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Dec. 29, 2008 - Rush Limbaugh Program
36:44
December 29, 2008, Monday, Hour #2
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Welcome to today's edition of the Rush 24-7 podcast.
And we are back on the cutting edge of societal evolution, the Rush Limbaugh program up and running for this last week of December 2008.
Welcome, one and all.
I am Jason Lewis in for El Rush Bow today and tomorrow.
Walter Williams on New Year's Eve, there's a real treat for you, as well as Mark Stein on Friday.
Best of rush come Thursday.
So lots to look forward to right here on the Excellence in Broadcasting Network.
Glad you could join us.
You know, one more thing on this economic stimulus plan or lack thereof.
It's going to be a trillion dollars.
They don't know.
The Barack Obama team really isn't saying whether it's going to be $750 billion, $850 billion, a trillion.
You add that on to the Bush bailout, the ill-advised, quite frankly, Hank Paulson bailout, the Bernanke panic.
And what we're doing is setting ourselves up for another stimulus bubble.
You know, we've talked about this before, but let me try to explain it one more time.
If housing goes up three, four, five, six, tenfold, and all of a sudden we get a surplus of housing, and the prices get so high because of Fannie and Freddie guaranteeing everybody a mortgage, and that's exactly what they did.
Once again, government intervention.
And it was people like Paul Krugman and Barney Frank who defended Fannie and Freddie.
Sooner or later, the prices become too high for people to afford and the bubble burst.
Now, naturally, prices must come down.
But what's the government doing?
We've got to go in there and modify mortgages.
We've got to keep housing prices up.
We need direct aid to homeowners.
We've got to have no foreclosure loans.
We've got to have bankruptcy judges intervene and rewrite mortgage contracts.
The common law be damned.
The contract law be damned.
We don't care.
We've got to keep this bubble going.
Well, all you're setting yourself up for is a larger burst down the road, solving debt with more debt.
And that's precisely what we're doing here.
And it's never, ever going to work.
We had an excess malinvestment, government-directed in housing.
That's got to be worn off.
It's got to be disabused, if you will.
And once the housing prices get back to normal, and if we would have allowed Wall Street to fail, we would have allowed bankruptcies to occur, then all of a sudden we reach a natural bottom and we start growing again.
But we're now in an entitlement society, and we can never have a downturn.
And the fine-tuners can prevent it, just like John Maynard Keynes thought he could prevent it.
Well, I got a little news for you.
The big government spending in the 1930s didn't prevent the Depression.
They exacerbated it.
Herbert Hoover, contrary to Mr. Krugman, was a big spending liberal.
I don't know how this guy knows.
His article today in the New York Times, Mr. Krugman, 50 Herbert Hoovers.
Herbert Hoover raised spending massively.
He raised taxes and he set up trade barriers.
What is laissez-faire about that?
What is free market about that?
Now, Roosevelt got in and he doubled down.
He did all of that in spades.
And you know what?
By 1938, unemployment was still 19%.
We didn't get out of the Depression.
The spending didn't do it.
If government spending could provide economic growth, Eastern Europe would have been a juggernaut.
And fundamentally, here's the reason why.
People like Krugman and the Barack transition team, in fact, Axelrod yesterday said on Meet the Press, well, we're going to give more people money to spend to help get the economy going again.
Really?
At whose expense?
Where are you going to get it?
Now, fundamentally, they think, well, as long as people are willing to buy Treasury bills at 0% for a negative return, well, we can borrow and borrow and borrow.
But sooner or later, that game is going to be up.
Sooner or later, the Treasury bill bubble is going to burst.
And this slump in private spending is going to be over.
And then how are you going to finance a stimulus package of a trillion dollars in new government borrowing for things that are not going to increase the nation's wealth?
The bridge to nowhere did nothing to increase productivity.
I mean, a number of infrastructure projects are make work projects, especially light rail, any place west of the Ohio River, save for maybe Chicago.
It is money down a rat hole.
It does not increase productivity.
It adds to government union membership.
I mean, let's be honest, the same thing is happening in Detroit.
You think we're bailing out Detroit because of economic concerns?
Think again.
We're bailing out the UAW.
We're bailing out the Michigan Democratic Party.
That's what we're bailing out.
That's why Democrats love corporatism.
