This is a rush transcript from "The O'Reilly Factor," October 9, 2007. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: We are pleased to have with us the former Mexican President, Vicente Fox, who held that position for six years, ending last year. President Fox is the author of the brand new book, "Revolution of Hope".

Thanks for coming in here.

VICENTE FOX, FORMER PRESIDENT, MEXICO: Thank you for that intro. It's quite aggressive.

O'REILLY: Yes, well that is our program.

FOX: We should talk about it.

O'REILLY: No spin zone. Let's take them one by one. Poverty. You know, you got the oil, you got the beautiful coastlines, you have a third of the population of the USA. Why can't you have a first world economy that supports your own people?

FOX: Well, first of all, because we have 72 years with a lousy government, corrupt government controlling the country.

O'REILLY: Does that include your administration?

FOX: No, of course not, 72 years of the PRI.

Number two, because in Mexico, we're working hard to try to overcome poverty, create jobs, and do our best for that purpose. It's our obligations. And we need those support for our people. No doubt.

O'REILLY: OK, but it's the year 2007. You were in for six years. And you got 60 percent of your people dropping out of high school? I mean, you're never going to get a good economy.

FOX: Not true. Not true.

O'REILLY: Sixty percent.

FOX: Ninety-four percent of kids today complete high school and complete basic school. 94 percent today. And improving and moving upwards. So the job is being accomplished step-by-step. It's not...

O'REILLY: All right, well, maybe there's a difference...

FOX: ...part of the problem.

O'REILLY: ...between your school system and ours. But the statistic is 60 percent don't have what you would equivolize here as a high school education.

But be that as it may, when you have 50 percent living below the poverty line, you know, you know how poor it is. I mean, you're going to come to the United States. You're going to come here.

FOX: OK. Poverty line is established by United Nations and World Bank.

O'REILLY: Correct.

FOX: Two dollars a day per capital. 18 percent of Mexican families are under the $2 a day.

O'REILLY: That's appalling.

FOX: And only four percent are under the $1 a day. It's not much. I know.

O'REILLY: Come on.

FOX: But it's difficult to have that poverty. We're trying hard to get...

O'REILLY: But you're not succeeding. That's — Mr. President, I'm not trying to give you a hard time. But the reason millions of what Mexicans are coming here isn't because they like L.A. or Miami. It's because they can make money here. And they can't make money there.

FOX: Of course. Of course.

O'REILLY: And you're not stopping them.

FOX: Because this economy needs them.

O'REILLY: That's true.

FOX: And we are not the ones to stop them as this...

O'REILLY: Well, wait a minute, wait a minute, wait a minute. If they're breaking our laws...

FOX: They work here.


FOX: They work here. Somebody hires them. They pay them here.

O'REILLY: Right.

FOX: And they are good, decent people ready to work.

O'REILLY: Most of them are...

FOX: And ready to progress.

O'REILLY: But don't you have an obligation to stop illegal immigration to the United States? Don't you have an obligation to do that?

FOX: Yes, yes. We do it everyday...

O'REILLY: Well, why haven't you done that?

FOX: Well, I'm trying to build up the jobs. Why my grandfather came from United States being born in Cincinnati, Ohio down to Mexico, migrating, without a penny in his pocket trying to make his American dream. I mean, that's human nature.

O'REILLY: But look...

FOX: And we all try to improve ourselves, and of course, if you earn ten times more salaries here then Mexico people tend...

O'REILLY: Explain this to me.

FOX: to tries to come to here...

O'REILLY: On the southern border with Guatemala, you got the Mexican army down there, OK? And it's hard to get through there. But on the northern border, you let anybody who wants to come el norte come. You don't stop them.

FOX: You see, at the end, I don't see where you get your information. That is not true.

O'REILLY: Well, according to Human Rights Watch — and do you know the group...

FOX: Two-hundred-and-fifty-thousand Central Americans cross the Mexican border.


FOX: And we shelter them. And we send them back to...

O'REILLY: That's not what — do you know what the organization Sin Fronteras is?

FOX: I don't know who they are.

O'REILLY: That's without borders. Human Rights Watch?

FOX: Truth information.

O'REILLY: All right.

FOX: True information.

O'REILLY: But the fact is that you haven't been able to stop...

FOX: Right.

O'REILLY: ...tens of millions of your citizens from coming to the United States.

FOX: No, not tens of millions. Not tens of millions.

O'REILLY: Well, the estimate between 12 and 20. And about 75 percent of Mexicans.

FOX: About 300,000 a year, which is what this economy needs.

O'REILLY: But you don't try to stop them.

FOX: I mean...

O'REILLY: You don't try to stop them.

