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Sept. 25, 2008 - Rush Limbaugh Program
36:49
September 25, 2008, Thursday, Hour #1
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Welcome to today's edition of The Rush 24-7 podcast.
For me, it boils down to who do you trust.
Now, in this financial rescue thing, it boils down to who do you trust.
Let's face it, folks, there are very few of us who can spend hours and hours and hours reading things about this.
I'm trying to rescue and talking to people about it, and still come away with anything approaching expert status.
So who do you trust?
Do you trust the president in his speech last night?
Do you trust Paulson?
Do you trust Barney Frank?
Do you trust Chris Dodd?
Do you trust McCain?
Do you trust Obama?
Who do you trust here?
I'll tell you who you trust.
You trust conservatism.
You trust conservatism, and I'll I'm gonna I'm gonna explain what I mean by that during the course of the program.
This is one of these three-hour jobs today.
They're all three hours, but it's gonna take three hours to get all this done today.
Don't expect it all done in the first 15 or 20 minutes here.
It's just not possible.
There's so much going on out there from McCain pulling out of the debate.
Poor Obama.
Poor Obama doesn't know what hit him.
I'm not looking, of course, this is politics, and of course it's a gimmick.
But this is what McCain does.
People have got to figure out when McCain sees an opportunity.
By the way, welcome.
It's the Rush Limbaugh program, a phone number 800 282-2882.
When McCain sees an opportunity to quote unquote rise above politics, he's gonna take it.
And he's done it here, and of course, old Barry's stuck down there in um in Clearwater, prepping for the foreign policy debate to barnight.
Uh he basically says, Yeah, call me if you need me.
When McCain says, get yourself up here, we're gonna work together on solving this financial crazy.
Well, call me if you need me.
And then he goes out and says, Hey, this was my idea.
You know, I wanted a joint statement this morning, and then McCain trumped me on this, and uh just it's it's you know, this is crazy.
And then he starts thinking, you know, well, we can still do the debate.
Presidents ought to be able to do more than one thing at a time.
Well, here's Obama, who apparently can't do more than one thing at a time.
Meanwhile, Bill Clinton is dropped, I mean, the uncivil war is back to the Democrat Party.
Bill Clinton is dropping neutron bombs all over the place against Obama.
And the campaign, no one's dying but the energy, the electricity has been knocked out of this campaign.
Obama, I'm I'm sure I'm convinced now he did not know who he was messing with when he dissed Hillary for the vice presidential nomination.
The Clintons, you know, when they were no longer treated as the king and queen of the party, uh, they went to war.
Bill Clinton is on Good Morning America today, admitting that the Democrats blocked reform of Freddie Mac and Fannie Mae.
Bill Clinton was on Good Morning America today, uh, praising McCain to the hilt.
Uh it blowing it is blowing Obama and Democrats away on every television show he appears.
He doesn't say that Obama's unfit, and he doesn't say that he's gonna vote for McCain, but he does.
Now what is what is Bill Care?
Hillary's a senator, he's a multi-millionaire, got rich during the Bush years.
Uh Obama and Michelle are gonna have to go through him if they want to get on that gravy train.
And right now, Obama's got to do more than two things at once.
He has to go to Washington and he cannot vote present.
He did not want his vote on this.
He did not want to be tied to it because he can't, you know, he's just one of a hundred people in the Senate.
He can't control what they're gonna do.
He's just one vote.
So he wants to vote present.
He's got people like Frank Lane's uh Frank Reigns and Jim Johnson on his staff who helped create this problem.
He has to pretend to look presidential as uh as he follows McCain and Bush's lead.
By the way, uh McCain spoke at the Clinton Global Initiative, and I understand being polite, but you gotta understand McCain was gushing in his praise for Clinton this morning, and I got a lot of emails.
Look at I understand Rush the need for him to be polite, but why in the world gush like well, you understand what Clinton is doing to Obama out there every chance he gets, folks.
McCain is indebted to him here.
I mean, this there literally are neutron bombs being dropped all over Paul Barry's campaign Here, and he has no clue.
He doesn't really know it.
So he's got to pretend to look presidential as he follows McCain and Bush's lead.
