RUSH: I want to dedicate today’s Dow Jones Industrial Average, it’s at about 269, up at the moment, to the Republicans in the House of Representatives for their boldness yesterday. Greetings, ladies and gentlemen, Rush Limbaugh, the Excellence in Broadcasting Network, and three hours of broadcast excellence, as you have come to know, love, and expect, straight ahead for the next three hours. Telephone number, 800-282-2882. The e-mail address, ElRushbo@eibnet.com.
I was going to say, I can’t believe how wrong everybody’s getting this. Then I have to stop and think, yes, I can believe how wrong everybody’s getting this, because the Drive-Bys are in the tank for the Democrats and for Obama, and they’re stupid, they’re dumb. They do not understand economics. They understand the narrative that Washington has the solution to every problem, and when Washington fails, the country fails, and it’s just the exact opposite. Glenn Reynolds, who runs the blog Instapundit, somebody sent him an e-mail yesterday, a reader of his at a major Drive-By Media newsroom, and this little e-mail will set up the rest of the program today.
‘Off the record, every suspicion you have about MSM being in the tank for O is true. We have a team of four people going thru dumpsters in Alaska and four in Arizona. Not a single one looking into ACORN, Ayers or Freddiemae. (sic) Editor refuses to publish anything that would jeopardize election for O, and betting you dollars to donuts same is true at NYT, others. People cheer when CNN or NBC run another Palin-mocking but raising any reasonable inquiry into Obama is derided or flat-out ignored. The fix is in, and it’s working.’ This is a reader of Instapundit working in a major newsroom sending an e-mail to Glenn Reynolds. We knew this; we’ve known it all along. So it really shouldn’t come as any surprise.
Let’s start with this bit of news here. The Dow Jones Industrial Average is up, about 269. NASDAQ is up 265 today. Who in the world at the close of business yesterday thought that would be the case today? Well, you might have, Snerdley, and I kind of expected it, but I’ll guarantee you the wizards of smart in Washington and New York are stunned today. They cannot understand it. They don’t believe this. They thought another 700-point drop was headed our way because, remember now, the template and the narrative is when Washington doesn’t do something the country is headed for disaster, when in fact it’s just the exact opposite. Here’s a story from Reuters today, headline: ”Stocks Higher after Consumer Confidence’ — US stocks held onto positive territory on Tuesday after a report showed a stronger-than-expected reading in a gauge of consumer confidence. The report from the Conference Board provided an added positive spur as a gauge of manufacturing activity in the US Midwest region also showed a stronger-than-expected reading.’
Every economic story, I don’t care whether it is down or up, is unexpected, from the AP, from Reuters, from wherever it comes. ‘A day after the House of Representatives rejected the proposed $700 billion rescue plan to reduce the US financial sector, investors held out hope that leaders in Washington might work around any disagreements.’ How do they know this? The consumer confidence report is for the month of September. It was not taken after yesterday’s bailout vote failed. It’s for the month of September. If it is reflective, it’s because the American people overwhelmingly are happy that this bailout bill did not happen as it was written. There was nothing new in what was voted on yesterday from the original proposal. Yesterday’s proposal that went down the tubes was the same as first proposed, it gave the Treasury Secretary — and that could mean Paulson for the next three months — if Obama wins, could mean Franklin Raines is back as secretary of the Treasury or somebody like that. It puts them in charge of ensuring the economic well-being of every citizen — it’s not possible. Karl Marx, number five, Communist Manifesto. If he knew what was going on in the United States, he would be thrilled today. I’ll share with you why in mere moments.
Everybody is misunderstanding what happened yesterday. CNN is destroying the Republicans. Our friends at National Review Online and their blog The Corner are destroying the Republicans. Well, I know, Snerdley, you may not read ’em but people on the Hill do, and the Republicans on the Hill do not understand what’s happened to Mr. Buckley’s organization because they’re being ripped to shreds by conservatives at The Corner and other places. The fact of the matter is Nancy Pelosi got exactly what she wanted yesterday. She got an economic disaster, perceived economic disaster. The bill went down to defeat. It was by design to go down to defeat. Nancy Pelosi didn’t do one thing to stop renegade Democrats from voting against the bailout. There are a lot of Democrats in very unsafe seats, unsafe districts right now. They had to vote ‘no’ because the overwhelming majority of the American people wanted no part of this, as written. They understand. As complicated as the language of this is, it’s not complex for the average citizen, which understands that the market and the government are two different things.
