RUSH: Let's go back, audio sound bite-wise, to me on my program, this program. This is March 12th of this year...
RUSH ARCHIVE: The TARP money was not used for its original purpose. There's something else out there, Jordan, you need to know. The Federal Reserve, before the TARP bailout, made loans totaling $2 trillion and they will not tell us to whom. We don't know who got the money. Whether the Fed loans it or the government prints it, it's our money. So you can talk about the $700 billion TARP. You can talk about the $787 billion stimulus. That's nothing compared to the amount of money that the Federal Reserve lent people at the same time: $2 trillion. We don't know where it went and they will not tell us.
RUSH: Well, we now know that it wasn't $2 trillion. We know it was a little over $3 trillion and we know where it went now. Finally we know where some of it went. "The Federal Reserve revealed details yesterday of trillions of dollars in emergency aid that it gave to US and foreign banks and to nonbank companies ranging from General Electric to Harley-Davidson during the financial crisis." So let me pause for just a second. We go to California and we look at all of the unfunded pension liabilities for the teachers, public employees unions, Teamsters, and the same thing in Illinois and in New York. We have people who have been living on federal dollars, people who have been living well on the public dole. Humongous lifestyles.
And none of it has been real.
All of this has made me wonder just how many of the people who are doing well have actually done well. How much of it is real? How much of it has really been earned versus how much of it is on the come. How much of it is just paper? I don't just mean debt when I say "paper" but just worthless dollars. It makes me wonder how much of any financial liquidity or solvency from an individual to a family to any entity, government or private, how much of it's real? We're talking $3.3 trillion in loans, giveaways. That amount of money, folks, is twice the annual budget of this country! Why do banks need that kind of money? What in the world...? Now, we know at the root of this -- the foundation of this domestically -- is the subprime mortgage mess.
That is the foundation. That's where Fannie Mae and Freddie Mac lost their value, lost their worth. It is where banks were forced to make loans to people who couldn't pay it back so therefore people were in homes they couldn't afford, therefore homes were built that really the market had no business building. There wasn't any genuine demand. All of this was the result of government policy that manifested itself in the form of government demands. Remember Janet Reno was threatening banks, bank presidents and executives. "If you don't do this, we're gonna investigate you." So how much of this is real?
For crying out loud! General Electric has always been licensed to print money just by virtue of doing business and yet they needed -- and I question if they even needed it, but General Electric ended up getting -- what was it, $116 million? Let me find the figure. Hell, even the California State Teachers Retirement System got some of this money. The city of Bristol, Connecticut, General City Retirement Fund got some of this money. I look at this, and my mouth falls open: "$3.3 trillion in loans to financial institutions, companies, and foreign central banks during the crisis in 2008. The figure comes from adding up the maximum amount of aid provided for each of the Fed's credit programs."
GE borrowed $16 billion! GE borrowed a total of more than $16 billion. Now, in the case of General Electric, let's connect some dots. The CEO of GE is Jeffrey Immelt. Jeffrey Immelt sits on one of Obama's economic commissions. CNBC is owned by General Electric. That business news channel has been obviously in the tank for Obama and regime economic policy since he was sworn in. General Electric has been big in this "green" technology movement and every other week it seems all of GE from NBC to CNBC to MSNBC "goes green." Now we find out that the regime found its way on the General Electric board in a sense.
When you end up lending this kind of money to private industry, you end up on their board, and you have a say-so in how their company is run. It's socialism. You don't have to go to the board meetings but this is Marxian. It's right out of Karl Marx. I know you start accusing these people of being socialists people laugh. "Ah, come on, Rush. That's insane talk. That's the talk of kooks." It may be but it's what it is. When Obama or anybody he wants to appoint essentially sits on the GE board and when GE doesn't care and there's this situation? It's very, very troubling, ladies and gentlemen. To try to understand all this I sought the counsel of Mike Munger who is the Director of the Philosophy, Politics, and Economics program at Duke University.