Here was the Clinton Global initiative, which is a joke, but still it happened there in New York, and McCain shows up in does his little speech and then hightails it back to Washington.
They got Barry down on uh on video on a camera on a screen there on the stage, because he's still in Clearwater, Florida.
Uh debate prepping.
And the uh the I watched a little bit of it.
It looks like that he's having telepromps, but he's not.
I don't think that's what it was.
For those of you who saw it, I I think Barry was waiting for the applause to die down when he thought there was going to be applause.
Uh and so he was uh he didn't want his next comments to be overcome.
But have you ever noticed, folks?
I finally figured out something every time Obama speaks, could be two people in a room, could be 200,000 out there in Berlin or whatever, and he always looks like he's looking over the horizon with his messianic, he's he never looks people, he's always looking away like this, as though they're the multitudes stretch so far that he has to look practically 45 degrees in the sky in order to be able to see them all.
That's a trick.
You know how they're doing it?
They put the teleprompter above his eye level.
So he has to constantly look up, and it's this looking up and looking around and so forth that it makes it look like he's addressing the multitudes that stretch from coast to coast.
Barack Obama.
He has to squirm, wondering if there's going to be a debate on Friday now.
I'll tell you what Ike is going to happen on that, by the way.
I think after the meeting today at the White House, McCain will come out of there.
Obama will come out of there, and McCain will say, There's been so much progress.
We have come so close here to finalizing our deal that I think our debate tomorrow night should take place on the economy.
While Barry has not prepped, he's been prepping on foreign policy.
I don't know how much prep Barry has to do on foreign policy.
His foreign policy is we lose.
His foreign policy is meet with uh Ahmadinizad with no preconditions.
Did you see where Obama, one of his financial bundlers from Code Pink, hosted a dinner for Ahmadini's od earlier this week?
In New Yes, Jody Evans is her name, and she was also one of the she's Code Pink, Code Pink Women for Peace, these people always getting into congressional hearings and protesting during the Iraq War testimony, general show up and so forth.
She was one of the bundlers of his big uh nine million dollar night in Hollywood.
And Ahmedini's, of course he's going to meet with an anti-American crowd, and they showed up, and she's one of Obama's bundlers.
And you have to wonder now, I mean, we know who these people are, they're cook fringe leftist anti-Americans, but they're also Obama supporters.
Obama bundlers, Obama fundraisers meeting with Mahmood Ahmadinizad in New York to discuss the evils of the United States of America.
Uh let's let's go to the audio sound bites.
Let's wait, because I I don't want to wait till the last hour today to go through them.
This this is two sound bites from Obama.
Yesterday in Clearwater, Florida, he held a little press conference, unidentified reporters.
Do you plan on attending the debate Friday?
Uh and is Senator McCain playing politics uh with this by saying he would not go to the debate?
It's my belief that this is exactly the time when the American people need to hear from the person who in approximately 40 days will be responsible for dealing with this mess.
Wrong, Barry.
And I think that it is uh it is going to be part of the president's job to deal with more than one thing at once.
Oh, yeah.
Oh, yeah.
Barry Obama wants to deal with one thing more than an insult to McCain.
McCain has dealt with more than one thing at once.
While he's being tortured in the prisoner of war hotel over in Hanoi, he was also able to recite the offensive line of the Green Bay Packers.
Don't talk to McCain, Barry, about doing two things at once.
And by the way, Barry, the new president's not going to be president in 40 days.
That's the election doofus.
Then an unidentified reporter said, Your decision to stay here, are you are you still going to stay here in Florida and prepare for the debate, or you think it'd be going back to Washington?
If I can be helpful, then I'm prepared to be anywhere anytime.
If you need us, if I can be helpful, I'm prepared to be there at any point.
You know, presidents are gonna have to deal with more than one thing at a time.
Uh it's not necessary for us to think that uh we can only do one thing uh and suspend everything else.
Okay, so there's the David Axelrod talking point, and that is we have to be able to deal with more than one thing at a time.
So he says essentially it's congressional leadership needed him, he'd be available.
Call me if you need me.
Now, who is he?
He is the he's the leader of his party right now, and he seemed to have absolutely no interest in being involved in this very important issue that's being discussed up there.
Uh his he you he does have a job.