They understand that the government has botched every attempt it’s made to toy with, fix, promote, whatever, the market. They instinctively understand that this is not how these things are to be done. They also understand that for $700 billion, you could give every American $75,000 toward retiring their mortgage, and if this is a mortgage crisis, then give every American $75,000 or $50,000 bucks instead of giving it someplace elsewhere shore up so-called liquidity. They understand if you’re going to start passing out money, give it to us. Our mortgages are the things that are in trouble. If you’re really concerned about this, they’re saying, if you’re really, really concerned, imagine the economic activity that would be spurred on — if we’re going to give $700 billion away, now, don’t misunderstand, I’m not suggesting this should happen, but I’m saying the American people say, ‘If you’re going to give $700 billion away why give it to people who made these bad loans in the first place just to make them healthy? Give it to us, let us retire a lot of our mortgages and watch us go to town here in the economy causing economic growth. I mean, if our objective here is to bring the economy back, save the economy, then hell, give it to us.’ They instinctively understand this.
So there’s a lot at work here, and it’s simple to understand. There were five committee chairmen that owe their careers to Nancy Pelosi, who voted against the bailout. She didn’t try to twist their arms. She didn’t do anything of the sort. She goes out there looking all ash-faced yesterday like it’s the dregs of disappointment. She got exactly what she wanted today. She’s got the idiots, the economic illiterates at CNN, at MSNBC, at ABC, CBS, wherever, blaming McCain, blaming Republicans, 35 days before an election. Five weeks out, the Drive-By Media is following right as they should, blaming Republicans for an upcoming economic disaster. They played election issue politics yesterday disguised as trying to help the country and save the country. The Democrats want as much economic chaos as they can create. They want as much angst; they want as much concern; they want you thinking crisis, crisis, crisis, crisis, crisis; they want all of this happening so that you will elect Obama. The Republicans in Congress, I think went out there and said some things about Pelosi’s speech yesterday that a lot of Republicans, a lot of conservatives, ‘Come on, you guys, can you grow up? Don’t tell us that you changed your vote on saving the country because Pelosi delivered a partisan speech.’ I, frankly, think that’s what they said, but I don’t think that’s at all why they changed their vote, if they changed their vote at all. I think that’s what they went out there and said.
The speech by Pelosi was irresponsible. She is stupid. One trillion of wealth was lost yesterday with that 777-point drop. But it’s coming back a little bit today as it’s up 264 points at the Dow Jones Industrial Average. Now, I think what happened — this is pure politics — the Republicans in the House are sitting there watching the vote go, and they’re seeing all these Democrats vote ‘no.’ Do you know that 12 members of Barney Frank’s committee voted ‘no’? Barney Frank wasn’t running around trying to change any votes. So the Republicans are watching all these Democrats vote ‘no’ after being told all week it was their responsibility to join with Democrats to make this happen, and after knowing full well that the Democrats really wanted this to happen, they could have passed it on their own without Republican help. That was the spin. And then they sit there and they see all these Democrats voting against it, voting nay, and they say, wait a minute, what’s happening here, and they figured it out. They figured out that the vast majority of public opinion around the country is dead set opposed to this, isn’t even close, and they see Democrats in crucially close districts voting against it so they can run around and campaign, ‘I voted against that bailout, I knew it was the wrong thing to do, but our Republicans voted for it.’
It was a setup from the get-go, and however it is that the Republicans decided to change votes or to vote against it, it was the wise and smart thing to do. Now there’s time to put something together that makes some sense, but this is not the bunch to do it! This is the bunch that caused it! I sit here in continual amazement that we are willing to let the very thieves that stole from Fannie Mae, Freddie Mac, the very thieves — I’ll tell you something else. Not only do Barney Frank and Chris Dodd, et al, need to leave office, we need to shut down Fannie Mae and Freddie Mac, shut ’em down. What have they done for us? What is the value that they have provided? They are at the root of all of this. Had Fannie Mae and Freddie Mac not done what they did and had it not been papered over and ignored by regulators in the House, the oversight committees, we wouldn’t be where we are today. It’s just that simple. You might say, ‘Rush, Pelosi is looking really bad. How do you know she got what she wanted?’ You gotta understand, you have to understand how they look at things. The country is second or third on their list right now. Power is number one, winning the White House, number one, holding the House and Senate, blaming Republicans is number two for everything that has gone wrong.