Now, here are some more details: "New documents show that the most loan[s] and other aid for U.S. institutions over time went to Citigroup ($2.2 trillion)..." $2.2 trillion to a bank? followed by Merrill Lynch ($2.1 trillion), Morgan Stanley ($2 trillion), Bear Stearns ($960 billion), Bank of America ($887 billion), Goldman Sachs..." Goldman Sachs? What do they need any money for? They were bailed out twice! They got this and they got money via AIG. Well, now, what is a little schlub like me supposed to make of this? Well, what I make of this is cap and trade. Somebody is gonna benefit from the "trades" if we actually do start trading carbon credits.
Goldman Sachs had the exclusive or the near exclusive on this, but still, why $615 billion? I remember when this was all happening. It was TARP that I was talking about, and I was being halfway facetious. But Henry Paulson was the Treasury secretary (former Goldman Sachs) and at the time, the fall of 2008, we're hearing nothing but the end of the world when it came to economics in this country and the world, and we had to do TARP or else life as we knew it ceased to exist. I said, "Oh, this is making a joke. Paulson just wants to make sure his buddies don't have to give up their homes in the Hamptons," and then I look at this list of people who got the money, and I'm sure they were able to keep their homes in the Hamptons.
Many other people are losing theirs. I mean, what are we to make of this $615 billion for Goldman Sachs? And during all this, they're paying billion-dollar bonuses to people -- in total, not individual billion dollars, but bonus packages totaling billions. "($178 billion), JPMorgan Chase" That's David Rockefeller's bank for crying out loud. He's not with it anymore, but it is. "Wells Fargo ($154 billion)." Merrill Lynch was later acquired by Bank of America. Bear Stearns collapsed and was sold to JP Morgan. And in the midst of all this was Lehman Brothers who, for some reason, they said, "Bye-bye, guys. We don't want to save you."
They went (raspberry) kaput! Why? We're bailing everybody else out, why not Lehman Brothers? "Foreign banks that benefited from the Fed's aid included Swiss bank UBS, which borrowed more than $165 billion," and isn't it interesting to note that that Swiss bank finally caved and decided to share the names and account data of Americans who had accounts with them? Now, Swiss banking used to be the epitome of privacy. You wanted nobody to know what you were doing financially if you put your money with a Swiss bank -- and nobody knew. Not even the Swiss bankers knew what you were doing.
But all of a sudden, UBS borrowed more than $165 billion, and the IRS makes a deal with them or Treasury makes a deal with them and now that notion of privacy is gone. "Deutsche Bank ($97 billion) and the Royal Bank of Scotland ($92 billion). The documents are a reminder of how crippled the financial system had become during the crisis and how much it's recovered since. Banks earned $14 billion from July through September this year. Many of the individual loans the banks took were worth billions and had short durations but were paid back and renewed many times. Among the largest recipients were foreign central banks, such as the European Central Bank, Bank of England and the Bank of Japan.
"They borrowed huge amounts of dollars from the Fed to assist their own banks." This is the EU bailout, which we learned yesterday that we participated in. That's what this story is all about. "Large non-banking companies in the U.S. used the Fed's lending programs to pay employees or..." You try to go to a bank to get a loan to make payroll and see what happens to you. You're not gonna get a loan to make payroll. You gotta get your loan to do something else. But these nonbank companies got money from the Fed "to pay employees or suppliers or to make loans through their subsidiaries," like GE has GE Capital or something. "They did so," they went to Fed "because private financing had all but evaporated," and "private financing had evaporated" because the subprime mortgage crisis, essentially.
There are obviously other reasons for it. "Over time, GE borrowed a total of more than $16 billion," and then ended up in bed with the Obama regime, "Harley-Davidson $2.3 billion and a group of independent Caterpillar dealers $733 million." Now, Caterpillar, that rings a bell, too, doesn't it? Because Caterpillar was cited by Obama as initially supporting the Porkulus bill when the CEO said, "I'm sorry, but, no, we didn't. We're being misrepresented here," and the Caterpillar CEO eventually had to say, "We're gonna keep laying people off rather than hiring people." Obama said they were gonna start hiring.
