Rush Limbaugh Program - December 30, 2008, Tuesday, Hour #2

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Dec. 30, 2008 - Rush Limbaugh Program

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December 30, 2008, Tuesday, Hour #2

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	No, no, I'm not I'm not bitter about living in Minnesota.
	Not bitter about the top corporate tax rate of 9.8% here.
	I'm not bitter of an income tax rate of almost 8% at the top level.
	Sales taxes over 7% and most community.
	I'm not bitter about that in Minnesota because look, uh if nothing else, we've got the weather going for us.
	It's about 19 and snowing in the Twin Cities.
	Welcome to the North Pole, everybody.
	I am Jason Lewis.
	Everybody's Santa Claus this Christmas season.
	L. Rushbow is taking a couple of days off.
	He'll be back on Monday.
	You want to stay tuned for that in the meantime, Rush Limbaugh.com up and running as well.
	It's always great to be behind the golden EIB mic in the Attila the Hun chair at the Limbaugh Institute for Advanced Conservative Studies.
	And we had some advanced conservative studies in that first hour.
	Glad to uh engage some of you out there on the virtue of a free markets.
	Free people and free markets.
	You know, uh Kit and I were talking during the break.
	You can't eviscerate markets.
	You can try to, but they never go away.
	All you do is create black markets.
	The notion that we've moved beyond a market economy could only be taught in the ivory tower of academia.
	Nothing could be more self-evident than the supremacy of markets.
	The government can try to distort them, but then they create dislocations, like a housing bubble, like a commodity bubble, like a tech stock bubble.
	We can regulate the market and then you create dislocations.
	I mean, you you can regulate people to, oh, I don't know, make bad mortgage loans, which we have, and we get a mortgage crisis.
	But you can't eviscerate the marketplace.
	You can pass an amendment to ban liquor.
	You can go a prohibition.
	That ought to do away with the market and alcohol, right?
	Oh, yeah, Al Capone had something to say about that.
	The markets always exist.
	And when you try to intervene and supplant the market, what you get is misallocation of resources, i.e., poverty in a lower standard of living.
	And for anybody to suggest that you could do that is testament to the lack of America's education prowess these days.
	I mean, how many times do we have to go down the road of centrally planned economies and their failure before we get it?
	I mean, even in Cuba, the paradise known as Cuba, where everything is free, of course, when everything is free, nothing is free.
	Uh Cuba is uh suffering a depression.
	I'm shocked.
	They're preparing for their 50th uh anniversary of the revolution.
	Uh this was the revolution that said the centrally planned economy would be a paradise.
	Meanwhile, people are trying to get out of Cuba on old car frames and dying in the ocean.
	I wonder why they're leaving.
	The only people going to Cuba are bored Hollywood types like Michael Moore.
	Uh Cuba calculates, by the way, it's gross domestic product by uh including state government spending or na national spending.
	Do you know who else does that, by the way, just a little uh education for you?
	The United States.
	When we calculate our gross domestic product, and whether you use an income approach or a wage approach, there's a category called government purchases.
	Now, thankfully we don't include welfare in GDP.
	But when we calculate our gross domestic product, if the government creates a makework job, otherwise now known as the Barack Obama stimulus package, that counts.
	They count it.
	They count it as though we've created something of value.
	So, you know, you've got consumption plus investment plus net exports plus GP government purchases.
	And that's what drives a lot of these people who want to quote unquote fine-tune the economy.
	They think, well, if we can put people to work, uh beautifying schools, putting uh wireless internet on school buses, building more light rail in in Los Angeles, why that will create jobs and create wealth.
	No, just because the government calls it wealth doesn't mean it's wealth.
	If the government creates a bridge where that nobody uses, oh yeah, we did that.
	It was called the bridge to nowhere.
	Is that wealth?
	But the bureaucrats count it as such.
	And that a lot of that political reasoning is what's driving government spending.
	But if you're talking about your standard of living for every dollar spent on a stimulus package, and we're talking about dollars in a fiscal sense that the Federal Reserve hasn't created out of thin air.
