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RUSH: Now, the latest daily tracking poll from Gallup has Obama back up by two, 47-45. This economy stuff works for ’em, in the short run, and it’s about what’s happening on Wall Street. I said this yesterday. This is a sitting duck issue for McCain and Palin to head down the path of blaming the Democrats for this. You know, we can back ’em up on this, but they’re going to have to do it themselves. The campaign is going to have to get out there and start firing something other than blanks on this and stop worrying about offending Democrats. The Democrats are the opponent in this whole thing, and McCain is out of his cotton-picking mind if he doesn’t make this whole damn thing about Fannie Mae and Freddie Mac. It’s a sitting duck issue for him. He doesn’t need to go out and join the chorus and beat up on Wall Street and talk about investor greed and so forth — most Americans are investors! And most Americans don’t consider themselves greedy. Obama is standing right there guilty up to his eyeballs in all of this. I’ll tell you, the narrative is just waiting to be shaped out there as a singular campaign issue.

All right, people have been waiting patiently. I want to go to the phones. We’ll start in Temecula, California, this is Andy, nice to have you on the program, sir. Hello.

CALLER: Hi. Mega dittos, Rush, longtime listener.

RUSH: Thank you, sir.

CALLER: I wanted to illustrate your brilliance today having been in the lending industry for many, many years and the fact that you’re right, government has been the problem. In the late nineties, Fannie was given charge because the administration at the time wanted to expand home ownership to everyone, and I acquired assets for large banks, and we did not do what’s called conforming or Fannie Mae type product. But Fannie Mae was extending its portfolio and creeping into areas that we had traditionally bought. We had higher yields, higher risk, and were acquiring that. And all of a sudden Fannie Mae was creeping into it, and it became a word in the industry, Fannie Mae Creep. And those portfolios expanded. And the only way that the private groups and their securities could make any money was to expand the risk of their criteria given the yield. And not to try and make it too technical, the key is with the expanding portfolio characteristics of Fannie, the private groups having to expand theirs, it created a very unrealistic and unsustainable demand, thus values went through the roof unrealistically. Now they’re coming back down to where they should have in the first place.

RUSH: Now, is part of the reason for that that money got to be so cheap?

CALLER: I’m sorry?

RUSH: Is part of the reason it just skyrocketed and had all these different leverages was that money was basically cheap to borrow?

CALLER: Money was cheap, the yield spread that the guys on the street with the rating agencies could show was worthwhile. But as soon as the yield curve flattened, when the Fed raised rates, then it became uninteresting for the private securitizers, I mean the Fannie’s and Freddie’s had all the ability to securitize what they want because of the government backing. The other guys found it not worthwhile to do any more because the yield curve had gone flat. At that point, appreciation did not drop, it simply stopped. But everyone was so highly leveraged in their homes that then they could not refinance, and then the snowball started coming back downhill.

RUSH: Exactly. And while all this is going on, Fannie Mae and Freddie Mac are doling out campaign contributions out the wazoo to who? Democrats. At the top of the list, Christopher Dodd. Number two on the list, Barack Hussein Obama. I mean, this thing has been a little playground for Democrats in Congress for the express purpose of doling out money to their friends, fellow politicians, interest groups, and so forth. It got to the point where being involved in the mortgage industry was a side light to the real purpose of all this. Fascinating.

BREAK TRANSCRIPT

RUSH: Tell me something, folks. I know these are rhetorical questions, but I want to ask them anyway. In his nearly four years in the Senate, with a total of 143 working days in the Senate, did Barack Obama propose anything, at all, to deal with Fannie Mae and Freddie Mac? Now, let’s get beyond the fluff here, and let’s put it to this phony. Did he lift a finger to address what so many others saw as a huge and looming problem? McCain saw it; McCain supported some legislation on it. All this crap… sorry. But that’s what it is, all this crap about reform and change. What the hell did Obama do? He says he has experience, he says we should not put down his experience, to do so is racist. He says he’s experienced in ways others are not. Okay, 143 working days in the Senate. What did he do about this? Zilch, zero, nada.

