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Dec. 27, 2010 - Rush Limbaugh Program
35:41
December 27, 2010, Monday, Hour #3
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I do want to thank President Obama for something.
So far as I know, he hasn't made any appearances today in Hawaii.
Right now, with the whole eastern half of the country either frozen or snowed out or stuck at airports, the last thing we want to see is Obama walking around Hawaii waving his hands.
We haven't seen him so far.
No that I'm I don't want to tempt fate here.
We do have a report on his activities over the weekend here.
Something very rare occurred.
Obama went to church.
President Barack Obama and his family took a break from their Hawaiian vacation to attend Sunday church services, a rare occurrence for a president who prefers to worship in private.
Don't have a lot of information on the minister.
We don't know if it's another Jeremiah Wright guy or not.
We do see at the end of the story, however, the president and Mrs. Obama also extended wishes to people celebrating Kwanzaa.
Who?
Does anyone know anyone who celebrates Kwanzaa?
Black people don't even celebrate Kwanza.
They do not.
They do not.
I'm told I'm getting from the Peanut Gallery is telling me that yes we do.
Yes, we can.
Six.
I want to know what the count is.
I want Kwanzaa.
Kwanzaa.
I mean, this whole business of being inclusive and politically correct.
Let's throw Kanza Kwanzaa Kwanzaa worked out as well as George Costanza's father's name on Seinfeld Frank Costanza.
Didn't he invent something?
Festivus or something, festivists for the rest of us or whatever.
The President of Mrs. Obama also extended wishes to people celebrating Kwanzaa, all six.
The seven principles of Kwanzaa.
I want to reference something that I talked about a little bit earlier in the program, in which we talked about how gradually the discussion of the fatalities in the war in Afghanistan has moved from American military deaths to NATO deaths.
This is an associated press report from last night.
NATO says one of its service members has been killed in a roadside bombing in southern Afghanistan.
A coalition statement said the person was killed Monday had provided no other details.
NATO.
It might be an American.
It might not.
Eventually, we'll know.
These deaths were never reported that way.
Prior to this.
I want to take a moment here, my opportunity to guest host for Rush, to talk about what I think is going on in the American economy.
I happen to think that the Federal Reserve policy, essentially, let's flood the market with money.
Let's print as much money as we can, let's just make money available to banks at zero percent interest because we've got to do something to jumpstart the economy, isn't going to work, and is very dangerous.
The big problem is whether or not creating all of this money and further driving down the dollar will produce serious inflation.
Everybody's saying that the people who are worried about inflation are a bunch of wackos, the sky is falling, that they're chicken littles, that we don't have any inflation in this country, and that there's been no inflation for years.
That's the knock on us.
They sometimes refer to the people as gold bugs because they're urging Americans to invest in gold.
Gold, in fact, and silver especially has been a spectacular investment for the last five to ten years, notwithstanding.
This argument that there is no inflation is spacious.
It depends on what you're looking at.
If you're trying to buy a high deaf TV, yeah, there's no inflation.
The prices are plummeting.
Oil is over $90 a barrel and looks like it's going to stay there.
If we do have an economic recovery going on, it's likely to go even higher.
The demand from China, India, and even from Africa is driving the price of oil up.
That's translating itself into higher energy costs in the United States.
In addition to that, almost every commodity that exists is going up.
Look at copper, aluminum, look at food prices.
Soybeans are at their highest level in years.
Corn is exploding in price on the futures market.
Well, the government's figures don't include food and energy.
When they look at the core rate of inflation, they exclude food and energy.
That's like evaluating a football team and excluding the wins and losses.
Food and energy drives what most of us buy.
What business isn't affected by it and what individual isn't affected?
It's true that many American manufacturers and many retailers have lost pricing power.
They can't raise their prices right now because the public won't bite.
That's true.
And in those areas, there isn't any inflation going on.
But that's not the entire economy.
The areas they don't count is where all of the inflation is occurring.
To pretend that we don't have inflation is just to deny reality.
If somebody has to pay six dollars more at the pump per week than they did a year ago, they have less purchasing power for everything else.
