RUSH: I just got this over the course of the break at the top of the hour. By Bill Sammon, FoxNews.com: ‘Barack Obama, who lamented Friday that ‘we have not managed our federal budget with any kind of discipline,’ is nonetheless promising to spend $50 billion on a United Nations anti-poverty program that critics say will drive up American debt.’ So this is how Obama wants to solve the economic problems. He wants to give the corrupt rat hole known as the United Nations $50 billion of our money to fight poverty. That’s really going to help US American debt. And that’s not just once. He wants to do that every year. The UN’s millennium development goal wants to cut poverty in half by 2015 by distributing wealth from countries like the US and giving it to those less fortunate. Go talk to people, responsible leaders in Africa who are begging the world to stop this, because it is preventing education, ambition, inspiration, it’s preventing African citizens from learning to take care of themselves, which is exactly what the UN wants. Everybody knows that wealth transfers don’t work.
By the way, Snerdley said during the break, ‘After listening to your brilliant explanation of this in the first hour, why should I even bother paying off my mortgage? I mean, I could just not pay it, I go into default and the government’s going to let me keep the house.’ I said, ‘Ah, ah, ah, ah, ah, ah, Snerdley, the odds are that Fannie Mae and Freddie Mac didn’t buy your mortgage because your mortgage is probably not subprime.’ Let me ask you, did you have to put a down payment down? Did you have to pay closing costs? Do you have an ARM? You got a flat rate? Well, then I’m sorry, you don’t qualify, you gotta keep paying. That’s exactly right. Snerdley, you did things right, you followed the rules, and you better pay or they’re going to come take your house away, and if Barney Frank gets his way some subprime person is going to be put in your house if you default on it. That’s what Barney Frank’s trying to set up here. So, yeah, if you got a legitimate mortgage that’s not subprime the odds are that Fannie Mae, Freddie Mac didn’t buy it and, even if they did, they packaged it differently than they did the subprimes.
So we’ve got a Democrat candidate who wants to nationalize the private sector. We have a Republican candidate who is more populist than conservative. In case you missed this, last night on 60 Minutes, Senator McCain said that he would name Andrew Cuomo, the New York state attorney general, son of Mario the Pious, to the Securities and Exchange Commission. Now, Andrew Cuomo ran HUD under President Clinton. McCain said, ‘I’ve admired Andrew Cuomo. I think he’s somebody who could restore some credibility, lend some bipartisanship to the effort.’ Cuomo didn’t comment. From The Village Voice in August of this year, August 5th, the headline: ‘How the Youngest Housing and Urban Development Secretary in History Gave Birth to the Mortgage Crisis — In 2000, Cuomo required a quantum leap in the number of affordable, low-to-moderate-income loans that the two mortgage banks –known collectively as Government Sponsored Enterprises — would have to buy.
‘The GSEs don’t actually sell mortgages to borrowers. They buy them from banks and mortgage companies, allowing lenders to replenish their capital and make more loans. They also purchase mortgage-backed securities, which are pools of mortgages regularly acquired by the GSEs from investment firms. … Cuomo’s predecessor, Henry Cisneros, did that for the first time in December 1995, taking a cautious approach and moving the GSEs toward a requirement that 42 percent of their mortgages serve low- and moderate-income families. Cuomo raised that number to 50 percent and dramatically hiked GSE mandates to buy mortgages in underserved neighborhoods and for the ‘very-low-income.’ Part of the pitch was racial, with Cuomo contending that Fannie and Freddie weren’t granting mortgages to minorities at the same rate as the private market. William Apgar, Cuomo’s top aide, told The Washington Post: ‘We believe that there are a lot of loans to black Americans that could be safely purchased by Fannie Mae and Freddie Mac if these companies were more flexible.”