They’ll fix, they think, whatever mess they create in the process, after they get what they want. But the very people that are going to fix this are the very people that caused all of this. So what happened yesterday was exactly as I suspected, before we left the air yesterday, before this program concluded, we all were sitting here thinking, oh, wow, oh, it failed, oh, no, panic, crisis, down 777 points, Pelosi goes out all ashen-faced, Bush is distressed, he’s upset, and a lot of Republicans, conservatives are upset because they think the Republicans stand in the way of government doing the right thing. God bless the House Republicans. God bless ’em, folks. This whole thing was a setup. From the very moment that they started talking Armageddon-type crisis, I kept saying, why wait? Why wait a week? We don’t have two weeks. We don’t have a week, Armageddon-type crisis. Then the Democrats refused to do anything until they were assured that the Republicans would be on board.
Then Pelosi, the one stupid thing she did was take it to a vote without knowing the outcome. I’m not even sure she didn’t know the outcome. I’m pretty sure that she did know that the Democrats were going to lose this yesterday and wanted that to happen. And then, of course, a lot of Republicans in the House sitting there saying, ‘Wait a minute here. We got Armageddon going on, I’m supposed to put my neck in the noose and those lazy bums in the Senate get to wait two days to see what the fallout from our vote is? To hell with that.’ There are a whole lot of reasons for the House Republicans not to vote for this thing yesterday. And now the Senate, they’re going to take it up either tomorrow or Thursday if they do, they’re gonna come back and write a new plan.
RUSH: By the way, I blew it. Glenn Reynolds is Instapundit, not Little Green Footballs. I got the blogs confused out there. Here’s the thing. I’m watching the Drive-Bys just stick to script, and I’m craving anybody to step outside the narrative and get this right. America is not stupid. America understands what’s going on. How long did it take…? I’ll give you some relative comparisons here. How long did it take for George W. Bush to ‘panic’ the country into war with Iraq? ‘Panic,’ I put that in quotes. How long did it take? I think it was over nine months. How much time did we spend at the United Nations? How long did we go to the United Nations and beg France and the Security Council to join us? The president did not rush into this. He spent at least nine months, if not more, doing everything we could to round up allies, doing everything we could to explain how many resolutions that Saddam Hussein had ignored. Now, after being told for, what now, five years or so — the Iraq war started in 2003 — that the ‘rush to war’ in Iraq was wrong, we’ve got Pelosi, we’ve got Frank, we’ve got Dodd, we’ve got Harry Reid who want us to rush to bailout in a week, without knowing the specifics of what’s involved here?
And then we have such a catastrophic here, we have such an Armageddon, we have such a crisis — we’re on the verge of the Great Depression 2 — Congress takes two days off! (pause) How can these two go together? The American people are not this dumb. You don’t have Armageddon right around the corner. You don’t have Armageddon at the end of the day and have Congress take two days off. The same people who want us to rush into this so-called bailout accuse Bush of panicking and rushing everybody to war when it took nine months to a year! So it’s obvious the American people are not going to be rushed into this solution. Obviously government has a role to play here. If they’re going to spend $700 billion, most Americans can figure out that there’s a better place to spend it than where it’s earmarked at, and put somebody in charge of it other than one person — the Treasury Secretary — whoever it happens to be.
Now, I’ve gotta give Larry Kudlow some credit. One of the proposals that’s being bandied about today that a lot of people like is increasing FDIC insurance on bank accounts from a hundred grand to $250,000, and Obama is out there saying, ‘I did this! That was my idea.’ Obama has been absent. Obama hasn’t said one word about this. If this was so crucial, where was Obama getting the Congressional Black Caucus to vote for this? If this was so crucial, how come Obama couldn’t twist the arms of the Illinois delegation at least to vote for this, the Democrats in the Illinois delegation? Obama was worthless. Obama goes into the White House on a meeting last Thursday, the meeting blows up, he slinks out of the town, says, ‘I’m better at this on the phone from far away.’ He has nothing to do with this and he’s out there trying to blame McCain and take credit for this.