That's what inflation is.
If Bernanke's devaluing of the dollar by flooding the market with dollars and expanding the money supply, increases inflation, which he says is his goal.
He's come right out and said that we need to have some inflation in order to produce more economic growth.
You're piling it onto an economy that already has hidden inflation because of the refusal to consider what's going on in food and commodities costs.
Every manufacturer that uses any kind of metal is seeing an increase in the cost of their raw materials.
They are all going up.
Look at copper.
Look at the precious metals.
Look at gold and silver.
Look at food and watch what happens with energy.
Now that oil is going up, natural gas, which has been very cheap for a decade, might follow.
I don't know.
I can't predict these things, but it might.
This attempt to stimulate the economy through government action is extremely risky and can produce serious inflation.
What if Bernanke gets more than he wants?
Can we handle again oil at $110 a barrel, $120, gasoline over $4, over $450?
So while he's stimulating the economy, may put all of these dollars out there, the increase in energy costs is going to do just the exact opposite in terms of the growth he wants to produce.
If businesses and individuals have to put a larger portion of their spending power into energy, it's money that they can't invest or put into something else.
I think he's approaching this all wrong.
And to think that simply having a little bit of inflation is going to produce growth, the old Keynesian scheme, which has never worked, It didn't even work when Franklin Delano Roosevelt was doing it.
It's going to end up, I think, harming growth rather than driving growth.
What is going on with our economy?
I think we are in the middle of a recovery, but a very tepid one.
A wussy recovery.
Clearly, if you look at some indicators, Christmas sales, factory orders, and other things, there is improvement.
But remember, you're comparing the numbers to a terrible year.
When you look at year-to-year improvement, it's very misleading if you're coming off a rotten year.
A baseball team that wins 50 games one year and wins 60 the next may have a 20% improvement of wins, but they still were 60 and 100 too.
So the economy that we have is showing improvement over 2009 in some areas.
That can't be denied.
But unemployment isn't moving.
It's terrible.
It's been touching up against 10% for months, and there's no sign of it improving, particularly with private sector hiring, the only hiring that matters.
And the housing market remains bad.
Now there are some signs housing might be picking up in a couple of places, but housing is still terrible.
So even if you accept that we have recovery in some areas of the economy, it's got to be weighed against the fact that you can't ever have a full recovery if ten percent of the people who want to work and 20% of the people who exist don't have jobs.
And you can't have a full recovery if there isn't a housing market in this country because housing drives everything.
Housing is the average American's largest single investment program.
Housing is the area of the economy that touches almost everything else.
If neither of those two are improving, you can't have a real recovery.
So what I conclude is that we have a very tepid recovery with some positive signs and other signs that are not positive.
In other words, in an economy on the edge and is in real jeopardy of going right back into a second recession.
What we ought to be doing to have this become a real recovery is take the steps that are necessary to get companies to go out and hire people.
And all of this quantitative easing or QE2 or whatever term Bernanke wants to put on it, in which we're providing capital for the banks to lend, doesn't do anything to address the unemployment problem.
What it does do is create inflation.
You may end up with a complete repeat of the Jimmy Carter era.
The term itself is stagflation, a stagnant economy with inflating costs for goods.
It's the worst of both worlds.
I don't see how this easing and this increasing of the money supply is going to deal with unemployment.
I do see how it can create inflation.
Inflation that is already out there.
The reason it doesn't address unemployment is companies don't hire workers unless they believe they will make more money because they have that worker than if they didn't have that person on the payroll.
And so long as government has in place policies that penalize the employer for creating a job, that isn't going to change.
The average business person right now with 26 employees thinking of going to 28 is looking at potential number 27 and number 28 as two more huge costs they're going to face when Obamacare fully kicks in.
They aren't getting any relief on the payroll tax, that's only going to the employee, and they're seeing an economy that still hasn't fully recovered.
Why would that business take the risk of hiring those two workers until that business person believes he or she is going to make more money by hiring those two people, the jobs aren't going to occur.
