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Karl Rove: Economy No. 1 Issue in 2012

This is a RUSH transcript from "The O'Reilly Factor," November 14, 2011. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: In the "Impact" segment tonight: There is a reshuffling going on among those running for president on the Republican side. A bunch of new polls show Mitt Romney and Newt Gingrich gaining strength while Herman Cain has been damaged a bit, and Rick Perry continues to struggle.

Here now to sort it all out, Fox News analyst Karl Rove, who joins us from Phoenix, Arizona. So Mr. Rove, as far as the GOP is concerned, what's the most important thing that you've seen in the last few days?

KARL ROVE, FOX NEWS ANALYST: I think the most important thing has nothing to do with the Republican field per se and that is the CBS News poll that said the president's approval on the economy, which is going to be the no. 1 issue dominating the next 13 months, that his approval rating was 34 percent favorable, 60 percent unfavorable. And among those that felt strongly about it, 41 percent of all voters felt strongly disapproving of the president. That's a pretty strong number.

O'REILLY: OK. Now you know, and we have Brit Hume coming up behind you, that part of this "Occupy Wall Street" movement was to set a scenario that it isn't the president's fault that the economy is faltering. That it's the fault of Wall Street and the bankers and the greedy one-percenters who are oppressing everyone else. It's not Mr. Obama's fault. He wants to change that. That's his theme. That's what is going to go forward and the "Occupiers" have now planted that seed in a very explicit way. You think that has any chance of working?

ROVE: Well, it has a chance of helping, but I don't think ultimately it's going to work because first of all, people have watched the president with a Democrat Congress in '09 and '10 get everything he wanted to do. They listened to his promises about what the stimulus would do, about what health care reform would do, about all of these budget increases that he was fighting for, and all of which he got. What Dodd-Frank would do and so forth. And the economy didn't improve like he said it would. And now what is the president asking for that -- that Americans think will actually make a difference? This new stimulus bill has not drawn strong support from the American people; it's drawn anemic support, if that. So no, I don't think at the end of the day it is helpful for the president.

O'REILLY: All right, now, on the other side, Herman Cain has lost a little steam. Newt Gingrich picks that up. You see, whenever a conservative candidate gets into a little bit of trouble or does poorly then a little portion of -- of that support -- of their support goes to another conservative candidate. We've been seeing that since the rise of Michele Bachmann last summer.

Tonight, Greta Van Susteren has an interview with Mrs. Cain, and I'm looking forward to seeing that, who is going to stick up for her husband and going to say, listen, this is all politics and there is nothing to it, not the man I know; that kind of a thing.

If Herman Cain can ride out the next week without these people harpooning him in a way that really matters -- I mean, they can't just repeat the same stuff over and over and over, they're going to have to advance the story. Then I -- I think Herman Cain can come back a little bit. Does that impact on Newt Gingrich? Because Mitt Romney pretty much stays the same in all the polls.

ROVE: Well first of all, a slight disagreement. I think Mitt Romney has moved ahead slightly. Newt Gingrich has moved up some. But in fact, I think it was NBC-Wall Street Journal each of them had moved up five points.

I do think this about Mr. Cain. We -- the story -- if he can ride it out for a week the topic may turn elsewhere, but substantial damage will have been done to his prospects because the doubts will remain, the women will linger in the background, the object of you know, the thought of four women stepping forward and saying things in the general election that they were unwilling to say in the primary will still be there. The thing that could end it and begin to bend his curve back up is to get third-party evidence that what he is saying is true. And his wife, with all due respect to her, is not going to be able to provide third-party evidence. The reports that were done by the National Restaurant Association at the time of the two original incidents that the American people learned about, that might be -- the release of those if they did exonerate him would begin to bend the curve up.

Otherwise, I think what we are going to see is a steady albeit small but significant and continuing decline in his status as people mull over the prospect of a general election with Herman Cain as the head of the ticket and -- and these four women potentially ready to step forward and say in excruciating detail what they think happened.

O'REILLY: Yes, because they are always, sure, but they are being run by opponents of the Republican Party and we all know that now. But you're right, I mean, the specter of them you know raising this and continuing to raise it.

Now, this is the nasty part of the American political scene where anybody at any time can be attacked ad hominem, destroyed, harmed or whatever it may be, put on the defensive. Was it always that way in American politics? I mean, you're a student of history, I'm a student history, it got really nasty even back to John Adams days.

ROVE: Sure, John Adams -- my favorite nasty campaign is John Adams vs. Thomas Jefferson.

O'REILLY: Yes, but the difference now is…

ROVE: Yes.

O'REILLY: …the difference now is the Internet and the cables and it's all over the place.

ROVE: Right, the immediacy -- the immediacy of it, which goes back to the original mistake that the Cain campaign made. They knew for 10 days or two weeks that this was coming and failed to get ready.

O'REILLY: No, they didn't pre-empt it obviously. I don't think they knew.

ROVE: No and -- well, but that's the point. They should have known. The first thing to do is find out the facts. Get an attorney and have him go sit down with the attorney for the National Restaurant Association and say what happened? We have been talked to, The New York Times has talked with us, reporters are talking to us about two women who supposedly with the National Restaurant Association. Herman can't remember what happened. Tell us what happened to the extent that you are allowed under the agreement. And they would have at least then been able to prepare a better response. Because remember the difficulty here is the changing -- the changing responses. There is nothing -- this is just a smear by our political opponents. I don't remember anything about it. Now I remember something about it. It wasn't a settlement. It was an agreement. You know, I couldn't remember what she said -- what I said to her. Now I can remember. All these things are what eat away at people's confidence ultimately in the candidate.

O'REILLY: It erodes, right. All right. Mr. Rove, as always, thanks very much.

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