And his job right now is senator.
That's where he ought to be.
Well, call me if you need me.
Uh be glad to show up if you need.
Okay, look, I'm too busy playing God here.
I'm too busy being Messiah, I'm too busy to preparing for the call me if you need me, but I really wish you'd handle this on your own.
And then Harry Reed's out there saying, McCain, we don't need you, stay away.
Do you know by the way, did you hear what Bob Schiefer reported about this today on CBA?
Bob Schiefer said somebody told him, he was on the CBS uh early show this morning.
He said that somebody told him that uh Paulson, Hank Paulson called Senator Lindsey Grahamnesty after he met with the House Republicans yesterday, and only four of them said they would support the rescue plan.
Paulson called Lindsay Gramnesty and said, You got to get McCain up here.
McCain is the only guy that can provide cover for these Republicans.
You got to get McCain up here talking to these guys.
So Gramnesty called McCain, and that's how McCain ended up, according to CBS News.
That's how McCain ended up going to Washington.
It was not, therefore, a stunt that they contrived out of whole cloth.
There was a request from the Treasury Secretary to McCain, not to Obama.
I don't know why Paulson just didn't call McCain himself.
We call Lindsey Grahamnesty, but that's that's what Bob Schiefer said today.
Now let's let's go to some Bill Clinton neutron bombs.
This is Good Morning America today, co-host.
Now wait a second.
Yeah.
Uh co-host Chris Cuomo.
Delaying the debate.
McCain.
A good move.
We know he didn't do it because he was afraid because Senator McCain wanted more debates.
You could put it off a few days.
The problem is it's hard to reschedule those things.
I presume he did that in good faith, since I know he wanted.
I remember he asked for more debates to go all around the country.
And so I don't think we ought to overly parse that.
You heard it.
Neutron bomb number one.
Bill Clinton, he just threw Obama under the bus.
Here is here's Bill Clinton.
Hey, look, he's a guy that wanted all those town halls.
Maybe he wanted 10 of them.
And I didn't see the other guy say, okay, I'll be there.
So I mean, I'm McCain, he's not afraid to debate.
Let me tell you something about these debates, too, folks.
These debates.
They're phony things.
They're total media creations.
What happens in a debate?
Okay, these two guys show up someplace, they stand at lecterns, and you have three or four selected elites from the drive-by media get to ask the questions, therefore, frame the whole debate.
The candidates don't.
After it's over, the drive-by's then head to the spin room where various representatives of both candidates tell the drive-bys what they didn't hear, but that they wanted them to hear.
And then the drive-by's tell us after all that what they heard that they wanted us to hear, defying our own eyes and what we saw.
They tell us you didn't see what you saw.
Obama kicked butt tonight.
If you think McCain did, it's not gonna happen that way.
Media front to back.
That is why the saddleback church thing was so great.
There was no media in it.
There was no pre-media, there was no post media, there was no spin.
Well that a little spin room out there, I think, but that it it wasn't, it wasn't so this is no great loss.
This is McCain going straight over the media to the voters, a la the way Reagan did, And that's what they're doing with Sarah Palin.
All right, one more Bill Clinton neutron bomb, also from Good Morning America.
Chris Cuomo says it's a little surprising to you.
I hear the Democrats saying this came out of nowhere.
I mean, this was this is all the Republicans.
Pelosi saying it.
She knew what was going on with the SEC.
They're all sophisticated people.
Is that playing politics in this situation?
The responsibility that the Democrats have may rest more in resisting any efforts by uh Republicans in the Congress or by me when I was president to put some uh standards and tighten up a little on Fannie Mae and Freddie Mac.
Tighten up.
Now, this is the guy that caused the problem.
Here's the this is the guy that caused the problem, but notice what he's doing.
He not just neutron bombing Obama, he's neutron bombing the Democrats.
Yeah, the Democrats, I mean, uh, the Republicans really wanted to reform this.
I did too.
But this is my party stood in the way of this.
We want to tighten them up a little back there, but they're Democrats that won't go along.
Neutron bombs Bill Clinton all over.
I know.
But this is typical of Clinton to say, and I tried to uh, you know, I did everything I could.
I worked, I never worked harder than anything I ever did.