‘I’ve been on the phone with everybody; I know exactly what’s going on.’ Today changes his tune. Yesterday Obama is out there before the vote telling everybody, ‘A historic vote today is going to save the country.’ After the vote went down he had to change his speech. He’s clueless, you don’t know what’s happening, he’s playing no role in it, he’s out claiming that his idea is to up the FDIC insurance from a hundred grand to 250. It’s Larry Kudlow’s idea who is a brilliant economist, who used to be at Bear Stearns, and now is at CNBC, of course. There’s a piece today in, of all places — of all places, you have to look really hard for it — the CNN website. It’s a commentary piece by Jeffrey A. Miron, who is a senior lecturer in economics at Harvard. He’s a Libertarian. He was one of 166 academic economists who signed a letter to congressional leaders last week opposing the government bailout plan.
He said, ‘This bailout was a terrible idea. Here’s why. The current mess would never have occurred in the absence of ill-conceived federal policies.’ That’s it, in a nutshell! That’s exactly right. It would have never happened ‘in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk. Worse, beginning in 1977 and even more in the 1990s and the early part of this century, Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending. The industry was happy to oblige, given the implicit promise of federal backing, and subprime lending soared.’
RUSH: I have some confusion out there, ladies and gentlemen. I’ve gotta straighten this out. In the beginning monologue of the program, I said a lot, so I understand it’s a lot to keep up with and remember. But I said, ‘If you take $700 billion and give it to every American that has a mortgage and let ’em pay off — or at least pay off part — of their mortgage — you’d do a lot.’ I didn’t say divide $700 billion by every American. I said divide $700 billion by the number of Americans who have mortgages, and it’s nowhere near $700 billion. So let me give you the details. I want to go back to Jeffrey Miron’s column at CNN in just a second. I got this from Wizbang blog, and it’s about understanding $700 billion — and in fact there’s another way of looking about how to understand $700, and I’ll get to that right after this.
This $700 billion ‘is amazing,’ but, ‘they need every penny to prop up the mortgage lenders,’ they say. Okay, so you ask (again, this is Wizbang blog), ‘How many bad mortgages are there? Then after playing with that hypothetical in my head I wondered, how many mortgages are there in active in the whole country? So I looked it up. According to this 2006 pdf from the US Census, there are 33 million owner-occupied dwellings with first mortgages active.’ So, ‘$700,000,000,000 / 33,000,000 = Over $21,000 cash the government could just give to everyone with a mortgage!’ Give it to the people that make the country work. People could pay off their mortgages. ‘If we’re going to give $700 billion away, what kind of stimulus would that have on the economy to hand 33 million people $21,000?’ I’m not advocating this, I’m just saying — if we did that once, it’s over — it would be the same thing here as the government owning your mortgage in a sense because they’re going to get it back from you one way or the other.
But I’m just making a point here of how much money $700 billion is and how much of a profound impact it could have if it were injected into the market, into the private sector, into the hands of the people who make the country work rather than the lenders. But then Kevin at Wizbang blog says he ‘took it to the next level… On page 174 of the pdf [he] found an interesting table,’ and I can’t give you the numbers of the table here; I’ll just give you the results here. Numbers are hard to follow on the radio. He found an interesting table and ‘put the highlighted numbers into a spreadsheet to figure out just how many mortgages $700 Billion could retire if [the Congress] gave the money (back) to the people. I got this. The Bottom Line: If the Treasury simply took the $700 Billion and started paying off taxpayer mortgages, they could pay off every mortgage in the country worth less than $75,000…’
You could pay off every mortgage in the country worth less than seventy-five grand; ‘$700 Billion could pay off well over half of all outstanding first mortgages in the entire country. … So [some people might] say we just take the cash and pay off half the mortgages out there and see what that does to the credit market and the economy,’ and see what happens. But, again, the American people are not stupid. Why give $700 billion to one man, whoever he is? I mean the Treasury Secretary, this time it’s Paulson. Why give it to him and have as his charge, which is what the bailout legislation yesterday said was, ‘insuring the economic well-being of the American people.’ If you want to insure the economic well-being of the American people, retire their mortgage or half their mortgage or what have you. I’m not advocating this. This is just illustrative.
