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Sept. 30, 2008 - Rush Limbaugh Program
36:44
September 30, 2008, Tuesday, Hour #1
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Welcome to today's edition of the Rush 24-7 podcast.
I want to dedicate today's Dow Jones Industrial Average is at about 269 up at the moment to the Republicans in the House of Representatives for their boldness yesterday.
Greetings, ladies and gentlemen, Rushlin Baugh, the Excellence in Broadcasting Network, and three hours of broadcast excellence.
As you have come to know, love, and expect, straight ahead.
For the next three hours, telephone number 800-282-2882, the email address lrushbow at EIBnet.com.
I was going to say, I can't believe how wrong everybody's getting this.
Then I have to stop and think, yes, I can believe how wrong everybody's getting this because the drive-bys are in the tank for the Democrats and for Obama, and they're stupid.
They're dumb.
They do not understand economics.
They understand the narrative that Washington is the solution to every problem.
And when Washington fails, the country fails.
And it's just the exact opposite.
Glenn Reynolds, who runs the blog Little Green Footballs, had somebody send him an email yesterday, a reader of his at a major drive-by media newsroom.
And this little email will set up the rest of the program today.
Off the record, every suspicion you have about the mainstream media being in the tank for Obama is true.
We have a team of four people going through dumpsters in Alaska, four people in Arizona.
Not a single person looking into Acorn, Ayers, or Freddie Mac.
Our editor refuses to publish anything that would jeopardize the election for Obama.
And betting you dollars to know that's the same is true at the New York Times and other places.
People cheer in the newsroom here when CNN or NBC run another Palin mocking, but raising any reasonable inquiry into Obama is derided or flat out ignored.
The fix is in and it is working.
This is a reader of Little Green Footballs working in a major newsroom, sending an email to Glenn Reynolds there that we knew this.
We've known it all along.
So it really shouldn't come as any surprise.
Let's start with this bit of news here.
The Dow Jones Industrial Average is up about 269.
NASDAQ is up 265 today.
Who in the world at the close of business yesterday thought that would be the case today?
Well, you might have snerdly, and I kind of expected it, but I'll guarantee you, the wizards of SMART in Washington and New York are stunned today.
They cannot understand.
They don't believe this.
They thought another 700-point drop was headed our way.
Because remember now, the template and the narrative is when Washington doesn't do something, the country is headed for disaster.
When in fact, it's just the exact opposite.
Here's a story from Reuters today.
Headline, stocks higher after consumer confidence.
Stocks held onto positive territory on Tuesday after a report showed stronger than expected reading in a gauge of consumer confidence.
The report from the conference board provided an added positive spur as a gauge of manufacturing activity in the U.S. Midwest region also showed a stronger than expected reading.
Every economic story, I don't care whether it is down or up, is unexpected from the AP, from Reuters, from wherever it comes from.
A day after the House rejected the proposed $700 billion rescue plan to rescue the U.S. financial sector, investors held out hope that leaders in Washington might work out and need this agreement.
How do they know this?
The Consumer Confidence Report is for the month of September.
It was not taken after yesterday's bailout vote failed.
It's for the month of September.
I bet you take it today.
If it is reflective, it's because the American people overwhelmingly are happy that this bailout bill did not happen as it was written.
There was nothing new in what was voted on yesterday from the original proposal.
Yesterday's proposal that went down into tubes was the same as the first proposed it gave the Treasury Secretary, and that could mean Paulson for the next three months.
If Obama wins, it could mean Franklin Reigns is back as Secretary of the Treasury or somebody like that, and puts them in charge of ensuring the economic well-being of every citizen.
It's not possible.
Karl Marx, number five, Communist Manifesto, if he knew what was going on in the United States, he would be thrilled today.
I'll share with you why in mere moments.
But everybody is misunderstanding what happened yesterday.
CNN is destroying the Republicans.
Our friends at National Review Online in their blog, The Corner, are destroying the Republicans.
Well, I know, Snurdley, you may not read them, but people on the Hill do.