Well, guess how they got the flexibility? Hello, Janet Reno. Hello, Bill Clinton. Hello, Jamie Gorelick. ‘While many saw this demand for increasingly ‘flexible’ loan terms and standards as a positive step for low-income and minority families, others warned that they could have potentially dangerous consequences. Franklin Raines warned that Cuomo’s rules were moving Fannie into risky territory.’ Well, he went there, he went there and found a way to score huge. But the point is, the McCain campaign ought to quit running against Christopher Cox and the SEC and start running against Democrats on Capitol Hill, Barney Frank and Chris Dodd and so forth. Let me give you a brief history lesson, ladies and gentlemen. Two years ago the Democrats, great fanfare, took control of both the House and the Senate, promising great changes and great advances. So on January 5th, 2007, just about the time Pelosi and her cronies took control of the House, the Dow Jones Industrial Average was 12,400, the New York based Conference Board said its consumer confidence index was 110.3, the Bureau of Labor Statistics had the unemployment rate at 4.6%, and according to the CNN, a gallon of gasoline in January 2007 was about $2.20.
Last Thursday, at about one o’clock Eastern, the Dow had a bottom of 10,500 before Paulson and Bernanke intervened. That’s about a 15% drop in the Dow since Pelosi and the Democrats took over Congress. And we could go on. The Conference Board’s latest take, consumer confidence, 56.9%, a drop of 48%. The unemployment rate in August at 6.1%, an increase, Bureau of Labor Statistics of 33%, gasoline prices at about $3.70 a gallon, 68% increase. What changed? What changed? Barney Frank and Senator Chris Dodd took control of the House and Senate banking committees, Representative George Miller, Democrat, California, Senator Ted Kennedy took over their respective labor committees, John Dingell, Democrat, Michigan, Jeff Bingaman, Democrat, New Mexico, became chairman of the energy committees. There has been not only no oversight from the Democrat-controlled Congress on any of these things, there has been an active effort to prevent oversight while at the same time blaming capitalism and the fact that there has been no regulation.
They want as many of you thinking that capitalism brought this about when in fact all roads lead to Fannie Mae and Freddie Mac and the Democrats who enabled them and ran them. They keep saying that people didn’t believe in regulations. This was a policy imposed by law and enforcement on the private sector. So you’ve got Obama, wants to nationalize the private sector. We have a Republican candidate who’s more populist than conservative. What we want is change. Change the chairman of the banking committees in Congress, get rid of Chris Dodd and Barney Frank. They are a disgrace. They are lying about their roles in all of this. They shouldn’t be anywhere near addressing this problem now. They should resign from their posts. And the Republicans ought to demand it day in and day out. To sweep this thing under the rug is some sort of bipartisan failure or some kind of private sector meltdown or what have you, removes responsibility from the kingpins behind this. The tendency is of the Washington governing class to circle the wagons and protect themselves. When you get to a juncture like, this party is not going to matter.
Barney Frank and Chris Dodd need to step down from these committee chairmanships, and they need to be demanded that each day by the Republicans. Here’s the Barney Frank quote. ‘The private sector got us into this mess; the government has to get us out of it. We do want to do it carefully.’ The private sector didn’t get us into this mess, Congressman Frank, you did! And your party. So here they are demagoguing and demanding protections for homeowners while trying to prevent a cascading meltdown that will ruin everybody including homeowners, just like they do on Social Security privatization. By the way, Obama is out lying about that now. Obama is telling seasoned citizens groups that John McCain would have had their Social Security money in the stock market today. It is an abject lie, and the Washington Post all kinds of people are calling him on this lie. Even when McCain supported privatization, the bottom line was, if you were born, was it after 1950 or before 1950? If you’re before 1950, your money doesn’t go to the stock market. You do not have the option of investing it yourself. Your money stays right where it is in the Social Security so-called trust fund. It’s an abject out-and-out lie from The Messiah’s campaign.
RUSH: Joe in Annapolis, glad you waited, sir, welcome to the program.
CALLER: Thank you so much, Rush. Mega Navy town dittos to you.
RUSH: Appreciate that, sir.
CALLER: I am a mortgage banker. In fact, I might be the only mortgage banker in America who does not own his home currently.
RUSH: Well, now, wait. You have to explain that.
CALLER: (laughing) I sold my home directly before the boom —
RUSH: Oh, oh, I thought you meant you lived in it, but you didn’t own it.
