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We Need Economics Education

BEGIN TRANSCRIPT

RUSH: Ashland, Kentucky. This is David. I'm glad you waited, too, sir. Welcome to the EIB Network. Hi.

CALLER: Rush, thanks for taking my call. I've been trying to get to you for two weeks.

RUSH: Well, it's your lucky day.

CALLER: It is, and here's my question: Is anybody doing anything about the price of gas? The other thing is, why is it so much? And the other thing, I have a solution for the problem.

RUSH: Well, what do you mean? Oh. Oh. I misread it. You have a solution to the price of high gasoline. What is it?

CALLER: Yeah. Okay, if they can put gas at a palatable price, correct? To put more money in people's pockets, where you can go out and afford to go shopping or whatever, right? Isn't that gonna create jobs because you're gonna need more demand for goods out there, correct? You're gonna lose the surcharges on all delivery trucks, you know, deliveries from the freight companies, correct?

RUSH: If "they" lower the price, you say?

CALLER: Yes.

RUSH: Okay, who's they?

CALLER: The oil companies.

RUSH: Well, but they're not all the same, and gasoline's not the same price from station to station.

CALLER: That's right. But I mean like $3.89, you know, that's a pretty good chunk of change.

RUSH: Yeah, but the gas station guys, they'll tell you they break even on their gasoline sales. If it weren't for Twinkies they wouldn't have anything.

CALLER: Correct. I mean, am I thinking too far outside the box?

RUSH: Well, no, but it reminds me of when I was a kid. I would have loved to wave a magic wand and make everything cheaper. I would love for jet fuel to cost a buck. You know, I would really love it. You know what the price of jet fuel is these days? I would love for that to cost a dollar. I remember when I was a kid.I remember watching the early stages of the space program. We're watching the suborbital flights. It's Alan Shepherd and John Glenn and they're going to suborbital flights and they finally do the orbitals and I'm watching on TV. It's this giant, patriotic effort. President Kennedy said we gotta get to the moon. We gotta beat the Russians, blah, blah, blah, blah, blah.

I'm a young skull full of mush -- and, by the way, this story, I think, is very instructive in terms of just what a job we have in educating people about economics. Now, I'm a little kid, I'm watching this on television and I'm hearing how this is a patriotic effort by the United States. "President Kennedy has asked everybody to come together and make sure that we get to the moon in ten years," for whatever reason. I remember looking at my dad and I'm also hearing about how much it costs. Now, I don't know the numbers per se, what they were. I don't remember them, but it was a lot of money. Each rocket costs this, here's how much it costs to manufacture the capsule.

I said to my dad, "Why doesn't everybody involved just do it for nothing? Why does the space capsule cost us anything? If this is for the country, dad, why is anybody making any money off of it?" Now, I'm growing up in a family of rock-ribbed conservatives. In my instinct as a kid, I'm associating patriotism with "free." Okay, so my dad's got another challenge on his hands. He's gotta explain to me how the economy works so I will understand it, and he gave it a shot. He tried to tell me that there are employees everywhere along the line, that this capsule doesn't just get made. He said, "People couldn't afford to donate their time. They wouldn't have anything to live on."

He said, "What are they gonna eat, son, if they work, you know, 15 hours a day or whatever it is to build a capsule, if they're doing it for nothing." But I was this little kid wanting to know, "If it's patriotic, how come it costs anything? Why does America beating the Russians have to cost us?" And I think that there are adults who have that attitude about economics. Not so much the patriotic angle, but, "If it's that important, why isn't it free?" It's reflected in this gasoline price issue. Every time this subject comes up, somebody says, "Well, why doesn't somebody just lower the price? Look at how much you'd help the economy. If gasoline price went down a buck, people could afford to drive more and that means go more places. The leisure industry would boom."

Yeah, all that's true. So then the argument becomes: How do you lower prices? Well, at that point, there are people who believe that there's some evil guy who's profiting from the high prices -- one guy or one CEO, one company who doesn't care about the pain and suffering of everybody else, he just wants his profit -- and so that's where education on economics starts: From a false premise. This is why capitalism has a job to do in explaining itself. The liberals out there say, "Yeah, that's right, Limbaugh! If you'd-a kept that attitude, why, you'd be on our side today. Why should it cost anything?" A lot of liberals have that attitude. The understanding of basic economics, it's the simplest, most logical thing if you have a foundation to understand it.

So, yeah, you are overreaching, you're outside the box when you say somebody ought to lower the gasoline price. We gotta have a show that educates people on how the price of gasoline gets set. It starts with this: There is not one person who is involved in setting the price. There's not one person who can raise it or lower it. It's too complex, too many people involved. There's no way even one company can set the price of gasoline. They can within their own company and bailiwick but they'll soon go out of business if they try. Plus there are laws against them if they sell something at way too much below the market price. It's a problem.

END TRANSCRIPT

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