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Nov. 18, 2005 - Rush Limbaugh Program
36:37
November 18, 2005, Friday, Hour #1
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Welcome to today's edition of the Rush 24-7 podcast.
That's right, uh Johnny Donovan.
It is Walter E. Williams.
Make sure you put that E in there, uh filling in for the Vacationing Rush.
And Rush will be back on Monday.
And you can be on with us by calling 800-282-2882.
There's a lot of important stuff I want to talk about today.
And I think I want to lead off with this Wall Street Journal article, uh, November 18th, which is today, Friday, and it says that the Senate bill, it's taking aim at big oil companies and would raise their taxes by an estimated 4.3 billion dollars over two years.
And uh they're gonna do it the way they're not gonna call a windfall profit tax.
They're gonna do it an underhand way.
Uh they're going to change the method by which oil companies account for their oil supplies, their inventories.
Now uh that's in conjunction with hearings that were held on Capitol Hill where they carted in oil executives to explain their profits.
Now, can you imagine in United States, the land of the free and the home of the brave, and where we're supposed to have liberty, where CEOs are carted in front of Congress to explain their profits.
Now, what the Republic and the Republicans are responsible for this.
Now, the Republicans squandered a golden opportunity by to show the Americans how environmental wackos have imposed huge cost by making us vulnerable to oil supply shocks.
That is, uh we have a large amount of our oil drilling because of restrictions elsewhere, we have it in the Gulf.
And the Gulf is known for hurricanes.
Even before alleged global warming, it was known for hurricanes.
And instead of allowing us to drill off the coast of California, drill off the coast of Florida, off the coast of the Atlantic, and uh drill elsewhere and and build refiner capacity, they're forcing us to, you know, to to have our energy sources at the most vulnerable point.
And I think that the Republicans could have demonstrated this to the American people.
Yes, we need to be drilling in Alaska.
We're not going to hurt the damn caribou.
Matter of fact, the caribou, they love the oil pipelines that are there already because that's where they congregate to have their children.
They don't have children.
Do uh caribou have children?
No, they have uh uh damn it, what are they cubs?
Calves, okay.
Well, anyway, it's children.
Um Kit Carson said uh something I cannot repeat on the air about laying pipe.
But anyway, it what that shows so far as Caribou's concerned, just because an animal can do well in the coal doesn't mean he has to like the coal.
And so they they congregate around the pipeline to keep uh warm.
Now, now, if I were a CEO, let's say of uh Exxon Mobil, which might explain why I'm not the CEO of ExxonMobil, I would have gone in front of Congress and I would have said, ladies and gentlemen of the Congress,
on behalf of the oil companies, we thank you for making the windfall profits that we've just earned possible because without your restricting our drilling, uh when there's a shock, excuse me, when there's a shock, it just runs up prices, and we earn more windfall profits.
So we want to thank you, and we want you to continue to restrict the oil drilling in America so that we can earn higher and higher windfall profits.
But uh most CEOs, they don't have the courage to go in front of Congress and tell the Congress that give uh Congress that kind of message.
But let's talk about windfall profits for a moment.
Now, one of the functions of windfall profits, uh they have many functions, but one of the functions is to send a signal around the economy that there are human wants that are not being met.
And so when human wants are not being met and they're windfall profits to earn, that gets more people involved in the practice.
Now, since there are many restrictions in the oil, you know, to get into the oil industry, well, it does not windfall profits don't act as nicely as they otherwise, but they act a little bit.
Because after prices start going up for oil, you know, sixty dollars a barrel, you saw all these wildcat oil companies come online, you know, these little places in in Kentucky with that only get a couple of barrels out of the ground a day, they started pumping when oil prices started rising.
But um, because of the restrictions, um there's not great entry into the oil market.
Now, also windfall profits plays another role.
It gets people to take risks.
Now keep in mind that several years ago, oil was selling for eleven dollars a barrel.
And today it's around 57, 60 or something like that.
Now, if you're drilling an oil well, that's a risky operation because if you start drilling now and oil is $57 a barrel, and then by the time you get to the oil, you spend several million dollars, and you find that it's dropped to $30 a barrel or $20 a barrel, that's a huge risk that you're taking.
