While discussing Dan Rather's incredibly stupid remark about President Obama not being able to sell watermelons, Hannity defends his buddy Glenn Beck's remark that President Obama is a racist and does it by trotting out his old attacks on Jeremiah Wright. To their credit his entire panel tells him that the election is over, the public already weighed in on the matter and they don't care. Hannity already over-played that hand during the election and obviously he's not done yet.

Transcript via Nexis Lexis.

HANNITY: All right. Dan Rather is back and had this to say about President Obama selling watermelon.

(BEGIN VIDEO CLIP)

DAN RATHER: Part of the undertow in the coming election is going to be President Obama's leadership. And the Republicans will make a case, and a lot of independents will buy this argument. Listen, he just hasn't learned -- look at the health-care bill. It was his No. 1 priority, and it took him forever to get it through, and he had to compromise it to death.

And a version of, listen, he's a nice person. He's very articulate. This is being used against him. But he couldn't sell watermelons to...

(END VIDEO CLIP)

HANNITY: Go ahead, Penny. You defend him.

LEE: Why am I having to defend him?

HANNITY: Because you're a liberal. He's a liberal; you're a liberal.

LEE: Please, no. There is no place in America for racial insensitivity, and that is something that he needs to apologize for, that he needs to set the record straight. That is no -- there's no business like that here in America.

VARGAS: You know, Sean, you're going to disagree with me on this one. I really don't think he had any mal intent in this. I think he misspoke. I think, if he had to think about it, he would probably say, "Wow, that was pretty stupid for me to say it." I don't think he had any bad intentions with it.

HANNITY: I'm going to be honest with you, and I can't stand Dan Rather. I really can't. I can't stand the guy. He's a left-wing nut job. What he did, you know, that ended up him losing his job, is unforgivable from a journalist's perspective.

But I just question -- I just -- I just don't think he's that bright. I don't think he really thought about what he was saying.

SUOZZI: I think he was just trying to be clever. And he tried to -- you know, he's trying to come up with clever sayings and folksy sayings. And it was a bad, bad, bad mistake.

VARGAS: And we all do it, I think.

HANNITY: This is the...

VARGAS: Every -- we all misspeak. And when you do it, you say, "I'm sorry" and you know...

HANNITY: But this is -- this is the problem. We live in an America, where if you misspeak. Look, I have people that monitor -- right now there's some -- some psycho leftist liberal in her underwear, you know, hiding out...

(CROSSTALK)

SUOZZI: I don't want to hear about it. Another visual I don't need. No more visuals.

HANNITY: A psycho hanging out in their underwear, hoping and praying that dumb old Sean Hannity says something wrong. You know, they do it to everyone else on this channel. They do it to Rush Limbaugh.

LEE: And there are right-wing bloggers doing the same thing.

(CROSSTALK)

SUOZZI: You know what the problem is? That's one of the reasons we don't solve as many problems. They're spending some much time trying to say, "Got you! This guy made this mistake, he made that mistake." You know, we need to solve problems.

HANNITY: But this is a game that we're playing now. And the hope is, is that, you know, did -- for example, Don Imus.

SUOZZI: Right.

HANNITY: Did he apologize? Does anyone accept his apology? No. He's got to be fired for what he said.

Bill Maher says outrageous things every week. No one ever cares what Bill Maher says.

LEE: And Glenn Beck says some pretty outrageous things, too, every week. And Rush Limbaugh and other -- and other...

HANNITY: I don't think he's ever said -- wait a minute. He never said anything over-the-top like what Dan Rather said.

LEE: He has said plenty of things.

HANNITY: What?

LEE: When he called the president of the United States, referred to him as a racist. I mean, he has said some very outlandish things.

HANNITY: But wait a minute. Wait, hang on a second. When the president hangs out with Jeremiah Wright for 20 years, I'm -- can one conclude that there are issues with the president, black liberation theology?

LEE: And the president gave a speech and said he was being intolerant.

HANNITY: I'm asking you.

LEE: That president said that that is intolerant.

HANNITY: In a moment when he had to say it to save his political career.

LEE: No, he said it. And he had given one of the greatest speeches on race to address that same issue. So he's...

HANNITY: Well, obviously, I'm not saying -- I think we ought to live in a world where you can make a mistake, what you're saying. And revise and extend your remarks, apologize, and it will be accepted. But we don't live in that world anymore.

SUOZZI: We're spending too much time just picking on each other all the time instead of solving problems. And I think that it's not -- it's not a liberal; it's not a conservative thing. I think it's just the reality of the society we live in right now.

VARGAS: We've got -- we've got too many big things that we have to deal with as a country. We've got to get to a point where we can actually have those dialogues and those discussions and actually get to the heart of the matter.

And if we -- if we parse every single word that we say and slice and dice it and we waste our time on it, we're not going to get to the heart of the matter.

HANNITY: Let me ask you this. Is it -- is it worse that the president hung out with Jeremiah Wright for 20 years? Do you not find anything wrong with -- wait a minute. With the president hanging out with and not immediately condemning when the words came out, "G-D America. America's chickens come home to roost"?

When he found out about it, he didn't immediately condemn him. Does that -- wait a minute. Does that not bother you? Did that not show us how radical the president is?

LEE: We were all offended with what Jeremiah Wright said, and the president did stand up and say it. But back to Danny's point, the politics of the extreme...

HANNITY: You're ducking. You're now -- let me divert your attention, Mr. Hannity.

LEE: I am not diverting.

(CROSSTALK)

SUOZZI: That was during the course of the 2008 election. It was fully debated. The president spoke about it.

HANNITY: It was not fully debated.

SUOZZI: It was fully debated. It was main news for weeks.

LEE: For a thread throughout the entire campaign.

SUOZZI: And he made a speech, and made the move forward. Let's move forward.

HANNITY: Forgive all that. It's right that he started his political career in the home of a....

SUOZZI: The American people -- the American people forgave him, and they said, "We're going to vote for him for the president of the United States of America." So they've moved on to the next step.

HANNITY: All right. Good to see you. Thanks for being with us. He cost you your job.