RUSH: Well, I needed something to make me laugh, ladies and gentlemen, after yesterday, after the weekend, and I found it today. The Senate Hindsight Hearings on what is being called a bailout. I actually don’t think it’s proper to call it a bailout, but it’s a fine point. But nevertheless, what a comedy! If the subject matter weren’t so serious and dire, this would be a comedy. This is a bunch of Senator Blowhards and Foghorns all giving their opening statements. We’re looking at a Bunch of Colonel Sanders telling the chickens that they shouldn’t have come into the coop. I mean these are the guys that screwed this up in many cases. Anyway greetings, folks. Great to have you here. It’s finally time for the EIB Network. I know you’ve been as eager for this to start as I have. Phone: 800-282-2882. The e-mail address, ElRushbo@eibnet.com.
Have you noticed, ladies and gentlemen, there’s a new Democrat Party buzzword going around here about this so-called bailout, and it’s called ‘Blank Check.’ The Democrats have reacted to this proposed bailout of the financial industry, $700 billion. Nancy Pelosi says Main Street must be protected from Wall Street. Whatever the hell that means. I mean, I’m glad she’s the one saying it. Too often Senator McCain’s gotten close to sounding like that. She said the Democrats will not write a blank check on the campaign trail. Lord Barack Obama, the Most Merciful echoed the Wall Street versus Main Street line. He said that Congress must have oversight. That’s what Pelosi wants. That means they want their hands in the stash to be able to direct where it goes.
‘We want oversight,’ said Chris Countrywide Dodd, who, by the way, got slapped down today pretty well by Hank Paulson. We got the audio coming up. Sit tight, hang in there, be tough, be cool, it’s all coming up. ‘We want oversight,’ said Chris Countrywide Dodd, demanding accountability. Barney Frank, who thwarted the Bush administration’s attempts to reform Fannie Mae and Freddie Mac back in 2003 had the gall to say, (sputtering), ‘Screw the private sector! I hate the private sector!’ ‘It’s up to the government to get us out of it,’ he said. And then he said, ‘We demand strong oversight.’ Now, a little news flash. For you guys and the Democrats, you had oversight! You were oversight! It was your oversight, and Bill Clinton’s proposals which mandated that banks loan money to people who couldn’t afford to pay it back. It was your oversight that Fannie and Freddie created so-called toxic loans and it was your buddies and your pals and your donors and your advisors who looted Freddie Mac and Fannie Mae, and now, after it’s all blown to smithereens, they want accountability in their hindsight hearings today.
This is about as laughable as the 9/11 Commission hearings were. The only thing missing here is Jamie Gorelick and Janet Reno sitting in as staff members for Chris Dodd. If the American people understood how complicit the Democrats are in this financial crisis, there would be accountability, let me tell you. And there’s still time for accountability. It’s called Election Day on November 4th. There is still time for accountability. Every one of these Democrats involved in this would be thrown out of office if there were accountability, the accountability these Democrats are asking for. A few of these Democrats would be handcuffed and frog-marched out of there as well if the accountability were what it should be. Now, you may have had the opportunity to have oversight over all this, and you punted. You didn’t want any oversight when it was your guys getting rich. You didn’t want any oversight when it was your party getting all the money donations coming out of Fannie Mae and Freddie Mac. You want oversight? Fine, you’re going to get it. We are going to be oversighting you. From now until Election Day, everyone on this program, and I’m sure throughout the so-called New Media, will be engaging in oversight of the Democrats involved in this mess.
Now, after yesterday’s program, ladies and gentlemen, as you can understand, I went to the general e-mail box, the ElRushbo@eibnet.com, and the kooks, lunatics, the insane asylum doors had been left open and they all got out. They found a computer to e-mail me, and they said, ‘You know what? You keep talking about the Obama campaign being simplistic. You are the essence of simplicity. All you do is blame Democrats. You think there’s no Republicans involved in this? Everything that comes up, you use it as a partisan opportunity to bash liberals and bash Democrats.’ Of course profanity was laced every other word, personal insults, and so on and so forth. Let me address this because we had a caller yesterday who I thought made a very good point about this. This is the first round of public hearings we’ve had about this whole mess that I can recall. I mean we’ve had the Fed guy up there talking about, ‘We’re going to give $75 billion of liquidity here to this Wall Street firm,’ or whatever, but this is the first. Now, I want to tell you guys something. You’ve got the Democrat Party, you’ve got people like John Conyers, and you’ve got Larry Wasserman’s daughter, who represents Florida. Wexler represents Maryland.