The Associated Press also has a story today putting $700 billion in perspective, and of course what do they start with? The Iraq war! ‘You could buy yourself a war with that kind of money — the US has spent $648 billion on Iraq war operations so far. You could match Franklin Roosevelt on his New Deal and raise him billions more.’ No, you could not! The New Deal has cost us seven or eight trillion bucks, with all the add-ons and all the other things. This is what I’m talking about: the genuine illiteracy, economic illiteracy and ignorance that exists in the Drive-By Media. ‘What else could the government do with a $700 billion blank check? … It could ensure universal health care coverage for six years … build 1,750 bridges to nowhere. Or run an entire country.
‘Seven hundred billion dollars is more than twice the size of the economy of Denmark. … According to the Wall Street Journal, half the money FDR spent on his New Deal program to lift the country out of the Depression and banking crisis was for public works projects.’ This is all BS. The New Deal did not get us out of economic crisis, and anybody worth his salt who can learn a modicum amount of economics in American history would know that it was World War II that did that. The New Deal might have made it worse, folks! Just like this raw deal would make things worse. It’s striking, the literal ignorance that’s out there — and I know what takes the place of the ignorance is partisanship, is an agenda that the Drive-Bys admit that they have. Now, back to Jeffrey Miron’s piece at CNN.com, ’cause basically what he’s saying is that bankruptcy is the right answer here, not a bailout.
He’s a Libertarian lecturer — not a professor, he’s a lecturer — at Harvard. ‘This subprime lending was more than a minor relaxation of existing credit guidelines. This lending was a wholesale abandonment of reasonable lending practices in which borrowers with poor credit characteristics got mortgages they were ill-equipped to handle. Once housing prices declined and economic conditions worsened, defaults and delinquencies soared, leaving the industry holding large amounts of severely depreciated mortgage assets. The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government,’ and that is one of the problems I have with this bailout is it gets nowhere near the root cause of this problem — and that is Chris Dodd, Barney Frank, Bill Clinton, Jimmy Carter, Harry Reid, Nancy Pelosi, Franklin Raines, Jim Johnson.
Democrats left and right. That’s another thing. I am agitated today. I am sick and tired of our conservative intelligentsia media trying to balance things out by saying ‘both sides are at fault.’ Both sides are not at fault! They may be talking about the vote yesterday on the bailout. Both sides are not at fault. Stop trying to impress people are going to hate you no matter how much you might think they like you. Stop trying to get invited to cocktail parties and dinner parties in Washington. Both sides are not to blame for this! What is the point of having a conservative media if they’re not going to stand up for conservatism? What’s the point of having a conservative media if all they’re going to do is wring their hands? ‘Well, we know that both sides are at fault, Mr. Limbaugh, and we must be assessing blame accurately and fairly on both sides.’
Both sides are not to blame. If you could find a Republican guilty here, he would be in the hoosegow. As I keep saying, they would have had congressional hearings led by, Barney Frank, Harry Reid, John Conyers, et al. Both sides are not at fault here, and until we can come to grips with that, we’re just going to be whistling Dixie (no offense to Dixie) about fixing this problem, and Lecturer Miron here sums it up in one brief sentence. ‘The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government. The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company.
‘Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of a businesses that remain profitable. In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government [again]. This ‘moral hazard’ generates enormous distortions in an economy’s allocation of its financial resources.’ I could not be happier that he put the word ‘moral’ in this, because what has happened here is immoral, and the immorality of those who created the problem survives to this day. They’re the same immoral people with the same immoral ideas, attempting to attach more immorality to the market in the hopes of ‘fixing’ it.
And when they knew they didn’t have the votes, then they circled the wagons. ‘Okay, it’s time to blame the Republicans for this.’ The Republicans had nothing to do with it, other than trying to stop it numerous times since 2000, since 1999, numerous times. The only role the Republicans had is that they failed to stand up and stop it. For example, we played audio from this YouTube video — that’s since been pulled down, by the way — the thing that we played yesterday, the congressional hearing with the regulator, the OFHEO regulator, Mr. Falcon, being attacked like Ken Starr was attacked, and he was just trying to say, ‘You guys have a big, big problem here. We can’t look the other way anymore,’ and Barney Frank (D-MA) and Maxine Waters (D-CA) and Lacy Clay (D-MO) were all just attacking him.
