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Economics 101: Small Business Cuts Back on Spending After Obama Election Victory

BEGIN TRANSCRIPT

RUSH: We have some news here. It's not surprising to me. "US small business owners' net capital spending intentions for the next 12 months plunged to minus 14 in November, the lowest level in more than two years, according to the Wells Fargo/Gallup Small Business Index. This is down from net capital spending intentions of minus 1 in July and suggests the nation's small business owners are likely to pull back on their business investments even more, given their negative expectations for the next 12 months."

Now, I give you an illustration. In 2004, 2005, 2006, 2007, this index -- the Wells Fargo/Gallup Small Business Index on Capital Spending Intentions -- was at anywhere from plus 28 to plus 16. Its low was minus 23 in 2009. Now it is minus 14. We've had, therefore, a net drop-off of 30 points. When you see it on the graph, it makes a little bit more sense. But as recently as 2008, small business net capital expenditure expansion spending was big, it was huge, and now it's at minus 14 for the next 12 months.

So it means no economic growth.

It means small business, which does most of the hiring, isn't gonna be doing any.

BREAK TRANSCRIPT

RUSH:  It is Rush "Stonewall" Limbaugh here on the Excellence in Broadcasting Network.  Great to have you here. 

So the small business guys are not going to expand in their businesses this year, according to the latest survey that we just had.  By the way, the survey came out in November.  What happened in November to dampen the spirits of small business people, I wonder?  But their projections on net capital investment in the next 12 months, negative 14.  This dovetails with a story from the Federal Reserve, ladies and gentlemen.  The Fed is projecting the unemployment rate will stay elevated until late 2015, suggesting that it's going to keep short-term interest rates low for the next three years. 

The latest economic forecast released yesterday after the Fed's final meeting of the year, little changed from September, but they coincided with a new communication strategery announced by the Fed that links future interest rate increases with unemployment below 6.5%.  The unemployment rate's now 7.7%, and the Fed says that's not changing.  For three years.  I want to take the occasion of this report to go back and revisit something that the Washington Inside the Beltway intelligentsia uses in their analysis of the fiscal cliff and what Obama wants. 

If you've heard it once, I'm sure you've heard it a gazillion times that Obama doesn't want to start the second term with a recession. He doesn't want employment going back up. He wants a great legacy.  Blow that out of the water.  No way.  Obama doesn't care about economic growth.  That's not what he's into.  He's into government growth.  It isn't going to get any better.  There are no expectations, even, that it's going to get any better, folks.  The sad fact is that among people who vote, we appear to be outnumbered.  We appear to be outnumbered by people who don't care whether the economy's going to grow or not.  And the sad reason for that is that they simply don't understand economics.  They don't understand the relationship of price to supply, for example.  Something as simple as that.  They just don't understand the economics 101 characteristics. 

It's really an amazing thing to see how successfully the left has blown up education in this country. Before the election we're all speculating have we reached the tipping point or not.  I don't know how you can say we haven't, among people who vote.  Now, maybe nationwide we haven't, but what difference does it make.  We are governed by the people who vote.  And the people who voted, it was pretty clear the takers dominate.  And that's exactly what this was.  A lot of people want to try to sugarcoat this, "No, these are people that were morons, Rush. They didn't really know what they were doing."  I have decided to formally reject that, just like I reject the notion that people voting to raise taxes on themselves in California was the result of them being fooled.  I don't believe that.  I think they knew exactly what they were doing. 

I think of the people who vote in this country, the low-information voter is dominating, and the low-information voter is not aware of how low-information he or she is.  And they are voting for the status quo.  They're voting for more of what life was like the past four years.  They clearly didn't vote for any change in it.  And don't tell me that Obama convinced them he wanted the economy to grow. That's not what he convinced them of.  He convinced them that the problem is that the rich aren't paying their fair share.  That was his theme.  His theme was the successful and the achieved are not paying their fair share and that he was gonna get it from 'em.  The inference is that once he gets it from them, they're gonna end up with more than what they've got now.

BREAK TRANSCRIPT

RUSH:  We go to Peoria, Illinois.  Hi, Eddie.  Great to have you on the program.  Hello.

CALLER:  Mega dittos, Rush.  I appreciate you.  I appreciate your show.

RUSH:  Thank you very much.  I appreciate you saying you appreciate it.

CALLER:  Earlier in the program you made a very interesting point, and your point was something along these lines, and correct me if I don't have it exactly right, that, you know what, the people who elected Obama, these people from the left really don't understand how the economy works.  They cannot appreciate supply and demand. 