You’ve got some of these Democrats claiming they’re either going to continue to impeach Bush or they’re going to mount war crimes trials. These Democrats are still trying to get Karl Rove behind bars. So I’m just telling you people, if there was one Republican, just one involved in all this — they run the House and Senate now, folks. They run the committees — if there was just one Republican that they could point the finger of blame at, throw all this on that Republican’s shoulders, bury that Republican, kill that Republican, end that Republican’s career, it would have started a month ago. The hearings would have started two weeks ago. There must not be a Republican around, because there is plenty of reason for hearings and investigations, but I wonder who the hearings and investigations would focus on? Why, it must be Democrats. Because if it were Republicans, folks, we have already found a culprit. The culprit would be in jail or destroyed or what have you. The Democrats would have already exonerated themselves. But there must not be a single Republican they can throw this at. Unless throwing in a single Republican would force that Republican to say, ‘Hey, wait a minute, you guys.’ I think it’s either that and it’s a pretty good bet, or else they’re all just circling the wagons around themselves. But I think the Democrats run this show, it’s an election year, and if they had a chance to tie this to McCain or Palin, they would do it. And they’re not doing it. There aren’t any hearings. Tells me, as a standard, longtime, perceptive observer of what happens in that cesspool swamp of a town, there must not be anybody but high-ranking Democrats involved in this.
RUSH: Hey, I’ve got a major correction to make. Obama is not ‘up ten in Virginia.’ He’s up ten in question of ‘Who do you trust most to handle the economy?’ It’s actually 49-46, Obama over McCain, margin of error. It’s fascinating, too, this is an AP story. Yeah, it’s an ABC/Washington Post poll, and it’s the headline. I goofed up here, folks, but they got me. The Drive-Bys got me. ‘Obama Holds Ten-Point Lead Over McCain in Trust Handling Economy.’ I saw ‘ten-point lead,’ and you don’t got the bottom line, until the bottom line you get the actual poll results. So it was a trick; I fell for it. If I fell for it, I’m sure many of you did, because I seldom do. It’s a Drive-By trick to make me think and everybody else that Obama was up ten in Virginia when he’s not.
By the way, I was watching some of the hindsight hearings during the commercial break and Chuck Schumer, a lot of these Senators asking Hank Paulson, ‘Do we have to decide on this this week, Thursday? I know the White House wants Thursday or Friday. I mean, it’s already Tuesday. Can’t we study this a little more and come back?’ And every one of them that asks Paulson that, ‘No, no, no,’ Paulson said, ‘You gotta do it now! We’re talking market confidence. If you don’t do this now it’s going to be a disaster.’ Then he said, ‘Besides, all my bank buddies and Wall Street buddies will have to leave the Hamptons and move to Yonkers, if we don’t get this done.’ By the way, Hillary Clinton is the latest to add to the ‘Blank Check’ montage.
‘Senator Clinton said Tuesday she worries that taxpayers could be left holding the bag with plans from a $700 billion…’ This is less than their stupid health care plan would cost, and that would have left us holding the bag, the IV bag. That would have been the colostomy bag. We would have all been holding it. Our bowels would have been empty. She’s worried about us holding the bag here? And then she said, ‘Congress should not give the Treasury a blank check to straighten out the problem.’ Well, now, she had ‘a blank check.’ How many people gave her how many millions to run her campaign and she’s how much in debt and hasn’t been able to pay it off, and was lousy running the whole thing? ‘Ready to lead on day one.’ Hillary has her own mini-financial crisis.
They gave her a blank check, then she spent it, and is just all done with it. Now she’s coming around: ‘We need a new FDR-type deal to handle it!’ We’ve got 15 FDR-type deals. We’ve got the Great Society, we got Medicare, Medicaid, Medicare Part B. We’ve got OSHA, FOSHA. Screw you! We’ve got all these different acronyms out there. We have the war on poverty. We’ve got FDR times 30, and look where it got us! A new FDR-type program? What we need are several Ronald Reagan programs, ladies and gentlemen. Let’s go to the audio sound bites. Here’s Chris Dodd, the chairman of banking committee, opening things up today. The gall of these people! He should be answering questions! Chris Dodd should be answering questions today, not asking them. He ought to be the first witness Barney Frank calls. (doing Frank impression) ‘I would never be behind Chris Dodd! What are you saying? Chris Dodd? I’d be beside him. Just crazy. Be behind Chris Dodd?’ So they ought to be the first two witnesses out there. How much of a sweetheart mortgage did you get from Countrywide, Senator Dodd? How much in political contributions did you get from Fannie Mae? Those would be my first two questions. Here’s what Dodd said in his opening statement.