You know, the Republicans have an opportunity here to be the party of free markets, to say, you know what, we ought not punish corporate America by regulating and taxing them to death, but we ought not subsidize them either.
It is the Democrat Party that is now leading the charge for corporate welfare.
They're not trying to bail out Detroit.
They're trying to take over Detroit.
They're just fine with that.
I mean, the UAW says we're not going to give any more concessions at all.
Kit reminds me what Samuel Gompers, the godfather of unionism, said a century ago.
The enemy of the worker is an unprofitable employer.
Unions have to make the company successful.
Employers have to recognize the contribution of the worker.
What he was saying is you can't love employees and hate employers.
But you say, well, wait a minute.
Why is the UAW being so intransigent?
Because they don't care.
And certainly the Democrats in Washington don't care.
They would love to have government intervene, take over, nationalize the automobile sector, and then control it.
That's what this is about.
It has nothing to do with economic interests.
Now, getting back to the stimulus, however, what's going to happen when sooner or later people aren't willing to loan the federal government trillions and trillions of dollars at 0%?
What's going to happen when sooner or later we all man up and we say, you know what, I think I will invest in that computer business in my garage.
I think I'll open that coffee shop.
I think I will loan to this manufacturing company.
And all of a sudden, there's a competition for private capital.
Well, the federal government is going to be stuck.
We will have created all of these makework jobs, green schools, wireless internet on school buses, bridges to nowhere called infrastructure, hiring people to dig ditches, hiring other people to fill them up again, and counting that as employment, counting that as GDP.
You know, almost anything the government does, our national income accounting figures count as GDP.
It's a horrible Keynesian bias.
We need to rethink, but that's a topic for another day.
What's going to happen?
Well, sooner or later, here's what's going to happen.
The day of reckoning is going to come due.
You can't keep borrowing and borrowing and borrowing, which we are now set to do.
We'll have a trillion-dollar deficit now, and we'll have trillions in the future.
And what's, I guarantee you, is going to happen is sooner or later people are going to take a look and say, gosh, putting my money in a 0% treasury might not be the best place.
I think I'll put it here.
The government will have only two choices, to fund their stimulus programs, which supposedly is propping up the economy.
It's just another bubble, by either massively raising taxes or letting interest rates go up, which quite frankly they should have done the last few months.
I know what you're saying.
That would have really put us in the bind.
What they're trying to do is keep interest rates low right now in order to prop up housing, and it's not working.
But when you and I are not willing to loan the government money through this deficit financing scheme, then the government's going to have to raise taxes to fund the stimulus plan, or they're going to have to allow interest rates to skyrocket so foreign capital will still buy Treasury bills, so you and I would still buy Treasury bills at 14% instead of 0%.
Either way, tax increases or high interest rates are going to kill the economy.
So do you know what, Barack Obama, the president's only option is going to be then?
To do away with the stimulus plan.
Well, we can't finance it.
Can't finance it by killing the economy by massively raising taxes.
Can't finance it by allowing interest rates to go up.
So let's just undo the stimulus plan.
And all of a sudden, all those people employed are now unemployed.
We can't build 20 bridges to nowhere.
And we're right back where we started from, except because the Federal Reserve and their inscrutable monetary policy, because we are monetizing the debt, the dollar will be worth half of what it is today.
You know, you want a crisis.
You let the government keep doing what they're doing.
You want to see the Chinese and other foreign creditors dump the dollar and have a massive run on the dollar.
You know, the Federal Reserve has become the lender of first resort, not supposedly the lender of last resort.
And they can prevent a run on the banks, but they can't prevent a run on the dollar.
And if we keep going down this road, when the economy does turn, we're going to be faced with very, very severe inflation.
And already the dollar is losing on the foreign exchange markets.
And when that happens and the Chinese dump the dollar, foreign creditors dump the dollar, other people dump the dollar, what are you going to do?
Well, the only thing you'll have to do then is raise interest rates in a very, very severe fashion, try to rein in the money supply, raise taxes, and all of a sudden you've killed the economy that way.
We are laying the foundation of a worse problem down the road by following the likes of Mr. Krugman, by following the likes of a stimulus plan, by all of these false pretenses that suggest all government has to do is wave a magic wand to undo the malinvestment that government imposed.