He tells us what he’s going to do now, and he’s pointing a finger of blame at everybody but his circle of political hacks, the people who are responsible for this. I will tell you what Obama did during his 143 days in the Senate while all this was bubbling up and the house of cards was about to crumble, I’ll tell you exactly what Obama did. He took money from Freddie Mac. He took contributions from Freddie Mac and Fannie Mae. He spent his entire time in the Senate planning his run for president, taking money out of these institutions. He is a do-nothing will have, left-wing, self-absorbed man-child passed off as some sort of savior, messiah, anointed one, and it’s all a full-fledged crock.

RUSH: Jean in Morongo Valley, California, great to have you on the program. Hi.

CALLER: Hi, Rush, mega dittos.

RUSH: Thank you.

CALLER: Longtime listener, first-time caller.

RUSH: Great to have you here.

CALLER: I’m livid! All this crap. I got a hold of Barney Frank the other day when this Fannie Mae, Freddie Mac thing came out where these people walked off with all it is money in their pockets.

RUSH: Yeah, yeah, yeah.

CALLER: I mean, he started yelling at me when I started to question him.

RUSH: Wait a minute. You actually got through?

CALLER: I got through to Barney Frank.

RUSH: Well, what did you say to him?

CALLER: I upset him when I asked him, ‘What were you doing when all this was going on? Aren’t you on the regulatory committee?’ And he raised his voice. I said, ‘Whoa, whoa, whoa, back off. I called you. I want some answers.’

RUSH: You mean he started yelling at you?

CALLER: Oh, yeah, he raised his voice about four octaves.

RUSH: Well, you know, Barney is one of these elitists. He is a smart guy but he thinks you’re stupid while he’s —

CALLER: Oh, of course, of course. Anyway, he said they were going to see what they could do about it. Ain’t that something else?

RUSH: Going to see what they could do about it? Well, we’ve seen what they’ve taken over now.

CALLER: Well, I’m telling you, I don’t know why there aren’t people marching in the streets on the way to Washington.

RUSH: Well, the ones who would march are busy working. In this case, the ones that would usually march are not upset with this. The government is taking over, and that’s exactly what socialism —

CALLER: Unbelievable. I cannot believe that people can be so damn stupid — excuse me — so stupid to believe this crap that he’s —

RUSH: Well, look, this is a battle we face out there, Jean. We’ve had 50 years of people being told that government’s the savior, the salvation, government will fix what’s wrong, and despite the evidence that government screws it all up, people want the government to do it again. It’s the age-old battle. It’s okay to get mad, get fired up, but understand that this is a battle that has to be fought every day, because ignorance is easy, intelligence is tough. Ignorance is very easy. It’s the most expensive commodity we’ve got, and being informed and using your brain is a tough thing to do. A lot of people don’t like to do it, except when they’re, you know, watching Captain Planet.

The Wall Street Journal today has an interesting column called ‘Barney’s Rubble.’ And what they point out: ‘Mr. Frank contends that he favored ‘very strong reform’ of Fannie Mae and Freddie Mac, even before Democrats took over Congress after the 2006 elections. To adapt a famous phrase, this depends on what the meaning of ‘reform’ is. Mr. Frank did support a bill that he and others on Capitol Hill described as reform. But on the threshold reform issue — limiting the size of the portfolios of mortgage-backed securities (MBS) that the two companies could hold — Mr. Frank was a stalwart opponent.’ He was not for reform. He wanted to increase the size of Fannie Mae and Freddie Mac right up until the bailout. And for him, for Barney, it’s all about affordable housing.

What was that bailout, $200 billion? Affordable housing for who? Affordable housing is nothing more than code words. And, by the way, how can it be a code when we know the code? But it’s still a code. We know the code. We know the liberal code. Affordable housing means government-paid housing, welfare state homes. Affordable housing is welfare state homes. What was Fannie Mae doing? Basically giving people houses that they couldn’t pay for the mortgages. It’s exactly what affordable housing is, is when liberal constituents get a house for nothing and don’t have to pay it back when they can’t pay it back. Barney’s Rubble. Everybody got paid in this. Taxpayer has to pay to keep constituent Democrats in their houses that they didn’t have to pay for. That’s affordable housing.

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