DODD: As I and many members of this committee have argued for the past 17 months, since I became chairman of this committee, the root cause of our economic crisis has been the collapse of our housing market triggered by what Secretary Paulson himself has called ‘bad lending practices.’
RUSH: This is just —
DODD: What is tragic and lamentable is that the ensuing calamity was entirely foreseeable and preventable.
RUSH: Yes! Yes!
DODD: This was no act of God. It was not like Hurricane Hike — Ike, rather. It was created by a combustible combination of private greed and public regulatory neglect.
RUSH: Private greed? I guess you had some because you got a sweetheart deal with Countrywide, and public regulatory neglect? Folks, do you realize the gall? And he had to write it, or a staff member did. How did he sleep last night? I ask that rhetorically because I know he’s not bothered by it at all. ‘Ever since I became chairman of the committee the root cause of our economic crisis has been the collapse of the housing market triggered by what Secretary Paulson himself has called ‘bad lending practices,” and then Chuck-U Schumer. Get Chuck-U Schumer’s take on this.
SCHUMER: My colleagues and fellow Americans, we live in amazing and dangerous times. Who would have thought that the lowly mortgage, long regarded as the safest of investments, could bring our financial system to its knees. But that is where we are.
RUSH: Do you realize what he just said? The mortgage as an instrument, ‘the lowly mortgage,’ has brought our financial system to its knees? A mortgage is an inanimate piece of paper! You and your buddies brought the financial system to its knees by constructing all these various scenarios with no oversight. Despite Obama lying through his teeth that there was no oversight whatsoever and it was the free market running wild, it was the exact opposite. This all started in the Clinton administration. We chronicled this for our whole first hour yesterday, and I’ve had a lot of people telling me, ‘You need to repeat it. You need to get that out there. That needs to air in as many airports as CNN is in.’ You know, in the waiting rooms and the bars and the restaurants, they watch CNN in there. So I’m not going to go through the whole thing right here, but this is just…
To blame the ‘lowly mortgage’? (laughing) All those mortgages got together, you see? Mortgages got together and they started talking to each other. Those mortgages said, ‘You know what? We don’t like the way we’re being used by these people. We want to teach these people that constructed us a lesson, and so we’re going to all band together and we’re going to default! We mortgages are just not going to pay! We mortgages, we’re going to make sure that we get lent to people that can’t pay back. We’re going to totally screw up the US financial system.’ Now, Hank Paulson wasn’t having any of this, and I’m a little surprised. He could have slapped them down a little harder here, but he still slapped them down. Here’s Hank Paulson. We have two sound bites from his opening statement.
PAULSON: I’ve heard your comments on executive compensation. I share your frustrations. I feel those frustrations. Practices throughout America also upset me. Let me just say that with regard to Freddie and Fannie and AIG — in case you or your constituents don’t know — in those cases CEOs were replaced, the government got warrants for 79.9% of the equity. Golden parachutes were eliminated. Strong action was taken. I will also say to the comments made about Freddie and Fannie and the bazooka, that you all can be darn glad you gave us the bazooka because we needed it. Let me tell you something: the root of that problem was in congressional charters started many, many years ago.
RUSH: Now, he could have said ‘the Clinton administration,’ but he’s not going to go up there and get partisan even though — he’s a Democrat, too, by the way. Hank Paulson… By the way, everybody talking about what a free marketplace Wall Street is. I’ve got the paper today. If you go look at not just the CEOs, look at the employees of all these firms that you’ve heard of, from Lehman Brothers to Bear Stearns to AIG, I don’t care what it is, vast majority of employees and management donate to Obama and Hillary and the Democrats. It is rich Democrats running Wall Street, rich liberal Democrats, and they are the ones asking for this bailout. Now, Hank Paulson, he took it to them here.