CALLER: I do not own my new — I have a condominium now in Annapolis, but did I own a home before. I sold it directly before the boom, and of course after the boom, housing prices went so high that it eliminated me from the market because of course being in the mortgage business there wasn’t a whole lot of chance my income was going up at that juncture.
RUSH: Well, see that’s another aspect of it, because the overvalued price of homes is a central factor in what happened here because of the bankrolling and the support for all these worthless mortgages and so forth. With everybody running into the market to buy a house, what happened to the supply of houses? It shrunk up so the price of housing went sky-high.
RUSH: And that led to ARM crises with people and their mortgages and so forth. I know they took the pledge and understood that it could go up, but when it did they weren’t able to handle it. What’s happening now in the home price business, correct me if I’m wrong, is just a major correction here, prices are now starting to stabilize. What the market would really set them to be opposed to this mess that existed with Fannie Mae and Freddie Mac.
CALLER: Well, you are absolutely correct and, of course, I get very concerned as a non-homeowner at this point that people will step in in terms of government — when I say people — and try and correct it. Of course politicians always want to have the economy look good if they’re in office and they always want it to look bad when they’re not in office. And when the housing prices were going up, nobody was doing anything except for trying to encourage it with lower rates and that sort of thing, government was always involved with Fannie and Freddie, as you have discussed at great length and very accurately, I might add, so nobody was doing anything. Now that it’s crashing, as it needs to in effect, everybody is complaining and blaming Bush and the Republicans.
RUSH: Yeah, they are, and of course the Republicans are not out defending themselves in any of this. You used the word ‘crash,’ but in California, first-time home buyers are up almost 20%, because prices out there are stabilizing and people can afford to get into the housing market now for the first time. Anyway, Joe, appreciate the call, thanks much.
Laura in Newman, Georgia, nice to have you here. Hello.
CALLER: Hey, how are you today?
RUSH: Ah, pretty good, thank you.
CALLER: I just wanted to say how much I enjoyed your explanation. All roads lead to Fannie and Freddie, the explanation of the current financial debacle that just gave me a much better understanding of what’s going on. And I think you need to repeat it every day.
RUSH: What did you think, I’m curious, before you heard my explanation, what did you think the problem was?
CALLER: Well, I thought that it related to redlining, but I just could not understand how big it had gotten. I mean, it’s hard for me to grasp the amount of money, and I guess I don’t really understand the sheer number of people involved. You would think if someone is writing a mortgage, they would want to give it to people who could pay it back eventually.
RUSH: See, this is one of the fundamental problems that people are coming to grips with. Most people, when they go borrow money have to prove that they can pay it back. They have to show a net worth statement, income, all this. It’s tiresome and it’s invasive, depending upon the amount of money you want to borrow and for what reason. The loans we’re talking about, these people didn’t have to prove they had jobs. See, you can’t relate to that.
CALLER: No, I cannot. I remember the seventies when interest rates were so high —
RUSH: I do, too.
CALLER: — and I thought that I would never be able to own a house. My husband and I made a move and we sold our house and moved to a place where houses were a good bit more, and it was, you know, quite a shock and interest rates were so terribly high, and it was depressing, I thought we’ll never own a house again, but we do, so it’s not all bad.
RUSH: There are some positives here. I don’t want to be totally negative. I mean, people don’t want to hear the positives right now, but we’re learning that you can’t lend money to people that can’t pay it back. Whether we’re going to keep doing it is another matter. What’s at stake here, folks, is the takeover of the US economy by the American left. That is what is at stake here. And you might be saying, ‘Well, where’s the Bush administration on this?’ Hey, I can only guess, but the last thing I think any sitting president would want to leave office on is an economic situation like this. So whatever it takes to get this off the books for a while and look, there are some people, folks, who believe that something drastic has to be done because if we just let it go and crash, that too much is going to crash and it’s going to hurt a whole lot of people. But who is it that’s telling us this? The people telling us this are the people who want control over this. There’s a big idea at stake here. It really is. It is whether or not socialism works.