We would not be where we are today if Fannie Mae and Freddie Mac would not have insured by the trillions bad paper.
That is a government intervention.
And that insurance of bad paper told Wall Street, leverage against it.
Start using your collateralized debt obligations and using that as the basis of it, because don't worry, the mortgages aren't going to go away.
The government is going to guarantee them.
If I've got an instrument here and I know the government's going to bail me out, what the heck?
I'm going to leverage it.
And that's what Wall Street did.
So now the unwinding is that much more severe, all because of a savings and loan type induced moral hazard.
All of that is due to government.
None of that is due to the free market.
None of that is due to Glass-Steagall being repealed.
None of that is due to a lack of regulation.
All of it is due to government intervention that distorted the marketplace and had us bid up the price of housing.
That is called an asset bubble.
It was created by government and easy money.
And there's only one way out of it, to deleverage.
It doesn't have to be the end of the world, but we've got to understand we've got to go through it and get government out so we can recover with private sector productivity.
Look at it this way.
What's going to be more productive going forward?
Having the government build another bridge to nowhere, build a light rail line in Salt Lake City, where 4% of the commuters may use mass transit, which costs $40 to $50 million per mile, light rail much more expensive than buses.
Is that going to be more productive for your place at work or your efforts to improve your station in life?
Or is that money better used by a tax cut, let's say, on the means of production, the owners, corporate tax cut, capital gains, dividends, and yes, high-income earners.
So they can then take that money, give it to a private sector investor who builds a new plant, who buys the truck driver a new truck, who in fact builds a new assembly line or buys you a new tool, and then your productivity goes up.
Real investment increases productivity.
And you know what, folks?
When your productivity goes up, you earn more.
If you're a salesman and you sell more, you earn more.
If you're on the assembly line and you produce more, you earn more.
That's the only way a rising tide can lift all boats.
If you don't have increases in productivity, then the only way you're going to get more money is to take it from somebody else.
We usually call that a government transfer program.
Government investment is not going to increase your productivity.
Now, granted, there are some investments we have to have, a national defense, a system of jurisprudence, some roads, but you know as well as I do, they're going to go on overkill.
The $286 billion transportation bill in 2005 was so full of pork, it was malinvestment.
And that's the fundamental difference between the left and the right today.
I trust you doing with your money, whether you're spending it or investing it, for your own benefit more than I trust a bureaucrat who somehow is omniscient and can say, oh, oh, I know what Salt Lake City needs.
I know what Seattle needs.
I know what Mississippi needs.
I know what New Orleans.
I'll just do that.
They can't, and they never will.
And so my point in all of this is quite simply, if you want to make things worse, keep having the government involved.
They were the ones that got us here, and now we're relying on them even more.
That is not a recipe for success.
More of the Rush Limbaugh program coming right up when we return on the Excellence in Broadcasting Network.
You're a solution for the Post's Christmas blues, the Rush Limbaugh program on the Excellence in Broadcasting Network.
I am Jason Lewis.
Minnesota's Mr. Wright in for El Rushbo today.
Back to the calls we go.
Thanks for your patience.
1-800-282-2882.
The contact line is always John in Lake Zurich, Illinois.
You are up first this segment on El Rushbo's big show.
Hey, Jason, I just wanted to call in, and I know Rush is usually fairly dismissive of rail-based transportation projects, and I agree that the Los Angeles project is probably way overpriced.
However, I think I believe that Mayor Riordan, who's no real conservative, said that was his biggest mistake as mayor going forward with the LA transit scheme.
And I think people should, you know, the people behind these projects should be more looking at turning the regular railroad system back into both passenger and freight than doing these separate light rail projects, because I think that would probably be a better utilization of an existing resource or taking back some of the rail lines that have been turned into bike paths and making them part of a upgraded and modernized transportation network.
I strongly believe we need to have a choice of transportation modes.
Why?
For example, when prices got really high this summer, I tried to use Amtrak to go from Chicago to Wisconsin Dell.
Right.
They had been sold out for weeks, you know, and they had no excess capacity.
Then why is it, my friend?
And by the way, I just fundamentally disagree with this notion of, and this is code for government, a choice of transportation modes.
Well, I'd like to have a taxi pick me up every morning.
So have the government fund a program to pick me up.
