This is a rush transcript from "Hannity," August 22, 2011. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Joining me now with analysis of all the breaking developments is the host of "War Stories" right here on the Fox News Channel, Lt. Colonel Oliver North. Colonel, welcome back to the program.

OLIVER NORTH, HOST, "WAR STORIES": Good to be with you, Sean. Although it is not looking quite as good as it did 24 hours ago. It is still a great day to know that this guy is on his way out, at least.

HANNITY: Yes, I agree. But I'm concerned. Because if you remember during the Arab spring, which by the way is responsible for our economic collapse in the country according to the Obama administration. But all the predictions were, this new democracy is emerging, and it seems that as bad as Mubarak was, that it seems things are going to get rather worse. So, the question is obvious right now, you know, what are the president's plans? He did not layout an economic plan. What are the plans for the short term, what are his plans for the long term?

NORTH: Well, clearly from what he said today, he doesn't have one. And it's the case of irrational exuberance talking about all of this Arab spring business. You know, on the 22nd of March, while he was travelling in Latin America, Mr. Obama said, this was going to be an operation would take days and not weeks. So, here we are now five months on. And we still don't know where Qaddafi is. We know that his son is not as was earlier broadcast, and claimed by the Transitional National Council, they claimed that he was in their hands. Well, clearly that is not the case. And I think what we can look at is several days, if not months of chaos in what is today Libya.

HANNITY: Well, the Heritage Foundation reported today as we look at images of what has been going on, that a new Libyan draft constitution has been posted online. And it does mention things like that are familiar to western democracy, like rule of law, freedom of speech, freedom of religion, a multi-party electoral system. But despite all of that, it also says Islam is the religion of the state and the principle source of legislation is Islamic jurisprudence, in other words, Sharia.

NORTH: Well, this is one of the reasons why British Prime Minister David Cameron went back to work today from his vacation. Because they know and we should, that the so-called TNC, the Transitional National Council is made up of tribal clans, radical Islamists, former regime technocrats and that they really don't know what's going to come of all this. The chairman of this entity, the TNC, Mustafa Abdul Jalil is a former Qaddafi justice minister, and defected and now he's claimed the title as being in charge of it. What I think we are looking at is the possibility that Libya becomes a Somalia with oil with tribal warlords and of course piracy, the kinds of things that we've seen in the past. There's no guarantee that this is going to turn upward as everybody predicted after what happened in Egypt.

HANNITY: If that constitution calling for Sharia in fact takes place, if the Muslim Brotherhood which is now allying with the military, seemingly now allying to take over Egypt, takes over, am I right to say between North Africa and the Middle East, then elsewhere that things are going to get decidedly worse especially for our ally Israel?

NORTH: Well, here's what's very important about this. Libya is not Egypt. Egypt was the linchpin of American policy in the Arab world. The army is still in control. Whether the army acknowledges that or not is irrelevant. There is no army in Libya. There is no national sense of law and order. And you now, you have NATO and the United Nations talking about peacekeepers being put on the ground. Today Mr. Obama said that is not going to happen.

The infrastructure of Libya is not that of Somalia. It is capable of producing a million and a half barrels of oil a day. And that's roughly at today's price of about $85 million a day that are coming in. And there's something in the neighborhood of $50 billion worth of Libyan assets that are in the control of NATO, the United States and other countries that froze those assets. So, Libya has potential. The problem is, what does this mean for people like Assad where in Syria he's got an exit. Qaddafi has nowhere to run. Syria has...

HANNITY: Well, I would argue he probably does. Probably, you know, Hugo Chavez comes to mind at first.

NORTH: Yes. But you can't get there from here. I mean, his problem is, there's no airplanes that's there's going to be able -- now that the airport is, Steve Harrigan just reported, the airport is now in the hands of the rebels, there's no way out for this guy. He's not going to be able to get to Zimbabwe or South Africa, or certainly Venezuela.

HANNITY: If Qaddafi goes, does that mean that President Obama agrees with the Bush doctrine on preemption now? Just a thought.

NORTH: Well, you know, you make a very good point. Because in all of this there's been ambivalence, there's been uncertainty, there's certainly been no coherence to American policy in this case. It was leading from behind pushing others in front of us. And now you've got a country that's descending on absolute chaos with no law and order, no hope that there is not going to be terrible brutal reprisals. Even if the rebels find Qaddafi tomorrow, what's going to happen in the next few weeks, it is no one knows for sure, it's anybody's guess.

HANNITY: But Secretary of State Colin Powell said, regarding President Bush and Iraq, that if you break it, you buy it. You know, does that apply now to Libya and President Obama? I mean, you know, again what is the short term answer and the long term? I don't see one.

NORTH: And again, this is the case where you know that they are going to hammer the United States to get more aid. And the president said today, he was going to continue to provide humanitarian aid. We're going to continue to run surveillance flights, we're going to continue to run the command and control for the NATO operation. The ultimate question is, where are the rest of the Arab world? The folks where we send our petrodollars, what are they going to do for the people of Libya? And that's a question that apparently nobody knows the answer to that either.

HANNITY: But last question, in the end, what does President Obama get out of this? And should he like Prime Minister Cameron be headed back to Washington to deal deal with the economic conditions of the country and with this situation that is unfolding? Or is he capable of playing golf and...

NORTH: Like all presidents, he's getting lots of national security briefings, wherever he is, the White House goes with him wherever he is.

HANNITY: The golf course is really good for security briefings I hear.

NORTH: Well, as you know, Prime Minister Cameron said, I'm going to go back because we have to deal with this as a quote, "crisis," this is a crisis. Not just for the Europeans, ultimately it's a crisis for us.

HANNITY: It is a crisis for us as was the Muslim Brotherhood. And all the media in this country ignored it. People wrote about people like you and me as being Muslim Brotherhood obsessed. I wished they were right and we were wrong. But we weren't.

NORTH: Unfortunately, we were right.

HANNITY: All right. Thanks Colonel North.

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