Can the government be the provider, the guarantor, the protector of everybody for their wants and their needs? We know intellectually, we know historically, it doesn’t work; it has never worked, at least it doesn’t work for creating prosperity. It creates tyranny. It works for people at the head of the chain on something like this, but it doesn’t create prosperity for people. So these are, to me, very, very crucial questions. The arguments that we have in this country are over how to manage our affairs. You could be charitable and you could say that people on the left and people on the right want the same things. I used to think that but I don’t anymore, but for the sake of discussion you could say they want the same things. We want a prosperous economy; we want educational opportunity for kids; we want a safe, crime-free neighborhood; we want economic opportunity growing; we want access to plentiful supplies of energy, all the basic things here that have defined the country. The argument has been how to provide them. The liberals think that government should be in charge of parceling these things out because they’ll do it in a more fair way. Conservatives say, no, the government doesn’t create diddly-squat, it’s the private sector that creates all this and rewards risk and rewards people who work hard and so forth.
I really don’t think the left wants and has the same vision for the country anymore that they once did. I think this is a radicalized Saul Alinsky Democrat Party that JFK would not recognize, that Hubert Humphrey would not recognize, that Robert Strauss from Texas would not recognize, that Pat Brown, the governor of California, would not recognize, that Morris Udall would not recognize that, Scoop Jackson would not recognize. I mean, none of these old Democrats would recognize this Democrat Party. This party has been radicalized, it’s been taken over by the Alinskyites, and their purpose is to destroy the country as it exists and remake it. You say, ‘Why would people want to do this?’ They don’t like it, folks. I can’t explain the psychology of liberalism. I think it’s a disease, but I can’t explain it. We don’t have time to try to understand it. We don’t have time to gather our thoughts, why are they doing this because, frankly, in my case I don’t care that they hate me, I don’t care to understand why, doesn’t matter. The fact that they do is what is, and the situation right now is these people have to be defeated. After that we can put ’em on the couch, try to figure ’em out.
How can you live in the greatest place in the history of humanity and hate it? It’s not rational. We try to understand this applying the same belief systems to our own belief systems and it doesn’t work. We don’t have hatred for the country, we don’t understand it. It’s not rational to us. To try to rationalize their irrationality is a very, very frustrating thing. In the meantime, we have a golden opportunity here. They have nominated a 100% empty suit with no experience, no qualification, no nothing except he comes right out of the Alinsky Rules for Radicals school which is all about taking down the existing power structure and blaming the United States for imperialism, being too powerful, being too rich, being too wealthy, being too unjust, being too unfair, blah, blah, blah, blah, blah, and they’re on the cusp here of grabbing in both hands a trillion dollars worth of money to sit here and nationalize the home mortgage business. The very people that wrecked it seek now to control it.
RUSH: By the way, some of you earlier may not believe that Janet Reno was involved in pressuring lending institutions back in the Clinton days. This is from the CybercastNewsService.com: ‘Under the Clinton administration, federal regulators began using the act to combat ‘red-lining,’ a practice by which banks loaned money to some communities but not to others, based on economic status. ‘No loan is exempt, no bank is immune,’ warned then-Attorney General Janet Reno. ‘For those who thumb their nose at us, I promise vigorous enforcement.” Now, look, let me say something about redlining. Redlining in and of itself is horrendous. You just decide because of the way somebody looks or where they live that you’re not going to give them a loan. That’s not good. But you don’t fix that by giving one to everybody that’s not capable of paying back a loan. It’s exactly what we did with affirmative action. We started elevating people with no accomplishments, no achievements on the basis of past transgressions. They tried the same thing here with redlining, and look at where it got us. ‘The Clinton-Reno threat of vigorous enforcement pushed banks to make the now infamous loans that many blame for the current meltdown. One economist told the Cybercast News Service, banks, in order not to get in trouble with the regulators, had to make loans to people who shouldn’t have been getting mortgage loans in the first place.’ And then the banks, they could just sell the loans off to Fannie or Freddie, who could buy them with little regard for negative financial outcomes ’cause that’s what Fannie and Freddie were set up to do.