Therefore, I have a choice.
That is a silly premise.
If, in fact, Amtrak is under great demand, and they are not any place except the Northeast Corridor, but if they have great demand, why don't they raise their fares?
Okay.
And you're going from the premise of making the rail system pay for itself.
But the rail system and the airline system don't pay for themselves either.
Wrong you are, my friends.
Wrong you are.
You include all of the money spent to build the roads and to run the air traffic control systems.
All that money is coming out of various taxes that we've set aside.
No, you're just wrong on that.
And I hear this time and time again for the rail apologists all the time.
Let's just go over these one by one because I think you're a reasonable guy, John.
First of all, do you know what the Highway Trust Fund is made up of?
The Federal Highway Trust Fund.
Gasoline taxes.
Gasoline taxes and a few other fees, but primarily gasoline taxes.
Do you know that since 1982, the Service Transportation Act has been diverting 20% of each increase in the federal gas tax towards mass transit?
Now, that is not transit paying for roads.
That is gas taxes coming from road users paying for transit.
But the gas tax does not supply every dollar spent to build highways.
It actually supplies most of them.
The other comes from developers who build roads and price that into the price of a development.
The only quote-unquote modicum of a subsidy you could make for roads is not the capital outlays.
Those are fundamentally self-sufficient.
There is a maintenance factor that is built into property taxes and things like that.
But primarily, roads are the epitome of user fees in America.
And the money from road users is being diverted to all of these other forms.
Well, I would more than willing, I'd be more than willing to say, look, we're going to have everybody pay for their mode of transportation.
By the way, airports get their money from where?
Airports get their money, John, from airline landing fees.
Yes, there is some money there.
Some?
That's not all of it.
No, but that's the bulk of it.
And where does all of the money spent on the air traffic?
But look, if your argument is we ought to privatize airports, I think we ought to.
I'm saying that we subsidize both roads and airline travel.
We do not subsidize.
Look, look, I'll give you an example.
The Hiawatha line in Minneapolis-St. Paul, 12 miles of light rail, right?
Costs $18 million in operating expenses every year.
Do you know how much they collect in fares?
Under $8 million.
So we've got an operating deficit, as far as the eye can see, of over $10 million every year.
That sort of ratio is nowhere in sight when you talk about roads that primarily pay for themselves.
That's the difference between transit and roads, which are much more of a public good.
I mean, after all, you can, in fact, remember, you can, in fact, ship goods on the roads.
You don't ship goods on light rail lines.
More coming right up after this.
Hold on.
Hold on just a second.
I got to take my blood pressure medication here, guys.
Hold on.
Oh, now I'm ready to go for the last hour and a half of the Rush Limbaugh program.
Greetings, conversationalists across the fruited plane.
Jason Lewis filling in for El Rushboat today.
I'll be back tomorrow as well.
We've got Walter on Wednesday, Mark on Friday, and the best of rush.
New Year's Day, don't go anywhere this week other than the Excellence in Broadcasting Network.
And of course, on January 5th, a week from today, the big guy returns.
We're all waiting for that.
The last caller, as well-intentioned as he is, it's one of my pet peeves because I've been fighting this mass transit preoccupation by the smart growth crowd for years and years and years, every place I've been.
And this is a con.
I know exactly what they're up to.
You've got to understand the urban renewal crowd.
You know, you've had liberals in control of major urban areas for 40 years.
And what have they given you?
Well, they've given you high rates of crime, high taxation, and crummy schools.
Other than that, how was the play, Mrs. Lincoln?
I mean, things are just jolly.
Well, they're not.
So people naturally left.
They go to the suburbs and you get urban sprawl.
Let me tell you something.
Urban sprawl is a good thing.
It's cheaper to build a home when you don't have utility infill, when you've got barren land, than it is to build one in the middle of the city.
But beyond that, people are fleeing, obviously.
You can take a look at a number of urban areas.
They're smaller today in population, the inner cities, not the metro, the inner cities than they were 30, 40 years ago.
So what's the response from our liberal lefties?
Well, it's, well, we could lower the taxes.
We could beef up the schools, more charter schools, more choice, you know, actually get some tuition tax credits or some vouchers, as the chancellor of Washington is trying to do, fighting the teachers' union.
We could do that.
We could crack down on crime.