Try to straighten out this mess, but they wouldn't listen to me.
You just have to laugh, and we will continue to do so, folks, because we are Americans.
And we'll be back right after this.
Stay with us.
Not that it matters uh to anything major, ladies and gentlemen.
Interesting little tidbit of news from the business and media institute.
Uh media not talking about this.
Barney Frank's ex lover, his ex-boyfriend, was an executive at Fannie May when all of this uh excrement started hitting the fan.
Now, Barney has received 40,000 in donations over the years from uh from Fannie Mae, Freddie Mack.
Uh the guy's name is uh Herb Moses.
Now, Herb's gone now.
He left uh he left Fannie Mae's working at some place like a pottery barn, uh joining the arts and croissant crowd, the the uh Chablis and Brie bunch.
Uh but anyway, just interesting little tidbit.
Now, in in Obama's response to McCain's announcement yesterday, he kept mentioning a joint statement that he thought was something important.
Yeah, I mean, that's big.
That's really big.
He wanted to put out a joint statement.
See, that way he could pretend that he's not partisan, except joint statements aren't the same as getting legislation passed.
Joint statements don't do anything.
They are typical of Obama who doesn't do anything.
He doesn't take a stand on anything because he doesn't want to have to explain it later on.
A joint statement is a symbolic gesture that means nothing.
Exactly way a good way to define Obama.
It's perfect for him.
He wanted to pretend he was a Rainmaker.
He wanted to pretend he was a leader who could get things done.
Whether you agree with what's about to happen here, and it does boil down to who do you trust in all this?
McCain and Bush acted like leaders.
Obama acted like a poser.
He had his little meaningless joint statement there.
Little Barry didn't think he was needed in Washington.
Call me if you need me.
Call me.
He's only the leader of his party.
The debate's taking place where he has a job.
Call me if you need me.
Uh this is the kind of guy who thinks a treaty has the weight of a peace imposed by winning a war.
This is a guy who thinks he can sit down, talk to Ahmedinizad, issue a joint statement, and poof, Iran's no more an enemy.
He's a man child, my friends.
He doesn't understand that a failure to quickly solve a credit crisis risks long-term damage to countless Americans.
He said we could call him on a phone if he was needed.
You talk about callous, talk about not having the judgment to lead.
Sounds like a guy who would remain an active member of a racist church for 20 years and not know what's going on in there.
He's not in touch with reality.
He doesn't get it.
He still has Jim Johnson advising his campaign from Fannie Mae.
How about a joint statement uh on Why Jim Johnson's advising his campaign, Barry?
Why don't you put a statement out explaining that?
I want to go back.
Snurdley was paralyzed for three minutes after this Clinton bit.
And one more time, Chris Cuomo, look at all these Democrats saying that this problem, financial problem, is all a Republican's fault.
What do you say to that?
The responsibility that the Democrats have may rest more in resisting any efforts by uh Republicans in the Congress or by me when I was president to put some uh standards and tighten up a little on Fannie Mae and Freddie Mac.
Look at Pal.
You caused this.
This is all traceable to the Democrats, resisting oversight, resisting reform, creating the mechanisms in the first place, traceable right to you and Jimmy Carter.
This is just but he's dumping on his party.
I'm telling you, this guy mad at the party leaders.
He's mad.
He thinks Obama's gonna lose, and he and Hillary are gonna pick it all back up.
By the way, we've I've been mentioning to do this for a couple weeks.
A friend of mine has just written a new book and uh ran a commercial for it in the first uh availability of this just concluded spot break.
Ted Bell's his name, good friend of mine down here in Palm Beach, uh, his is written a book called Tsar, T S A R. You may remember me talking about this book.
I he gave me an advanced copy of it uh in the summertime, maybe, maybe early spring.
And I started, I I read the I stayed up all night reading, I could not.
This is a novel, but it is about the uh reemergence of Russia.
Really, really prescient.
Now, he changed a little couple things in the ending, uh, which you don't know about because I didn't tell you how it ends.
I didn't tell you much about it, but it's it really is a great it got me back into reading novels again.
I hadn't I hadn't been reading novels for a couple of years because I've been so busy with their stuff.
TSA Arts by Ted Bell.
