RUSH: Gloria Borger today on CNN’s website, ‘Obama Takes Ownership of the Economy,’ is the headline, which is fascinating ’cause he hasn’t said anything yet. He hasn’t offered anything specific. Some of the Drive-Bys are worried about this. We’ll get to that later. Here’s how Gloria Borger begins her piece: ‘At long last, a team. And it’s formidable. With Tim Geithner eyed for the head of the Treasury…’ By the way, the New York Times kind of dumps on this guy, too. They said he was everywhere to be found in the Citibank collapse. He was everywhere in a lot of these bailouts. Some people are not happy with Geithner, although he’s been portrayed as a wonder boy savior like Obama, but Gloria Borger here still smelling the coffee or whatever.
‘With Tim Geithner eyed for the head of the Treasury Department, President-elect Barack Obama has chosen a fellow already knee-deep in the bailout, someone who gets what has gone right and is smart enough to understand what could go very wrong.’ Somebody who gets what has gone right? I don’t know that anybody has yet. Because remember the brilliant monologue from yesterday: every time they do a bailout, ‘Yaaaaay! (clapping) Then there’s the next day where it just doesn’t seem to have mattered. She goes on to praise Larry Summers and all the other people that Obama named ’cause it’s the inside-the-Beltway crowd. They’re back. We’re going to have parties! The White House is going to be festive again. It’s going to be cool and all my friends are back in power now, which means I have access.
And then there’s this paragraph: ‘Some Republicans have predictably begun to grumble about the size of the stimulus package, but here’s a question: What would you in the GOP do differently? Would you continue the deregulation that got us into this mess? And didn’t you folks break the bank over the last couple of years? Aren’t even some of the most conservative economists now advising spending as a way to get ourselves out of this hole?’ Now, my natural knee-jerk reaction to anything on CNN or Gloria Borger is to reject it. These are actually pretty good questions that Ms. Borger raises: What would you in the Republican Party do differently? Well, I can’t speak for the Republican Party — proudly, I say. Proudly and thankfully, I can’t speak for the Republican Party. But I can speak for conservatism. What would we do differently? Let ’em fail. We would follow the Ronaldus Magnus model. He was asked to bail out the Big Three back in 1982. He said, ‘Nope. They’re going to have to become more competitive.’ They were worried then about Japanese and Korean imports.
Would you continue the deregulation that got us into this mess? This is the one question that Ms. Borger asks that has a flawed premise. I don’t know what deregulation she’s talking about. There was plenty of regulation at Fannie Mae and Freddie Mac. It was just ignored, Gloria. If I’m not mistaken, it was the Bush administration that numerous times attempted to get new regulators in there and new forms of regulation, the exact opposite of deregulation — and I think, Gloria, if you’ll go look this up, you will find that it was people like Barney Frank and Chris Dodd that rejected new oversight on Fannie Mae and Freddie Mac. I think if you look, Gloria, you might also find that this whole subprime mortgage thing is one of the primary problems that has caused the collapse of a lot of other things that were associated with it. The whole subprime thing was a flawed, unworkable premise in the first place: loaning money to people that never had a chance to pay it back, and letting them stay in their homes, and then trying to secure the value of that worthless paper with the creation of new forms of securities like derivatives and credit default swaps. These things piled on top of each other in an effort to make this paper have some value, and it didn’t — and still doesn’t. There are still toxic assets out there that the secretary of the Treasury says, ‘We’re not going to buy ’em now. We’ll just leave ’em out there as toxic assets.’
I don’t think that deregulation is the problem here. I think lack of regulation is the problem and it was the Democrats who did not want any regulations whatsoever. See, this is somewhat offensive because anybody worth their salt could look at what happened in the Fannie Mae, Freddie Mac thing, and see for certitude where the fault lies. But this is Dump on President Bush Time. This is Dump on the Republican Party Time, and for the life of me, I don’t know why people in the Republican Party wouldn’t stand up and say, ‘Look, here’s the truth about this.’ I mean, Chris Shays might have been able to save his seat in Congress, but he didn’t want to be partisan. Republicans are Republicans. The next question: Didn’t you folks break the bank over the last couple years? Yeah. Unfortunately, there was too much federal spending over the last couple of years and we see where it got us. So if you ask conservatives what we would have done about this, Gloria, we would have stood up and tried to stop it, but there weren’t enough conservatives in the House and the Senate to make a case of it. Plus, when the president of your party is behind all the spending, it’s very difficult for members of the party in the House and Senate to stand up and oppose him. That just doesn’t happen much.
‘Aren’t even some of the most conservative economists now advising spending as a way to get ourselves out of this hole?’ It depends on what kind of spending, Gloria. Consumer spending is the fastest way to get us out of this. Therefore, what we conservatives would do would be to cut taxes. If we had our way, we’d wave a magic wand in front of the President-Select and we’d have him cut the corporate income tax rate. We would have him cut the capital gains rate. At the very least, we would have him say definitively, Gloria, that there would be no tax increases for the next two years. Give some stability, and cut the capital gains rate and maybe cut the top personal rate just a point-and-a-half. You want to generate an economic rebound, Gloria, it has to be done from flyover country, not from inside the Beltway; and the only way we’re going to generate more spending is if more people get hired and if more people have more disposable income, not because the government sent them a check (they’re just going to save it) but because they’re earning it. They’re keeping more of it because their taxes go down. So she has great questions, and answering as a conservative, not as a Republican, is quite easy.
RUSH: By the way, one more thing about Gloria Borger and her great questions in the CNN piece. The Republicans did break the bank in federal spending. There’s no question about it. But isn’t it interesting to note, though, that at the time the Republicans were breaking the bank, the Democrats were out there complaining they weren’t spending enough on whatever it was. They still said ‘Republicans are making draconian cuts,’ and, ‘The Republicans are hurting the little guy,’ and so forth. Gloria, look, you talk about deregulation. The banks were allowed to diversify in the nineties in a bill sponsored by Democrats, voted into law by Clinton. That was okay, right? Diversification is saving a lot of banks right now. But what Republican deregulation is she talking about? Government policies led to this disaster. Everybody that’s paying attention knows it. Except the Drive-Bys and the Democrats aren’t going to admit it because that would be to harm themselves, and more government policy is making this worse.