All Episodes
Previous Next
July 29, 2005 - Rush Limbaugh Program
36:04
July 29, 2005, Friday, Hour #2
| Copy link to current segment

Time Text
That is absolutely right, Johnny Donovan.
This is Walter Williams sitting in for Rush.
If you didn't tune in the first hour, and we're pushing back the frontiers of ignorance.
And by the way, check out Club Gitmo.
It's at rushlimball.com.
And if you buy Club Getmo gear and you put it on and you find yourself wearing, you know, the gear or holding a coffee cup or holding soap on a rope.
And all you guys in the military, you better buy this soap on a rope.
It can kind of get dangerous sometimes in the shower.
And anyway, if you are wearing some of the material or holding a cup or holding a soap on a rope, email us your picture.
Send it to clubgetmo at rushlimbo.com and we'll post it in the club getmo gallery that's updated daily.
And by the way, for all you ladies out there that just love Walter Williams, and by the way, no ladies have called in.
Get a lady, have a lady call in.
While Rush is away, we'll be podcasting the guest host shows for the members of Rush 24-7 and adding some podcast bonus materials, including exclusive audio of Rush's unedited interview with Rudy Giuliani.
The print interview will appear in the next issue of the Limbaugh Letter.
And by the way, join Rush 24-7.
Okay, the last hour we're talking about appointments to the Supreme Court.
And this hour, I want to talk about, you know, change focus a little bit.
By a narrow 217 to 215 vote, the Congress approved the Central American Free Trade Agreement.
The Central American Free Trade Agreement, sometimes called CAFTA, it lowers trade barriers.
It lowers various excises on imported goods from Central America and vice versa.
Central America is going to lower tariffs on goods coming from the United States.
It lowers tariffs.
And despite the United States sugar interests, there'll even be a small increase in the amount of sugar that's allowed in the United States.
These people in the sugar industry, they have control over Congress.
They have big bucks.
They contribute almost a million dollars to campaigns.
And why do you think they do that?
Do you think they just like participating in the political process?
No.
They give this money so that congressmen can continue with trade restrictions against sugar coming in our country, making Americans pay up to four times the world price for sugar.
And some of you out there, I know you're going to call in and say, well, we need protectionism to protect our jobs.
We need a level playing field.
Let's go to the protection of jobs.
Now, the fact of, just tell me, call in and tell me what you think of this.
Those of you who say we have to protect American jobs, what do you think of this?
Because of the high price of sugar, several candy United States candy manufacturers have left the country.
For example, lifesavers, they've moved to Canada.
Now, they're not taking advantage of low wages in Canada.
Wages in Canada are very similar to the United States.
But what are they taking advantage of?
Well, by moving to Canada, lifesavers moving to Canada means that they save $10 million a year in sugar costs.
See, Canada does not have these big restrictions or owner's restrictions against the import of sugar.
And maybe one of the reason is that the sugar lobby in Canada does not have the power that the sugar lobby has in the United States.
Okay, that's one.
And I forget how many jobs.
I think it's like 8,000 jobs have moved to Canada.
Then there's Brock and there's Ferreira pan candy manufacturers.
They've moved to Mexico because of the high price of sugar.
So I want somebody to call in and tell me how protectionism saved jobs.
It saves some people's job at the expense of other people's jobs.
Now see, and see, politicians love this.
They love to be able to say that, look, I voted for tariffs on foreign sugar, and look at all the sugar workers working.
If you had been listening to that old Walter Williams, these sugar workers would not have as many jobs.
See, they are the visible beneficiaries of Congress' restrictions on foreign sugar.
The people who have lost their jobs in the candy factory, they're invisible victims.
And politicians love visible beneficiaries and invisible victims.
Now you say, okay, so Americans pay four times the price of sugar, four times the world price of sugar.
Now, how is that so?
How many of you like to pay higher prices for sugar?
Or higher price for milk, or higher price for many, many other things?
How many of you?
Well, I doubt whether many of us prefer that.
And so you might say, well, how does it get done?