You know, and the Republicans on the Hill do not understand what's happened to Mr. Buckley's organization because they're being ripped to shreds by conservatives at the corner and other places.
The fact of the matter is, Nancy Pelosi got exactly what she wanted yesterday.
She got an economic disaster, perceived economic disaster.
The bill went down to defeat.
It was by design to go down to defeat.
Nancy Pelosi didn't do one thing to stop renegade Democrats from voting against the bailout.
There are a lot of Democrats in very unsafe seats, unsafe districts right now.
They had to vote no because the overwhelming majority of the American people wanted no part of this as written.
They understand this is as complicated as the language of this is.
It's not complex to understand for the average citizen, which understands that the market and the government are two different things.
And they understand that the government has botched every attempt it's made to toy with, fix, promote, whatever the market.
They instinctively understand that this is not how these things are to be done.
They also understand that for $700 billion, you could give every American $75,000 toward retiring their mortgage.
And if this is a mortgage crisis, then give every American $75,000 or $50,000 instead of giving it to someplace else to shore up so-called liquidity.
They understand if you're going to start passing out money, give it to us.
Our mortgage is the ones that are in trouble.
If you're really concerned about this, they're safe.
You're really, really concerned.
Imagine the economic activity that would be spurred on if 75,000, if we're going to give $700 million away, billion away.
Now, don't misunderstand.
I'm not suggesting this should happen, but I'm saying the American people say, if you're going to give $700 billion away, why are you going to give it to people who made these bad loans in the first place just to get them healthy?
Give it to us.
Let us retire a lot of our mortgages and watch us go to town here in the economy, causing economic growth.
I mean, if the objective here is to bring the economy back, save the economy, then hell, give it to us.
They instinctively understand this.
So there's a lot, there's a lot at work here, and it's simple to understand.
There were five committee chairmen that owe their careers to Nancy Pelosi, who voted against the bailout.
She didn't try to twist their arms.
She didn't do anything of the sort.
She goes out there looking all ash-faced yesterday, like it's the dregs of disappointment.
She got exactly what she wanted today.
She's got the idiots, the economic illiterates at CNN, at MSNBC, at ABC, CBS, wherever, blaming McCain, blaming Republicans, 35 days before an election, five weeks out, the drive-by media is following right as they should, blaming Republicans for an upcoming economic disaster.
They played economic and election issue politics yesterday, disguised as trying to help the country and save the country.
The Democrats want as much economic chaos as they can create.
Excuse me.
They want as much angst.
They want as much concern.
They want you thinking crisis, They want all of this happening so that you will elect Obama.
And it's, you know, the Republicans in Congress, I think, went out there and said some things about Pelosi's speech yesterday that a lot of Republicans, a lot of conservatives, come on, you guys, can you grow up?
Don't tell us that you changed your vote on saving the country because Pelosi delivered a partisan speech.
I frankly think that's what they said, but I don't think that's at all why they changed their vote, if they changed their vote at all.
I think that's what they went out there and said with the speech by Pelosi was irresponsible.
She is stupid.
$1 trillion of wealth was lost yesterday with that 777-point drop.
But it's coming back a little bit today as it's up 264 points at the Dow Jones Industrial Average.
Now, I think what happened, this is pure politics.
The Democrats are so the Republicans in the House are sitting here watching the vote go, and they're seeing all these Democrats vote no.
Do you know that 12 members of Barney Frank's committee voted no?
And Barney Frank wasn't running around trying to change any votes.
So the Republicans are watching all these Democrats vote no after being told all week it was their responsibility to join with Democrats to make this happen.
And after knowing full well if the Democrats really wanted this to happen, they could have passed it on their own without Republican help.
That was the spin.
And then they sit there and they see all these Democrats voting against it, voting nay, and they say, wait a minute, what's happening here?
And they figured it out.
They figured out that the vast majority of public opinion around the country is dead set opposed to this.
It is even close.
And they see Democrats in crucially close districts voting against it so they can run around and campaign.
