This is a RUSH transcript from "The O'Reilly Factor," August 23, 2010. This copy may not be in its final form and may be updated.
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LAURA INGRAHAM, GUEST HOST: In the "Unresolved Problem" segment tonight: As we just heard before the break, Vice President Biden believes that Democrats will hold the House and the Senate in November. One man who wants to change that is Dick Armey, a prominent leader in the Tea Party movement, who is the author of a brand-new book, "Give Us Liberty: A Tea Party Manifesto." Bill spoke with the congressman last week.
BILL O'REILLY: One of the things that strikes me about the Tea Party is that it basically came about because people were getting fed up with big government. I mean, and it really caught fire fast. But a lot of the Tea Party people that I talk to, they objected to the stimulus package in the beginning. Remember? Bush came out and said, "Oh my God, the whole thing is -- we have to do something." And I remember going on the radio and saying, look, "If Bush and all these guys, Paulson, the secretary -- Treasury secretary at the time -- if they say the economy is going off the cliff, we've got to do something." We the federal government. Was I wrong back then?
DICK ARMEY, AUTHOR, "GIVE US LIBERTY": I believe you're wrong.
O'REILLY: You believe the government should just step back and let it go?
ARMEY: No. No. The whole notion of too big to fail, that's just simply a rational for government intervention. Most…
O'REILLY: Bush isn't a big government guy.
ARMEY: Bush isn't a big thinking guy either. He's not well-schooled on economics.
O'REILLY: Do you think he panicked?
ARMEY: Yes. And Paulson, too. Paulson's panic was born out of this. Paulson grew up, made his fortune in a world where my competitors fail, it's good for America. Where my firm might fail is a catastrophe.
O'REILLY: Look, the stimulus package that Obama instituted is 18 months in operation, and unemployment has gone from 8.2 to 9.5. So obviously, it hasn't worked thus far. But I'm sitting there as a commentator. I try be fair. You watch the program, right?
ARMEY: Right. Sure, I do.
O'REILLY: I try to be fair. All right. I'm not an ideologue. And I'm seeing Bush and Paulson, the two big guns, come out, and their face is ashen saying, "If we don't do something now to bolster confidence in the U.S. economy, overseas primarily, it's going to be Armageddon." I've got to believe them. I've got to believe them.
ARMEY: No, you don't.
O'REILLY: I don't?
ARMEY: No, you don't. I'm an economist by training. I studied it all my life. I have an advantage over them because I read (INAUDIBLE). But the fact of the matter is, the most -- the most critical affliction that came to the economy in that, those few days was the nation seeing the secretary of Treasury and the president in a total panic.
O'REILLY: So they should have...
ARMEY: Adult discipline.
O'REILLY: You wouldn't have done anything? No intervention? You would have let whatever happened happen?
ARMEY: Absolutely right. You've got to -- you can't -- you can't privatize profits and socialize loss.
O'REILLY: Then the Tea Party rises because built on that initial government bailout came all the others, and the Tea Party said, "No, we don't want it." And I believe it's absolutely a legitimate form of protest. But then you, you go out and you hammer Obama. You really hammer him. And basically, I want to know, do you think the man is a socialist?
ARMEY: No. I didn't -- I never said that.
O'REILLY: No, you didn't but you hammered him.
ARMEY: What I said was, quite frankly -- just call me a little bit more present, a little bit quicker than everybody else -- is that he's incompetent.
O'REILLY: OK, so...
ARMEY: Dick Armey is the last voice to say he's incompetent.
O'REILLY: You just don't think he knows what he's doing?
ARMEY: He doesn't know what he's doing.
O'REILLY: In all areas?
ARMEY: And he's surrounded by people that don't know what they're doing. If it came to -- if it came to growing big government without any real sense of responsibility about the long-term impact on the nation, but only to fulfill a short-sighted self-serving set of objectives for myself and my party, I think the man is quite competent. But he doesn't know what to do with it except to grow it, because his ideology doesn't really give him any intellect to go beyond that.
O'REILLY: OK. So he's an ideologue who's got a wrong system. But the upcoming election may correct it to some extent. I don't know. You know, it looks that way.
Now, let's go to 2012. The Tea Party is going to be a factor in the presidential nomination. That's what your book is about.
ARMEY: There's going to be -- it is an already existing, healthy influence over this election cycle.
O'REILLY: In November 2012, OK. Say Sarah Palin decides to run for president on the Tea Party ticket. Say she tries to go out into the primaries. She'll galvanize Tea Party support, OK? That puts Obama back into office.
ARMEY: Absolutely. But there won't be a Tea Party ticket. There has not been a Tea Party ticket.
O'REILLY: It will split. See, it will split the Republican vote between the Tea Party people and the traditional Republicans.
ARMEY: See, here you're living with your fears and...
O'REILLY: I'm not afraid of anything, Mr. Armey. You know me.
ARMEY: The fear of a third party Tea Party is not a reality based fear.
O'REILLY: Who would you vote for right now today?
ARMEY: I think there are a lot of people out there.
O'REILLY: No, no, no. Who would you vote for right now, today, Republican?
ARMEY: The governors of Indiana and Minnesota.
O'REILLY: Pawlenty and -- so you'd vote for one of those two governors?
ARMEY: I think they are both -- I think there are other good people. We have a wealth of good available candidates if they'll do the work. But remember this: You don't just go walk on the scene and say, "Hey, look at me. I'm pretty, so give me the nomination." You earn the nomination.
O'REILLY: That's what I would do though. I would just walk out and say, "Look at me. I'm pretty."
ARMEY: You might get away with it. But look at my face. Do you think my face is going to mobilize any voters?
O'REILLY: All right. The book is "Give Us Liberty: A Tea Party Manifesto." Mr. Armey, thanks for coming in.
ARMEY: Thanks for having me. Appreciate it.
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