This is a rush transcript from "Hannity," June 22, 2009. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Now as President Obama charges full speed ahead with his plans to socialize the country, a brand-new book tells you how you can stop him. Dick Morris is the author of the brand new book just out today, "Catastrophe: How Obama, Congress, and the Special Interests are Transforming a Slump Into a Crash, Freedom Into Socialism, and a Disaster Into a Catastrophe, and How You Can Fight Back."

And he joins me now.

Dick, good to see you. Thanks.

DICK MORRIS, AUTHOR: Good to see you. Thank you.

HANNITY: Look, I've read all your books. This is by far the best — I think the best you've written, and I want to get into the details and all the specificity.

Video: Watch Sean's interview

MORRIS: I agree with that.

HANNITY: Do you agree with that?

MORRIS: No it is the best.


MORRIS: And it's running against my second best and all my others but it is.

HANNITY: OK. But the timing is ideal. I want to just follow up with what we were talking with Ambassador Bolton about, because you write about this in the book, and you know you ought to hand this transcript, this manuscript in a long time ago.

Obama sends a message, the war on terror is over.


HANNITY: All right. We're meddling. It doesn't matter which side wins in Iran.


HANNITY: You know? It's not for us to decide.


HANNITY: You know? This is chapter 6 of your book.

MORRIS: Absolutely. Well, it's so important to remember and to realize what this guy has done. He decided not to prosecute the mastermind of the Cole bombing.


MORRIS: And dropped the death penalty. He closed all the CIA interrogation centers, banned the use of waterboarding, appointed an attorney general and Justice Department officials who experted at investigating interrogators, not terrorists. He said he was going to close Guantanamo, granted the Arab television nation his first interview.

HANNITY: Now when did you hand this in? This is all in there. When did you hand this in?

MORRIS: Well, one of the nice things about working with Harper Collins is our last changes in this book took place six weeks ago.

HANNITY: All right. Well, it's very current.

MORRIS: So it very, very current.


MORRIS: One of the things that we talk about here about the war on terror concerns Sharia financing, and this is something that people need to know all about and don't know much about at all.

All of the major banks and financial institutions in the United States have Sharia compliant funds, almost all have.

HANNITY: But those that don't understand Sharia law.

MORRIS: It's Muslim law.


MORRIS: It's the — it's like kosher is for Jews.

HANNITY: This is women cannot speak to men that are not in their family or they get beaten in Saudi Arabia.

MORRIS: Right. And it's more benignly, you don't eat pork, you don't gamble, pornography, and stuff like that. But the — but what they originally did was to set up these funds so that none of the money that you were investing as a devout Muslim would go to the pork industry or something like that, but then they appointed imams who are the most reactionary pro-terrorist people in the world to be on the Sharia advisory boards.

Some of them have gotten removed because they're on the FBI terror watch list.


MORRIS: And these folks are determining how almost $1 trillion is now invested, and they're aiming it at industries and causes and organizations that help them, and they take 2.5 percent of the money and give it to their favorite charity, which is usually Hamas, and when you violate the Sharia compliance law, you have to pay 7.5 percent to expunge your sin, and they tell you where to send it.

HANNITY: Look, I use the term, and liberals get angry with me, and I'm not — I don't have anything personal against Barack Obama. I think he's unilaterally disarming this country. You know at a time when we have this problem with North Korea, he's talking about, you know, eliminating strategic defense and cutting back on defense spending.

You know I don't understand the mentality.

MORRIS: Just cut 19 interceptor missiles from Alaska.

HANNITY: Yes, well, you know what? We may have a missile being fired at Hawaii in the next couple of weeks. But you know, if you look at all the things you mentioned. You have another chapter. "United States."

Why would we give money to Hamas, a group in its charter that calls for the destruction of our ally in a democracy, Israel?

MORRIS: Exactly, and we disguise it by giving it to the pellet — to the United Nations Refugee Authority, but that is a front for Hamas. All of the Hamas leaders graduated from the U.N. schools. The U.N. facilities are used as staging areas for the Hamas terrorists, and the U.N. has become basically a pass-through for aid to Hamas.

So George Bush would send you to jail if you gave money to Hamas. We are sending $1 billion of U.S. tax money to Hamas.

HANNITY: Hamas which is fighting an Iranian proxy war against Israel and firing 7,000 missiles into Israel on a yearly basis.

MORRIS: Precisely.

HANNITY: But now we also call — we can't call it a war on terror.


HANNITY: The man-caused disaster, right?

MORRIS: That's right. That's right.

HANNITY: All right. Well, first of all, it's great. I want you to explain why — you really think it's catastrophe. You think this is catastrophic.

MORRIS: Absolutely.

HANNITY: So hold that thought. We're going to come back. We got another segment with Dick straight ahead.

More with Dick Morris. His new book just out today, "Catastrophe."


We continue now with former Clinton adviser, author of the brand new book, just out today, "Catastrophe: How Obama, Congress, and the Special Interests are Transforming a Slump Into a Crash, Freedom Into Socialism, and a Disaster Into a Catastrophe, and How You Can Fight Back."

By the way, did you ever think of a shorter title?

MORRIS: Well, I believe in putting the table of contents on the cover.

HANNITY: You know, you start out this book, and you actually go in how Obama's causing a catastrophe, and you went back to your last book, "Fleeced."