I voted against that bailout.
I knew it was the wrong thing to do so they could turn it, but our Republicans voted for it.
It was a setup from the get-go.
And however it is that the Republicans decided to change votes or to vote against it, it was the wise and smart thing to do.
Now there's time to put something together that makes some sense.
But this is not the bunch to do it.
This is the bunch that caused it.
I sit here in continual amazement that we are willing to elect the very thieves that stole from Fannie Mae, Freddie Mac, the very thieves that I'll tell you something else.
Not only do Barney Frank and Chris Dodd at all need to leave office, we need to shut down Fannie Mae and Freddie Mac.
Shut them down.
What have they done for us?
What is the value that they have provided?
Shut them.
They are at the root of all of this.
Had Fannie Mae and Freddie Mac not done what they did and had it not been papered over and ignored by regulators in the House, the oversight committees, we wouldn't be where we are today.
It's just that simple.
Now, you might be saying, Rush, Pelosi's looking really bad.
How do you know she got what she wants?
You got to understand.
You have to understand how they look at things.
The country is second or third on their list right now.
Power is number one.
Winning the White House, number one, holding the House and Senate.
Blaming Republicans is number two for everything that has gone wrong.
They'll fix, they think, whatever mess they create in the process after they get what they want.
But the very people that are going to fix this are the very people that caused all of this.
So what happened yesterday was exactly as I suspected before we left the air yesterday, before this program concluded.
We all were sitting here thinking, oh, wow, oh, it failed.
Oh, no.
Panic crisis down 777 points.
Pelosi goes out all ashen-faced.
Bush is distressed.
He's upset.
And a lot of Republicans, conservatives are upset because they think the Republicans stand in the way of government doing the right thing.
God bless the House Republicans.
God bless them, folks.
This whole thing was a setup from the very moment that they started talking Armageddon type crisis.
I kept saying, why wait?
Why wait a week?
If we don't have, we don't have two weeks.
We don't have a week of Armageddon type crisis.
Then the Democrats refused to do anything until they were assured that the Republicans would be on board.
Then Pelosi, the one stupid thing she did, was take it to a vote without knowing the outcome.
And I mean, I'm not even sure she didn't know the outcome.
I'm not even sure.
I'm pretty sure that she did know that the Democrats are going to lose this yesterday and wanted that to happen.
And then, of course, a lot of Republicans in the House sitting there saying, yes, wait a minute here.
We got Armageddon going on.
I'm supposed to put my neck in a noose.
And those lazy bums in the Senate get to wait two days to see what the fallout from our vote is.
The hell with that.
There were a whole lot of reasons for House Republicans not to vote for this thing yesterday.
And now the Senate, they're going to take it up either tomorrow or Thursday if they do.
They've got to come back and write a new plan.
We're going to go through all of this in great detail, supported by audio soundbites and your telephone calls as well.
So brief timeouts, sit tight.
We're coming right back with all the rest of today's unparalleled excellent program.
Stay with us.
By the way, I blew it.
Glenn Reynolds is insta-pundit, not little green footballs.
They got the blogs confused out there.
Welcome back, Rush Limbaugh, meeting and surpassing all audience expectations.
You know, here's the thing.
And I'm watching the drive-bys just stick to script, and I'm craving anybody to step outside the narrative and get this right.
America is not stupid.
America understands what's going on.
How long did it take?
Let me just give you some relative comparisons here.
How long did it take for George W. Bush to panic the country into war with Iraq?
Panic, I put that in parentheses.
How long did it take?
I think it was over nine months.
How much time do we spend at the United Nations?
How long do we go to the United Nations and beg France and the Security Council to join us?
The president did not rush into this at least nine months, if not more, doing everything we could to round up allies, doing everything we could to explain how many resolutions that Saddam Hussein had ignored.
Now, after being told for what now, six years, five years or so, the Iraq war started 2003, after being told for five years or so that the rush to war in Iraq was wrong.
We've got Pelosi, we've got Frank, we've got Dodd, we got Harry Reid.
