Updated

This is a RUSH transcript from "The O'Reilly Factor," June 1, 2010. This copy may not be in its final form and may be updated.

Watch "The O'Reilly Factor" weeknights at 8 p.m. and 11 p.m. ET!

BILL O'REILLY, HOST: In the "Weekdays with Bernie" segment tonight: a nasty controversy in Wasilla, Alaska. As we reported last week, writer Joe McGinniss has moved in literally next door to Governor Palin. McGinniss is writing a book on her on the heels of penning an anti-Palin article for Portfolio magazine. Sarah Palin, of course, is outraged and has made her displeasure known.

(BEGIN VIDEO CLIP)

SARAH PALIN, FORMER GOVERNOR OF ALASKA: He can do what he wants to do. However, I think any mom in my position, if they put themselves in my shoes, that they would feel the same way and that is…

GLENN BECK, FOX NEWS ANCHOR: Of course they would.

PALIN: …you know, do your thing. Do your thing…

BECK: Of course they would.

PALIN: But keep your distance. And you better leave my kids alone.

(END VIDEO CLIP)

O'REILLY: Well, after hearing that, McGinniss is fighting back.

(BEGIN VIDEO CLIP, "TODAY" SHOW)

JOE MCGINNISS, AUTHOR: Sarah hysterically puts up this Facebook page with all sorts of ugly innuendo, which frankly, you know, is revolting the things that she has caused people to say about me. And I think it's probably a lesson for the American people of the power Palin has to incite hatred and her willingness and readiness to do it. She has pushed a button and unleashed the hounds of hell, and now they're out there slobbering and barking and growling. And that's the same kind of tactic — and I'm not calling her a Nazi — but that that's the same kind of tactic that the Nazi troopers used in Germany in the '30s.

(END VIDEO CLIP)

O'REILLY: All right. Joining us now from Miami, Bernie Goldberg, the purveyor of BernardGoldberg.com, a very fine current events website.

So this is a tough one to cover in any kind of a fair and balanced way without taking a moral position. Legally, McGinniss can live where he wants.

Click here to watch the segment!

BERNARD GOLDBERG, FOX NEWS CONTRIBUTOR: Right.

O'REILLY: But McGinniss doesn't like Sarah Palin. We know that. In fact, based upon that interview, and I understand that the man is fearful of what's happening to him. Based upon that interview, I would say he adamantly dislikes the woman, and he's 15 feet away from her and her family.

GOLDBERG: Right.

O'REILLY: Morally, to me, unacceptable. What say you?

GOLDBERG: Well, it's an interesting way you phrase that. I would say that it isn't a moral issue, or an ethical issue, or a legal issue. Joe McGinniss can legally, morally and ethically live where he wants. It's just wrong to live where he wants. Now look…

O'REILLY: But why is it wrong if it's not immoral or unethical or illegal?

GOLDBERG: Because…

O'REILLY: Why is it wrong?

GOLDBERG: Because it's creepy and because even famous celebrity/politicians have a right to a zone of privacy. The word I would use to describe it is it's unnecessary. He just simply didn't have to do this.

O'REILLY: Well, it's provocative and brings him a lot of attention. But let me make my argument that it's immoral, because this is why — how we're covering the story on "The Factor". That's how we're covering it. I don't know McGinniss, OK? He wrote a very good book about Nixon way, way, way back.

GOLDBERG: Right.

O'REILLY: The Portfolio article is, you know, we don't like Palin, she a dunderhead, that kind of thing. But he is intruding upon her life and the life of her family. He's doing that that without a doubt by his presence there, a malevolent presence for them, because they know he's going to do — write bad things about them.

GOLDBERG: Right.

O'REILLY: He's intruding upon them, all right? Their pursuit of happiness, which is guaranteed by the Constitution, basically has dropped 100 percent because he's there. And it's — and you use the word creepy. You know, I'm in a public eye. And if there's somebody who doesn't like me around my home, I call the police.

GOLDBERG: Yes.

O'REILLY: I call the police.

GOLDBERG: Right.

O'REILLY: Go ahead.

GOLDBERG: Well, it's — first of all, she has no constitutional right to the pursuit of happiness as it pertains to Joe McGinniss living next door. But look, there are going to be people out there — and I want to get this on the record, who are going to say well, you know, Bernie's on Fox. She's on Fox. So, you know, he's going to take her side. Let me just say for the record, I have defended her on this network and I have criticized her on this network. In this case, I just happen to think she's right, because I'm looking at it a different way.

I'm looking at it this way. I worked at CBS News for 28 years. Let's say I decided to write a book about Dan Rather, Bob Schieffer, Diane Sawyer, who I worked with, or Katie Couric, let's say. And I decided to move right next door to them. And let's say the book, there's a great chance the book is going to be a smackdown negative book, because you know the McGinniss book is going to be that. How do you think they would take it? They wouldn't like it one bit. And Sarah Palin has every right not to like it one bit. I just don't think Joe McGinniss is committing any journalistic breach of ethics or morality. Or certainly he's not violating the law.

O'REILLY: I do and I…

GOLDBERG: It's just that he doesn't have to do this.

O'REILLY: If I were his publisher, I would tell him not to do it. I don't think it's the right thing to do.

GOLDBERG: And if you were his publicist, what would you tell him then?

O'REILLY: Well, I wouldn't be a publicist because — not — with all due respect to all the publicists, you know, that's not what I do. But I would be an editor and I would say, look…

GOLDBERG: But that's…

O'REILLY: …McGinniss, you can go to Alaska. And you can stay in the no tell motel if you want, but you're not going to get that close, because it's going to come back on you. One other thing, the Wasilla, Alaska, newspaper actually did a bad thing…

GOLDBERG: Yes.

O'REILLY: …in defense of Sarah Palin by writing an editorial…

GOLDBERG: Right.

O'REILLY: …that said, hey, we have gun law here that allows protection, which is a thinly veiled threat against McGinniss. That's not good. We don't do that.

GOLDBERG: Yes, I think everybody…

O'REILLY: Right.

GOLDBERG: I think everybody needs to bring it down a few notches.

O'REILLY: Right.

GOLDBERG: Palin suggests that Joe McGinniss is a Peeping Tom at best and maybe worse, looking into her daughter's bedroom. Then McGinniss responds with this hounds of hell, you know, over the top rhetoric. And the newspaper talks about how deadly force can be used. Look, I have said before on this program, Bill, I route for chaos. This is great entertainment, but bring it down a few notches.

O'REILLY: Yes, enough's enough.

GOLDBERG: Take a chill pill. This is crazy.

O'REILLY: McGinniss ought to get out of there if he has any class at all. And look, Joe, I don't know you. If you have one scintilla of class, you'll get out of there. That's not right what you're doing.

All right. Bernie, thanks very much.