And so what gets people to take that kind of risk is the knowledge that if they make it, they are in for a killing.
But there's another issue on this, and I'll get to phone calls in a minute.
There's another issue here, and that has to do with price gouging.
That is people are saying, well, the oil companies are engaged in price gouging.
Now, have you ever thought that the government, that Congress, is engaged in tax gouging.
And the tax gouging makes the so-called price gouging uh look like child's play.
In other words, the amount of money in the form of taxes that Congress gets out of a gallon of gas that you buy is two to three times the profit that oil companies are earning.
So who is gouging the most?
And one final thing on this oil business, and that is if you are worried about higher prices for gasoline, there's a way out of it.
That is, you just get your little bit of money together and buy oil stocks.
They call it hedging.
That is, if you think prices are going to get higher, let's say you think prices are going to go to four or five dollars, as some of the people have been predicting, well, go out and buy some oil stock because if the price rises to three, four, five dollars, well, you will make a capital gain in the stocks that you buy.
But however, not all the capital gain will be yours because the United States Congress is going to take some of it.
See, that's the problem.
See, see, people are worrying about what oil companies are doing and not worrying about what Congress is doing.
Now, you have some power against oil companies that you don't have against Congress.
That is, if you don't like the price of oil or gasoline, don't buy any.
But if you don't like Congress, you're stuck.
You have to pay them anyway, whether you like what they do or not.
Now, I know some of you are going to call in and say, oh, well, uh, Professor Williams.
Matter of fact, that's what Mrs. Williams uh calls me Professor Williams, uh, because I don't have we're not on a first name basis, even though we've been married 45 years, I just it's the way I control my household.
But you might call in and say, Professor Williams, you we can't do without oil.
We just need to have gasoline for the cars.
Well, uh that that it works at that's a refutation of the first fundamental law of demand.
That is, it's you uh the first fundamental law of demand says that the higher the price, the less people take of it, the lower the price, more people take of it.
And so at a high enough price, you'll find a substitute for gasoline.
And what's a substitute?
Not buying it.
That's one of the substitutes.
And you say, Well, I cannot do without gasoline.
Well, when people give me that kind of answer, I say, well, well, what did George Washington did do?
I mean, he he he beat the mightiest nation on the face of earth without gasoline.
And so, you know, just go back to riding horses.
You can respond to some of these comments by calling 800-282-2882, and we'll be back with your calls after this.
You're listening to Rush Limbaugh on the excellence in podcasting network.
We're back.
Uh Walter Williams filling in for the vacationing rush who will be back on Monday.
Uh there's another issue that uh we might want to talk about, and this was in today's USA Today, and it says House rejects one hundred and forty-two point five billion spending bill.
And the reason why it got uh uh rejected, why it was rejected was that the bill would have made some cuts for schooling and health care and some other uh spending programs.
And the reason why, now I think uh uh that you uh we ought to do more spending cuts uh than what has been proposed, but one of the reasons why there's a push for spending cuts by some members of Congress is to compensate for all the money that's going to New Orleans to uh rebuild after Hurricane Katrina and Rita.
Now one of the problems you might want to think about is there any constitutional authority for Congress to send money for disaster relief.
It is not in the Constitution, ladies and gentlemen.
And matter of fact, on my website I have a it's Walter E. Williams.com.
I have a veto message by President James Madison.
It was at a time when presidents upheld the Constitution.
And he vetoed a public spending bill because he said it's not in the Constitution.
And keep in mind that James Madison is the acknowledged father of the Constitution.
So he sh so he should know whether the government has any right or any power to provide for disaster relief.
Now you say, oh, Professor Williams, how heartless.
How can New Orleans come back without federal disaster relief?
Yeah, well, because if there's a a disaster, well, we need federal money.
Well, I'm gonna give you three cases.
Now, in 1871, the city of Chicago darn near burned down because of a fire.
Now, Chicago came back, but there wasn't any federal relief, any federal disaster uh money.