	I'm talking about the government Taxing or borrowing.
	For every dollar spent on a stimulus package, it's one dollar you must go without.
	You must defer.
	You must reduce your consumption or reduce your savings so the government has that to create a bridge to nowhere.
	It's infrastructure.
	It's good.
	Now you've got to ask yourself a question.
	Is that going to improve your standard of living?
	Or would it be better if you actually kept that dollar and either consumed with it or even better yet, loaned it to your neighbor who's starting an internet business or some other business?
	What is going to add to the nation's productivity?
	What is going to be invested the more wisely?
	Bureaucrats can't possibly know what to create.
	This is what the great economists like Ludwig von Mises and Henry Hazlitt and Hayek all tried to get through the heads of those kids with the heads full of mush.
	Apparently it might not be working at St. John's in Minnesota.
	But regardless, the government cannot possibly know what is demanded in the market.
	The millions and millions of decisions and the private knowledge that somebody like Stephen Jobs is going to start a computer company.
	How would the government ever do that?
	How would they know?
	How could they read his mind?
	Government will make investments, they'll create things based on political interests.
	So if the potentate of Pork of Minnesota and the United States Congress, Representative James Oberstar, one of the real demagogues of the United States Congress, if he wants to take the stimulus package, because he's going to be one of the House architects as chairman of the Transportation Committee, he's going to make certain his eighth district gets a snowmaking machine that you're going to pay for in Minnesota.
	Shrewd.
	That's why some of us, some of us are a little bit distrustful of government doing this.
	And of course, the empirical evidence is everywhere.
	Cuba now is going downhill as though it weren't already.
	in the environment of 2008 when they had very high oil prices?
	Well, the state-run Mexican government oil company, Pemex, managed to do that.
	The company posted a $7 billion loss in the last few years.
	How is it how is that possible?
	Actually, that was a couple of years ago when oil prices were even higher, they posted a loss.
	How's that possible?
	Because when government owns something, nobody owns it.
	There is no market discipline.
	The beauty of profit and loss, the beauty of the PL, it focuses the mind.
	If I've got my money invested with my neighbor's business, I'm going to see his quarterly PL statements.
	I'm going to look at those.
	I'm going to look at his debt to equity ratio or debt-to-asset ratio.
	I'm going to make certain that I get my money back with a return.
	But when politicians spend money, there is no market discipline.
	If they blow it, if they waste it, they just borrow more or tax more.
	They don't get thrown out of office.
	They usually become a chairman of the House Transportation Committee.
	Therein lies a crucial difference.
	The beauty of profit and loss is it focuses the best uses of our resources.
	It signals where our money should go.
	It provides productivity because profits are always reinvested.
	We used to call this the marketplace before academia got a hold of it and apparently brainwashed a few folks.
	So I could go on and on about the empirical evidence of state-run companies and government spending.
	It doesn't work.
	And 2009 will be no different.
	I wish somebody would tell that to the LA Times.
	You should have seen the editorial in the LA Times.
	They were lamenting the fact, and thank God for the two-thirds vote requirement in Sacramento to raise taxes.
	Because you had a number of Republicans who are fighting the Uber Liberal Assembly in Sacramento, as well as the Uber liberal governor, Republican governor, doing for Republicans what a former president did for Fidelity.
	Arnold Schwarzenegger wants to raise taxes.
	But the Republican minority is saying no way, and you've got to have a two-thirds vote to raise taxes, and they're holding out.
	So naturally, the apologists for big government, the Los Angeles Times.
	How's that subscription uh ratio going or that subscription rate going out there?
	They blasted the GOP in California for their no tax hike pledge.
	The no tax pledge, The taxpayer protection pledge from the Americans for tax reform blindly, blindly promotes one policy position over the interests of the economy and even taxpayers in California.
	Now this is downright Orwellian.
	This this is what?
	Through the looking glass.
	Words mean exactly what I want them to mean.
