This is a rush transcript from "Glenn Beck," July 6, 2009. This copy may not be in its final form and may be updated.

GLENN BECK, HOST: You thought the housing crisis was a blast, you ain't seen nothing yet. Congressman Barney Frank, the chairman of the House Financial Services Committee, wants to essentially roll the dice again and lower the standards on buying condos in America. After all, I mean, we learned our lesson on the houses. God knows — what?

He's asked Freddie and Fannie to roll back those pesky financial guidelines because those rules, quote, "may be too onerous."

Dr. Thomas Sowell is the author of "Housing Boom and Bust." He joins me now.

Dr. Sowell, welcome to the program, sir.

I can't believe, when I — when I heard this, I thought, this is the most irresponsible man I think I've ever seen.

DR. THOMAS SOWELL, SYNDICATED COLUMNIST: Well, there's a lot of claimants with that title but I — he might — he might well win. But when you think about it, there is no reason for him to learn any lesson from any of this. I don't doubt for a minute that he's going to be re-elected. He gets credit for helping particular classes of people, and when the foreclosures come, he is able to blame somebody else.

BECK: So, how does this end when we — when we are a bailout nation? How does this end when we don't learn our lessons?

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SOWELL: Well, people do learn their lesson in the marketplace. Unfortunately, there's no — there's no incentive for a politician to learn a lesson. What Barney Frank is advocating — which is to say lowering the lending standards in order that more people can have homeownership, that's been tried as far back as the 1920s by the Republicans and in the 1930s by the Democrats, after World War II by both parties. And in all these cases, the foreclosure rates went up, and nobody who advocated those lower lending standards was ever punished politically.

BECK: You know, Doctor, I saw the interview with Bill O'Reilly and Barney Frank, and Barney Frank actually — I mean, he actually said, well, there wasn't enough regulation. That was the problem. And Bill O'Reilly said, "You were the one who is saying we should lower the standards." He said that's absolutely untrue.

How responsible is Barney Frank and Freddie and Fannie for what we're going through right now?

SOWELL: More so than probably anyone else connected with all of this. The banks did not choose to lower the lending standards. The government leaned on them. The Justice Department under Clinton threatened them with prosecution if their lending patterns didn't suit the government. So, we had regulations. It was precisely the regulators who pushed the lower lending standards, just as Barney Frank is doing now, and that's at the heart of the financial crisis we're going through now.

BECK: So, we're not learning our lesson. We're — this week, everybody celebrated, as, in a way they should. I mean, Bernie Madoff is a crook, a criminal, destroyed people's lives, but everybody was wanting blood from him, and nobody is even looking at Freddie and Fannie and the fact that there is no new regulation there.

Could you — could you design a coming collapse any better than what we're doing now in our country by not — by bailing everybody out, not holding the right people responsible, by ignoring the problems in Congress?

SOWELL: I don't think anybody could have designed something that was more destined for disaster. Moreover, this is not hindsight. Long before the housing bubble burst, all kinds of people, in London, Washington, Wall Street — and I even did a piece in "The Wall Street Journal" saying this thing could lead to a collapse like a house of cards.

So, all sorts of people warned for a very long time. Barney Frank brushed aside all those people. He said if we overemphasize safety, then we won't get affordable housing.

BECK: No, but I'm — but I'm asking you now. We are just — I don't think we're coming out. I think this is a false bottom in this — in this market, in our economy now. We're not even really coming out of it. We just kind of appear to be stabilized a bit, and yet we're repeating the same mistakes, except on a national level now with our own treasury.

I'm talking about — could you design the collapse of our country any better than what we're doing today, not what we did yesterday, but what we're doing right now?

SOWELL: Oh, absolutely not. I mean, time and time again, when you lower the standards, that has led to more foreclosures, and because of the way Fannie and Freddie Mac operate, the lenders have very little incentive to worry about whether the loans are safe.

BECK: Right. Well, there .

SOWELL: In other words, you lend to somebody, and then you sell the mortgage to Fannie Mae and Freddie Mac, and it becomes their problem, which means, ultimately, it becomes the taxpayers' problem.

BECK: Well, we're — we're now talking about erasing student loans, that if you have a student loan, and you can't pay it within 20 years, they just erase it. I mean, what do you mean you just erase it? You don't just erase money. Somebody pays for it, and that's the taxpayer.

It's — you know, my mother used to always say, money doesn't grow on trees. I don't — I think they actually think in Washington that money does grow on trees.

SOWELL: Well, at least at the Federal Reserve.

BECK: Are you — are you at all convinced that we are through this? I keep hearing on TV .

SOWELL: No, I'm not.

BECK: . all the green shoots.

SOWELL: No, I'm not.

BECK: What .

SOWELL: No, not all, because for one thing, we are not through with all the huge amount of spending. Because I saw just recently, we've only spent 6 percent of this money so far. Now, when the other 94 percent of that money gets out there, I'd be enormously surprised if we don't see a tremendous amount of inflation.

BECK: Dr. Sowell, it's always good to talk to you. And your book is absolutely tremendous and thanks for all the hard work that you have put on it. If you haven't read it, yes, you should. It's a — it's an easy way to understand exactly how this happened, and who is responsible, and it's a little bit of everybody. "Housing Boom and Bust," Dr. Thomas Sowell, thanks.

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