In 1900, Galveston, Texas was destroyed by a hurricane and it killed 20,000 people.
But Galveston came back without federal relief funds.
In 1906, San Francisco had a devastating earthquake that destroyed the city.
But nonetheless, San Francisco came back without federal handouts.
So anybody who says, Well, you just need them today, well, I say, well, how'd the cities do uh in in yesteryear?
How was it possible for them to rebuild without huge billions and billions of dollars coming in there to rebuild?
How'd they do it?
So anyway, but I was talking to one congressman about this.
Oh, several weeks ago, I guess maybe a month ago.
And you know what he said to me?
He says, Williams, people are suffering.
We can't be worrying about the Constitution.
Now imagine a congressman saying that.
Can you imagine a Congressman?
Oh, I guess by n in nineteen hundred in the in the nineteen hundreds saying that.
He would not have said that.
Okay, let's go to the phones.
Uh Marcus from Toledo, Ohio.
Welcome to the show, Marcus.
I uh well, I just I have a comment.
I I've been wanting to get through uh on Ross's show every time he brings this up on the oil subject or the gasoline prices, that it would be one thing if if all the gas prices didn't go up together.
But if it you know, gasoline's not like peanut butter.
If peanut butter gets out of price range, you know what?
I can live without peanut butter, but I can't bicycle twenty-five, twenty-six miles each way to work in the morning and afternoon.
Well you move closer to your job.
You can move closer to your job, couldn't you?
Really?
Wow, I I th that that's really awesome that uh that selling a house uh that uh is you know has has been my house for years is such a great option.
Oh well, so what you're doing what you just said is cheaper to pay the higher price than pursuing the alternative, the next best alternative.
I'm not anti-capitalist here.
Don't don't don't come across to me like I'm anti-capitalist or anti-oil industry uh or anti, you know, making a profit, but you they know doggone well that everyone has to have gasoline and they and it's not like Exxon raises their prices by fifty cents and BP leaves theirs down there so that there's a gas price war.
They all raise it up together.
And the y they know doggone well they're doing something wrong with the everyone else, but they don't want to preach against capitalism because that's absolutely not the conservative.
Well, wait a minute, what what wait a minute, Marcus?
They all were similarly affected by the supply shock.
And so is it surprising when when there's a hurricane and a destroy and it and it shuts down the pumping facility, does it surprise you that all prices go up?
Uh no, unfortunately it doesn't surprise me.
Well, that's a way that's what we're talking about.
Now, but moreover, look, why did you let's say you pay three three dollars and fifty cents for a gallon of gasoline.
Why did you pay it?
Uh, because that's the price.
Okay, no, no, you paid the three dollars and fifty cents because you perceived yourself as being better off by giving up that three dollars and fifty cents and getting the gallon of gasoline than keeping the three dollars and fifty cents in your pocket and not getting the gasoline.
Is that true?
Uh yes.
Okay, well but see you can't you can't apply the principles uh with gasoline that you can to plastic wrap or peanut butter or you know you know Marcus Marcus, you're saying that you're saying like, well, I say, well, the the uh independent uh influence of gravity on a falling object is thirty-two feet per second per second.
And you say to me, Oh, well, that's for a brick, but not for a chicken.
Well, g uh uh gravity, I don't care whether it's a brick or a chicken or human being, the law of gravity works the same on all of them.
All of them have to obey it.
And I don't care whether it's peanut butter or gasoline, all of them obey the Laws of supply and demand.
But their supplies obviously didn't go down because they still sold just as many gal gallons of gasoline as they would have had it didn't no the supplies were interrupted by the hurricane.
Right?
Uh there was never a shortage where I live, and we're a long way away from there.
Well, maybe there was not a shortage because prices rose.
That's one of the that's one of the roles of prices.
That's one of the functions of prices is that when the supply conditions change, well, prices go up.
Or if they uh if supply becomes abundant, prices will go down.
But thank you for calling in, Marcus.
And those of you who want a basic economic lesson, you can check my website.
There's a ten-part series I have called Economics for the Citizen, and I guarantee you that you'll understand it.
We'll be back after this.