They're on the list, and then two other recipients: "The California State Teachers Retirement System" is going to the Federal Reserve and borrowing money "and the City of Bristol (Conn.) General City Retirement Fund." That's ESPN. That's all that's there: ESPN and a couple of cheap hotels. (interruption) Don't ask me, Snerdley. I don't know how you get the money. I don't know if you have to know somebody. When the Fed window is open can anybody go in there? No. Obviously it doesn't happen that way. "The documents disclosed details of more than $3.3 trillion in loans to financial institutions, companies and foreign central banks during the crisis. ...
"The Fed detailed more than $2 trillion it lent through eight programs from December 2007 to July this year ..." Now, the next question becomes: Where did THEY get the money? You see, they're independent, the Fed. Munger explained this in the e-mail this morning. The Fed is totally independent. They don't have to get money through legislation. Congress does not have to approve it. They can, as you know, print it, which they're doing. So was any of this real in the sense of was it backed by anything, or did they just essentially print this and add to the money supply with nothing to back it up? The smart money is on that.
RUSH: Now, I know what's going on out there today. The people, wherever they are and whoever they are, who know exactly what happened here, what it's all about, they are having the most fun listening to people like me trying to figure this out. They're out there and they're listening to us go through all this, they know exactly what happened, they know they got away with it, and they're saying, "Okay, let's see what these clowns like Limbaugh and everybody else in the media has to say about it." You know they're doing that. You do the same thing when you're on the inside and you know something that's happened, people are just finding out about it, you love to hear 'em talk about it when you know everything about it. So I know that's happening out there. And at the end of this, they're gonna think, "Well, we succeeded. We pulled it over everybody's eyes. They think they know, but they got no clue."
I think it's very interesting that all this news is coming out right after the elections and as long as possible before the next election. We get word of a vast emergency during the campaign of 2008, a crisis. If we don't act now, we're dead. None of us will have anything. So we act on it. We are mired in a continually down spiraling economy, so bad that our exalted leaders now tell us that unemployment checks grow the economy. That's how bad it is out there, that they have to feed us that pap. And now it's after the election and we get wind of all this, and there's still two years plus before the next election.
Jeff Immelt, GE CEO, sits on Obama's Economic Recovery Advisory Board. Did GE need $116 billion? I maintain to you that if GE needed $116 billion Immelt would be gone and the stock price would be in big trouble. I think that $116 billion was a gift. I think it's free money, a bribe, a payoff, whatever you want to call it. They didn't need it. Now, Europe did. MSNBC didn't need any money to stay in business. MSNBC is a loss leader. Refrigerator sales subsidize MSNBC. Hell, the washer-dryer division probably subsidizes MSNBC. They're a loss leader. They can sit there and lose all the money in the world they want. No bailout was for MSNBC, I guaran-damn-tee you of that. Europe, those banks, yeah, they needed the money, but GE didn't, these companies, they didn't need it. But they made a fortune. Somebody gave them $116 billion, they were able to invest it or do whatever they want with it. They were bought. Something happened. Now, you don't just get $116 billion from the regime for nothing. You own something when that happens. Nothing's free. And you want in on the deal, here is the price.
RUSH: I just want you to remember all the populist bluster coming out of Obama's mouth about how he was gonna stick it to these Wall Street guys. The only thing standing between them and you with the pitchforks was Obama, and look at who got all this money. We know who's in bed with who else. They can't fool us on this.
RUSH: Bear Stearns was on the list of banks that got bailed out by the Fed. But Bear Stearns had been out of business for some time. Is it safe to say that they didn't pay that money back? He-he-he-he-he. And now they'll never pay that money back? For all of that populist rhetoric, all of that bluster, all of Obama talking about these evil Wall Street guys, how he's gonna protect you from these guys, these guys are not gonna make their bonus payments, we're gonna send ACORN out there, we're gonna disrupt their lives, we're gonna make they're lives miserable. And all the while it's the rich Wall Street bankers that voted for Obama that are getting bailed out.
