This is a rush transcript from "Glenn Beck," March 30, 2009. This copy may not be in its final form and may be updated.

BECK: OK. Hang on — hang on here for just a second, because I want to talk about a couple of other things. The similarities between what's going on today and what happened in the 1930s under FDR are striking and alarming.

With me now is Burt Folsom. He is the author of "New Deal or Raw Deal: How FDR's Economic Legacy has Damaged America."

Look, America, I have to tell you something — and Burt, I read your book, and I've read several other books of this time period from really, 1910 to 1950, and every bad move that we could make as a country, we made over that period of time and we're making all of them right now in this collapsed period of time. Would you agree or disagree?

BURTON FOLSOM, JR., AUTHOR, "NEW DEAL OR RAW DEAL": I would agree. It's not reset. In some ways, it's not reallocate. It's redistribute. And we are going to see wealth redistributed and we will never be able to hit that reset button again if we're not careful.

BECK: OK. Why do say — give me — give me some of the parallels from what FDR did and what's happening now?

FOLSOM: Sure. One of the parallels is we had price fixing in the 1930s. We went quickly to price fixing. And when we had price fixing, we had penalties. Of course, once you fix prices, you have to give penalties for people who don't charge the right price.

BECK: Like for instance, because we're talking about the car companies now.

FOLSOM: Right.

BECK: Ford was a guy who was overpaying people. He wasn't paying — you know, they set a minimum wage.


BECK: . and he said, "I'm not paying minimum wage," because he was paying way...

FOLSOM: He was paying more.

BECK: ...way over. And he said, "This is not right. You can't do this constitutionally," right?

FOLSOM: Exactly. He said, "In order to live up to your standards that you're setting, we have to live down to them."

BECK: Right. And so, what did the government tried to do?

FOLSOM: Well, when Ford wouldn't go along with the program, they wouldn't let him bid on government contracts, at least bid successfully.

BECK: Right. He actually bid but he'd bid way below everybody else.

FOLSOM: Exactly. They had a contract for 500 trucks for the Civilian Conservation Corps, which is a federal agency. Ford's bid was $169,000 below that of the next bidder. Roosevelt said, "We refuse to take your bid."

BECK: Then he said, we can't afford to take that?

FOLSOM: "We refused to take it because you're not going along with our program."

BECK: Right. So../

FOLSOM: So, the taxpayers pay $169,000 more for vehicles.

BECK: In the 1930s.

FOLSOM: In the 1930s, right.

BECK: OK. So, here's what is striking to me, is that FDR went after individuals..

FOLSOM: Right.

BECK: . not just — just exactly like AIG.

FOLSOM: Exactly.

BECK: . not just the business, but he would target specific individuals, and when he couldn't win in court, he'd smear them in the press.

FOLSOM: In the press, and in some cases, an IRS investigation. The tax code would be used for those purposes.

BECK: Gee, I mean, who would use the IRS as a weapon to go after enemies? Oh, I can't imagine.

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FOLSOM: The previous secretary of treasury had cut the tax rates to 24 percent. Roosevelt got them up to 79 percent and did an IRS investigation of the secretary of treasury that had them back down to 24 percent.

BECK: And didn't the Supreme Court say you can't, because — he, at one point, wanted to do 100 percent tax over $25,000.

FOLSOM: We had that. Roosevelt instituted that as an executive order, a 100 percent tax on all income over $25,000, April 27, 1907, a day to remember.

BECK: Did you do any of the history of the Great Depression, David? Did you read any — I mean, did you — was any — we are so conditioned .

BUCKNER: We're replicating.

BECK: Right.

BUCKNER: We're replicating much of what has occurred. We're replicating.

BECK: But most people who are watching right now will say, "Oh, well, that's good, the New Deal worked"?

BUCKNER: No. What they're not recognizing the New Deal might have actually elongated the process. Now, historians will argue day in and day out whether that process was caused by or simply elongated, but the reality of it is, when the government became involved in the markets — and you know I'm free market guy — I suggest that when the governments became and they started mandated equilibrium or legislating it, it failed.

BECK: OK. So, help me — help me on this, because it's not enough to be able to say to people, oh, you know what, we should just let them fail. That's not enough, because people will say, well, wait a minute, that's really bad and spooky.

BUCKNER: Even if the government backs off and simply goes to regulation, just to regulate, become the referee again, rather than going in and being the player as well as the referee, that would be a better position, that's an OK position. That's not a purity free market but at least it sets standards for rules and laws that can be adhered to and understood.

BECK: How did we get out of the — World War II pulled us out.

FOLSOM: In a sense it did, Glenn, but the problem is, we are transferring unemployment to overseas, and taking unemployed people, putting them in the military and sending them overseas. What we had to do is build confidence in business in order to .

BECK: And when did that happen?

FOLSOM: When Roosevelt died. I mean, I regret to say that. But the businessmen began to say, I think it's time to invest, at the point when instability that was perpetuated by Franklin Roosevelt left to sink.

BECK: So, for anybody who doesn't understand this, when you say, they didn't trust, it's exactly — as a small business owner, that's exactly how I feel. I don't know what they're going to do to me next.

FOLSOM: Exactly.

BECK: I don't know if they're going to try to come after me, if they're going to raise my taxes, if all of a sudden I've got to pay a new carbon tax or I'm an unpopular — so, you don't know.


BECK: You're not willing to spend. You're not willing to invest.

BUCKNER: But it's not only the small businesses like you and I. I have a $300 billion corporation as a client of mine and the first thing they told, we're going to sit back, we're not going to spend anything until the economy gets better.

BECK: What happens — what happens when a huge corporation like that says that?

BUCKNER: They hold. They hold.

BECK: So what happens?

BUCKNER: The economy seizes up. It freezes. It won't move. And when they're telling me that they're going to wait until the economy gets better and say who's going to create a better economy, as if this administration or any administration.

BECK: What is their choice? You're advising them, what is their choice?

BUCKNER: Their choice is to recognize that the fundamentals — and they got to get back to the principles of what business is, do they have a good business model? Do they sell good products? Are they in demand?

The fundamentals, if they are secure, holding and simply creating an environment which nobody can buy their products and nobody can produce the products is not the way to go. They got to start producing and distributing and engaging in the process.

BECK: OK. Guys, thank you very much. And Burt, I think you're going to be part of a special that we're doing on Friday.


BECK: You are?

FOLSOM: Thank you, Glenn.

BECK: Good, yes.

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