Walter E. Williams filling in for Russia, and you could be on with us by calling 800-282-2882.
And we're holding forth and we're talking about gasoline prices.
Actually, I don't want to talk so much about gasoline prices.
We're I introduced the uh topic by saying that the Republicans lost a golden opportunity to show the American people how we are being increasingly made vulnerable to energy shocks, and that we ought to do something about it.
And that focusing on price gouging, windfall profits, and all that does not get us very far.
What we need to do is do those kind of things that will increase supply and to allow companies to take risk and uh and to be a little bit more independent or be a little bit more flexible uh when they're when there are supply shocks.
Uh let's go back to the phones and let's talk to Matt.
Welcome to the show from Matt from Vermont.
Uh Professor.
Yes.
Yes, welcome to the show.
Well, thank you.
Um I just wanted to observe that that man who was talking about not wanting to uh move to get closer to his job has totally missed the fact that when he bought his house, he took a risk.
He took a risk that he might not be able to commute so easily.
And what he's saying is that the oil companies in this case, or the government, and I guess the next case, should underwrite that risk for him.
Well, I I didn't quite get that, but maybe you're right.
Maybe that's exactly what he's saying.
But risk is a part of life.
Thanks a lot, Matt.
Uh let's go to Wayne.
Welcome to the show, Wayne.
Hello.
Hello.
Hello, Doctor.
Hello.
Uh I'm calling to ask you, first of all, I want to say it's an honor to speak with you.
Thank you.
And I wanted to ask why we can't cut some fat out of the farm bill, paying our farmers not to grow crops when they could be growing an alternative renewable fuel source.
Well, what you know, what makes you think, or what what makes anybody think that the government knows which is the best alternative fuel source.
And why should the government be subsidizing it?
Well well, why are they subsidizing the farmers for not growing crops?
Well, I I don't think they should be subs uh I don't think they should be subsidizing the farmers at all.
Same here.
Why don't they just say, hey, you're not going to get the money, and if you want to turn that farmland into farmland, uh find an alternative uh fuel source.
But I I understand that ethanol is more expensive than gasoline.
I and I believe that's true.
And maybe that would prod some people into being uh to drilling in an war.
If we can't get uh the alternative fuel source, let's get an war.
Well, it's the well, it's the environmental wackos and the power they have with some congressmen like the 14th uh 14 congressmen that voted against our opening up drilling in Anwar.
Yes.
I mean they they have po see they have power to the Congress.
See, now let me let me tell you a little bit about lobbying.
See, Congressmen, they don't give a damn about the many, many Americans who are paying higher prices for gasoline, but they do care about the environmental wackos because they are powerful lobby groups.
See, like you and me, people like you and I, people like you and me, we're not very powerful.
We don't have much influence on Congress, but these uh environmental groups, they have a lot of influence on Congress, and they are able to get the Congress to uh to hold off drilling on the on the coast, uh let's say on the in Florida, there are people down there uh that want to see a pretty scenic view and they don't want to see any oil rigs uh interfering with their view of the ocean.
It's it's people like that that are making us pay through the nose.
But they're not only making us pay through the nose for our fuel, they're making us pay through the nose for our taxes.
And until the people get smart and start caring about uh what they're sending to Uncle Sam every week, uh we're just going to be paying people for doing nothing.
Uh you're absolutely right.
Thanks for calling.
Let's go to Wayne on his cell phone in uh Montclair, California.
Welcome to believe we should actually look into what Congress spends, not where the oil companies are making their money.
These guys absolutely know the answer to that question.
They know where that money's coming from to the oil.
They know it's us buying their products.
And there's no law against that as far as I can remember.
So why don't Congress spend their time trying to control themselves and ask questions where are we spending our money and wasting the tax dollars?
You know, Congress is lobbied, just like you said, by these environmental groups.
The environmental groups are getting their money from where?
They're getting it from OPEC.
OPEC pays these lobbyists to lobby the politicians.
Well, I I'm looking for evidence of that.
I that's a suspicion of mine.