I went back to my own website 'cause I wanted to actually find the transcript of what I had said. This is back in March of 2009. This is during the first three months of this regime. This is when there was all the controversy over the AIG bailouts. I'm sure you'll recall that. Everybody had been whipped into a frenzy. Here's AIG, they'd received all this bailout money and they're still paying bonuses. And so it was portrayed that your tax dollars were paying all these AIG executives their bonuses, and AIG was in debt and they were going south, they were about to go out of business, then we learned that Goldman Sachs got some bailout money after it had been laundered through AIG. So I came to the Golden EIB Microphone, I said, ladies and gentlemen, I have all of my insurance policies, most of my insurance policies with AIG. And it would be a real hassle for me if AIG went bankrupt or if they were allowed to fail. It would not benefit me at all. I'm a longtime customer of AIG. And as such, I have preferred pricing, like Chris Dodd got at Countrywide, except my preferred pricing is simply 'cause I'm a good customer, because I'm a volume buyer, not because of who I am. I have a lot of insurance.
By the way, here's another thing. I would love to be treated just once like Chris Dodd, friend of Angelo, gets a reduction on his mortgage. People see me coming and they double the price of everything thinking I can afford it. I never get a deal. Nobody even offers me a deal. Everybody tries to screw me, or rip me off. I see other media people being given this or given that. Not me. Old El Rushbo comes along and they hit me up for twice what things cost. So here I am, I'm paying the freight at AIG, I'm buying my insurance, I'm a volume buyer so I get some little bit of a discount, but it isn't much. And if AIG went away it would be a lot of hassle for me. I'd have to get with my broker, sit down, start all over again, prices wouldn't be as good. And so I said at the time, "Why shouldn't taxpayers bail out the company that underwrites my insurance? I mean after all, I am paying a bunch of people's mortgages out there under Obama. Fair is fair. If I'm gonna bail out your mortgage and a bunch of other people's mortgages and stuff, if I'm gonna buy your gasoline and I'm gonna buy your home heating oil and so forth, the least you can do is underwrite the company buying my insurance or insuring all my needs."
But seriously, it's hysterical to watch this because the dirty little secret is that all these people getting all these bonuses are friends of Barack. All these bonuses were people that vote Democrat. Most of the people on Wall Street who have their homes in the Hamptons, San Francisco, Hollywood, Chicago, New York, most of these people are wealthy Democrats. A lot of this money, the AIG bonus money, the stimulus TARP money, a lot of it's going straight to people who end up kicking it back to Obama. The reason I'm telling you this is that I was prescient. This is March of 2009. Today we learn that what I was saying back in March of 2009 was, for the most part, accurate. A lot of this money, this is TARP we're talking about here, and of course at that time we thought an additional two trillion that we didn't know who got it, a lot of this money is going straight to people who end up kicking it back to Obama in the form of campaign contributions, what have you. Now AIG, the bonuses, which came to light yesterday, $165 million, that's chump change. When you get down to brass tacks, it is. The vast majority of all these people getting bailouts are wealthy, filthy-rich Democrats.
I'm not playing the class envy card here. I'm not doing anything of the sort. I'm just telling you who these people are getting these bailouts and getting these bonuses. The people getting this money, the companies are for the most part headed up by wealthy Democrats, they're huge contributors. They are donors to Democrat Party causes and if they were in financial trouble they were being helped out and paid back. So in a sense Obama was buying them, is buying their loyalty. And I said it even better in a later portion of the show. I said they've got too much debt. We're trying to prop up failures because of who's at these failures. That was the key to TARP and that's the key to what we now learn is $3.3 trillion, the banks, the Wall Street banks, European banks, we're trying to prop up these failures because of who these failures are.
All of these people have giant homes in the Hamptons or second homes at ski resorts, and by all means we have to keep them in their homes. Don't misunderstand. I'm talking about all these Ivy League eggheads hanging together protecting their own. They're all liberal Democrats. The vast majority of them are, and they're not going to go the humiliated route like Bernie Madoff. They're not gonna be kicked out of their penthouse. They're not gonna be kicked out of their summer places in the Hamptons or wherever. They're not gonna give up their parties. They're not gonna give up the social circuit. They're gonna get bailed out and they're gonna get saved regardless the damage they've done to these companies and the companies that have invested in 'em. The rest of society is gonna keep on paying for this. Those who are poor or made poor decisions are gonna have to participate in improving themselves despite setbacks as we all have or they won't succeed, either. That's the way it works. But to destroy the core of our system, to bail out failed institutions and send wealth to those who have not earned it destroys the entire system. And that's what's happening here. Giant kickbacks back and forth from the regime to wealthy Democrats at these firms are being bailed out. The money will keep circulating in the form of campaign donations. That's how it comes back.