How does it happen when a relatively small number of Americans, those who are owners and workers in the sugar industry, can impose this huge cost on a very, very large number of Americans?
Well, it happens because of a phenomenon that economists call narrow, well-defined benefits versus widely dispersed, small costs.
Now, for example, let me explain this.
Now, it pays the people in the sugar industry to kind of tax themselves to get up a million dollars to lobby Congress to impose tariffs on foreign sugar.
Why?
Because they fork over this million dollars.
It might mean tens of millions to them in the terms of higher profits and higher wages.
So that's the benefit side.
It benefits a small group of Americans.
But what about the cost side?
Well, the cost side means that when you and I go to buy sugar, we have to pay maybe $20 or $30, $40 more a year for the sugar that we use.
That's a relatively small cost.
So which one of us is going to get on an airplane, pay $200 for airplane ticket and get a hotel in Washington for $300 for a night and try to unseat that congressman who voted for restrictions on foreign sugar that force us to pay $30 more a year for the sugar that we use.
We just say forget about it.
It's not worth it.
And congressmen know that.
They know that this is our response.
That is, we will not descend on Washington.
And then it's pretty hard to organize us too.
Because if you come to my house and you say, well, Walter, we're trying to unseat this congressman who imposed these sugar tariffs and made us spend $20, $30 more a year for the sugar that we use.
Could you contribute to our efforts?
Would you give us $5 or $10 to help us, you know, to finance our going to Washington?
I would tell them to go play in the traffic.
And the reason why is because even if I don't contribute to their efforts, if they're successful and sugar prices come down, I benefit without having to fork up $5 or $10 to help them.
And if they don't, if they're not successful, I haven't lost any money.
So it's fairly difficult to organize consumers of sugar to fight these sugar tariffs.
But however, for the people in the sugar industry, it surely pays them to go to Washington.
Matter of fact, they have headquarters in Washington.
They have lobbyists in Washington to ride shotgun on congressmen to make sure that they don't ease up at all on the sugar tariffs that are so profitable to the sugar industry.
Now, for those of you who are for protectionism, there's a great quote by a French economist named Frédéric Bastiat, a very eminent economist, philosopher.
He's dead.
He's long dead.
He's been dead for more than a century.
But he said, when goods cross borders, troops don't.
That is, free trade or nations trading with one another promote peace among nations.
And by the way, I know some of you are going to call in and say, well, Japan has huge tariffs on foreign imports, on American cows, American rice come in their country, and these tariffs make Japanese pay four times, five times the world price for rice.
They pay high prices for beef because of all these tariffs.
So we ought to do the same in the United States.
Are you telling me, are you telling this audience because Japan or some other country, I'm just using Japan as an example, because Japan rips off its citizens, that we ought to get even with Japan by ripping off American citizens.
Don't call in and tell me that.
We'll be back with those calls after this.
Walter Williams sitting in for Russia, and he'll be back on Monday, and you can be on the show with us by calling 800-282-2882.
And let's go to the phones.
Eric from Concord, New Hampshire.
Welcome to the show, Eric.
Hi, CAFTA has nothing to do with free trade.
If you want free trade, we have free trade.
This is about taking away America's sovereignty.
Wait, a minute.
When you say we have free trade, are you saying that there are no tariffs?
Oh, there are tariffs on the little business, the little businessman, and CAPTA and FTA.
Wait, wait a minute.
I'm asking a question to you.
Here's my specific question.
On goods coming into the United States from Central America, are there or are there not tariffs on these goods coming into the country?
I suppose there are.
There are tariffs on our stuff going into China.
Try and get a China into product.
Try to get a product into China or Europe.
Okay, so China rips off its people.
Should we rip off ours?
It's not about ripping off our people.
Saving $20 in sugar.
This is a welfare handout.
This is economic development.
Wait, no.
You know, you're not being specific.
We'd like to talk nicely and kind of get to the heart of issues.