That is if I were a member of OPEC, it would be in my interest to do anything that would stop the American people from uh finding alternative oil supplies uh you know to mine.
But however, do you have evidence of that?
There is evidence of it, and it's uh it can cause room temperature conditions for people, so it's i it's an ugly situation.
There are there are people out here that have that evidence, yes.
We're on the West Coast, and that that evidence is okay.
Well, it you it it's plausible anyway.
But thanks a lot, Wayne.
Let's go to a bill on the cell phone from New Jersey.
Welcome to the show, Bill.
Are you there?
Uh yes, here it uh the New York Post ran an article uh a couple of weeks back talking about underfunding of pension funds and healthcare care funds, and it seemed that mobile Exxon uh was the leader on the list and they were underfunded by something like thirty billion dollars.
Uh it seems that there's some extra profits around now, they should use it to deal in with this problem uh because in the end we become liable to it.
The government has guaranteed pension funds.
Well, uh look, let's put this matter in perspective.
Uh how do you think the underfunding of the pension fund, uh whatever pension funds you're talking about, uh compares to the underfunding of Social Security and prescription drugs.
It's probably only a fraction.
Yeah, you matter of fact, the under the unfunded liability of Social Security and Medicare and prescription drugs is estimated to be between sixty and seventy-one trillion dollars.
And to have Congressman, I've heard Congressman bring up the same uh issue that you're bringing up saying that uh certain un uh pension funds are underfunded, and just imagine that there's the Congress with 71 trillion, sixty trillion uh uh unfunded liabilities, and they're talking about somebody's measly thirty billion.
I think that is disgusting, but thanks a lot, Bill.
Uh by the way, folks, Uh Rush has started an adopt a soldier program.
Now what that means is that any soldier anywhere in the world, he should sign up to be adopted.
And if your soldier son is out of the range of my voice, and if you are a parent of a soldier, you can sign up for him.
Like I I'm quite sure uh Mrs. Williams is not a soldier, but I could sign up for her, couldn't I?
Yeah.
Uh Kit Cart sa Kit Carson says that uh there is hazard duty associated with him.
But in all seriousness, and so what it requ what it requires out of uh you is not a soldier, making the world safe for democracy, you have to call in or you have to sign in, go to the website, and subscribe to the 247, is that right?
Uh okay, you sign up for uh Kit's help me here.
You sign up for a 24-7 Rush Limbaugh uh subscription, and at a reduced price you'll be paired up with a soldier at a reduced price.
And we'll send him the voice of liberty and patriotism while he is overseas.
You ought to do that today.
Rush Limbaugh.com.
Gotta put that www.rush limball dot com.
Uh Kit Carson didn't tell me that.
We'll be back with your calls after this.
We're back.
There's another issue that I was reading about today in the newspaper, and I'll get to your phones in a minute.
Your phone calls in a minute.
And that was a very nice article written by Charles Cratheimer uh in the Washington Post.
And he's talking about the controversy over intelligent design.
Now, I don't want to get into issue over whether intelligent design is more descriptive of the real world than Darwinism.
But there's a conflict going on.
Matter of fact, uh the Dover in Dover, Pennsylvania, the uh whole school board was voted out because they wanted to have intelligent design as part of the school curriculum.
And it's a debate that's that's raging uh in some quarters uh across our country.
Now, but what what is the conflict issue?
I assert that the conflict issue is not over whether there's going to be Darwis and Darwinism taught along with intelligent design.
The issue, the con the source of the conflict, is the government schools.
That is, if you have a government school, either it's going to be intelligent design as part of the curriculum or not.
Uh or it's not going to be a part of the curriculum.
Now the solution is that, well, let me go back before I give the solution.
I think that every parent has the right to determine how and what his kid is taught.
That is, some parents might want their uh kids to uh have condoms when they're teenagers, the school to distribute condoms.
And I think that if a parent wants that, that's the parents right.
Uh some parents uh would like their kids to say prayers in the morning, and some parents would not.
I think that again is the parents' right.
The problem, the conflict could be resolved by getting out of public production or government production of education.
Now you might say, well, there's a case, there might be a case for public financing of education, but there's no case at all for government production of education.