And I don't see how inflating the economy and driving up the cost of food and energy even more than they are now, driving up the cost of commodities, is going to do anything to get businesses to want to hire.
If businesses are seeing their costs go up, it's a reason not to hire people.
I believe the approach we're taking here is totally wrong.
There are ways to improve the economy, but it is never going to come from government micromanagement.
I'm Mark Belling, sitting in for Rush.
I'm Mark Belling, sitting in for Rush.
I'm going to tell an amazing story here.
Before I do, I want to back into it a little bit.
I was talking in the first segment of this hour about what's happening with our economy and how sales for a lot of businesses are improved but still not All that healthy.
Yet we see in some areas of the economy an absolute boom.
Look at the stuff that was selling this Christmas season.
The iPad kind of started it, but all of the other electronic readers that are out there, and they aren't book readers anymore.
The iPad, which produced the iTablet, and all of the I this and the I that is creating an entire market sector.
Amazon has its Kindle, which is primarily a reader.
Apple has its reader, which can also access the internet, and then you've got these devices of every size imaginable.
Some have medium-sized screens, some are small.
Most are now accessing the internet, most have Wi-Fi component on them.
Most now have virtual keyboards where you can type and compose and send email.
These readers are kind of morphing into mini laptops that do most of the things that laptops can do.
Most of them can't make calls, and most of them can't text, but some of them can do some of that.
These things are selling like crazy.
Where did that market come from?
Did that come from government?
Did anybody in Washington invent Al Gore may think he invented that?
That idea came probably first from Apple and was quickly picked up on either improved depending on whether or not you're an Apple fan or copied or whatever.
But the fact is that these things are selling like crazy.
Somebody out there came up with an idea, and a bunch of other people came up with ways to create products that found a market that people wanted.
The retailers that are selling them are making a lot of money and the manufacturers are making a fortune.
Check out the stock of some of these companies.
This is a part of the economy that really is happening.
And while a lot of the gadgets themselves aren't made here, most of the companies that are selling them are based here.
If they have a Wi-Fi or phone component, you're probably working with a service provider that's from here.
You're using them to access websites that are run by companies that are based here, and they're being sold in stores with employees that already are here.
This is an economy that's working.
And it occurred without any input at all from government.
We didn't have any stimulus plan to get people to go out and buy readers.
There was no cash for read there was no cash for clunkers or cash for readers for this.
The government didn't provide any credit to go out and do so.
It's not like solar power or wind power or ethanol where we're going to subsidize them.
Companies came up with a product that the American public wanted, and they're selling them in droves.
That's the only way our economy is going to recover when we have companies, be they large, small, medium, that are able to innovate and are willing to take a chance.
The economy can still work, but this idea that we're going to sit back and give credits for this and credits for that, and we're going to print all this money so the banks loan money, it's all an attempt by the government to make an economy happen when the economy can only occur when private individuals choose to transact business between themselves.
That brings me to an amazing company.
I heard a little bit about it over the last couple of years, but then read about it a couple of weeks ago on the Wall Street Journal.
The company is called Groupon.
G-R-O-U-P-O-N.
It's a combination of the words group and coupon.
A guy, his name is Andrew Mason, and a couple of partners started this company barely over two years ago in Chicago.
The concept is so simple and totally brilliant.
Their idea was to once a day put a coupon on the internet.
The coupon would simply be something that you would log in and pay for and then get a certain percentage off.
It's usually 50 or 60% off of something, and there would only be one per day.
The kicker was that the coupon would be worthless And your money would simply be refunded unless enough people agreed to take advantage of the offer.
The incentive, therefore, if you were interested in this, okay, 60% off of meals at this restaurant, is to contact all of your friends and get them to sign up, otherwise you can't take advantage.
So who's doing the advertising?
Who's doing the word of mouth?
The customers themselves.
This started in Chicago only two years ago.
And there's only one offer a day.
It's been so successful that Groupon is now up all across the country with offers in each of these cities.
The owner of Groupon just turned down an offer from Google to sell the company for six billion dollars.