FOX: ...we are not going to build a pressure in Mexico. We're not building walls to retain our people. We're not Cuba. We're not Communists.

O'REILLY: So you think it's OK for them to come undocumented?

FOX: Of course, it's OK for them to look for a better future for their family.

O'REILLY: You think — I mean, I want to get this clear.

FOX: Like my grandfather did. Like...

O'REILLY: OK, but your grandfather — look, I don't know what your grandfather did, but there is law. There's international law.

FOX: Yes.

O'REILLY: And Mexican citizens by the millions are violating United States law. And you're saying it's fine.

FOX: Yes, because you hire them here.

O'REILLY: Is it that — we'll take care of our guys, we'll take care of our guys...

FOX: And we take care of ours.

O'REILLY: But you're not trying to stop them.

FOX: They're bringing them. They are hardworking people doing their best.

O'REILLY: They're violating our law. What if millions of Americans were violating Mexico's laws?

FOX: You're responsible for applying the law yourself.

O'REILLY: No, I'm a — all I am is an analyst.

FOX: What you cause is irritation. And this is the xenophobics I'm referring to. It's people retaining people. That's not the way to handle problems. It's not up to the Democratic standards of this nation. It's not up to the...

O'REILLY: So you want an open border then? You want an open border? You want every Mexican who wants to come here?

FOX: Absolutely not.

O'REILLY: Well, you're not stopping them. You're not stopping them. You're letting them come here, violating our laws.

FOX: Let's take sensitive intelligent decisions. I pledge Congress to deal with immigration...

O'REILLY: But you didn't.

FOX: ...and let's bring order to immigration. Let's bring legality to the issue. Let's have a framework through which this economy will benefit from those workers, because you need them to...

O'REILLY: That's right. Do it in an orderly manner. Look, no American wants...

FOX: That's my first...

O'REILLY: ...most Americans...

FOX: ...(INAUDIBLE) with that.

O'REILLY: OK, most Americans don't want the wall, Mr. President. They don't want the wall, but we have to have the wall...

FOX: I'm sure they don't want it.

O'REILLY: ...because the Mexican government won't stop the chaos. They won't do it.

FOX: We enjoy much of this nation of the free, this nation of globalization, the champion of Democracy, the leader in the world of opening markets. I mean, isolating itself...

O'REILLY: Not isolating itself. It's protecting ourselves.

FOX: They call it protecting...

O'REILLY: Protecting ourselves.

FOX: ...I call it isolation.

O'REILLY: Yes, 20 million people here, and we don't know who they are. We have to protect ourselves. We have to build a wall, because your government wouldn't stop it. That's why we have to do it.

FOX: What about Central Americans? What about Asians? This land is the land of opportunity. People come here because...

O'REILLY: They can't come here undocumented.

FOX: ...it's a great nation. And I love this nation. And I love what this nation has been. But this nation needs, needs to go back to its basics, its fundamentals, and to deal with issues and solve them. Every day I hear tomorrow, tomorrow, manana, manana. Maybe after the election...

O'REILLY: Look, I agree with you 100 percent. I mean, I agree with you. I think you and I could have solved this problem. But I — if I were President Bush, I would have demanded, demanded that you stop or help stop that immigration flow.

And then we can — once we stop it, then we can do an orderly way. All right, I'm going to hold — I want to talk a lot more. We have a lot more to talk about. I want to talk about this narcotics thing, because I know you hate that.


O'REILLY: And I hate it, too. It's terrible. And it's hurting Mexican people, too.

FOX: So much.

O'REILLY: We're going to talk about that. And we'll talk about the president's excellent book as we continue.


O'REILLY: Continuing now with Vicente Fox, who was president of Mexico for six years. He is the author of the brand new and excellent book, "Revolution of Hope."

You said to the Associated Press, "the xenophobics, the racists, those who feel they are a superior race, they are deciding the future of this nation, the United States." What you mean by that?

FOX: Minutemen, Minutemen, (INAUDIBLE), aggressive, violent, xenophobic...

O'REILLY: The Minutemen on the border?

FOX: Yes.

O'REILLY: I'm not aware of any violence they've done.

FOX: I mean, that's my claim. I mean, we must act with intelligence. We must work on this framework, so that immigration becomes an asset to both nations. Believe me, what — just the Mayor Bloomberg said here in New York, that this city would be stopped, totally stopped if it were not by the immigrants working here.

O'REILLY: Every American understands that it's partially the fault of the United States that this is so out of control, because the United States looked the other way after the Reagan amnesty and allowed people to come over.

But it's partially the fault of the Mexican government for allowing it to happen. And the reason is because the dollars that go back to Mexico are your second-largest industry.

