This is a rush transcript from "On the Record ," April 2, 2009. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: Well, it's over. The G-20 summit in London is now in the history books. The leaders pledged to pump $1.1 trillion into the International Monetary Fund and created an international body to fight (ph) problems in the global economy. So now what? Who supplies the $1.1 trillion for the loans? And who makes up the international body to flag the problems in the global economy?
Joining us live is Dick Morris. And don't forget, you can sign up at Dickmorris.com to get all of Dick's columns e-mailed to you free.
All right, Dick, before we get to the actual G summit, the president described -- and I suppose in a little cavalier, flip way -- he described his performance, or his success or -- I guess performance is a better word -- as "OK." Do you give him a higher grade than he gives himself is OK? I think he's being -- having a little fun with it. But what do you think?
DICK MORRIS, DICKMORRIS.COM: Well, it depends on what you want to achieve. I think it was a disaster, but it's probably a disaster he likes. Literally from April 2nd of this year -- that is, today -- it's a whole new world of financial regulation in which, essentially, all of the U.S. regulatory bodies and all U.S. companies are put under international regulation, international supervision. It really amounts to a global economic government.
Let me read you from the communique, Greta. "We agree to a framework of internationally agreed upon high standards. We will set up a financial stability board with a strengthened mandate to extend regulation and oversight to all systemically important financial institutions, instruments and markets" -- including hedge funds, all -- anything that they decide is important to the system -- "to endorse and implement tough new principles on paying (ph) compensation and to support sustainable compensation schemes and the corporate social responsibility of all firms."
Just when Obama is accused of socialism, he's essentially creating world economic governance. This means that the FSB, this newly created board, Financial Stability Board, patterned on the Financial Stability Forum that now exists, headed by an Italian banker, populated largely by the European bank executives, will make the decisions on what standards our own SEC and Federal Reserve board should apply to all firms in the United States of any significant size about executive compensation, market activities, and a whole range of issues that used to be under free enterprise reserved for private decision making.
This is an unbelievably radical document! This trivializes everything Obama's done until now!
VAN SUSTEREN: All right, the Financial Stability Board that you're speaking of -- two questions. Who makes up this board? Actually, it's three. Who makes up the board? Who decides who makes up the board? And is the board almost a sort of a -- an intellectual exercise, in the sense hat it makes reference to what people -- what countries should do, or is it -- or is it mandatory?
MORRIS: Well, it's made up the central bankers of the G-20 states. And one of the ironies and things about this is the United States has about 60 percent of the assets of the G-20 -- no, I'm sorry, about 40 percent of the assets of the GDP of the entire G-20, and yet we have one vote and Argentina has one vote.
But the central bankers make this up. They essentially are more or less a self-perpetuating oligarchy. They're not really chosen by anybody. I suppose they're appointed by their prime ministers and presidents, but that's a lengthy and arm's length process.
And as to whether their rules will be advisory or mandatory, it'll be up to them. Clearly, this communique indicates that they want agreed upon high standards, which means uniformity. And they presumably will have the power to compel this through their member states.
You know, I've had a long experience in dealing with the European Union, and this is how they operate. All the focus was on how much will there be in the stimulus package, $1.1 trillion. And did Obama win? Did Sarkozy win? And in the meantime, they slip this in under the radar, which is absolutely creating an international economic union.
VAN SUSTEREN: Did anybody oppose it, any country say, Look, this is a lousy idea?
MORRIS: Yes, Obama. This was so unbelievable. Obama was the one pressing for less regulation and more spending. And he had to convince the Europeans. But eventually -- but Obama himself is a socialist, I believe, and he had no problem really with this.
This truly creates a global economic system. From now on, don't look to Washington for the rule making, look to Brussels.
VAN SUSTEREN: All right, the $1.1 trillion loan for the IMF, who pays that $1.1 trillion? I mean, I know that we're quite a generous nation.
MORRIS: I think we pay.
VAN SUSTEREN: We contribute a lot. But I'm trying to figure out how much we're -- you know, we're putting into the kitty.
MORRIS: I forget the exact number. I think we pay 250 and the other countries chip in the rest. But the point is that the European -- the IMF, the International Monetary Fund, and the FSF, the Financial Stability Forum, are basically European operations. They're run by Europe. The World Bank is run by the United States.
And at Bretton Woods, when they set this up, they sort of said Europe has the IMF and the United States has the World Bank. And what that means, really, is that European socialists are going to be making the regulatory rules concerning compensation for all, all systemically important U.S. firms. All!
VAN SUSTEREN: And we got to go. We got to go, Dick. Thank you.
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