Six billion, and he turned it down.
I've been telling you about a company called Groupon.
It's brand new, it's only two years old, and it is such an unbelievable success that the owner, just a guy, his name is Andrew Mason.
I think he's a lefty.
He was involved in something that didn't work earlier.
They tried to put up a website that would be a place where we could organize rallies and liberal stuff.
Well, not surprisingly, that didn't work.
So he moved on to something else, and they came up with this concept of creating a website where every day there'd be a new coupon offer.
You'd buy it for less for about half price or a little bit less.
If enough people bought it, the offer would be accessed.
The thing is so successful that Google's trying to buy it for six billion dollars, and he told them, No, I you're not hearing me not enunciate properly.
I said six billion.
And he turned it.
I don't there is absolutely nothing I could invent that I wouldn't sell for six billion dollars.
If somebody thinks it's worth six hundred billion, I'm taking the six billion.
I can make that work.
Nonetheless, he turned it down.
There are some of you out there who've probably heard of this.
If you have any stories about Groupon, I'll put out the phone number here, which is 1800-282-2882.
I'm going to give you some numbers, and the reason I'm doing this is this is how an economy grows.
This is how wealth is created.
This is how money is spent and invested.
Groupon, as I said, started in Chicago.
It was such a hit there that he moved it to the neighboring cities around Chicago.
It's now spreading across the United States.
If you log on to Groupon, your site from your community, if your community has Groupon, will come up, and they put in a sales force in each of these communities, and the Salesforce goes out and sells the right to be on that day's Groupon.
And you know how much it costs the business to be that day's offer?
Nothing.
It's free.
This is just brilliant.
What you have to do is somebody that Groupon's willing to use.
And right now, Groupon has way more businesses trying to be the offer of the day than they have days of the week.
So Groupon doesn't have to spend anything, and the advertiser spends nothing.
Most of the businesses that are on here, since the offer is usually for 50 or 60% off, are very small and very new businesses that are trying to increase their customer base.
And a lot of it, since I first talked about it and checked it every day, there still isn't anything that I found in there that I would ever use.
It's a lot of spa services, salons, nail places.
There may be a restaurant, but it may be 35 or 40 miles away from where you live.
But the key is there's a market for this stuff.
And the beautiful part about it is that it's mostly aimed at these small businesses that would never have been able to afford an ad in their daily newspaper.
They can't buy an ad on television if you're a nail salon.
You've got all this wasted time.
Here, they don't have to buy anything.
They just have to convince Groupon to make them the deal of the day.
If the deal of the day is 50% off of something that would cost 50 bucks, that's 24, 25 dollars.
The business gets half of the sale, Groupon gets the other half.
Now that means the business is going to be providing $50 of service and only getting 12 bucks.
But if you're a business that's trying to build a customer base, that $38 may be worth it to you if the customer comes in and spends more than the $50, or the customer comes back.
As everybody in business learned, all of your repeat customers were a first-time customer at one point.
So you've got businesses that have been able to access the advertising market at no cost and attract major customer base without spending any money.
You've got Groupon, which has done literally nothing other than put the offer up on the internet.
They do counsel the business on how to structure it, and they try to work, and you know, they have they have a sales force that's out there, but as I said, most of this is now walk-in business, people begging to be part of Groupon.
It is such a success that Google thinks the concept is worth six billion dollars.
It's a high cash, low expense business.
There are a lot of copycats that are springing up in trying to do this in their own individual in their own individual communities.
Create your own version of Groupon and City X. The advantage Groupon has is that they were there first.
And as we've learned with most of these operations, the one that gets there first or usually second and does it right is the one that explodes.
It's kind of like Facebook.
Mark Zuckerberg was named Time Magazine's person of the year.
All he did was create a website that allowed other people to create their own website.
That's all it was.
Zuckerberg is worth how many billions.
He's the subject of the movie that some people think is going to win the Oscar, the social network.
These are stories that are still happening in America.
They're not the clap.
This isn't Henry Ford inventing the automobile.
This isn't even Bill Gates coming up with software.
