

BECK: Look, you know, I said to Blumenthal — I said that he's an insult to George Washington. Quite frankly, Washington was very, very clear that we are respecter of laws, not of men. And I think everybody is just going after people now.

GIULIANI: There is a tremendous anger. It is very understandable. Nothing about the anger that is not understandable. In case of leaders, political leaders who have specific missions — they should be controlling that anger, not stoking it. We're not going to accomplish anything with this anger.

BECK: But this is the — we have the attorney general now who has a history of this. This is Eliot Spitzer as well, but that, you know, the Holder memo and Eliot Spitzer who —

GIULIANI: People don't remember — I mean, one of the cases that Eliot Spitzer brought — he lost it ultimately. That was the whole Grasso — in Dick Grasso's case, he went after him for a bonus, essentially, that he got for doing a good job. The allegation I could tell against Dick Grasso was he got too much money for doing a good job.

(CROSS TALK)

And the theory was — the theory there was that the New York Stock Exchange was a charitable organization. I mean, the New York Stock Exchange is run on business principles. Everyone agreed he did a fabulous job. Whether you think he got more money than he should have for doing a fabulous job, that is up to the board of directors.

BECK: Exactly right.

GIULIANI: It's up to the people running the company, not up to me and you.

BECK: OK. You know, you went after bankers when you were a prosecutor. You went after bankers. But as far as I can tell, there was always a crime.

GIULIANI: There was always a law that they allegedly violated. We proved most of the cases. We lost some of the cases. But the cases we lost and the cases we won were all based on violating Section 10B5 and violating the manipulation law and sometimes basic things like perjury and destruction of documents and obstruction of justice. They are always specific statutes that it was based on.

BECK: Where do you think this lead us? We don't turn this — I just see people pitting people against each other. I mean, look, politics is one thing. But now, we're going after private citizens and we're saying, "Get them."

GIULIANI: What we need right now is a calming influence, not a — what we need from the president, from the governors, from the A.G.s, from the attorney general and the attorney generals is — you know, let's deal with this in a measured way, not jump on top of every single time we can get some applause from an audience by saying something.

BECK: President Obama knew about the bonuses I think two days before he spoke out about it.

GIULIANI: Right.

BECK: His secretary of the treasury knew about it long before then.

GIULIANI: Senator Dodd put the language in the —

BECK: Exactly right.

GIULIANI: ... put the language in the statute.

BECK: And people started to whip up a frenzy. Shouldn't the president have come out, instead of saying some of the things he did, come out and say, "Whoa, whoa, whoa," and try to focus people?

Instead, the unions, ACORN — all of these special interest groups — they started protesting. And the media covered it, and it just whipped it up.

GIULIANI: Wisdom is required here, not just giving in to the understandable but not very helpful mob mentality that's going on. And wisdom would suggest pointing out some of the reasons why bonuses for many of these people might have been justifiable.

And secondly, pointing out even where they weren't, these were all done contractually. They were all done with approval, including with the approval of the United States Government, which they left out until two days later – 3 days later. I think Sen. Dodd first denied it before he was confronted with having approved it.

BECK: Let me take you one more place. Do you watch this show?

GIULIANI: I do, and I enjoy it.

BECK: Thanks. Then you know what I believe is coming if we don't wake up, if we don't pull together, if he we are not the good people that say, "Forget the Democrat and Republican thing. Just do the right thing."

GIULIANI: Absolutely right.

BECK: Do you fear for our country if we don't wake up? It's not a political statement.

GIULIANI: Yes, sure.

BECK: Should we —

GIULIANI: I fear for our economy, at least up to the point where I fear for our economy with a tremendous weight that has been placed on it. Now, having run a government of a much smaller size, but during a time when it was in economic crisis and having it brought out of economic crisis, this government right now, the Obama government, is doing everything opposite of what I did. It is a total other direction.

I tried to reduce spending rather than increase spending. I tried to reduce taxes to put more money back in the private sector. They've increased spending more than any time in American history in a middle of a recession. I don't get it. It just doesn't make any sense.

It doesn't make any sense to me that if you are going to have less money, you spend more. All that seems to me it is setting us up for — if we make a recovery, we are going into tremendous inflation.

And I think that's part of the problem the president is experiencing in Europe. To have, you know, one of the heads of the Chinese communist government tell us we are spending too much money is frightening. We've got to rely on — I've got to end up agreeing with a Chinese communist leader?

BECK: I know. I know it's crazy. All right. Mayor, thank you very much. I appreciate it.

Content and Programming Copyright 2009 FOX News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2009 CQ Transcriptions, LLC, 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 CQ Transcriptions, LLC's copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.