RUSH: John in Canton, Ohio, glad you called, sir. Welcome to the EIB Network.
CALLER: Yes, hello, Rush.
RUSH: Hi.
CALLER: I was calling about President Bush’s call for a freeze on subprime loans. I’m just wondering if there is a magic number of people being heard that triggers a government intervention.
RUSH: That is an excellent question. You know what, that is an excellent question. I’m going to ask you one in return.
CALLER: Okay.
RUSH: You are obviously watching all of the stuff on the subprime. You’re reading it in the Drive-Bys. For how long it’s been going on now, a month? A little bit longer, right? What is your impression? How many people in America do you think are defaulting on their mortgages and not paying? All mortgages, subprime, every mortgage, how many? What percentage do you think are in default and going to be foreclosed?
CALLER: The percentage?
RUSH: Yeah.
CALLER: I don’t know. Three or four percent maybe.
RUSH: Ninety-four percent of all mortgage holders are paying their mortgage.
CALLER: Mmm-hmm.
RUSH: Six percent are being affected by this.
CALLER: That’s a little more than I thought.
RUSH: Well, it’s still not much.
CALLER: No, it’s not.
RUSH: Ninety-four percent of Americans are paying their mortgage. We’ve got this doom and gloom out there, a lot of people think half the people with houses are being kicked out of them.
CALLER: I’m just worried about how this could affect the markets. I mean, this is messing with the markets where the government has no business, I feel. I have a struggling business myself. I don’t ask the government for help. So I just was wondering your take on it.
RUSH: I don’t like it. I understand what they’re trying to do here. Everybody is responding to a crisis going into the holidays. (New Castrati impression) ‘The American dream: people losing their homes, Mr. Limbaugh. You can’t sit by without compassion and watch this! You have to do something about it, Mr. Limbaugh. Certainly your heart of steel could certainly find some compassion.’ This is what people out there do, and politicians react to it.
CALLER: Mmm-hmm.
RUSH: This is exactly the point made in the global warming story. We’re living in the middle of a hoax. The hoax perpetuates based on the ignorance of the American people. It’s a democratic country, and so the people are clamoring. The thing here is, 50% of the people aren’t clamoring. I don’t know how many are, but you can figure that a lot of people who are not being foreclosed on, watching this doom and gloom, think they’re going to be.
CALLER: Yes. Yes. Yeah. I don’t know if this would affect the bond markets or what adverse effects this would have.
RUSH: Look, here’s the thing. This is, essentially, is price control, right?
CALLER: Mmm-hmm.
RUSH: We need to freeze interest rates. The last time the wage and price controls happened in 1972 with Nixon.
CALLER: Yeah.
RUSH: We did it when inflation was like 3%, and the oil prices were going through the roof and so forth. One thing I noticed: Wage controls worked. The employers said, ‘Well, we love this! The government’s riding our backside pretty seriously, Rush, here. We can’t really give you a raise other than inflation. That’s all.’ But I’d go to the grocery store, and I’d see brand-new cuts of beef that I never saw before. The price controls were in effect, and they were expensive as hell. I asked, ‘Well, what the hell is this?’ Well, after the price control went into effect, the price controls were in effect on items at that moment, but anything new had no price control on it. (laughing) So people will find ways around this.
CALLER: Uh-huh.
RUSH: The market will do that, but you’re right. Let the market work this out. It will in time, but we don’t have the patience, and we’re too ignorant.