What needs to happen is what the oil company execs finally learned. The oil executives year after year after year go after and get lectured by these pompous windbags on these committees accused of price gouging and price fixing and so forth. The last time there were hearings, the oil execs fired back, said, ‘Screw you! You’re the guy standing in our way. You’re the guys we’re paying all these taxes to. Our profits net 8%. You’re the ones standing in the way of our exploration.’ So what needed to happen, the only fault the Republicans have here that I can find is they did all these committee hearings, they found the truth and didn’t do anything about it, when they ran the show. The Republicans were the majority in the House in 2004. They could have done something about it at the committee level, but they thought conducting the hearing was enough. So, maybe they are to blame for something, but they have no structural, institutional role in this crisis in the sense of designing it, in the sense of perpetuating it, in the sense of knowing it was going wrong and looking the other way and lying to the American people about it.
So both sides are not responsible, and in the sense that this vote in the House yesterday was a sensible one, why rush into this? Why hurry? Get this done right. We’ve now got the time to do it right. Even people on our side do not even understand what Pelosi pulled off here. She pulled off an election-year trick, designed to get the Republicans blame for this, and what’s happening is too many in the conservative media are like right along: ‘Both sides are to blame.’ This is every bit as winning an issue as gas prices, oil drilling, and everything else, and then McCain. McCain did a statement today and said, ‘Bipartisanship is tough. I want to work together with everybody, try…’ Bipartisanship is tough? Bipartisanship is the easiest damn thing in the world, Senator! Bipartisanship is easy. Compromise what you believe, agree with the other side, and you got bipartisanship. Partisanship, standing up for your principles, that’s what’s tough because everybody comes after you! Everybody tries to destroy you. Talk to the House Republicans about that today. Bipartisanship is tough? Bipartisanship is just like liberalism. It’s gutless.
RUSH: Let me wrap up this piece here from Mr. Miron, who is a lecturer at Harvard. ‘Thoughtful advocates of the bailout might concede,’ this perspective, that there’s moral hazard generating enormous distortions in an economy’s allocation of its financial resources, ‘but they argue that a bailout is necessary to prevent economic collapse. According to this view, lenders are not making loans, even for worthy projects, because they cannot get capital. This view has a grain of truth; if the bailout does not occur, more bankruptcies are possible and credit conditions may worsen for a time. Talk of Armageddon, however, is ridiculous scare-mongering,’ and he is right. All of this crisis-mongering is political, it is strategic. The Democrats are using it to win a presidential election. It is not realistic. ‘If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen.’
J.G. Wentworth come along, have you seen his latest commercial, 1-877-NEEDCASHNOW. Somebody’s out there willing to loan money. ‘Talk of Armageddon, however, is ridiculous scare-mongering. Further, the current credit freeze–‘ and this is crucial, folks ‘–is likely due to Wall Street’s hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents.’ So his point is, they could be making loans; they’re just not going to do it yet, to wait and see what happens with the bailout to find out how much. So even the credit market drying up is a bit of a scam being perpetrated here because once the biggest pile of money in the world says it’s going to get in the game, the people who stand to benefit from that big pile of money are going to wait around and see how much of it they’re going to get. Why use your own money when you can use other people’s money, in this case ours?
‘The costs of the bailout, moreover, are almost certainly being understated. The administration’s claim is that many mortgage assets are merely illiquid, not truly worthless, implying taxpayers will recoup much of their $700 billion. If these assets are worth something, however, private parties should want to buy them, and they would do so if the owners would accept fair market value. Far more likely is that current owners have brushed under the rug how little their assets are worth. The bailout has more problems. The final legislation will probably include numerous side conditions and special dealings that reward Washington lobbyists and their clients. Anticipation of the bailout will engender strategic behavior by Wall Street institutions as they shuffle their assets and position their balance sheets to maximize their take. The bailout will open the door to further federal meddling in financial markets.’
Let me translate that for you. It means that nothing is happening on Wall Street because everybody’s waiting to see what the government does, which means the market has been brought to a screeching halt because of the government, under the guise of fixing it and staving off collapse, Armageddon, Great Depression 2. The lending markets, the credit markets, are theoretically stalled. Government is preventing market activity. However, consumer confidence is up, unexpectedly. The Dow Jones Industrial Average is up 270. How does this happen? How can this possibly be after yesterday’s near crash? Would it be, ladies and gentlemen, that people actually do believe in the fundamentals of the United States economy, hmm?