March 13th on FOX News 5pm ET
GLENN: You said to me or one of my researchers last week that you thought the President saying -- you know, giving hope now was absolutely irresponsible. Why?
ZIMMERMANN: Well, not so much irresponsible. I mean, anybody in government, it's their job to try and maintain confidence in government and that has nothing to do with Democrat or Republican.
GLENN: Right, right.
ZIMMERMANN: That's just the nature of government to try and maintain some hope for the future.
GLENN: George Bush was doing the same thing.
ZIMMERMANN: What I think is irresponsible is not being hopeful but encouraging people to spend when they really need to save, when the only way out of this is to get people to replenish their savings, rebuild their cash position. What brings an economy out of depression is not increasing spending and debt but lowering debt. Raising cash and letting prices fall back to levels that are affordable. That's the only real basis for a springboard up out of a severe economic contraction like is currently unfolding.
GLENN: Walter, I said probably a year and a half ago when I pulled my money out of the stock market and I just battened down the hatches, and then there was a time where I just, I did everything that my -- you know, that our thinking tells us to do is un-American. You know, you've got to participate, you've got to put money in, you've got to buy the stocks and everything else. And what I finally came to was someone has to retain wealth to rebuild the country.
GLENN: So people being responsible and getting into cash, getting into paying down their debt and being responsible is actually an extraordinarily patriotic thing to do.
ZIMMERMANN: Absolutely. It's not un-American at all. That's how this country has succeeded where others have failed is being responsible, taking responsibility for one's own life and not depending upon other organizations and governments to bail one out. There's absolutely nothing un-American about being responsible.
GLENN: Is it realistic when the President said we just have to stop, we have to stop these mortgages from failing now and then if we can just stop this, we can get people to lend again and things will be moving?
ZIMMERMANN: Well, see, the problem there is if you have some money and you're thinking of buying a house and you notice that housing prices just dropped another 15 to 20%, you know, in your area, there's the expression, you know, catch a falling knife.
ZIMMERMANN: Trying to pick a bottom. People are going to want to wait and see, well, how far down is this going to go. And what deflation is really, it's a buyer's strike, say I'm not going to buy; I'm going to save. And the problem is that's what you need to get the basis for a recovery. Prices need to get cheap enough, again, to be affordable. And you don't get there by trying to prop up failing mortgages taken out by people who couldn't afford them in the first place. You need prices to become more affordable. However painful that is, that's going to happen whether the government tries to get in the way of it or not because that's the basis of a sustained recovery: Low prices and people have rebuilt their savings.
GLENN: Walter Zimmermann from ICAP, Vice President of ICAP. Thank you, sir, we'll talk again.