	The LA Times now says raising taxes benefits taxpayers.
	Yeah.
	They think, you know, if you don't raise taxes, you're forgetting the oath to serve the people.
	Well, let's take a look at California because it is such a basket case.
	Uh they they have been spending money like uh drunken Hollywood actors, and in fact, the more they they tax, the more they spend.
	You've got a situation here where they've got the largest state budget deficit in the country.
	So what's their answer in California?
	Their answer is uh, let's see.
	We're going to uh raise sales taxes one and a half percentage points.
	So that's going to bring the state and local sales tax rate in a number of areas to over nine percent.
	We're gonna triple the car tax.
	Didn't the former governor get in trouble out there in California for tripling the car tax?
	Uh we're going to uh we're going to invigorate the economy by creating government jobs.
	Part of which, by the way, will be, and we talked about the uh futility of rail transit.
	Californians want federal money and state tax money to build a railroad, presumably across the state, that's gonna cost thirty-four billion dollars.
	That's gonna increase your productivity at work, isn't it?
	So this thing in in California, you know, they've got the worst credit rating, I believe, in the in the country.
	Uh they've got this high speed rail system they want to spend the money on.
	How is it that nine states have no income tax at all?
	I believe it's nine.
	Uh you know, you think of Texas and Florida and Nevada and Wyoming and Tennessee.
	How do they how do they provide their services?
	Oh, yeah, those are the states that are growing uh still.
	Yeah, that that's that's right.
	Look, the bottom line is this the idea that we are undertaxed, and this is the premise of all the tax raisers in the country.
	They they they keep incrementally raising taxes, thinking, well, another quarter won't hurt, another dollar won't hurt, and that's based on a false premise that we are in fact under taxed.
	If you take a look at the United States total government spending, federal, state, and local.
	Now remember, when we came out of World War II and we did the right thing, we burst the government war machine bubble, and we we literally deleveraged and went back to a private economy, and a lot of people were laid off for a while, but all of a sudden in the fifties the economy boomed because the federal government didn't spend more than 15% of the j uh of uh the GDP.
	Now we've got a GDP of about 14 uh trillion dollars.
	Do you know how much we spend from that GDP on government at the federal, state, and local level?
	You're looking at six trillion dollars.
	Six trillion.
	The Federal Government's budget's 3.1 trillion right there.
	You add another almost three trillion at state and local government, and you're looking at six trillion dollars out of a 14 trillion dollar GDP.
	You're looking at 40 percent of our national income being consumed by government, and yet the LA Times and every liberal from LA to New York, from Minneapolis to Houston is saying, Well, what we need is to raise some taxes, especially on the wealthy.
	We are undertaxed.
	Seriously, folks.
	This this is living proof that some people All right, I'm not gonna go there, I'm gonna be nice, a kinder, gentler, jollier uh Jason Lewis filling in for Rush Limbaugh right here on the Excellence and Broadcasting Network.
	We are on the cutting edge of societal evolution, the Rush Limbaugh program up and running for a Tuesday.
	Walt Williams, Walter Williams back here tomorrow.
	That should be fun.
	Mark Stein on Friday, best of rush on uh Thursday, New Year's Day, and then the big guy L. Rushbow back on Thursday in the meantime, holding down the forts in the Northern Command.
	I am uh Minnesota's real anchor man, Jason Lewis, Minnesota's Mr. Wright, call me what you want, but just call 1-800-282-2882.
	Let's go to St. Paul, Minnesota.
	Paul, you are up next.
	Hello.
	Hello, Jason.
	Uh I I appreciate the uh Rush Limbaugh program.
	I think you do a great job of filling in for them.
	Make a Christmas ditto to you from the great State actually I'm in uh Wisconsin right now.
	I with respect to your comments about free markets and and specifically about these bailouts that have been occurring, it's really been bothering me uh that that Russia's been focused on this this notion of a bailout of the UAW, which I think is completely uh ill conceived.
	If we want to take a look, actually, you know, we we don't really have such a thing as free markets.