And uh if you have some idle time and and you um you want to be really entertained, it is just a fabulous book and a fabulous story.
Guess what?
Have you heard that the government agreed to loan automakers 25 billion dollars this year and another 25 billion next year?
The FDIC says it's gonna need a hundred and fifty billion to maybe take care of some of these banks that are gonna go south in the coming months.
We're talking $700 billion now to bail out the mortgage industry of the credit markets, essentially.
And while all this is going on underneath the radar, you probably heard yesterday that the Democrats decided to cave on the moratorium against offshore drilling.
And if you heard me discuss this, you also heard me say that this is just a cheap political move for appearances because of $350, $4 a gallon gasoline, all the uh the the grief they're getting from constituents.
I said what they're gonna do, they're gonna have their legal beagles get with the uh environmentalist wackos and start filing lawsuits every project that comes up.
Guess what has happened?
There's all these temporary spending bills are taking place right now because the uh everybody's got so many irons in the fire.
Harry Reed has I'm sorry for laughing at this.
It's just this this stuff just strikes me funny because it's so predictable.
Harry Reid has decided to sneak an extension of the oil shale ban in a piece of uh continuing resolution legislation that is being debated now in the Senate.
One day, now the is it the the offshore drilling moratorium has been lifted, but he's putting back the oil shale moratorium one day, sneaking it in there.
Jim Dement found it.
These guys.
You know, I laugh, but I'm Kerry Reed and who else?
Chris Dodd, uh Barney Frank.
These people need to be punished for what they have done.
And in America, the way they are punished is they are voted out of office.
Now I know that's highly unlikely because they all come from blue districts and blue states.
Now, in looking into the financial mess, as I said at the beginning of the program, I it it who do you trust here?
It's simply too massive, and there are too many opinions.
I mean, you can go certain places and you can find a conservative.
Say, I've been talking to smartest people in the room, smartest people in the room, and they tell me, you know, uh, we gotta do this, and we gotta do it.
We gotta do it now.
And if we don't do it now, we're in big trouble.
And other people say, well, you know, I've been talking to people in the smartest people in the room here, and they say this can't, this is a disaster waiting to happen.
And if we do this, we're going to be paying for this for the rest of our lives, or we're going to end up with socialized, nationalized everything.
And then other people are saying, I've talked to the smartest people in the room about this.
And one thing I have understood, yeah, we've got to be conservatives and we've got to be conservatives first, but this trumps conservative.
And that's the one that got me.
Cause for me, nothing trumps conservatism.
There are ways of dealing with this that do not have to include total socialization of the market process or the nationalization of the mortgage industry.
Now, I went and read a piece today in the Wall Street Journal, and it happens to end up being one of the most persuasive pieces I have read in uh in all of this.
It's by Andy Kessler, a former hedge fund manager.
And he's the author of How We Got Here, published in 2005.
Let me join his column in progress.
Here's what's happened so far.
New technology like electronic trading, i.e.
Chuck Schwab, meant that Wall Street's bread and butter business of investment banking and trading stocks stopped making a lot of money years ago.
So investment banks took their enormous capital and at first packaged yield-enhanced subprime mortgage loans into complex derivatives such as collaterized debt obligations.
Eventually and stupidly, these institutions owned them for themselves, lots of them, often at 30 to 1 leverage.
The financial products were made safe by insurance products, known as credit default swaps, a credit derivative from companies such as AIG.
When housing turned down, the mortgages and derivatives were worth a lot less, and no one would lend Wall Street any money.
And then the piling on started.
Hedge funds could short financial stocks and then bid down the prices of CDOs stuck on Wall Street balance sheets.
And this was pretty easy to do in an illiquid market because of the federal accounting standard board's mark to market 157 rule.
Wall Street had to write off the lower value of these securities and raise more capital, diluting shareholders.
So the stock prices would drop, which is uh what the shorts wanted in the first place, it was all legitimate.
There's a saying on Wall Street the market can stay irrational longer than you can stay solvent.
Long-term capital management learned that lesson ten years ago when it got its portfolio picked off by Wall Street as its short-term financing dried up.
I had thought the opposite.
Hedge funds picking off Wall Street would happen today, but in a weird twist, it's the government that's set up to win the prize.