I'm saying you're not saying, I hope you're not saying, because one country rips off its consumers by forcing them to pay higher prices than they otherwise would have to pay, are you saying that to retaliate against those countries, we ought to force Americans to pay prices that are higher than they otherwise would pay?
Absolutely not.
I'm saying that we're not, by saving $20 a year in sugar, that doesn't make up for the welfare subsidy that we're going to be giving to Central American countries.
It's also opening up the border.
CAFTA has almost obliterated our border.
Once FDAA passes the free trade area of the Americas, all of the Western Hemisphere will be consolidated into essentially one country.
It's going to be like the EU.
Well, you're not making sense.
And so when people don't make sense, we're going to move on to somebody else.
Now, we don't mind anybody disagreeing with us, but we at least want you to be fairly reasonable.
Let's go to Ed on the cell phone in Connecticut.
Welcome to show, Kennedy.
Ed?
Hi, Mr. Hitchcock.
Can you hear me?
You called the wrong day.
How are you?
Who did you address me as?
Mr. Hitchcock.
Oh, Mr. Hitchcock, he's resting.
Okay, I'm sorry.
This is that guy, Walter Williams.
Williams, I'm sorry, Mr. Williams.
Yes, okay.
Question regarding the tariff.
When we don't have really a big domestic product such as sugar, I mean, I know we have some minor production.
What are we benefiting by blocking or having tariffs on imports when it's a product we don't produce in great quantities domestically?
Oh, yes, we produce a lot of sugar.
We produce a lot of sugar, and we want to continue to be able to produce a lot of it and sell it at very high prices.
Okay, now I was unaware that we produce sugar in that quantity.
Oh, yes.
Okay, that was my...
Okay, well, thanks a lot.
Let's go to Bill on his cell phone in Tallahassee, Florida.
Welcome to the show, Bill.
Hey, how are you today?
Okay.
You know, in general, I think on the long haul, free trade is a good thing, but I think there's some really serious short-term consequences.
Because of the disparity of incomes between a disparity of standard of living between us and most of the countries that we're dealing with now, goods are so much cheaper there that we tend to buy goods and have goods manufactured overseas or down below the border.
I think it could be a national security issue because basically we don't even make the chips that go into our highly technologicalized military anymore because we can get them cheaper from China and Japan.
Well, that's not wonderful.
We can kill more people at a cheaper price.
No, because when they get mad at us and say no, we're SOL.
No, that's incredible.
I mean, people have been saying, say, making that argument since, I guess, around 1814, 1816 with the tariffs on steel, you know, the infant industry argument that we needed for national defense and things like this.
And those arguments just don't quite make sense.
Well, there's one other thing that you interestingly brought the framers and the original intent of the Constitution into this.
If I'm not mistaken, the only federal income was basically tariffs on goods.
Oh, that's excise taxes and tariffs.
And the tariffs were relatively low.
But however, even during those days, there were tariff problems.
Matter of fact, one of the reasons why the Confederate states were angry with the North was because of the tariffs, the protectionist tariffs that the North that had the power in Congress were imposing on the trade in the South, the trade between the Southern states and England.
Right.
Well, I think that was using the South as well.
So, you know, one of the things that people always do with government is they try to use government to create special privileges for themselves.
Yep.
Okay.
Well, thanks a lot for calling in.
We don't have time to go to the phones again, but I just want to make another point about this CAFTA agreement.
The President Bush had to virtually give away the House.
And he did it through to buy these votes.
He had to agree to a huge transportation bill that spent much more money than he wanted to.
That is, he had to tell congressmen, well, look, if you vote for the CAFTA, we'll put a highway, we'll put a bridge, we'll put whatever in your area.
And that's how he got it passed.
But I think you people ought to be disappointed with your elected representatives for using this kind of extortion.
We'll be back after this.
We're back, Walter Williams, sitting in for Rush and Rush will be back on Monday.
And you can be on with us by calling 800-282-2882.
And for those of you who just joined us, we're talking about CAFTA, that is the Central American Free Trade Agreement that Congress just voted narrowly, 217 to 215, to try to free up trade with Central America.