	I think we all need to be honest about that and and take a look at how government policy drives business to make some of the decisions that they make.
	And if you take a look at our auto industry, for example, the national policy is for unions and companies to negotiate for what what used to be a social compact.
	And for you know, starting out with Henry Ford, who realized this even before we had the the government policy for collective bargaining, you had these companies enter into agreements with unions for good wages for health care, eventually for terrific pensions and so forth.
	And for a hundred years, these companies, uh General Motors, for example, they've been prov providing good wages, good benefits, pensions to to these employers, and they were and they were doing it under the under the umbrella of government.
	So and what do you mean they were doing it under the umbrella of government?
	Government policy.
	Back in the nineteen forties, the government actually uh established laws that said that this is what good companies should be doing.
	It's actually the national policy, collective bargaining is national policy.
	Well, what would you say to this?
	Let us establish a law.
	In fact, I've got a plan to eradicate third world poverty in Africa.
	And we'll we'll do it here first and then we'll go there.
	We're gonna have the government just establish a policy or a law that says the minimum wage for everyone is two hundred dollars an hour.
	And we'll just pass a law.
	And if we pass a law, we can create something like it grows on trees.
	Well, uh, I think that that would be uh uh uh companies, uh the the free market, if you will, governments, we would have to find a way to to work within that within that framework.
	I mean, uh what you're saying is what you're saying, of course, is it wouldn't work because governments don't create and passing a law doesn't create anything.
	Now you you are right, ever since the national labor's uh labor um, NLRB, the National Labor Relations Act, uh we created this notion of in a number of of communities closed shops, where if the union got fifty percent plus one, the entire uh workforce would have to be unionized.
	You didn't have a choice.
	Number of states don't like that under Section 14 B and the NLRA, they are right to work states.
	But that is not that is not an outgrowth of the free market.
	Uh if we really had a free market, the only power unions would have, to be perfectly honest with you, Paul, is to say, look, we're gonna collectively bargain, and we hope you want to too, and the company might say, Yeah, it might be easier to do one big contract rather than negotiate with everybody.
	So we'll do that.
	But by the way, if you walk off the job, we're going to replace you.
	And if you walk off the job, uh you better get everybody to walk off.
	And they would have they would have no more power than the power of persuasion.
	Of course, that's that would that would hamstring a number of unions.
	They need the power of coercion and force and government to make people pay dues, to make them walk off, to keep them intimidated, otherwise a number of people simply wouldn't latch on to the union agenda.
	I don't think that's anything to do with free markets.
	Well, they operate within the so-called free market, and and I agree, the only persuasion that unions I mean, right right now companies if if they disagree with their their employees, I mean, yes, the they they can they can send them to the street or the unions can strike.
	And if you take a look, for example, in the General Motors case, the UAW uh the they've used the strike weapon and the just in time mechanism, which is a you know product of the last thirty years, very effectively.
	Regrettably, the cost structure that exists, for example, at the UAW, it it it's it's it's completely out out price General Motors and some of these other companies from from certain segments of the market.
	Well, well, wait a minute, wait a minute, you just hit the problem on the head there.
	And and when General Motors has to pay uh or I have to pay two to three thousand dollars per car just for health and retiree and pension plans, not for the car, General Motors has a cost structure problem, and that's because the union has been intransigent over time.
	Now now, if you take a look at the bailout, Paul, uh the everybody expects the executive to take a cut.
	They expect shareholders to take a cut.
	The only people that are refusing to take a cut is the UAW.
	Why wouldn't you think we're bailing out the UAW?
	But that's that's that's where I have the problem uh with you and with Rush.
	The UAW folks are taking cuts.
	If you take a look at the the at uh the negotiations that are coming out of Detroit right now, in two thousand ten, workers will go from a twenty-eight dollar basic hourly wage to fift fifteen dollars an hour.
	Except excluding one, except you've got to exclude one item there.
	And that is benefits.