Want us to rush to bailout in a week without knowing the specifics of what's involved here?
And then we have such a catastrophe here.
We have such an Armageddon.
We have such a crisis.
We're on the verge of the Great Depression, too.
Congress takes two days off.
How can these two go together?
The American people are not this dumb.
You don't have Armageddon right around the corner.
You don't have Armageddon at the end of the day and have Congress take two days off.
And the same people who want us to rush into this so-called bailout accuse Bush of panicking and rushing everybody to war when it took nine months to a year.
So it's obvious the American people are not going to be rushed into this solution.
Obviously, government has a role to play here.
And if they're going to spend $700 billion, most Americans can figure out that there's a better place to spend it than where it's earmarked and put somebody in charge of it other than one person, the Treasury Secretary, whoever it happens to be.
Now, everybody, again, to give Larry Kudlow some credit, one of the proposals that's being bandied about today that a lot of people like is increasing FDIC insurance on bank accounts from $100,000 to $250,000.
And Obama's out there saying, I did this.
That was my idea.
Obama has been absent.
Obama hasn't said one word about this.
If this was so crucial, where was Obama getting the Congressional Black Caucus to vote for this?
If this was so crucial, how come Obama couldn't twist the arms of the Illinois delegation at least to vote for this, the Democrats in the Illinois delegation?
Obama was worthless.
Obama goes into the White House on a meeting last Thursday, and the meeting blows up.
He slinks out of town and says, I'm better at this on the phone from far away.
He has nothing to do with this, yet he's out there trying to blame McCain and take credit for this.
I've been on the phone with everybody.
I know exactly what's going on.
He had to change his two.
And yesterday, Obama's out there before the vote telling everybody a historic vote today is going to save the country.
After the vote went down, he had to change his speech.
He's clueless.
He doesn't know what's happening.
He's playing no role in it.
He's out claiming that his idea is to up the FDIC insurance from $100,000 to $250.
It's Larry Kudlow's idea, who is a brilliant economist.
He used to be at Bear Stearns, now is at CNBC, of course.
There's a piece today in, of all places, of all places, you have to look really hard for it.
It's on the CNN website.
It's a commentary piece by Jeffrey Myron, who is a senior lecturer in economics at Harvard.
He's a libertarian.
He was one of 166 academic economists who signed a letter to congressional leaders last week opposing the government bailout plan.
He said, it's a terrible idea.
And here's why.
The current mess would never have occurred in the absence of ill-conceived federal policies.
That's it, in a nutshell.
That's exactly right.
It would have never happened in the absence of ill-conceived federal policies.
The federal government chartered Fannie Mae in 1938, Freddie Mac in 1970.
These two institutions are at the center of the crisis.
The government implicitly promised these institutions it would make good on their debts.
So Fannie and Freddie took on huge amounts of excessive risk.
And worse, beginning in 77, even more in the 90s and the early part of this century, Congress pushed mortgage lenders and Fannie Freddie to expand subprime lending.
The industry was happy to oblige, given the implicit promise of federal backing, and subprime lending soared much more straight ahead.
I got some confusion out there, ladies and gentlemen.
Let me try to straighten this out.
In the beginning, monologue of the program, and I said a lot, so I understand it's a lot to keep up with and remember, but I said if you take $700 billion and give it to every American who has a mortgage and let them pay off or at least pay off part of their mortgage, you'd do a lot.
I didn't say give.
I didn't say divide $700 billion by every American.
I said divide $700 billion by the number of Americans who have mortgages.
And it's nowhere near $200 billion.
So let me give you the details.
I'm going to go back to the Jeffrey Myron story here, his column at CNN in just a second.
I got this from WhizBang Blog, and it's about understanding $700 million.
And in fact, there's another way of looking about how to understand $700 billion, and I'll get to that right after this.
This $700 billion is amazing, but they need every penny to prop up the mortgage lenders, they say.
Okay, so you ask, and again, this is a whiz-bang blog, how many bad mortgages are there?