MORRIS: Right.

HANNITY: And you predicted all of this.

MORRIS: Yes. We — in February of 2008 we wrote this line, and it was published in June of `08, so it was way before the crash. We said in "Fleeced," Obama's tax increases will trigger a stock market crash and devastate the already slumping real estate industry. Selling psychology often feeds on itself and can induce a market-wide panic.

So the nearer Obama gets to power, the faster the markets are likely to dip, so look for a sharp downturn as Election Day approaches, and especially in the period between the Democratic victory and inauguration day.

Obama will doubtless blame the drop on the outgoing Bush administration, but it would have been his own tax plans that send the markets into a tizzy.

HANNITY: I hate to say that you're right. Look, Dick, it's a war on prosperity, but more — if we look a little bit more deeply.

MORRIS: It's no longer a war on poverty, it's now a war on prosperity.

HANNITY: It's a war on capitalism.

MORRIS: Exactly. And he is pursuing a European idea, an idea that is totally different from the American idea of economic growth.

HANNITY: You say a European drummer.

MORRIS: Yes, he follows the European dream, the idea that you redistribute income, that you segment society into classes, that you attenuate your economic growth in order to pass it out among everybody.

And it's a — what he's doing in the tax laws, for example, he's dividing America between taxpayers and tax eaters. He's reducing the number of taxpayers, expanding the amount they pay, expanding the number that pay no taxes, and expanding the number that get money back from the IRS.

HANNITY: What do you make of the fact that the poll numbers up until recently have shown that he remains personally popular with the American people, but there's this disparity between his policies and the person.

MORRIS: Right.

HANNITY: And now that gap seems to have narrowed if you look at Gallup and Rasmussen. What do you glean from those new numbers?

MORRIS: Well, Obama is very vulnerable. Starting on inauguration day, he lost points every single week for four months. Lost 13 points. Then there was the hoopla about the 100 days, and he gains it all back with the media hoopla about everything, but since April both Gallup and Rasmussen have him losing 13 points, and now he's back at his lowest.

And I think that the thing is that his policies are going to prolong this recession. Because they are not policies designed to end the recession. The recession was designed to pass his policies. The spending isn't the means to the end, it's the end.

HANNITY: I believe this too because if stimulus were supposed to be a jolt to the economy, Dick, it would have been front loaded.

MORRIS: Exactly.

HANNITY: And I don't think it would have been as extensive. Now we've got to take over banks and financial institutions, all the things that this audience is very familiar with, but you go a little bit more — you go a little deeper into more detail, and you believe this is a blueprint for political domination.


HANNITY: That he wants to take over — radically alter America.

MORRIS: There's a four-part strategy for political domination. First is immigration. He's going to open the borders and give everybody an easy path to citizenship and to voting.

Secondly, talk radio. He's going to squelch it, not by the fairness doctrine, but by imposing licensing requirements on stations that diversify the ownership which means they bring in liberals to own the stations.

The census. He's going to cook the data to count people that aren't there. And union representation, he's going to force people to join unions. And that's his four-part program of political domination.

HANNITY: Yes. And so — but the idea, though, in his heart and in his soul as you predicted and now you see the implementation of, the radical socialist agenda, the weakening of national defenses, his unwillingness to even speak out for freedom as we've been discussing, show a weakness with North Korea. All these things.

You think it's about what? Who is this person?

Look, I said this statement, and every time I say it people say Hannity, you're going over the line. But I think he is Bill Ayers.


HANNITY: And I'm not — no the terrorist, I think he shares the political ideology. I think he is Reverend Wright. I think he hid it well, but I think he's now implementing and proving me right.

MORRIS: I think he wants the United States to be like Germany and France. He wants us to be a socialist democracy. Now we have a chapter in here, "Is Obama a Socialist?" Well, the way you define socialism is what percent of the economy does the government control?

When he took office it was 33 percent. After the stimulus package, it's 40 percent. After health care reform passes, it will be 46 percent. And Germany is 47 percent.


MORRIS: So — and his strategy for achieving socialism is in every Kentucky Derby race. He has one horse that the government owns that's on steroids and nobody else can take the steroids, so GM is subsidized and it beats out Ford.

The government paid health care system is subsidized and it beats out everybody else. The banks that he's basically taking over will get federal aid and the others won't. And the idea is that the competitive marketplace awards the victory to the government subsidized entity that then takes over the economy.

HANNITY: Well, look, we're really only beginning to touch on the substance.

MORRIS: There's so much more in here. We need to.

HANNITY: Well, let's do it. It's now in the top 10 in Amazon, as non-fiction, and I'm not surprised, and today you're just launching the book, it's in bookstores everywhere.

I think you're right. I think history will prove — will be very kind to George W. Bush, and it will prove that we conservatives that warned about him were right.

MORRIS: Richard Nixon once said.

HANNITY: I don't want that to be the case.

MORRIS: Richard Nixon once said history is written by liberals.


HANNITY: All right. Checkmate. I give up. You're probably right. Thanks, Dick. Congratulations on the new book.

MORRIS: Thank you. Appreciate it.

HANNITY: And it's in bookstores everywhere, Amazon.com, and I have it on my Web site, by the way, Hannity.com.

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