	If you include the benefits, then all of a sudden Detroit is way out of whack, and those simply have to be addressed before Detroit's going to be healthy again back after this.
	You know, the last caller, I mean, nice guy and a lot of people I chide the UAW, Rush chides the UAW, but a lot of good people in unions, I have no problem fundamentally with private sector unions because if they become overbearing, if they ask more than they produce, the market will punish them.
	I don't have to go out and buy a car.
	I don't have to fly on an airline.
	If the union is overreaching and the company is going under, or they have to raise prices or what have you, I don't have to patronize them.
	So the market will will take care of itself if government stays out.
	In this particular case, in Detroit, I've got a problem with the bailout because the government is now intervening with my money to bail out an uh in unsustainable cost structure driven by past UAW contracts.
	You gotta remember in the nineteen fifties, we had demolished our competitors.
	There was no competition from Germany or Japan or Asia.
	We could we could build a car for whatever we wanted to, and that was the only game in town, and we could sell it.
	I'm exaggerating only for a fact here.
	All of a sudden, those World War II competitors now become economic competitors, and they are they are driving this is what markets do, they are driving efficiencies.
	They are becoming competitive.
	And the UAW is stuck in lala land saying, Well, we don't have to we don't have to produce more with less.
	We don't have to compete.
	Well, yes, you do.
	And they're hoping the government will tell them they don't want to compete.
	Or don't have to compete.
	Now it's altogether another story when it comes to the public unions, of which I vehemently oppose.
	Fundamentally, and we're gonna talk about this next hour when I get to the single biggest problem in K through twelve education today.
	It's called the National Education Association.
	Unions are there for the benefit of their members, not for the kids, not for anybody.
	They are there to protect mediocrity with one size fits all contracts.
	They don't want any stars, they don't want anybody producing more and earning more, because that breaks up the brotherhood.
	And without the brotherhood, without the solidarity, you get nothing.
	And again, the market will punish that if they get overbearing.
	And if they don't get overbearing, God bless them, earn earn as much as you possibly can in free negotiations.
	But in the public sector, there is no market.
	The idea, quite frankly, and I'm gonna go out on a limb here and be somewhat radical.
	The idea that we even allow government unions is an oddity to me.
	The idea that we can have a conflict of interest where every governor or every legislator in your state is negotiating with the very teachers union that is then lining their pockets with campaign contributions.
	Talk about conflicts of interest, serving two masters.
	And that's the fastest membership growth in the country.
	Government unions.
	And that also, my friends, it's what's driving the Paul Krugmans, the Barack Obamas, the Chris Dodds, the Barney Franks.
	They know they've got a build-in permanent political constituency if they can get more people on the government payroll in the government union, because that money flows right back to the career political types, the career politicians.
	And you wonder why we have the largest amount of inputs, five hundred and thirty-six billion dollars we spend on education in this country, K through twelve.
	And yet we get whipped in international test scores.
	The National Education Association.
	I hope I'm not traumatizing too many of you.
	But then again, you're probably not listening because you're on vacation this week.
	Tom in Brownsville, Texas.
	That ought to do it if the monologue didn't.
	Tom in Brownsville, Texas, thanks for waiting.
	You're on the Rush Limbaugh program with me, Jason Lewis.
	Hi.
	How are you doing, Jay?
	I'm doing fine.
	How are you?
	I've got a question for you.
	I've had a little bit of accounting in college and stuff, and I'm not quite as good as our government is.
	But I'm curious, if if it's our gov if it's our country they're trying to bail out, why don't they take the seven hundred billion dollars and give it to the people that are in debt?
	Well it's much more than seven hundred billion now, but the potential we should be clear about that.
	The potential of the bailout is much more than seven hundred or a trillion even.
	Look, I don't know that that would be the right thing to do because I'm not in I don't think government should be in the business of rewarding debt and rewarding people that uh make bad investments.
	However, from a macroeconomic standpoint, Tom, you're right.
	It's no different than what we're doing with the money.