Here's how.
As short-term financing dried up, Fannie Mae and Freddie Mac's deteriorating financials threatened to trigger some $1.4 trillion in credit default swap payments that no one, including AIG, had the capital to make good on.
So the Treasury Secretary, Henry Paulson, put Fannie and Freddie into conservatorship.
This removed any short-term financing hassle.
He also put up $85 billion in loan guarantees to AIG in exchange for 80% of the company.
Taxpayers will get their money back on AIG.
Mr. Kessler says my models suggest that Fanny and Freddie on the other hand are a gold mine for two billion dollars in cash up front and some 200 billion in loan guarantees so far.
And let's not forget that.
We've already I thought it was 300 billion, but we've we've already put at least 200 billion into this whole process.
And he's okay for two billion in cash up front and some 200 billion in loan guarantees so far, the U.S. government now controls five point four trillion dollars in mortgages and mortgage guarantees.
Fanny and Freddie each own around $800 million in mortgage loans, Some of them already get discounted values.
They also guarantee the credit worthiness of another 2.2 trillion and 1.6 trillion in mortgage backed securities.
If they're held to maturity, they may be worth a lot more than Mr. Paulson's going to have to pay for them.
They're called distressed securities for reason.
The bottom line is, and he says the government, if Paulson is able to buy up all these mortgages, and by the way, most of them are not into foreclosure yet.
Most of them haven't defaulted.
If Paulson, if the Treasury is able to buy up for $700 billion, $800 billion, all of these mortgages, and hold on to them, and then sell them off as the market value is established on them.
This guy's model say anywhere from $1.1 to $2.1 trillion could be realized by the government.
Being in the mortgage business, the government as an investment bank.
He says my calculations, which assume 50% impairment on subprime loans, suggest it's possible all in for this portfolio that the government's going to buy here to generate between one trillion and two point two trillion, the greatest trade ever.
Every hedge fund manager will be jealous.
Mr. Buffett's buying a small piece of the trade via his Goldman Sachs investment.
And by the way, a lot of people saying this means we've reached the bottom.
When the smart money gets in, the smart money in this case being Buffett, by the way, I never have either trusted a guy named after a smorgasbord.
But nevertheless, when they're saying the smart money gets in, Warren Buffett gets in, that means we're near the bottom of the market.
And that's one of the reasons why the Dow Jones Industrial Averages up a little bit.
Now, I have some thoughts on this because this one of the reasons why this piece, see, this piece makes it clear this is not a bailout.
It's a rescue.
Now these things still have some value.
I don't know what the value is, and they haven't been foreclosed none.
They're pretty close to worthless, but it's not technically a bailout.
And of course you're hearing all these warnings.
If we don't do this, then there's gonna not gonna be any credit.
Okay, now what does that mean?
Well, it could mean something like this.
Now I'm gonna give you an extreme example.
It could mean that all of our credit cards, outstanding balance is going to be called in.
Because there's no more credit.
If they're if if the if the credit markets have no cash to lend money, and if the assets that they hold are worthless, then there's no credit.
And if there's no credit, there's no expansion.
If there's no expansion, there's no growth.
Now, this is an extreme scenario, but this is what they're using.
They're using two things to sell this rescue plan.
They're using fear of you losing and everybody losing their credit, and the come on, wow, look how much money the government can make here.
2.2 trillion, 2.1 trillion.
Can you imagine the debt service that we could debt service?
Remember the peace dividend?
What do they do with it?
It didn't even exist.
They grew the government.
This is the kind of money, if Obama is elected, this is the money that will fund all of his brand new big-time social programs.
There's a lot to think about here.
And I'll get started with the analysis of all this after this brief timeout.
Sit tight.
Okay, here we go.
The uh piece I just read to you, Andy Kessler.
I should give you the headline, the Paulson plan will make money for taxpayers.
That's that's and he's a hedge fund manager, and that's how he's looking at the former hedge fund manager, and that's how he analyzes as one of these economists that has computer models and he's runs some uh projections.
Now, if this guy's right, and who knows?
See, that's a we don't know who to trust, and we don't know who's gonna end up being right.
Our experience is I'm from the government and I'm here to help you means we're gonna get screwed.