So after you ask, after playing with that hypothetical, how many mortgages are there in active in the whole country?
So I looked it up, and according to a PDF from 2006 of the census, there are 33 million owner-occupied dwellings with first mortgages active.
So, $700 billion divided by $33 million equals over $21,000 cash the government could just give to everybody with a mortgage.
Give it to the people who make the country work.
People who can pay off their mortgage.
We're going to give $700 billion away.
What kind of stimulus would that have on the economy to hand 33 million people $21,000?
I'm not advocating this.
I'm just saying that if we did that once, it's over.
It would be the same thing here as the government owning your mortgage in a sense because they're going to get it back from you one way or the other.
But I'm just making a point here of how much money $700 billion is and how much of a profound impact it could have if it were injected into the market, into the private sector, into the hands of the people who make the country work, rather than the lenders.
But then Kevin at WhizBang Blog says he took it to the next level.
On page 174 of the PDF, he found an interesting table.
And I can't give you the numbers in the table here.
I'll just give you the results here.
Numbers are hard to follow on the radio.
He put the highlighted numbers into a spreadsheet to figure out just how many mortgages $700 billion could retire if the Congress gave the money back to the people.
The bottom line is this.
If the Treasury simply took the $700 billion and started paying off taxpayer mortgages, they could pay off every mortgage in the country worth less than $75,000.
$700 billion would pay off every mortgage in the country worth less than $75,000.
You could put it another way.
$700 billion could pay off well over half of all outstanding first mortgages in the country.
So some people might say, well, just take the cash and pay off half the mortgages out there and see what that does to the credit market and the economy.
See what happens.
But again, the American people are not stupid.
Why give $700 billion to one man?
Whoever he is.
I mean, the Treasury Secretary at this time, it's Paulson.
Why give it to him?
And have as his charge, which is what the bailout legislation yesterday said, was ensuring the economic well-being of the American people.
If you want to ensure the economic well-being of the American people, retire their mortgage or half their mortgage or what have you.
I'm not advocating this.
This is just illustrative.
The Associated Press also has a story today putting $700 billion in perspective.
And of course, what do they start with?
The Iraq war.
You could buy yourself a war with that kind of money.
The U.S. has spent $648 billion in Iraq so far.
You could match FDR on his New Deal and raise him billions more.
No, you could not.
The New Deal has cost us $7 or $8 trillion With all the add-ons and all the things that this is what I'm talking about, the genuine illiteracy, economic illiteracy and ignorance that exists in the drive-by media.
What else could the government do with a $700 million blank check?
It could ensure universal health care coverage for six years.
You could build 1,750 bridges to nowhere.
You could run an entire country.
$700 billion is more than twice the size of the economy of Denmark.
According to the Wall Street Journal, half the money FDR spent on his New Deal program to shift the country out of the Depression and banking crisis was for public works.
This is all BS.
The New Deal did not get us out of economic crisis.
And anybody worth his salt would just learn a modicum amount of economics in American history would know that it was World War II that did that.
The New Deal might have made it worse, folks.
Just like this raw deal would make things worse.
It's striking.
The literal ignorance that's up, and I know what papers over the what takes place of the ignorance is partisanship, is an agenda that the drive-bys admit that they have.
Now, back to Jeffrey Myron's piece at CNN.com.
Because basically what he's saying here is that bankruptcy is the right answer here, not a bailout.
He's a libertarian lecturer, not a professor.
He's a lecturer at Harvard.
The subprime lending was more than a minor relaxation of existing credit guidelines.
Lending was a wholesale abandonment of reasonable lending practices in which borrowers with poor credit characteristics got mortgages they were ill-equipped to handle.
Once housing prices declined and economic conditions worsened, defaults and delinquencies soared, leaving the industry holding large amounts of severely depreciated mortgage assets.
The fact that government bears such a huge responsibility for the current mess means that any response should eliminate the conditions that created this situation in the first place.
Not attempt to fix bad government with more bad government.