Nah, I don't like those.
We want to keep spending.
Here's what we'll do.
We're going to put up urban growth boundaries so people can't leave the city.
And we're not going to extend infrastructure, sewer lines, water lines, roads beyond the urban growth boundaries in every major metropolitan area.
And the epicenter of this was Portland, where housing prices went sky high, much higher than other places, because when you limit the supply of development, naturally you're going to get a run-up in prices.
Well, let me tell you something, folks.
It's happening all over the country.
It's happening in the Twin Cities.
It's happening in Charlotte.
It's happening in Portland.
It's happening everywhere.
And it's a smart growth scheme.
That's all it is.
They call it smart growth, and it's about as dumb as you can possibly imagine.
In the name of urban sprawl, we have no crisis of land.
If you take a look at the Department of Agriculture's statistics for what is developed and what is undeveloped, I think we've got around 5 or 6% of our total land mass considered urban or developed.
There's no crisis.
This is a scheme to round you up and keep you from fleeing.
And part of that scheme, high-density development around mass transit stops.
They don't like you out in the suburbs with a three-car garage.
Boy, that's decadent.
We don't like that.
We're not going to subsidize those roads out there as if you're subsidizing them.
So they put up urban growth boundaries.
They put up high-density development.
You get a bunch of smart growth architects and they say, we're only going to produce condos.
Everybody's going to live on top of each other, just like Manhattan.
Going to turn the world into Manhattan.
And everybody's going to crowd at the train station and we're all going to rush home.
People don't want to live that way.
If they did, they would live in Manhattan.
They want space.
They want a three-bedroom house, four-bedroom house, three-car garage in the suburbs.
That's what this is about.
And mass transit is a key component of this new urbanism.
Now, a lot of you people in rural areas are saying, well, why does that affect me, Jason?
We don't have that problem in Kansas or Alabama or wherever.
Well, yes, you do because you're paying automobile taxes.
You're paying 18.3 cents, yeah, 18.3 cents at the federal gas tax.
And that money is being siphoned off to build light rail lines and smart growth development in Minneapolis, in Portland, in San Diego, in Seattle, in Charlotte.
And none of these systems pay for themselves.
Not even close.
You know, you take four cities in the country.
I think it's Chicago, Boston, Washington, and New York.
Only four cities have a commuter or four cities that's a percent of commuters above 10% who use transit.
In the Twin Cities, it's about 4.8%.
It's similar in other mid-sized cities or even large cities.
Nobody uses it.
And yet, to build a light rail system, Denver's gone GAGA over this.
It costs $40 to $50 million per mile.
You know what a freeway costs?
Less than half of that.
You know, we've got a new line now.
They're getting ready for the next light rail line in the Twin Cities.
It's already scheduled at $1.2 billion.
I can guarantee you it'll be $1.6 or $1.7.
That previous line I mentioned, the 12-mile Hiawatha line, was slated to cost $400 million, came in at three-quarters of a billion dollars.
This $1.2 billion scheme connecting downtown St. Paul to downtown Minneapolis.
Oh, yes, I'm going to get in my car in the suburbs, drive to downtown Minneapolis, get on the light rail line and go to downtown St. Paul, walk six blocks and do the same coming home.
No, nobody uses them.
That's why they have to give them away.
That's why they can't raise fares.
No one would use them.
The only thing they can do is lower fares so much that it's a freebie to get ridership.
That is not adding to the nation's productivity.
It is throwing bad money or good money after bad.
But you people in rural America are paying for this.
Your gas taxes, the mass transit account, has billions in it, and it's being used to bribe communities to build these light rail lines.
You don't see a thing for it in Topeka.
But the major urban areas need this smart growth development.
We can't keep engaging in urban sprawl.
And it's getting worse.
Now the potentate of pork in Minnesota, Representative James Oberstar, he's one of the nation's great scoundrels.
He stood on the banks of the Mississippi after the I-35W bridge collapsed and pronounced this was due to a lack of tax revenue.
He blamed taxpayers for not funding the federal or the highway trust fund enough.
And so he said, in order to prevent another I-35W bridge collapse like the one we had in the Twin Cities, we need to raise the gasoline tax 5 cents a gallon.
He wanted a 23.4 cent gas tax at just the federal level.