	I I you know if we're gonna run up a trillion dollars, Tom, or two trillion in deficits, why don't we run those up by giving people a tax cut?
	Exactly.
	I mean, everybody's talking about how these people have been duped into these mortgages.
	I've had a mortgage or two and there was some stuff I didn't understand.
	It was my own fault if I signed them.
	I'm not one for bailing people out when they get yourself in trouble.
	Right.
	But on the other hand, if anybody needs to get short changed on this deal, it's these government agencies and these big businesses that have been ripping people out.
	Well, first thing we need to do is stop the bailouts.
	So there is data now to conclude that in fact things were not going to hell in a handbasket.
	I think Rush touched on this last week, as much as uh Paulson and Bernanke and company uh said they were.
	Uh there's data to conclude that the government just plain and simple panicked, and that has become a self-fulfilling prophecy driving the downturn.
	Oh, there was no run on the banks.
	It would have been you know, frankly, if we would we would have let Bear Stearns collapse, what a wonderful signal that would have been.
	There would have been no panic.
	There would have been an investment bank that went under.
	Uh, you know, we wouldn't have had to bail them out so J.B. Morgan can own them at uh what was it, uh twenty cents on the dollar or whatever it was.
	Yeah.
	Uh yeah, I might have had some of that myself.
	Yeah, right.
	That would be the first thing we should have done.
	But you're you're quite right.
	H here's here is what I think you're trying to say.
	Remember remember the Bush stimulus package last summer, last spring.
	We're gonna give we're gonna tax people like you and me so we can give rebates to the quote unquote spenders.
	And that's gonna lift the economy.
	They're gonna take that rebate and they're gonna spend it.
	This is pure demand side Keynesian garbage that apparently Patrick has bought into from uh Virginia, our caller last hour.
	Uh you know, Kitten Mike told me I was gonna rip him the rest of the show, and I think they're right.
	Uh the point is that did nothing, did it?
	It did nothing to lift the economy because people you first of all, in order to give somebody a rebate, you had to get the money someplace else.
	So it was a zero sum game.
	But more importantly, people just took that rebate and they saved it.
	They didn't spend it.
	So I'm not altogether certain that's going to lift us out of the malaise.
	We do not have a lack of spending crisis.
	What we've got is an unwillingness to invest crisis.
	People are are saving money, uh, they're not spending, they're deleveraging, and the money that's going into the banks and the financial institutions is being given to the government in these ridiculous zero percent treasury bills instead of being loaned out to businesses.
	So what do we need to do to encourage people to loan money to business?
	Well, here's a novel idea.
	Increase the rate of return on business investment.
	Increase the reward for investing in business.
	So if you lowered the top marginal tax rates, and if you're gonna run up a billion dollar stimulus or I should say a trillion dollar stimulus package, let's run it up with a tax cut.
	In fact, Reagan did, and we grew out of the deficit.
	Point is if you did that and you cut all of the taxes on people who invest, on taxes on the top marginal income tax rate.
	So the people who have the money, whether it be individual venture uh capital funds or individuals themselves or companies or banks, had an incentive to start investing in business again and not zero percent treasury bills, because when you cut the taxes, they get to keep more of their return on that investment.
	That would be a much better way to use the government uh deficit, if you will.
	So I think you're on to something there, Tom.
	Thanks for calling Schaumburg, Illinois.
	Mark, you're up next on the Excellence and Broadcasting Network.
	Hi.
	Hi, Jason.
	I wish you would expand on your re repudiation of Keynesian economics in response to Patrick's errant beliefs.
	My understanding of this theory is that Keynes believed that the earth is sort of like a pie and that it only has a limited amount of resources.
	So if you, for example, take a piece of the pie, So to speak, so much the less is left for me.
	I, however, believe that the correct belief is that the earth is full and there is enough to spare.
	In other words, the earth truly, from human perspective, has limitless and in fact renewable resources, and that we mortals don't have the capacity to exhaust them.
	So it's best to rely on free markets and in fact God versus some puny man's arbitrary determination as to who gets what.