So the way you solve some of the conflict over some of these educational issues is that let's say in Pennsylvania, let's say it costs $7,000 per kid to have him educated.
Okay, so what the state of Pennsylvania does is send out a voucher that's worth seven thousand dollars and let the parent decide what school to send his kid.
That is uh the parent who wants to send his kid to a school that has intelligent design, sends school to c uh sends their kid to the school that has intelligent design.
A kid a parent who wants their kid to say prayers in the morning, they send them to that kind of school.
And you get rid of the conflict.
Now imagine for a moment that there's only gonna be one car produced.
The government was in the business of producing cars and it's only gonna be one car produced.
Well, I like a Lexus.
And you might like a Cadillac.
Well, that means that I have to enter into conflict with you.
Because if I lose, I'm gonna have to drive some crummy Cadillac.
And if you lose, you're gonna have to drive a crummy Lexus.
But to the extent that we don't have government production of cars, well, I buy my Lexus, you buy your Cadillac, and we can be friends.
We can play tennis.
We get rid of the conflict.
The same thing would be true if there were private production of education.
And that's that's the solution.
And it seems so easy, but I think what most Americans like, and it's sad for me to say this as an American.
I think most Americans like forcing their preferences down the throats of other people.
And that is a real tragedy.
Let's go to the phone.
Let's go to Dave on a cell phone.
Rosemead, California.
Welcome to the show.
Uh yeah, Dr. Williams.
Yes.
Uh yeah, I'm letting me let me take a few minutes here to kind of insult you, pretend you didn't know anything and do a little bit of Socratic method.
Okay, okay.
First of all, you we don't have a lot of time.
We're up against the clock.
So you have to hurry up.
Okay.
Who pays Bill Cat Gates' tech taxes?
Who pays it?
Yeah.
I don't know.
Obvious answer is Bill Gates.
Uh-huh.
Where does he get the money?
He gets the money from Microsoft.
But where do they get the money?
They get the money from whoever buys Microsoft products.
So the only the best and only fair way to tax everybody is to change the constitution so that the only tax the federal government can charge is a consumption tax.
Well, well, first of all, there are a couple things.
Before I would a lot of people uh point out the benefits of a consumption tax uh or national sales tax or a or a flat tax, but I urge people that there's a more important issue, and that is federal spending.
Now, for the most part, for most of our history, federal spending was only three percent of the GNP.
Uh now it is 20 some 25% of the GMP if you include the underground government.
And so if the federal government is only 3% of the GMP, almost any kind of tax system is non-abusive.
But if the federal uh spending is 50, 60, 70% of the GMP, any tax system is oppressive.
I don't care whether it's a fair tax, flat tax, or income tax.
We'll be back with your calls after this.
But folks, you really have to stay tuned for the last hour.
Uh, we're gonna have Tony Blankly on, and he's gonna talk about his new book, The West's Last Chance.
Will we win the Clash of Civilizations?
I urge you to tune in or stay tuned for this.
Let's go back to the phones, and we have Natalie from Stewart, Florida.
Welcome to the show, Natalie.
Hi, Professor Williams.
It's an honor.
Thank you.
I must know what Mrs. Williams is getting for Christmas this year.
Uh, well, uh, folks, uh, if you're not up to date, my theory on Christmas gifts for the wife is to kind of look around the house and see what you're gonna have to buy anyway and buy that for a gift.
Now, for example, uh, and I I'll probably talk a little more in the next next hour, but for example, uh Mrs. Williams had a heart problem last year, and so when she got out of the hospital, a doctor said she couldn't do a lot of heavy lifting.
And so what I did for a Christmas present last year, I bought her a little children's snow shovel so that she can shovel the driveway, and the little shovel doesn't hold much snow, so it doesn't weigh much.
And so that way it's a little bit easier on her heart.
So, but but guys, you have to get imaginative.
Just look around the house for something you have to buy and buy that for a gift.
But wrap it nicely.
That is ver that's the key.
Because Mrs. Williams, you should see the smile on her face when she's opened up the package with a little shovel in it.
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