But I'm interested about the racist situation. I don't think the Minutemen are racist. I don't know of any violence. I don't think they're racist. I think what they're doing is protesting. They're protesting.

70 percent of Americans want the illegal immigration thing brought under control. The Minutemen go out there. And they are protesting. They say, we have to stop this. I don't see that as racist.

FOX: I see it as xenophobic. I see it violent. I see that — that fear is dominating the scene here in the United States. And that we must deal with that problem. Let's move now into drugs.

O'REILLY: OK. One of the reasons that I want the fence, and I'm not a big fence guy, I was more of a National Guard guy, is because I want to stop the massive amounts of drugs coming from Mexico that originate mostly in Colombia.

With the fence, it's going to make it a lot harder for the narcotrafficantes to get their loads across.

Now Nueva Laredo, Tijuana, other cities like that, are being run by drug dealers because they are ruthless and will kill anyone in their way. You were in office for six years. You weren't able to control it. Why not?

FOX: Well, first, who consumes that drug?

O'REILLY: We do. The Americans do.


O'REILLY: All right.

FOX: Who pays for that drug?

O'REILLY: The Americans buy it.

FOX: Who transports that drug when it crosses the border?

O'REILLY: Americans do.


O'REILLY: All right. All of that is true.

FOX: So it's a joing — It's a joint responsibility.

O'REILLY: Absolutely.

FOX: We have to work together to solve this huge problem that is hurting our kids in Mexico, that is hurting the kids here in the United States. And again, we are working — intensely dedicating our efforts, not only Mexico.

O'REILLY: I know Calderon is working, but is it enough for you, a president who was served for six years to say we're trying and then, all of a sudden, we're supposed to accept that. There's a difference between trying and success. There's a difference between trying and success.

FOX: What about this side of the border? What about the success here?

O'REILLY: The success here...

FOX: I mean, the drug war now (INAUDIBLE) Mexico will be...


FOX: ...liberated of this ego, of these...

O'REILLY: You have a problem in your country now.

FOX: ...criminal gangs.

O'REILLY: You have a problem in your country now. You have a problem with violence and addiction and all of that. But the Mexican army and the Mexican police force is so corrupt, corrupted by these narcotrafficantes...

FOX: But how? How freely you speak about everybody...


FOX: ...being corrupt and nobody working. I mean, those judgments do not take us to understand each other.

O'REILLY: But they're stats. Reality is reality.

FOX: We will speak with facts, with the truth. And of course, there is corruption. There's corruption here.

O'REILLY: Not at your level.

FOX: There's (INAUDIBLE) here.

O'REILLY: Not at your level. It isn't at your — at your level, the drug trafficking and the drug czars...

FOX: All the money collected from drugs...

O'REILLY: ...who control these cities — it's nothing like that here.

FOX: ...here in this country is legal?

O'REILLY: No, we have a problem here, but it's nothing like Mexico.

FOX: But if you solve the problem, we have solved our problems because...

O'REILLY: Well, right. If everybody in the United States didn't use drugs, you wouldn't — there wouldn't be any market. But that's a pie in the sly. Look, you had an archbishop shot down by drug dealers. I mean, come on, that's out of control, Mr. President.

FOX: That's not proven yet.

O'REILLY: That's not proven yet? Come on, who do you think did it? Somebody in the pew?

FOX: You want to make your point. All right, I mean, drugs is a problem, a big, big problem very unfortunately...


FOX: ...because of this huge market.

O'REILLY: But if you keep blaming us, you're never going to solve it.

FOX: Mexico moved from just being a placed of transit. Now there's drugs being produced in Mexico, as well as in the States. And the worst of it is that our kids now are consuming...

O'REILLY: That's right.

FOX: ...drugs. And they're consuming drugs because we've been successful in reducing the drugs crossing into the United States.

O'REILLY: But you oppose the fence.

FOX: Drug has been given away to Mexico.

O'REILLY: You oppose the fence. And the fence would help Mexico...

FOX: No...please, please.

O'REILLY: ...because it would take these clowns off the border. They're not going to get through the fence.

FOX: With that money, we could build the jobs that we're needing for our people back there. And we could invest it for that purpose in the States and in Mexico.

O'REILLY: All right, but you have enough oil money where you can make any infrastructure investment you want in Mexico. So there.

FOX: Well, I wish we had that. That amount.

O'REILLY: Yes, you've got an immense amount of money...

FOX: We're trying hard.

O'REILLY: All right.

FOX: We're doing our best.

O'REILLY: We're going to carry the president over one more. And I'm going to ask you about your personal story here, because you do. Your — the president's grandfather came from Cincinnati...