And I think it's a good idea.
I'm sorry.
I would like for someone to call in and tell me what moral case can you make for preventing me, that is Walter Williams, if I want to buy some tomatoes from a Mexican tomato growers, and In return, I want to sell him some of my economic lessons.
Who should have the right to interfere?
On what basis?
See, a lot of you people out there believe that the United States trades with Mexico.
United States trades with Japan.
That is nonsense.
I mean, do you actually think that it is the United States Congress trading with the Japanese deity?
Or do you think it's the United States Congress trading with the English, the British Parliament?
No.
It is individual Americans trading with Japanese individual businessmen or corporations through their intermediaries.
So the question that we need to focus on is not whether the United States should trade with Japan.
It's a question of whether an American citizen should have the right to deal with another citizen of another country.
I mean, it's just as easy as saying, well, should a Pennsylvanian have the right to trade with a North Carolinian?
And who should have the right to stop him from trading?
It's none of anybody else's business.
So let's get away from the talk about United States trading with another country.
There are individuals trading with individuals in other countries.
Let's go to the phones and welcome from Alexandria, Virginia.
Henry, welcome to the show.
Hello.
Hello.
You're on.
I want to talk to you about, I don't disagree with individuals being able to trade with other individuals in other countries, but that in reality is not what happens.
You deal with middlemen and marketeers.
Well, that's what I said.
Do you know what intermediaries means?
It means middlemen and marketeers.
The point I want to try to make is you use the sugar industry as an example to make a point, and you put out a lot of misinformation.
Number one is that the sugar industry is not subsidized.
The only guarantee that the sugar industry has that they can sell their product is that they can sell all of their product before imports can come in and take over.
The candy industry has very little sugar in their candy.
Most of it is high fructose corn syrup.
There's no sugar in soft drinks in this country.
You can find them in Brazil and South America.
Wait, a minute.
One of the reasons why there's no sugar in many, many soft drinks is because of the I hate to use the name, but it starts with its initials are ADM.
It has a lot of power in Congress, and it is able to, and between ADM and the sugar manufacturers, they've driven up the price of sugar, so it's cheaper to use the fructose.
Jacking up the price.
The competition keeps them from jacking up the price because they're guaranteed that they can make a profit on the sugar that they can import into the market.
Well, wait a minute.
Wait a minute.
Now, it's the same as a subsidy.
That is, the government can give you $100 or it can force me to give you $100 more.
Nonetheless, it's a subsidy.
Okay.
Thanks a lot, Henry, for calling in.
Let's go to Chris from Maine.
Welcome to the show, Chris.
Hey, you know, you're one of my favorite guest hosts.
But I got to say this CAFTA thing.
Up here in Maine, NAFTA devastated the job market up here.
Say that again?
NAFTA devastated the job market in Maine.
And we can go back and forth about whether it did or it didn't, but I've seen it firsthand.
I mean, the shoe industry went to El Salvador or wherever it went.
I don't know.
It went down south.
As soon as NAFTA passed, the industry left the state.
I live here.
I see it.
We can argue back and forth, but I actually live here and have seen that.
And that's just a fact.
But okay, but so what?
I don't think that sugar, you know, when I go to the store, the cheapest products to buy are sugar-based products.
I think the problem is why are we worried about gas?
I mean, this is ridiculous.
Well, I just want to get it all up before I stumble too much.
I know, but I'm going to give you time, so let's not rush.
Now, if Americans can buy shoes more cheaply if they're being produced overseas, why not?
Aren't we richer?
That is, in the sense of job creation, that is, if Americans can buy cheaper shoes, then they have more money left over to buy something else.
If they have jobs, they have more money.
But as the job is to do it.
Well, not every American is working in the shoe industry.
No, but everybody knows, I mean, up here in Maine, for every one high-paying mill job, it produces four or five support jobs.
But jobs.
Every cheap support job, what you call secondary jobs, produces one or two secondary jobs.
It's just the way it is.
Wait, wait a minute.