And this is one of the problems I have with this bailout is that it gets nowhere near the root cause of the problem, and that is Chris Dodd, Barney Frank, Bill Clinton, Jimmy Carter, Harry Reid, Nancy Pelosi, Franklin Rains, Jim Johnson, Democrats left and right.
And that's another thing.
I am agitated today.
I am sick and tired of our conservative intelligentsia media trying to balance things out by saying both sides are at fault.
Both sides are not at fault.
They may be talking about the vote yesterday on the bailout.
Both sides are not at fault.
Stop trying to impress people are going to hate you no matter how much they may think you might think they like you.
Stop trying to get invited to cocktail parties and dinner parties in Washington.
Both sides are not to blame to this.
What is the point of having a conservative media if they're not going to stand up for conservatism?
What's the point of having a conservative media if all they're going to do is wring their hands?
Well, we know that both sides are at fault, Mr. Limbaugh.
And we must be honest, they're thefing blame accurately and fairly on both.
Both sides are not.
If you could find a Republican guilty here, he'd be a no hoose gal.
As I keep saying, they would have had congressional hearings led by Barney Frank, Harry Reid, John Conyers, et al.
Both sides are not at fault here.
And until we can come to grips with that, we're just going to be whistling Dixie, no offense to Dixie, about fixing this problem.
And lecturer Myron here sums it up in one brief sentence.
The fact that government bears such a huge responsibility for the current mess means that any response should eliminate the conditions that created the situation in the first place, not attempt to fix bad government with more government.
The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy.
Bankruptcy means this.
It means that shareholders typically get wiped out and the creditors own the company.
Bankruptcy does not mean the company disappears.
It's just owned by somebody new, as has occurred with several airlines.
Bankruptcy punishes those who took excessive risks while preserving those aspects of a business that remain profitable.
In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky lending.
Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government.
Again, this moral hazard generates enormous distortions in an economy's allocation of its financial resources.
And I could not be happier that he put the word moral in this, because what has happened here is immoral.
And the immorality of those who created the problem survives to this day.
They're the same immoral people with the same immoral ideas attempting to attach more immorality to the market in the hopes of fixing it.
And when they knew they didn't have the votes, then they circled the wagons.
Okay, it's time to blame the Republicans for this.
The Republicans have nothing to do with it other than trying to stop it numerous times since 2000, since 1999.
Numerous times.
The only role the Republicans have is that they failed to stand up and stop it.
For example, we played audio from this YouTube video that's since been pulled down, by the way.
The thing that we played yesterday, the congressional hearing with the regulator, the Ofeo regulator, Mr. Falcone, being attacked like Ken Starr was attacked.
And he was just trying to put, you guys got a big, big problem here.
We can't look the other way anymore.
And Barney Frank and Maxine Waters and Lacey Clay, Missouri, they all just attacked him.
What needs to happen is just what the oil company execs finally learned.
The oil executives, year after year after year, would go up and be lectured by these pompous windbags on these committees, accused of price gouging and price fixing and so forth.
The last time there were hearings, the oil execs fired back and said, screw you.
You're the guys standing in our way.
You're the guys we're paying all this taxes.
Our profit's net 8%.
You're the one standing in the way of our exploration.
So what needed to happen, the only fault the Republicans have here that I can find is that they did all these committee hearings.
They found a truth.
They didn't do anything about it when they ran the show.
The Republicans were the majority in the House in 2004.
They could have done something about it at the committee level, but they thought conducting the hearing was enough.
So, you know, maybe they are to blame for something, but they have no structural institutional role in this crisis in the sense of designing it, in the sense of perpetuating it, in the sense of knowing it was going wrong and looking the other way and lying to the American people about it.
So both sides are not responsible.
And in the sense that this vote in the House yesterday was a sensible one, why rush into this?
Why get this done right?
We've now got the time to do it right.
But even people on our side do not yet understand what Pelosi pulled off here.
She pulled off an election year trick designed to get the Republicans blamed for this.
