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Americans Search for the Recovery

BEGIN TRANSCRIPT

RUSH: Timothy in Leeland, North Carolina. Great to have you on the program, Timothy. Hello.

CALLER: Hi, Rush. First off, I'm a huge fan. It's awesome to get to talk to you today.

RUSH: Thank you, sir, very much.

CALLER: But, secondly, I tuned in during lunch and I heard one of the audio sound bites where one of the newswomen mentioned that, you know, the economy is getting close to bottoming out. You know, she said it's showing signs of recovery. And just analyzing that statement, it is just extremely contradictory to me because for the economy to "bottom out," that would mean that it is still trending downward. So we're traveling on a downward path. And for it to be a recovery, the economy would need to trend upward from that bottoming out. So by saying that we're close to hitting the, you know, bottoming out of the economy, I don't know how you could say we were ever in a recovery to begin with because we just hit bottom now.

RUSH: Well, that's interesting, because these people have been saying that we've been in a recovery since 2009, and yet yesterday they just realized we're in a recovery.

CALLER: It was just unbelievable to me.

RUSH: Grab sound bite two. I'm gonna play again what you're talking about. It's actually a montage. We have since learned the news people you're hearing here are reacting to an AP story today which cites census data, Timothy. It's census data from 2011 shows that people are moving -- moving homes, moving out of their parents' houses -- and that's what means the economy's recovered. That alone. That's it.

Less than one half of 1% of the population moved, and the media says, "That's it! The economy is back. We're finally roaring now. People are moving around out there! They're leaving their parents' basements and changing homes. They're moving around, finding work. Wow, that's great!" That's what they're reacting to, and this was the montage we put together. We played it in the first hour. This is what Timothy is reacting to...

STEPHANOPOULOS: The big headlines on the economy this morning: are we on the road to recovery?

VARGAS: There's great news out this morning on the economy. Are we really turning a corner?

GOLODRYGA: Great news. It looks like this recovery really has legs.

O'DONNELL: The economic downturn may have bottomed out.

WESTHOVEN: It was like machine gun fire of good economic reports.

KOSIK: We finally hit a bottom, that you're seeing this recovery really take hold.

COSTELLO: Breaking news into the newsroom, another sign that the real estate market could be improving.

RUSH: So, Timothy, you're right on the money. They say we're "bottoming out" three years after the "recovery" began.

CALLER: Right.

RUSH: And that's what you've noticed.

CALLER: Right. So, I mean, I don't see how we could be recovering until we bottomed out and continued on an upward path from there. So that was just my take on it.

RUSH: Well, do you think we are recovering?

CALLER: No! Absolutely not! I still have to work 12 hours a day just to get by, so... (chuckles)

RUSH: Well, I work about 18. So I hear you. Nobody believes that, but I do. Anyway, Timothy, what do you do, by the way?

CALLER: I'm a civil engineer.

RUSH: Civil engineer!

CALLER: Yes, sir. Yes, sir. I work for a contractor. We build water and wastewater treatment plants.

RUSH: That's tough. You have to be smart as a whip for that. That's a lot of education to become a civil engineer. Where did you go to school?

CALLER: I went to school at the University of Cincinnati.

RUSH: University of Cincinnati. Oh.

CALLER: Yes, sir.

RUSH: And how's the economy dealing with your business or where you work?

CALLER: Well, I'll tell you what, Rush. It was tough in the beginning. We were bidding a lot of work without success. But, you know, with the true American spirit you gotta adjust to it. And we've made adjustments and found a way to get around that, and now we're starting to do quite well.

RUSH: So you lowered your bids on the front end, and then you added in the real costs when the job was done, and they had no choice but than to pay you?

CALLER: Correct. You know, another --

RUSH: Just kidding. Don't answer that! (laughing)

CALLER: (laughing)

RUSH: I'm just kidding.

CALLER: I am a contractor, but the true answer to my question would be: You know, we found better ways to do things 'cause the economy forces you to do that.

RUSH: Right, you had to. Exactly. Okay, Timothy, in Leeland, North Carolina, thanks very much for the call.

All right, folks, I gotta take a brief time-out. There's not enough time right now to be fair with another caller even if it was a cretin, who wouldn't deserve much time.

BREAK TRANSCRIPT

RUSH: Joshua in New Smyrna, Florida.  It's great to have you on the EIB Network.  Hello.

CALLER:  Mega dittos, Rush.  You know, like you just said, I'm here in Florida.  We're not seeing too much recovery in our small business, but, you know, I'm --

RUSH:  What kind of business are you in, Joshua?

CALLER:  It's a family entertainment center.

RUSH:  Family entertainment center.  Okay.

CALLER:  Go-carts, batting cages, miniature golf.

RUSH:  Oh, okay.  Cool.

CALLER:  But, Rush, you know, I'm even more worried about something else.  You talk about that impending fiscal cliff quite a bit, and I wanted to know, I wanted your take.  Do you see a currency crisis occurring here in the United States as we continue the expansion of the money supply, as we continue the explosion of our national debt?