But they are ideas that people have.
And whenever those ideas turn into tremendous success, it means that a lot of money changes hands.
And that's what an economy is.
An economy is nothing more and nothing less than money going from one person to another person.
And when that second person gets it, they then spend or invest the money.
There isn't a single one of these huge successes that have come out of the internet that had anything to do with Barack Obama, Nancy Pelosi, Harry Reid, Paul Krugman of the New York Times, or any other micromanaging big government liberal spender.
These are people that are coming up with ideas and getting people to invest in them and spend.
Most of them are driving the advertising market, which is creating problems for the traditional media that depend on advertising.
But they are all tapping into a desire that's out there.
You just have to figure out what it is.
There are other areas of the economy that are obviously more problematic.
attic.
Manufacturing, any kind of sales, the housing market stinks.
But what stories like Groupon are proving is that if you have the right idea, it's still possible to make an unbelievable amount of money.
Groupon started two years ago in Chicago.
Do you know how many subscribers they have now?
44 million.
It's only 300 million people in the United States and Groupon still only in the U.S., There are a lot of cities that they're not in.
But 44 million people have put on their email addresses and signed up to be part of this.
With Groupon doing nothing to reach out and find them.
They're not running any ads on TV, they're not in any newspapers.
It's all going on through word of mouth.
And the word of mouth occurs when somebody sees an offer that they want, they need to get other people to buy the offer, or the offer doesn't kick in and doesn't qualify.
So they go and email all of their friends, their friends now find out about Groupon.
It's a giant chain letter that's turned into six billion dollars, and the guy's turning the money down.
Don't tell me that you still can't make it in America.
The thing that's so sickening about the whole thing is that usually to be a guy that becomes a multi-billionaire, you think of some genius who figures out some kind of quantum physics.
All this guy came up with, okay, I'll bet I'll put a kill pot on the internet and make people buy it.
And that made him a six times over billionaire and he turned.
I do think he needs to take that offer before somebody figures out how to steal this idea and become a better Groupon than the uh Groupon guy is.
I don't know what they call the customers of Groupon, although I suspect it's probably uh probably groupy.
My name is Mark Belling, and I'm sitting in for Rush, and this is EIB.
I'm Mark Belling sitting in for Rush the day that the entire eastern half of the United States is paralyzed because of the storm.
But we're move by the way, I mentioned that Groupon story, and the uh guy that started Groupon turned down six billion from Google.
How much did Newsweek sell for?
Think about that for a minute.
Guy puts coupons on the internet six billion dollars.
The Bible of American liberalism ten bucks.
Let's go to Citra Florida, by the way, one eight hundred two eight two two eight eight two is always the number on the Rush program.
Citra Florida and Jim, it's your turn on the IB.
Hi, Jim.
Listen, I I'll make it short.
Manufacturing you mentioned your earlier conversation, manufacturing is the only way we're ever gonna get out of this.
Come along.
Everybody went to work making uniforms, guns, planes, you name it.
And everybody went to work, but they got eighty-nine cents an hour.
I don't realize they go back to that kind of money, but the unions are gonna have to cut back on their they're paying way too much money.
All we're uh all we got over here is services.
Well everything is being made by the other people.
So the manufacturing is a huge problem.
And it's not at any part at all of the Obama program.
We still have some manufacturing industry in this country, but by and large, it's involved in traditional forms of energy.
They make drilling equipment.
We make a lot of that stuff here.
In my own area of Milwaukee, we make a lot of coal mining equipment and other industrial mining equipment.
We're involved in making a lot of things that's not very politically correct.
The worst thing that we could be doing for manufacturers right now is imposing more radical environmental laws that punish those companies and drive them to move their jobs overseas, and the worst thing we can be doing for them is to be coming up with all of these new regulations like Obamacare that punish them for hiring Americans.
What we have to be is a country that makes things.
On the other hand, it's clear that our economy is changing and that the internet is driving all of this, and our definition of what it is that we're making is changing.
Is Groupon making anything?