	Well it's interesting.
	There were so many precepts in Keynes' general theory, it's hard to know where to start, but the but you know i do realize the kind of trauma, Mark, you are instilling in every program director in every radio station in this country.
	What?
	They're talking about Keynesian economics?
	Oh no, can't we dumb this down?
	Give us a lesson in Friedman versus Keynes.
	Well, I mean the Friedman was the guy that repudiated Keynes for crying out loud.
	He wrote capitalism and freedom.
	He wrote free to choose.
	Henry Hazlitt repudiated Keynes.
	The idea that you would quote a free market economics as somehow buttressing Keynes shows you where our uh our caller was going, nowhere.
	But you look, I I think you've described what liberals essentially believe, and that is that we have a zero sum society.
	So the only way the rich can gain is by taking from somebody else.
	When in fact the greatest single resource in the world is people.
	The human human ingenuity.
	That is limitless.
	So what we need to do so everybody can prosper is to make certain that A, when we work and save and invest, we're reward rewarded for that, and B that capital doesn't go to government, capital goes to me and the private sector so I can increase my productivity with a new machine, a new tool, and then productivity goes up, a rising tide lifts all boats, and we all gain without having to rob from somebody else.
	That I don't know that that would I would describe that necessarily as a refutation of Keynes.
	I certainly would describe it as a a wholehearted endorsement of free market classical economics.
	You're on the Rush Limbaugh program back after this.
	You know, more on economics tomorrow with uh economist Walter Williams, uh brilliant man, he'll be in uh New Year's Eve on the Rush Limbaugh program.
	I can hardly wait.
	Mark Stein, funny guy, he's in on Friday.
	And the best of rush, Thursday, New Year's Day, right here on the Excellence and Broadcasting Network.
	In the meantime, it's the little old me, Minnesota's real anchor man, Jason Lewis, trying to just trying to fill the shoes of El Rushbow right now in Greenberg, Georgia.
	Here's Granville, hi, and welcome to the big show.
	Hello.
	Um I was calling mainly because I think the premise that uh the money supply has been growing too fast is uh in and of itself wrong.
	Productivity's been outgrowing the money supply for a number of years, and that's one of the things that's led to the kind of um recession that we've had.
	Uh it it inevitably has to lead to recession because the money growth supply the growth of the money supply does not match the growth of uh the economy.
	Well, it depends how you measure the money supply.
	There are a number of different measurements there.
	It depends also how you calculate inflation.
	Uh we've got this uh novel little plan, Granville, of calculating inflation without the core core inflation rate, they call it.
	So they exclude energy, they exclude a few things as if we really don't pay for those.
	If in fact you were correct and we weren't we weren't uh supplying enough liquidity to the economy, we would be in a severe deflation mode.
	And although CBI prices again, wait a minute, wait a minute.
	CPI, I think is uh misleading stat given what they count and what they don't count.
	But regardless, we have only seen a drop in CPI in the last couple of months.
	You can go back to nine nineteen two thousand, nineteen ninety, nineteen eighty, and tell me when we had deflation year to year.
	Now we haven't had de deflation, but what we have had is a restrictor on the economic growth this country would have otherwise had, and it also puts us makes us non competitive in the world.
	How on earth?
	Granville, seriously, how on earth could you say that liquidity wasn't available when we had a housing bubble unlike any in history?
	Where did that money come from?
	We had the most massive credit expansion in the nation's history leading to this credit bubble.
	That came directly from easy money, a one percent let me tell you, can a federal funds rate Actually be negative and not be a loose monetary policy?
	We had we had the Federal Reserve loaning money to member banks to get the mortgage thing going, which was a malinvestment at rates that were negative.
	You're telling me that's too tight a monetary policy?
	But at the same time, they were using as a target uh a three to five percent uh growth in the economy in the uh money supply as a whole.
	And by limiting the growth of the money supply, what they've effectively done is limit the growth of the money.
	No, no, no, no, no.