And what's happening is that too many in the conservative media are playing right along.
Both sides are to blame.
This is every bit as winning an issue as gas prices, oil drilling, and everything else.
And then McCain, McCain did a statement today.
He said, bipartisanship is tough.
I want to work together with everybody.
Bipartisanship is tough.
Bipartisanship is the easiest damn thing in the world, Senator.
Bipartisanship is easy.
Compromise what you believe, agree with the other side.
You got bipartisanship.
Partisanship, standing up for your principles.
That's what's tough because everybody comes after you.
Everybody tries to destroy you.
Talk to the House Republicans about that today.
Bipartisanship is tough.
Bipartisanship is just like liberalism.
It's gutless.
By the way, we will complete parsing the debate from Friday night.
We didn't get to all the sound bites yesterday.
We'll do that today.
Let me wrap up this piece here from Mr. Myron, who is a lecturer at Harvard.
Thoughtful advocates of the bailout might concede a perspective that there is a moral hazard generating enormous distortions in an economy's allocation of its financial resources, but they argue a bailout's necessary to prevent economic collapse.
According to this view, lenders are not making loans, even for worthy projects, because they can't get capital.
This view has a grain of truth.
If the bailout does not occur, more bankruptcies are possible and credit conditions may worsen for a time.
But talk of Armageddon, however, is ridiculous scaremongering.
And he is right.
All of this crisis mongering is political.
It is strategic.
The Democrats are using it to win a presidential election.
It is not realistic.
If the financial institutions cannot make productive loans, a profit opportunity exists for somebody who can.
Might not happen instantly, but it will happen.
There will be.
J.G. Wentworth, come along.
Jay, you've seen his latest commercial.
1-877 need cash now.
Somebody's out there willing to loan money.
Talk of Armageddon, however, is ridiculous scaremongering.
Further, the current credit freeze, and this is crucial, folks.
The current credit freeze likely is due to Wall Street's halting operations while they wait for a bailout.
Bankers will not sell their lousy assets for 20 cents on the dollar if Paulson will come in and pay 30, 50, or 80 cents on the dollar.
So his point is they could be making loans.
They're just not going to do it yet to wait and see what happens with the bailout to find out how much.
So even the credit market drying up is a bit of a scam being perpetrated here because once the biggest pile of money in the world says it's going to get in the game, the people who stand to benefit from that big pile of money are going to wait around to see how much of it they're going to get.
Why use your own money when you can use other people's money, in this case, ours?
The costs of the bailout, moreover, are almost certainly being understated.
The administration's claim is that many mortgage assets are merely illiquid, not truly worthless, implying taxpayers will recoup much of the $700 billion.
But if these assets are worth something, however, private parties should want to buy them.
And they would do so if the owners would accept fair market value.
Far more likely is that current owners have brushed under the rug how little their assets are worth.
And the bailout has even more problems.
The final legislation will probably include numerous side conditions and special dealings that reward Washington lobbyists and their clients.
Anticipation of the bailout will engender strategic behavior by Wall Street institutions as they shuffle their assets and position their balance sheets to maximize their take.
The bailout will open the door to further federal meddling in financial markets.
Let me translate that for you.
It means that nothing's happening on Wall Street because everybody's waiting to see what the government does, which means the market has been brought to a screeching halt because of the government.
Under the guise of fixing it and staving off the collapse, Armageddon, Great Depression II, the market, the lending markets, the credit markets are theoretically stalled.
Government is preventing market activity.
However, consumer confidence is up unexpectedly.
The Dow Jones Industrial Average is up to 70.
How does this happen?
How can this possibly be after yesterday's near crack?
Could it be, ladies and gentlemen, that people actually do believe in the fundamentals of the United States economy?
I fully intended to get to phone calls in this hour, but the best-laid plans got in the way.
We're going to continue on this theme, providing evidence and documenting the assertion that Nancy Pelosi got exactly what she wanted yesterday when the so-called bailout bill failed.
Lots more.
Straight ahead, folks.
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