Wait a minute.
Wait a minute.
Chris.
Jobs disappearing is really a good thing, isn't it?
Maybe for Walter Williams.
No, no, no.
Let me give you an example.
Let me give you an example.
When's the last time you've seen an ice wagon?
What?
The job is gone.
I mean, when's the last time you've seen a stagecoach driver?
Bus drivers, yeah.
The job is gone.
I mean, there are many, many.
For example, when in 1787, 93% of Americans were farmers.
They're no longer farmers.
All those jobs are gone.
What's going to fuel our economy when all of the better-end manufacturing jobs are gone?
Are you saying making shoes is a better-end manufacturing job?
Well, in this state, yeah.
It's devastated this state.
Shoes are devastated?
Shoes, textile?
Yeah.
Why don't we remove restrictions on business from our own government?
Our businesses in our own country compete with our own government.
That's right.
That's exactly what you should be doing.
For example, I was talking to some people in North Carolina, and they were, because when you brought up textiles, it reminded me of it.
I was talking to people in North Carolina, and they were lamenting the fact that textile manufacturing, a lot of it was going overseas.
And they're talking about how awful it was.
Well, I reminded a lady who I was talking to.
I said, you know, at one time, our textiles industry, manufacturing industry, was all in New England.
Now, when it came down to North Carolina, were you crying?
Why did it come down to North Carolina?
Let me ask you, Chris, how come the textile industry moved from New England to the South?
It didn't.
Well, I don't know about when it moved south.
That's the point.
No, Very narrow point.
I'm asking, what do you think was the motivation for the textile industry to get up and leave the New England states and head to the southern states?
Well, obviously, obviously, it would have been cheaper labor.
Aha, right, right.
Wait, wait, wait, Walter.
Pardon me?
It still doesn't benefit us as a country to open us up.
Wait a minute, wait a minute.
Wait, wait, no, no, you wait.
No, wait, wait.
I'm in charge of waiting.
Now, what I'm saying is that we are all better off when textiles became more cheaper by going from a high-cost place in the United States to a lower-cost place.
We're all better off.
The same thing applies when textiles go from a higher-cost section of, let's say, South and North Carolina to a cheaper-cost place of China and India.
And we can buy clothing cheaper.
I'm a printer, okay?
I will compete with anybody in what I do.
I'll produce a better product and I'll do it faster.
But I can't compete with a guy that's making 10 cents an hour.
I can't do that.
Just to be in business, just to go through the permits, the regulations, the taxes, the hassle with my own government.
Now you're going to introduce an outdoor city that doesn't go through any of that and on top of that has a lower wage.
And you're not going to be able to convince anybody this is a good idea, Walter.
That's why people like me are calling you.
But see, there's the problem.
We're up against the clock and I have to let you go.
But see, what you're pointing out, what he's actually saying, look, a lot of American industry becomes less competitive worldwide because of all the regulations, taxes, and et cetera, that are imposed by government.
And they do this in order to do something good to somebody over there.
You know, have high taxes.
Now, that reminds me of a Negro play.
It was written by Marcus Cook Connolly.
And it was called Green Pastures.
And matter of fact, I mentioned this place a couple years, a number of years ago when I was testifying in Congress.
Somewhere in the play, God says to the angel Gabriel, every time I pass this one miracle, I has to pass four or five more to get up, catch up with it.
That's what the government's doing.
That is, the government is creating miracles by imposing all these regulations on American business.
Instead of American businesses fighting these regulations tooth and nail, they say, well, government, since you screwed me, make me whole by screwing somebody else.
And that's not the way to do it.
And so, matter of fact, I've told Congress, you can read testimony, I said, Congress, you ought to get out of the miracle business and leave miracles up to the good Lord.
We'll be back with your calls after this.
We're back, Walter Williams, holding forth for the vacation in Rush Limbaugh.
And the next hour, folks, you really have to stay tuned.
We're going to have Congressman John Shattuck on to talk about his health insurance choice.
That is, how we can make more of a free market.