FOX: Yes.

O'REILLY: ...and went to Mexico.

FOX: As a migrant.

O'REILLY: Right. And we'll talk about that.


O'REILLY: All right, we are talking with the former president of Mexico, Vicente Fox, who's new book is called "Resolution of Hope." $25 for your book, all right? What are people going to learn? Why should they buy your book?

FOX: You know, I was so enjoyed when we were not on the stage, talking with you. And that's what you get in that book. What life, relationship was with leaders, for instance.

O'REILLY: With George Bush?

FOX: Behind the scenes.

O'REILLY: Right.

FOX: Number two, a biography. That is interesting. I mean, imagine my grandfather back 1895, taking a horse, riding down all the way to Mexico.

O'REILLY: Cincinnati to Mexico. That was some ride.

FOX: Cincinnati — yes, to one Guanajata. He decided to settle there...

O'REILLY: Right.

FOX: ...and buy a farm. And it's where we've been for five generations, but he was born the very same day that Abraham Lincoln was shot to death, the 14th of April...

O'REILLY: Interesting.

FOX: ...1865.

He took this — values this dreams, this American dream of this land down to Mexico. And that's where I nourish myself and why I think the way I do now. That book also tells a lot of anecdotes, talks about Latin America. It talks about leaders. Talks about the immigration problem in the States.

O'REILLY: Right.

FOX: And talks about my feelings to this nation. I love this nation. I'm part of this nation.

O'REILLY: I believe that.

FOX: And I like to convey my feelings, my emotions, my experience, the information I have to public use, public opinion...

O'REILLY: Where did President Bush go wrong here? I mean, he was very, very high in the polls after 9/11. And now, he's low in the polls. Where do you think he went wrong?

FOX: You said that. I'm not saying that he went wrong. He's trying hard.

O'REILLY: All right. Well, just in the polls. Again, I'm a stat man. I go with the stats. You know, he's up in the 80s, favorability. Now he's down in the 30s. What do you think happened there?

FOX: Well, my point of view with all respects — there's too much concentration on the subject of terrorism. And you have even built this fear.

O'REILLY: Do you think the fear is unfounded?

FOX: No, I think it's founded, but you have to live and this life goes on. You cannot concentrate all of your efforts just on fear and on defense and on terrorism.

O'REILLY: So you think he was too tunnel vision?

FOX: (INAUDIBLE) people need (INAUDIBLE), people needs jobs, people like...

O'REILLY: But this economy in the United States is outstanding. It's very resilient and very, very strong.

FOX: Oh — it's very — It's very good. I wish we would have the same. It's very good.

O'REILLY: So do I. I mean, we all wish Mexico would.

FOX: But part of that is by Mexico, the support of Mexicans here. And number two, let me tell you, we buy from the United States over $200 billion U.S. dollars imports...

O'REILLY: Yes, but you know, there's a trade deficit.

FOX: Yes, that's more.

O'REILLY: There's a trade deficit. We give you more than you give us.

FOX: Yes, that is more than we buy here than what — Italy, France, Germany, Britain, do together.

O'REILLY: Listen, there's no a question.

FOX: That accounts of millions of jobs.

O'REILLY: But we want you — we want you to be an equal partner.

FOX: Jobs in Mexico sustains here in the United States...

O'REILLY: Right, but we want you to be an equal partner. We want you to have a first world economy.

FOX: Oh...

O'REILLY: And I think you...

FOX: Hey, that's smart.

O'REILLY: You have to improve the education system and wipe out the corruption.

FOX: (INAUDIBLE), not complaining, not provoking violence is the way we are going to do that.

O'REILLY: Well, you got to do it yourself, though. We could..

FOX: (INAUDIBLE) with solidarity, with understanding like Europe does.

O'REILLY: I understand you.

FOX: That's why the union in Europe is so strong.

O'REILLY: But I want more action on the part of the Mexican government to stop illegal aliens, stop illegal drugs, and educate your own folks.

FOX: Let's work together on that — let's work — you should be my ally.

O'REILLY: I am your ally.

FOX: OK, let's both of us...

O'REILLY: I only want the best.

FOX: ...ask Congress to solve this situation, to come up with a framework.

O'REILLY: Listen, we pound those pinheads in Washington every night here. OK? So...

FOX: So you said that.

O'REILLY: That's right. All right, President Fox. And we really appreciate you coming in. The book again is "Resolution of Hope." It was a pleasure to meet you and talk with you, sir.

FOX: Muchas gracias. You're invited to Mexico.

O'REILLY: All right, but I think I'll care the children if I come down there, but I will come.


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