You know, this whole thing started with congressional charters, many, many years ago. Now, he could have kept going and really dinged these guys, but he didn’t. Frankly, I wish that he had. But some of these guys on the Senate committee had started dinging Paulson. ‘Well, you didn’t do enough and you weren’t trying hard enough and you weren’t being honest with us.’ He said, ‘Look…’ They’re complaining about executive pay. ‘We gotta lower executive pay. We gotta lower golden parachutes.’ He said, ‘Look what we did at Fannie Mae. We got a lot of money back from Franklin Raines, fired a bunch of people,’ but you still got Daniel Mudd there — well, not there, but he left with a huge golden parachute as well. This was just a big piggy bank for the Democrat Party, and this is a little sideshow going on here to make us think they’re getting serious about fixing it.
RUSH: There’s a great Wall Street Journal column today: ‘Blame Fannie Mae and Congress For the Credit Mess.’ We were all over this yesterday. I’m glad to see people picking this up and echoing this now. It’s by Charles Calomiris and Peter Wallison. Calomiris is a professor of finance and economics at Columbia Business School. He’s also a scholar at the American Enterprise Institute, and Peter Wallison, senior fellow at AEI, general counsel, Treasury Department, the Reagan administration. I’m not going to read you the piece. I’ll just tell you what it shows is that at the front end of all this, the Carter and Clinton administrations were pressuring private banks to give risky community development loans as a greater and greater percentage of the bank’s portfolio. Why? Because at the other end, Fannie Mae and Freddie Mac were encouraging the banks to issue more and more of these risky loans so that they, Fannie Mae and Freddie Mac, could buy ’em up and increase their assets.
They’re buying bad paper; they’re buying loans that can’t be paid back, the mortgages that were out to screw all of us, according to Chuck Schumer. They were able to raise their asset level and show Congress how well they were doing even though they were buying bad paper, and this is how Franklin Raines and Jim Johnson, the executives, made millions in self-issued bonuses. Now, what this shows is that at the front end, they were doing a number of tricks like this and at the back end all over the place in order to balloon their assets that were false, and that’s how they paid themselves. By the way, should Chris Dodd — I mean if we’re gonna eliminate golden parachutes for executives that fail on Wall Street and the credit industry, should Chris Dodd be forced to give up his pension? Should Barney Frank be forced to give up his pension? Here is one more Hank Paulson bite. And you could interpret this as him saying, ‘Okay, look, you Democrats, shut up and let’s get this done.’
PAULSON: If any of you felt that I didn’t believe that we needed oversight, I believe we need oversight. We need oversight. We need protection. We need transparency. I want it, we all want it. And we need to do that in a way that lets this system, lets this program work effectively, quickly. Because it needs to work effectively and quickly and it needs to — it needs to, to get the job done.
RUSH: This is one of those instances where the Democrats say, (paraphrasing) ‘Are you sure we have to decide this right now? We don’t have enough time to get our hands in this and figure out, you know, how much money Maxine Waters should get and we don’t have enough time to figure out how much money Obama ought to get and ACORN ought to get. You can’t force us to accept this deal before we get our hands in there and figure out which of our constituents and support groups are going to get rich with this kind of money,’ and Paulson said, (paraphrasing) ‘No, we don’t have time for that, we gotta get this done, we’re talking market confidence. Give us any kind of oversight, transparency, all you want, but we gotta get this done, we gotta get this done, again because my buddies, if this doesn’t get done are going to have to sell their houses in The Hamptons and move to Yonkers. It’s bad out there, boys. I don’t have time to let you get in there and figure out whose skids you want to grease. I gotta take care of my own.’ Now, last night Chris Dodd was on The NewsHour with Jim Lehrer on PBS, the senior correspondent, Margaret Warner, interviewed Chris Dodd. Her question was, ‘Do you think you’re close to some agreement, at least in concept, that limiting CEO compensation should be part of this bill?’
DODD: If you’re investing $700 billion of taxpayer money what the public would be irate over is if in some of these companies where we’re buying this junk, getting it off their books, that they turn around and end up having contracts that award them and reward them with multi-million dollar compensation packages, I can’t begin to describe to you the anger we would receive from people if we didn’t try to address that as well.
RUSH: Do you understand how angry people already are, Senator? And do you have any idea how much angrier they’re going to be once the full scope of this is known and understood?