	You keep saying they limited the growth of the money supply, limited the growth.
	We could double the money supply.
	What makes you think tomorrow that's going to grow the economy?
	Just as you said, uh productivity, the actual supply of things, when they when it grows, it grows uh the economy.
	Uh when people go out, no, no, no.
	What grows the economy is actual production.
	Right.
	Right.
	Okay.
	If if in fact in Greenberg, Georgia, a plane flew over your community tomorrow and dumped uh a billion dollars, but nobody produced anything more in Greenberg, no no new doctor's offices were open.
	We were producing the very same thing.
	Would you be richer?
	No, but at the same time, if when uh productivity is growing at uh eleven, twelve or greater uh rate, which is they were over the last uh fifteen or twenty years, and you limit uh the growth of the money supply to three to five percent, then uh you're inevitably going to lead to recession.
	You can't do that.
	No, Grand Granville, i if uh productivity wasn't growing that fast, but even if it were, even if it were growing that fast and we had a restrictive money supply, you would see falling prices because growth is essentially anti-inflationary.
	And we haven't seen that when you look at the real price.
	And by the way, the best arbiter of inflation in my view are the price of commodities, whether it's houses or whether it's pork bellies or the mother of all commodities, gold.
	And there aren't many deflation signals there.
	Granville, thanks for calling.
	I'm Jason Lewis, in for El Rushpo.
	Don't go away.
	More coming right up after this.
	All right, I want to switch gears just a tad next hour, talk about education.
	As you know, Barack Obama, president elect, has decided to send his child to a private school.
	Well, if it's good enough for the president elect, the common man, why isn't it good enough for you?
	Talk about education reform and the big push from liberals everywhere, preschool being collectivized or nationalized, destroying the last market in education preschool.
	They want to make that a government job, so it's no longer K through twelve, it's going to be E through twelve.
	All of that on the docket next hour, right here on the Rush Limbaugh program.
	In the meantime, let's squeeze in art in Ohio.
	You're on the excellence in broadcasting network with me, Jason Lewis.
	Hi.
	Uh dittoes, Jason, enjoying your fill-in.
	Uh I've got a real question, and you sound like just the guy to answer it.
	I've asked several people, including a guy that owns a car a lot, and he can't answer it.
	If GM Ford and Chrysler are making all these cars that they can't sell for a profit and they want a bailout from the government to keep them working for what?
	What are they going to do with the cars?
	It becomes a bridge to nowhere.
	Yeah, I mean, are they going to give them to us because we paid for them?
	What do you think we're doing with ethanol?
	What do we do with any government subsidy?
	What happens is a government subsidy begets a government subsidy.
	It's a great question.
	So they got these cars, they can't sell them.
	What they will do is they will give you a voucher, kind of like one for your TV, a converter voucher that everybody's relishing now, and you'll get a voucher to buy a car that you wouldn't pay full price for.
	But that means to keep the cars moving, you're going to have to have a perpetual subsidy.
	But I didn't want to buy one of their cars in the first place, or I would have.
	Well, you'd buy it if the government paid for half of it, wouldn't you?
	I doubt it.
	I'm not a hundred percent sure.
	I mean, well, let's be fair.
	Wait, wait, wait, let's be fair to Detroit.
	I I I I do think they get a uh little a little poor treatment when it comes to the quality of their vehicles.
	I think they produce fine vehicles.
	I just wish the the management and the union would have gone to Washington and said, you know what?
	How dare you tell me what we have to do?
	You're the guys that got us into this mess by effectively banning the SUV, our most profitable line.
	Yeah, well, that's my problem.
	I drive an SUV and I've had three of them now and I enjoy 'em, but it's kind of reminiscent of in the 70s when the unions couldn't compete with the foreigners instead of saying, Well, we'll make a better car, we'll lower the price, they came to the government and said put an import tax on it, so it just made it impossible for me to buy an import or a domestic.
	So you're just exactly.
	I mean, that's what protectionism does, it taxes consumers.
	Uh that's a great point.

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