RUSH:  That's a toughie.  Here's the logical or the rational line of thinking.  If you're gonna have QE3, which is more printing of money, at some point there has to be a corrective action for that, and that means there has to be a contraction of the money supply.  And when that happens, Joshua, is when interest rates could get volatile.  And if there is a significant uptake in interest rates after QE3 -- and this whole QE3 thing is just designed to get Obama reelected.  It's designed to prevent the economic collapse, on paper, just as far as appearances are concerned.  Of course it's not gonna do that at all.  But it's designed to make it not happen while it could hurt Obama. 

CALLER:  Right.

RUSH:  But when they have to contract the money supply, because at some point we're gonna have to or else all kinds of problems, then you've got the uptick in interest rates. One of the places to look for guidance on this might in fact be Japan.  Japan just went for QE8.  They're in their 20th year of this, 20th year of economic essential stagnation.  No growth, shrinkage, no prosperity. They're on the verge of war with the ChiComs.  It's not pretty.  There are a lot of people that have the fear that you do, that the currency crisis, however you define that, could cause rampant, run away inflation.  The purpose of the Federal Reserve is to prevent exactly what they're creating.  That's what everybody's so upset about.  Their job is to prevent exactly what they're creating, or potentially creating.

CALLER:  Exactly.  It's a real fear for me, you know, not only working in a small family business, but, you know, I love this country, and, you know, I'm looking at a scary world that we live in. 

RUSH:  Yeah, you and me both, you and me both.  I wish more people saw it the way you do. And maybe they do and we just don't know about it.  I really wish more people saw it that way.  I, too, love the country.  I love it dearly.  I am hurt by what I see happening.  I'm genuinely hurt by what I saw being done to it on purpose.  And I'm bothered that apparently so many millions of people don't see it, or if they do, don't care or don't think it's gonna affect them one way or the other, for whatever reason.  And the thing that bothers me most about it is is that the people who are getting hurt are the people like you.  You are continuing to keep your business open. 

You're doing everything you can to keep it open and to pay your employees, and you're playing by the old rules that we all grew up believing would pay off in the end.  Industriousness, hard work, playing it as close to the straight and narrow as you can, and basically thinking that this in itself will be its own reward.  You find out that people like you, to the Democrat Party, you pose the problem.  You're not paying your fair share here or you don't care about other people not doing as well as you are, whatever.  It's really, really frustrating.  And you know the country's got this major partisan divide over a number of issues like this.  It sounds to me like you don't want to take an easy way out.  You want to get this all fixed.

CALLER:  Exactly, Rush.  I mean, we need interest rates to go up. 

RUSH:  Yeah, but not too fast and not too soon.

CALLER:  Yes.

RUSH:  There's your currency crisis right there. If interest rates spike dramatically, gas prices, for example.  They're already through the roof and continuing to rise.  If you add massive inflation to it real quickly, you've got a consumer crisis, where people won't be able to --

CALLER:  I agree with that, but I think that, you know, Japan's still in their crisis because they're keeping that --

RUSH:  Well, okay, so you're of the school that they're artificially keeping interest rates way too low and that this is ultimately the harm itself?

CALLER:  Well, they are, yeah.  I mean, you know, we're all feeling inflation, while they're telling us it's not here.

RUSH:  Yeah. Which, of course, will lead to stagflation.

CALLER:  Yeah, and hopefully not in the future hyperinflation, but --

RUSH:  And then disinflation.  And that's just as bad.

CALLER:  Well, Rush, you know, it was an honor, an absolute honor to talk to you.  You're a hero of mine.  I've been listening to you since I was --

RUSH:  I wish I had a better answer for you.  I really do.  I wish I had a better answer.  None of us are in control of the money supply.  Eleven people are, basically one guy, and his objective with it is not what yours or mine would be right now.  His objective is political.  Disinflation, people think, wow, that would be great.  Here's the problem with disinflation.  Disinflation, the manifestation, without getting into the financial world legalese definition of it, the manifestation of disinflation or deflation is that people who manufacture a product cannot sell it for what it cost them and so they shut down. 

And, by the way, even if they could sell it for what it cost them, there's no reason to make it.  If, at the end of your 18 hour day where you've worked yourself to the bone and all you've done is made back exactly what it costs you to produce whatever it is you produce, why do it?  There has to be some profit.  Disinflation prevents profit.  You simply cannot sell what you produce or even your service that you provide for what it costs you.  It's not the opposite of inflation in the sense that the currency becomes super, super valuable.  It's also a function of worthlessness, but it has a different set of circumstances attached to it.  Disinflation is depression, and businesses just give up and quit.  There's no reason to stay in business.  There's no reason to sell anything, because you can't even make back what it cost you, and that's what happens when disinflation sets in.  Anyway, Joshua, thanks for the call and your very nice words.  I really appreciate it.

END TRANSCRIPT

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