And we know there's not one single person involved in this that you can I trust with that.
There's not a Ronald Reagan here.
But Ronald Reagan would say we had to do this, I would believe it.
For example, there isn't one of those.
So you got to scrounge around and it's actually a great educational process.
I mean, I sturdely came in today and said, I did I have never worked harder in my life trying to understand this financial thing.
I've been spending more time this past week working and trying to Understand this?
Because I uh this all it's all Greek, all these lingo lingo jingo they use and talk about these derivatives and the credit whoops and whatever.
But it has been an amazing educational exercise.
But if this guy, Mr. Kessler is right, it underscores points made prior to today by me on this program.
Number one, that the federal government is nationalizing the financial markets.
I don't care what anybody says this is nationalizing the financial markets.
Number two, these loans, it makes it clear in this piece, have not yet defaulted, even if they are risky.
Number three, when the market recovers, the federal government will be able to make lots of money selling the undefaulted loans back to the private sector, even if they're sold below their original value, it will be more than the government paid to take them off the hands of the financial institutions today.
It's made clear by Mr. Kessler in his piece.
Also, we can conclude, since he's a former hedge fund manager and he's like he likes this, we can conclude that Wall Street's desperate for this to happen, so that these financial institutions that are in need of cash can get it and get it fast, whatever the price they have to sell their loans for.
Cash is king right now, they don't have any, and they need it.
They can't borrow.
They can't lend.
They can't do diddly squat.
The federal government, as Mr. Kessler makes clear, will have a windfall of potentially trillions of dollars, which experience tells me will be used to expand the size of government.
I have yet to see a budget one year less than the budget the prior year.
I have never seen the federal government with a huge stash of money that it didn't expect.
You know what?
We might be able to make a dent in Social Security here if we put a little we might make a dent in Medicare.
We might maybe we could cancel a pro they come up with new stuff to spend it on.
So that's why look at this.
If Obama gets elected, this windfall, if it happens, will pay for all the new programs at the front end.
Whether the money was realized or not, as long as it's as long as we're being told, hey, this could generate 2.1 trillion, they're gonna start spending it now.
Especially if it's Obama.
McCain McCain McCain, let me go on now.
The Warren Buffett here is posed to make another fortune.
He is an Obama advisor.
Soros made a fortune betting against the British pound.
George Soros in the currency markets made a billion dollars betting against the British pound.
So you you've got you you watch people who make the money on this thing.
Who are the people that are really going to make the money on this?
Is it more than just making people whole and able to do business again?
Does it does it contain a lot of golden opportunities for people to take some of this stash and enrich themselves personally?
Now that these are the kind of rules that are going to have to be built into this.
I I'll tell you that as you go through this and you understand it, what becomes clear to me, and I said the beginning of this hour, who do you trust?
I trust conservatism.
Conservatism free market economies work.
It is based on growth.
If you want, you want to spur Wall Street, you want to give those people some confidence, you want to give them some cash right now.
Just suspend the capital gains rate.
Just end it.
It's now 15%, take it to zero.
For a year or two.
You watch what happens.
You watch what happens to the Dow Jones Industrial.
You watch what happens, all the money pouring in, but we'll not get our share of the government.
Wait a minute.
I thought I thought this is more important than anything.
Either we're hearing we've got to do this or it's over.
So can't you guys in government maybe do away just for a year or two with the capital gains tax?
Catch just look at look at the downside or the upside rate.
You're going to get all these new trillions by taking over all these mortgages.
Maybe you could get rid too of the corporate tax rate for the same period of time.
Try a little conservatism here.
We don't have to have this all decided By five o'clock this afternoon, so that we can do our debate tomorrow night.
Every time I hear we don't, I mean, people have been telling us the fundamentals of our economy are strong and no problem.
All of a sudden, yesterday, we're past two days, if we don't get this done by the end of the week, I don't even want to think about it.
Well, whatever else they're gonna do, put some conservatism in it.
Cut taxes, spur growth.
We know how to do it.
It works every time it's tried, and it'll generate so much revenue that the $700 billion will not be needed.
Back in just a second.
By the way, folks, much more on this coming up, but don't be fooled by this notion that taxpayers are gonna make a lot of money on this.
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