Well, they're making money, but are they making anything when they come up with an idea that someone wants to buy?
What I do know is that if Groupon is worth six billion dollars, a lot of jobs have been created in the process.
Any business that goes onto that site and increases their sales and makes it, he's going to hire people.
If they were a business that was on the verge of collapse, those jobs are saved.
Every time you've got economic activity going on, somebody is going to benefit and people are going to be put to work.
As for the old-fashioned raw material manufacturing, we still have it in this country, particularly the second and third-tier manufacturers, the ones who make something for somebody else.
But we've got an administration whose view of jobs never translates into that.
They believe in creating government jobs.
They believe in a stimulus program that's going to give money to government to hire more government workers.
They aren't focused on the private sector because there's an aversion to it.
The entire administration has come out of the public sector.
Obama himself never worked a day in his life making or doing anything.
They look down their noses at all of these types of companies.
But the only growth you're ever going to get is when they are willing to invest.
Let's go now to uh Houston, Missouri, and Dan.
Dan, it's your turn on the Rush Limbaugh program.
Good to talk to you, Mark.
I think you've set the record for hanging on to hold hanging on hold to talk to me in all of my guest hosting time, and I I applaud you for doing it, Dan.
Well, I was doing other things.
You weren't listening?
You mentioned earlier how the left works incrementally.
And I'm just my question you comment on is if we're going to do death counseling, how much further down the road will it be before we have government funded assisted suicide.
There are a lot of liberals who strongly believe in it.
An earlier caller referred to Rahmanuel's brother, who's one of the leading thinkers on all of this.
You talk to liberals when they have their conversations, they believe you have an obligation to get out of the way.
Whenever conservatives try to talk about where the liberal end game is on any policy, we're told to shut up that we're making it up.
If twenty years ago a conservative talk show host said they're going to try to force the military to accept gays, or they're going to try to legalize marriage between gays, we would have been told that we are exaggerating.
But you always have to take a look at where they're going because everything that the left does is achieved incrementally.
The most successful liberals are the ones that realize that you can't do it all at once, but you have to gradually do it a little bit at a time and a little bit at a time and a little bit at a time.
That's why health care is so dangerous.
As bad as Obamacare is, as written.
It just got worse now that we've learned that the president is writing right back into the law via administrative rule that...
This end of life counseling stuff.
What do you think it's going to be in a year?
If he's re-elected and emboldened with a second four-year lame duck term, what do you think the rules are going to be like then?
Liberalism always marches forward like that.
And those of us who try to take a look at the logical conclusion of all of these things, like realizing that end of life counseling and proscriptions on what type of care is and is not to be provided, both of which are now in Obamacare, can clearly lead to things like death panels.
That's not an exaggeration.
That's realizing where the left is trying to take us.
I'm Mark Belling sitting in for Rush.
I'm Mark Belling sitting in for Rush.
A lot of people had to go to extraordinary efforts to uh make this show work given the uh storm that's paralyzed the East Coast, including, by the way, me has showing enough foresight to change my flight to get here before they closed all of the uh New York airports.
I was here first.
There's almost some irony in that.
See, the guy from Wisconsin knows how to deal with Witter.
I have to end the program, though, with this.
Associated Press, Arnold Schwarzenegger landed in the governor's office after announcing his upstart bid on late-night TV and railing against government spending during campaign rallies.
So begins a summary on Schwarzenegger leaving office.
The damage that Arnold did to the conservative movement in California cannot be overstated.
California is the biggest mess we have.
They have massive debts, raising all the taxes in the world could never pay their bills out there.
People are talking about the state going bankrupt.
Yet despite all of that, they overwhelmingly elected two re-elected two loons, uh, re-electing Barbara Boxer and electing Jerry Brown.
The reason is for Californians, Arnold Schwarzenegger and his spending money like crazy and drive making the problems worse became the face of Republicanism.
It is only when the Republicans are represented by true conservatives who govern in a conservative fashion that they will be presented as an alternative to Democrats.
And it's something that the Republican Party needs to learn next year as we approach the 2012 presidential election.
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