You add on your, of course, state and local taxes, and you're looking at 40, 50 cents, dwarfing anything the oil companies would make when it comes to profit.
And now he's back.
Now this potentate of pork, who's the chairman of the House Transportation Committee, says he wants to take the stimulus package from Barack and divert money from highways to, are you ready?
Yes, that's right, more mass transit.
Divert your taxes from roads that might do you a little good.
Now, to be fair, we can overbuild on roads, too.
I mean, if you really take a look at the problem of highways, it's one of timing.
You know, if you're traveling today, more than likely, you're not seeing congestion.
You're traveling in the off-peak hours during the weekday, you don't see congestion.
So we need to go to a market-based system of pricing roads.
We could do that through tolls.
We could do it through a whole host of systems.
But that's not the point.
All things being equal, what's going to do you more good?
A freeway interchange that will pay for itself in development overnight or billions more for a one mile of mass transit or light rail that costs twice as much that no one's going to ride.
That's why you don't trust government to, quote unquote, invest.
Their considerations when they invest are political.
We're going to bail out the UAW.
We're going to inflate the number of government workers by getting mass transit employees, beefing up that.
Oh, by the way, they'll become union members and contribute to Democrats.
Government invests for political considerations, a return on voting.
You and I in the private sector invest for a return on equity.
That's all you need to know on why we should do the investing, and government should be one of limited powers, enumerated powers, and do a very, very few things and try to do them as best they can.
I'm Jason Lewis.
Went a little long this time.
When we come back to the phones, we go once again on the Rush Limbaugh program.
All right, we are back.
The Rush Limbaugh program up and running for a Monday.
Glad you've tuned us in as you do each and every day.
I'm sure 1-800-282-2882.
Jason Lewis in for Rush Today in Atlanta.
Mike, you are on the Excellence in Broadcasting Network.
Hello, sir.
Hello, Jason.
How are you today?
Could not be better.
Let me say this, and I'll get to my point as we go through here.
First off, I wanted to say about James Overstar.
Yeah, you're exactly right about that guy.
He's bad news.
He's bad news.
He's the reason we're parking the Delta Queen.
I mean, that was a union issue.
That's right.
Yeah, and that's the union payback.
But anyway, you talked about that we did not subsidize highways and that we don't subsidize the airlines and that kind of thing.
And the actual truth is, yes, we do.
And follow with me here.
You know, Rush says that everybody's historical perspective begins at their day of birth.
I was a logistics and transportation major at the University of Tennessee, one of the top LT schools in the country.
I've worked in the railroad industry for 16 years now, and including railroad history while I was in college.
And here's what I can tell you.
If you go back and study where transportation, the pricing and cost and payment structure that we have in place now of how transportation is paid for in this country, it is not market-based.
It has not been market-based since at least the 1920s.
And therefore, what we have in this country is a socialized transportation system that has gotten market forces so out of whack that we have developed into an automobile society.
When you look at interrupt you here real quick.
You're coming dangerously close to this notion, and I hear it from folks in Atlanta all the time.
Well, you can't build your way out of congestion.
All we do is we build another road and the cars fill it up.
Well, I'll tell you what, why don't you close down a few freeways in Atlanta and see what congestion does then?
The inverse of that logic, what the best government can do, because we do have the government building roads, and I'd be more than willing to essentially privatize that and let oil companies keep their gas tax and build roads if you really want to get libertarian about it.
But the point I'm saying is government always, always has a misallocation of resources.
I don't care what it does.
It does not spend money as efficiently as the private sector and it never will because there's no market discipline there.
But when they're working the right way, they can see trends in development and they say, oh, people are moving to the suburbs.
Should we build a freeway, a beltway around the city?
Should we build an interchange here or there?
And when the roads follow the people, that's as close as you can get to a market development.
And it's my contention that when that interchange is built, you add the gas taxes that are consumed.
You add on to the development on the interchange, which increases the property tax base.
Some of that money, and I think it's a modicum, goes to maintaining the roads.
Roads by almost, in fact, I'll give you a perfect example.
In most Department of Transportations, Mike, there is a cost-benefit analysis done for every project.
So if they build an interchange, will it be a one-to-one ratio or will we actually get a return on this investment?
Almost every mass transit and rail project is negative.