Obama can't let these people go under. They fund his existence. It would hurt the Democrat Party if these people went south. It's a fine line here. I know I'm sounding like class warfare, but what I'm saying is that this is about the Ivy League elites, not the rich per se. This is about a certain class of people protecting themselves, and the best way to protect themselves is to be in bed with Obama, in bed with the regime. Now, all of this I was pointing out in March of 2009 when I started wondering, "Is any of this real?" This is about a certain segment of the rich protecting itself, protecting its political investment in Obama, Obama protecting their political investment in him. Let me tell you, these are the people who fund the Democrat Party. That's who's being bailed out. In March of 2009 I said this.
Now we see that I, as usual, was right. These are the people who fund the Democrat Party. They live in Manhattan; they live in the Hamptons; they live in the main line of Philadelphia, giant penthouses, San Francisco, Nob Hill, they live in Hollywood, they are the heart and soul of Democrat Party. The really super rich parts of our country are heavily Democrat now. We don't begrudge them their wealth; we don't begrudge them their success. We're just pointing out here what's going on. It's made to look like we gotta do this to save the country; we gotta do this to save our financial system, when it was about saving certain people and Obama.
So that takes us to the TARP part of this. And that's this $3.3 trillion that we've learned above and beyond TARP that went to GE, to the teachers in California, the retirement fund for the state employees, municipal employees, Bristol, Connecticut, Harley-Davidson, all the Wall Street banks, and all the European banks. What's being done here -- and this is where Mr. Munger at Duke University was invaluable in his assistance -- what's being done here is unprecedented. The Fed and QE2, Quantitative Easing, for all of its brazen chutzpah is at least legal because the Fed is independent, by design they don't have to answer to Congress or to anybody else. What they're doing is buying up debt, and that is what is unprecedented. The thing about TARP that was so unprecedented and so dangerous is that TARP gave government regulators the power and the money to buy up equity, that is, they were buying up ownership of companies.
There are two dangerous things about that. Number one, it means that the government now sits on the boards of these companies. That's socialism. You make fun of us when we say Obama, Pelosi, Reid, are socialists, but government ownership of the means of production is Karl Marx's definition, verbatim, socialism. I would add that it gets close to even fascism. It just is. And number two, it means that the government is in a position to help friends and punish enemies on a scale not seen since the 1930s. And that is what the real point of all of this is, TARP and this $3.3 trillion. The extended recession of the 1930s actually has the same cause as the high unemployment rate has today, uncertainty about government policy and the recognition that if you play ball, you'll get government money. If you play ball you get government money. But government money is a devil's bargain. Once the government has a seat at your board of directors table they'll want changes in how you produce, how you treat unions and so on. So as bad as Fed policy is right now, the real danger is that we forget the line between the debt and equity, which is ownership for government.
So on the one hand, you know, we're bailing out debt, fine. But now we're bailing out equity, or assuming equity, spending money on equity, and that dovetails so nicely with -- well, we got General Electric, General Motors, Chrysler, who knows whatever else the government is now directly involved with in how certain businesses, and now industries run. Health insurance next on the board. So you can see that this is fairly insidious. That's just the TARP side of this. There are other aspects of this, too, how we're monetizing our debt, and that has the ChiComs and everybody all ticked off at us because we're essentially paying off our debt now with Monopoly money, meaning we're printing money and paying it to ourselves. That's cheating, and as Munger explained it to me, when the ChiComs accuse you of cheating (laughing) you are cheating (laughing) because they allow so much, they're communists.
RUSH: So essentially TARP turned out to be the mother of all of Obama's slush funds, and now we know why Obama is not concerned in the slightest about all this budget spending, all the overages, all the deficits. He doesn't care, 'cause that pales in comparison to what we've done with all these other bailouts of our banks and their banks. At the end of the day, folks, we've just kicked the can down the road. None of this is real. You don't just go in and print $3.3 trillion worth of money without a price. There is gonna be a price to pay for this down the road. Inflation is gonna kick in at some point. Now, these revelations are far more shocking than the stuff in WikiLeaks, the WikiLeaks dump. But this stuff hurts the Democrats so it's gonna be buried.