RUSH:  They don't understand the basics.  They don't understand the relationship of price to supply, for example.  It's just not being taught.

CALLER:  Well, I agree with you 110%.  Now, I have a little different spin on this, and, you know, straighten me out if I'm incorrect.  Here's what I believe, Rush.  I think that there is a certain segment of that population that really is ignorant, I mean, ignorant.  However, I believe the greater side of that population, that is these people who lean to the left, these people who suck off the taxpayers' dollars, actually really have a very good understanding of exactly how the economy works.  And you know what they want?  They want the status quo.  That's why they voted Obama.  It's not because they didn't think, oh, well, you know, jeepers --

RUSH:  I agree with you.  I said, of the percentage of Americans who vote, those who voted for Obama knew exactly what they were doing.  I agree with you.  At the same time, those same people are wrong.  They do not know where prosperity comes from.  They're looking at prosperity purely in a selfish sense.  I don't think they look at themselves as prosperous.  They don't have to work, everything's fine.  They're still eating when they don't have a job.  They still have a car, phone, cell service, don't have a job.  What's to not like?

CALLER:  And that is, in their view, in my opinion, prosperous.  Why work?  Why get educated?  Why do what you need to do to help pull yourself up by the bootstraps?  Why not do that?  You know why?  Because people like Obama give it to them.  They don't have to earn it. 

RUSH:  Well, there's something a little bit more insidious than that.  Obama's role in this is to make those people feel justified in this because the really rich and successful have come by it dishonestly.  So if the game is rigged and the people who have stuff haven't really earned it, then it's okay for these people to be taking a little bit back from 'em.  That's Obama's message.  Obama's message is that everything about this country is illegitimate, particularly success and achievement.  It's been phony.  It's been preordained and selected by a select group taking care of itself.

CALLER:  I agree with you, and I believe that, you know, Obama's message went even further.  What Obama's message sent to these people is, hey, let's keep the status quo.  You know what?  That way all you people here who are getting --

RUSH:  Well, I know what you're saying, but if you listen to Obama -- and I do -- if you listen to Obama, he says repeatedly that what he's about is making sure everybody has a share shake, a fair shot. America is a place with a fair playing field, level playing field, you work hard, then that's what we want.  He talks like that.  But at the same time, he is excusing people who don't get involved that way because everything's stacked against 'em anyway right now until he fixes it.

CALLER:  Rush, that's exactly what they buy into.  They buy into the fact that, okay, we need to level the playing field.  Well, how do we do that?  Here's some money for you.

RUSH:  No.  The level playing field is achieved by tax increases on the rich.  The level playing field is achieved by taking money from the successful, by taking money from people that have even a dollar more than you do.

CALLER:  And that's exactly what they buy into.  And so there's no incentive for them to move themselves from where they are into a better place.  You know, these people who --

RUSH:  Well, that's true because if you go down that path you might be looking at 10, 15 years for the payoff.  It takes awhile to be successful.  If you go the hard-work route, you might get fired a couple times. You might work for a boss who's a creep.  It's really hard.  It's really hard, versus the status quo.

CALLER:  Heaven forbid that you go to school and work two part-time jobs --

RUSH:  No.

CALLER:  -- and educate yourself --

RUSH:  That's for suckers.

CALLER:  -- goals.  Heaven forbid.

RUSH:  That's for suckers.  That's for suckers.

CALLER:  Oh, yeah, yeah, suckers, and you know who the suckers are is everyone who voted for Obama. 

RUSH:  You understand something here, Eddie. There are a lot of people listening to you and I and think that we're full of it and we have not got to that point yet.  I know a lot of people think, "Come on, Rush you lose one election, you go over the deep end with this kind of thing.  We haven't gotten there yet."  I'm afraid among the people who vote, we have.  I think this is something we've got to admit.  Why do you think the left gets so ticked off at me when I describe their party as Santa Claus and Obama as Santa Claus?  They get ticked off because it's right. 

You gotta understand Obama's level playing field is not about opportunity.  You and I, we come from an opportunity society.  Everybody has a fair shake at opportunity.  That's not what Obama means.  When Obama talks about a level playing field, he's talking about outcomes.  And he is going to administer the outcomes.  He is going to be in charge.  Obama's gonna determine.  He's gonna pick the winners and losers.  And right now, the losers are people who are the winners in our society, because they have won unjustly.  They have made obscene profit.  They have charged people way too much for their service.  They have cheated, maybe, stolen, in fact.  So today's winners are actually the cheaters, and they are Obama's losers.  He's gonna get 'em.

END TRANSCRIPT

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