I know you folks calling in don't like free markets, but we're going to talk about cheaper health care.
I wonder how many jobs will be lost through cheaper health care, whether France will take over.
Anyway, let's go back to the phones.
And matter of fact, by the way, Congressman John Shattuck, as I said in the first hour when I was letting you folks know that he's going to be on, he is one of the handful of Congressmen that the framers of the United States Constitution would respect.
One of the handful.
Anyway, let's go back to the phones.
And Al from Sacramento, welcome to the show.
Hey, thank you, Walter.
Listening to you for years.
I enjoy it when you're on the show.
Thank you.
But there's a couple of points that I think you're wrong in.
One.
Well, wait a minute.
I have not made an error since I think it was in 1963.
Okay, well, let's talk about this.
Maybe this is a new day.
Okay.
When you talk about President Bush making these deals with the congressmen to build a bridge or do whatever to get their vote, okay?
Yeah.
If we do that in the United States, and the people that receive the money, by the time that money rolls 10 to 18 times, depending what they buy with the money, the money's all back in the Treasury, and we wind up with a bridge or a house or a building or a highway or whatever.
When you send cash overseas, it never comes back.
Oh, come on.
No, no.
Ow.
Ow.
Wait, wait, wait a minute.
Wait, wait a minute.
Let's ask a question now.
No matter where a dollar goes, ultimately it's only good in the United States.
That is, I mean, matter of fact, I think it'd be wonderful if these countries would sell us stuff and take our dollars, and that was it.
Because what we could do, these countries can be sending us all these goodies, and we could have somebody in Washington making up these little slips of paper that we call dollars, and the rest of us could sit out on the beach.
So the question is, why do other countries take dollars?
Can you tell me?
Sure, because it's a stable.
It's a stable.
But those dollars, okay.
Suppose we told the country, okay, here, here's $10,000 for, let's say, a car you're going to sell me.
Right.
And those dollars were no good.
Okay.
They could not be used in the United States.
Do you think anybody would take them?
No.
Okay, so the reason why they take these dollars is because they're good in the United States.
And whether we spend $10,000, give it to a Japanese, well, the Japanese might not buy anything right back with it.
He might buy something from a German and give him the $10,000.
And a German might buy something from the British and give them the $10,000.
But ultimately, the $10,000 are only good for redemption in the United States.
Okay, I can buy that premise, that the money is only good here.
But there's too many times when we've loan countries billions.
We're not talking about lending.
We're not talking about lending.
I'm talking about somebody.
About buying something overseas.
Yeah.
We're sending them money to buy something overseas.
See, I don't believe in protectionism, but I do believe, okay, Francis, let me give you this.
We closed down several shipyards, Philadelphia, Long Beach, and the West Coast, and several shipyards.
We are sending American naval ships overseas to get repairs.
They're being repaired in Japan and other places.
Now, the thing that you lose, you lose the talent of the people that are here that can actually repair these things.
And you're losing the jobs for the men to repair our own equipment.
You really believe that?
Yes, I do.
No, no, no, no.
We're sending ships maybe overseas for cheaper, not for reasons of having to do cheapness, but not because Americans can't do it.
No, no, it's not because of the state.
And Americans are doing it.
There are shipyards in the United States.
I know we have shipyards in the United States.
What is that?
Is it at Norfolk and also in Philadelphia?
Philadelphia's been closed down.
Well, the shipyard in Philadelphia has not been closed down.
I mean, I think Sunship might have, but I think the Navy base is still operating.
We'll be back with your calls after this.
We're back.
Walter Williams sitting in for Rush.
We're up against the clock, so we can't take any more calls.
But we're going to have John Shattuck, Congressman John Shattuck, on the next hour, and he's going to talk about his proposal for health insurance choice.
Now, there's something else I'm going to ask John Shattuck about, and that has to do with an amendment or a law that he's introduced a number of times and it has not made it through.
And it's called the Enumerated Powers Act.
And I'll just switch to appetite a little bit.
▲
Export Selection