You're not gonna have anywhere near the depth of detail of this stuff discussed in the Drive-By Media, State-Controlled Media. They're not gonna be interested in it. They've reported it; the Washington Post did on the front page. Get it out of the way. It's over. They'll move on to focus on how uncooperative and how mean the Republicans are. They want to starve kids again! The Republicans, damn it, they won't even go bipartisan here work with the Democrats. There's a story I've got it somewhere here in the stack where the media is all upset because the Democrats plans' are being upset by Republicans here in the lame-duck session, as though that's what all this is about: We gotta make sure the Democrats get what they want. So that will be the focus, the traditional horse race politics in the media. But the trillions of dollars of taxpayer money that we didn't even know about, who it went to and why, you're not gonna see another page about it.
To the phones we go to Tampa. We're gonna start with Don. It's great to have you on the program, sir. Hello.
CALLER: Rush, it is an absolute honor to talk to you, especially on such an important day, and I think one of your more brilliant monologues. So thank you. I'm not a very smart guy. I didn't go to Princeton.
RUSH: Let me tell you: If you understood what I just said, you're very smart. (chuckling)
CALLER: Well, I'm not, but can I run a little scenario by you?
CALLER: What I'm thinking is that all of these progressive world governments and state governments and these big banks and these liberal companies -- the GEs, the Caterpillars -- they all mismanaged their businesses. They're progressive businesses and they imploded. And in the fall when Obama was coming in, everyone panicked. Everyone dumped everything they had poured their heart and souls into, and worked for years and saving for retirement. They dumped all of their shares. And then "the Bernank," the Bernank steps in and he says, "I'm gonna save the day," and he gives all those entities -- the progressive implosion, he gives them -- our money, and they go out, the same ones, and they buy up all their own shares in Caterpillar, GE (garbled).
RUSH: I don't know about Caterpillar in this. I know why you're including Caterpillar in this. I'm not comfortable including Caterpillar, but I think theoretically you're onto something here. I would not dispute most of what you're saying.
RUSH: You want to know how the media is treating these Fed revelations, which I essentially spent about an hour on (and it's rare that we spend an hour solid on anything on this program)? In the New York Times, they have buried this story, which is enough to tell me it's bad. They have buried this story in their Economy section. And their headline is: "Fed Documents Reveal Scope of Aid to Stabilize Economy." Well, hello. That's all I need to know. When the Times writes of it that way, I know there's a cover-up -- or, if not a cover-up, "Let's deemphasize this. Okay, the Fed, we got the news out there. It's after the election and another two years before the next election. Just put it out there and say, 'Oh, yeah, we did report this,' and we'll move on to how rotten the Republicans are," which is what they've done.
RUSH: To Chico, California. This is Aaron. Thank you for waiting, sir. Great to have you here with us.
CALLER: How you doing, Rush? Early Merry Christmas and happy New Year's to you, sir.
RUSH: Thank you. Same to you.
CALLER: Thank you. You were talking about earlier about what people were just trying to figure out with the economic crisis, what happened in '08 and everything, and something Representative Kanjorski said in February of '09 talking about how there was an electronic run on the banks, and you played a small clip of that. He was on C-SPAN. But he said something throughout the entire thing about what really happened as far as what's (unintelligible), why didn't it, but at the very end he made the statement about how somebody threw us, meaning the United States, into the middle of the Atlantic Ocean without a life raft, and we are trying to determine which is the closest shore, and if we can swim that far and we ever get there and they don't know who or what did this.
RUSH: I remember this. I remember that now, Kanjorski, it was on C-SPAN, it did get a lot of widespread attention. We'll dig that out of our archives for tomorrow because, that's right, Kanjorski, Pennsylvania, did say that somebody started an electronic run on things that -- what was it, having a mental block. It's a common, ordinary term that did not mean in this case what it normally means. But, at any rate, we'll have to get the bite, 'cause I know exactly what he's talking about. We'll have to do that tomorrow. I know Cookie can find it in the archives. Thanks for reminding us of that, Aaron.