For every dollar you spend on a light rail system, you get back 0.42 cents or 42 cents on it.
Whereas almost every road project, freeway interchange, turns out to have a positive return.
And that's from, frankly, the DOT's own analysis.
Well, and I agree with that.
But again, I'll go back to what I said before.
Because we have socialized the transportation system in this country to such a degree, we don't have true market forces at work.
Follow with me here.
Back in the ⁇ you talked about developers that built roads and things like that, and then the taxpayers began to maintain them.
When you go back to the turn of the last century, 1900 to 1925 or so, what you had, if you'll notice, and I don't, I'm pretty sure the Twin Cities would probably fall into this as well.
But if you look at most cities of any growth in size at that time, the subdivisions that were being built, the quote-unquote urban sprawl, do you know how most people built their most developers actually built light rail lines to get people so that they would have convenient access to those new subdivisions?
And then again, you also have the fact that the automobile came into existence and became further and further refined technologically.
However, the government then got involved and said, this is how we're going to do things.
The regulation on the railroad industry was that they were regulated in a way that said basically the railroad industry is the only mode of transportation.
And all other modes of transportation were given a tremendous advantage over the railroad industry.
And I'm not talking about just passengers.
We can't do an historical tour to four here.
I know where you're going with this.
And first of all, the railroads got monopolies from government before they came out of favor.
But I'm saying is simply this.
And I want you to follow with me here.
If, in fact, we turned into a market system, as you desire, and frankly, I wouldn't be opposed to that either.
I think we ought to privatize airports.
I believe Heathrower Gatewick is privatized.
I think we ought to do that.
If we did that, or we privatize roads where your license fees would be paid to somebody who's running the road other than government, oil companies would have a fee instead of the government having to tax.
Oil companies would.
They would want to build roads.
Otherwise, they have no use for their product.
Automobile companies could have a fee, the same thing.
All I'm saying is if you went down this privatization road, roads would not go away.
Airlines would not go away.
Airports would not go away.
But if, in fact, mass transit had to pay for itself, it would be gone in a New York minute.
And I'm even talking about New York.
Now, I'm not saying it's going to be gone overnight.
What I'm saying is in New York, Chicago, Boston, where it is somewhat viable, these places run billions of dollars in deficits that have to have the government bail them out all the time because riders of mass transit are not willing to pay the full cost.
That's why the fares don't go up.
Same with Amtrak.
I would argue, if you take a look at all of the money that's siphoned off of your gas tax and other fees, license fees, automobile users are more than paying the full cost.
I'm Jason Lewis.
More coming right up, so don't go away.
All right, we'll squeeze in one more call before the break at the top, but never fear, another hour coming right up on the Rush Limbaugh program in Chicago.
Al, you're on the Excellence in Broadcasting Network.
Good afternoon.
All I can say is ditto, ditto, ditto.
What you're saying is absolutely correct.
I was in the housing market selling flooring to builders, most of whom are out of business or working at 7-Elevens today.
The amount of mortgages insured by Fannie and Freddie, I heard this recently, rose from $4 to $7 trillion in a matter of a few years.
And $1.6 trillion of subprime.
I watched as builders raise the prices of their townhomes, their single-family homes, 20, 30%, 40%, 50% in a few years.
Not because of cost, but because demand was so great they were selling before they even broke ground.
I also want people to look at the effects of law and, you know, they talk about regulation.
Look at what's happening in New York, that $50 billion meltdown.
The SEC knew about that nine years ago.
They closed their eyes to it.
So people who believe government regulation is going to protect this, yeah, go talk to Barney, go talk to Schumer, go talk to the Frankfurt.
That's a great point.
Remember the Keating 5?
Government regulation is never going to match government intervention or the political interests.
The regulators will be bowled over.
You got a great point, and let's try to put it in perspective here.
What you're saying is the government, through this subprime lending and through Fannie and Freddie and so-called affordable housing, engaged in a stimulus program to build homes, and the bubble burst.
How different is that in the stimulus program we're getting ready to fund now?
I agree with you also that in the future, our biggest fear should be inflation because the monetary policy of today mirrors the early 70s when Johnson with the war and the Great Society ramped up money, stopped tank.
Yep.
I got to go.
I got to go, my friend.
But stagflation in the future.
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