RUSH: I want to expand my thought process on this whole Madoff thing and take it into the realm of the current economic crisis, because, quite naturally, all this fascinates me. It’s about money. Well, it’s all of our money here, folks, that’s literally being tinkled away, and I’ve been asking myself, ‘How in the world did we get to this point when it all seemed to happen so overnight?’ Now, I understand that there were foundational problems that we were being told of as far back as last summer and in spring, but if you search your memory bank you will conclude that a lot of this appeared to happen within a month, starting in October. Now, the Madoff thing is larger and more vast than anybody realizes. The New York Times on Saturday had a front-page story. I printed it out, and it was 11 pages, had 11 contributors. It was written by one person, had 11 different reporters around the world digging up data. Money from Abu Dhabi was put into Madoff’s fund, from China, from Indonesia, from Singapore. He was in the process of shaking down the Chinese when the thing blew up, Chinese businessmen. It was huge. It was so huge no one person could possibly have done this for all these years. This required a whole team of people, even with false and phony monthly statements to the so-called investors.
But the group of people that were most — at least in America and in Europe — the group of people that were most affected by this were these people, sad to say, who structure their lives on a public relations basis. ‘Look at me. Notice how wonderful I am. Look how charitable I am. Look at the boards I am on, look at how I dress, look at me sitting in my antique car in a picture taken by a newspaper photographer. Look how cool I am. Look how they describe the way I live. I have elegant suits. I have an aristocratic aura about myself, and my wife is just as equally aristocratic, and our children.’ I’ve never thought any of it was real. I thought it was all contrived. Some of the money does go to charity and the charities do exist, and some of these charities do good works. But did the people involved really care about the charities? Or was it all about them? I think it’s all about them. And when you make it all about you, you are ripe to be ripped off; you are ripe to be swindled.
When somebody comes along that’s got this super exclusive club that’s closed and you can’t get into it but you think you’re something special, and the big allure is being in something so exclusive that nobody else can get in it yet you can brag about being in it. All these phony baloney, plastic banana, good-time rock ‘n’ roller reasons for doing things. And the first people that go belly up, unfortunately, are these people that live not on substance but on symbolism and image. We just, by the way, elected a guy who does this. But that’s for another day. Madoff is what it is. When I got old enough to start reading all of the newspaper besides the sports section, when I started reading society pages, none of it made any sense to me. I said, ‘Who are these people?’ The stories about them made them sound like from the moment they got up ’til the moment they went to bed, everything they did was charitable. It didn’t seem real, but I couldn’t put my finger on why ’cause I didn’t know anybody like this where I grew up.
When I started this program in 1988, up ’til that time nobody who knew me personally hated me. But a month after I started this program I was hated by half the country. I was totally taken aback. What is this? Nobody thinks I’m what the press says I am. I started noticing the people who got universal love and appreciation and respect. I noticed that they were all involved in charity, they were all very wealthy, or thought to be, they all had structured lives where their lives were really not about them, but their devotion to others. Even their lines of work were oriented to help others. It took me awhile to become educated and informed enough ’cause I was so naive about all this, to understand the game, and now I live amongst whole bunch of people who play the game. I don’t know them, but I read about them every damn day and I see all their pictures at all these stupid events that are organized just for pictures in the paper. The secondary purpose is to generate some money for the charity. Now a lot of them have been wiped out and I feel horrible for them. I don’t have any schadenfreude about this. There are a lot of people, you go to websites that run Bernie Madoff details, and you’ll find some of the meanest — I mean some people are happy these people are wiped out, just ecstatic. ‘Good, let ’em find out what it’s like to live like the rest of us.’ A lot of these people did earn their money legitimately. They just threw it away with this scam artist.
Now, remember, the root of this is this Nicholas Kristof column that got all this started today, Saturday in the New York Times. Arthur Brooks and a book that he wrote about how stunned he was to learn that the most personally charitable people in America are conservatives. Who don’t do it for show. It’s a stunning bit of news because they wouldn’t get credit for it anyway if they tried to, credit being accolades in the Drive-By Media. So it expanded on that to a discussion of what’s real? Look at all of these empty suits, all these institutions and traditions that we have all this faith in, now we all have nothing but doubts about them. And we’re wondering, no matter where we put our money, however small or large our nest egg is, is it going to be safe? Is it safe in the bank? Is it safe with a hedge fund? Is it safe with a money manager? All these questions arise. That got me to thinking about the overall financial collapse. You know, I’ve said on this program — you might have thought I was joking, and I wasn’t — that this financial collapse, the stock market plunge, the housing crisis, this may be the best October Surprise that has ever come down the pike.
I don’t know that there can ever be a better one. Yeah, the stock market started precipitously falling, and it went wacko real soon. Then the bottom seemed to fall out of the housing market, and then the banks had nothing, and there were runs on banks, and then there were people that were getting worried about — we had a couple, like Lehman Brothers was not bailed out, AIG was. And then the first $700 billion bailout, the TARP money, the build up to that was ‘it’s a crisis.’ I mean even educated, informed media people, not on the left, were going on television imploring people to support this. ‘Do what you can. We don’t have a moment to waste to save America.’ And I remembered back to something that a lot of people have forgotten. I’m operating under the premise here that a lot of this is an October Surprise.
By the way, I have a little story here. Do you know that the Treasury secretary, Hank Paulson, was giving Bernie Madoff and his associates personal briefings on the market as it was plunging through a political action committee? So the regulators were telling Madoff in advance where we’re heading, what’s happening. I’ll give you details on it in just a second. And then Mr. Snerdley reminded me, it was Chuck Schumer — when was this, in September? Early October? It was sometime in the fall. We’ll double-check it. Chuck Schumer started a run on a California bank. Schumer said, (paraphrasing) ‘It’s my responsibility, people have to know the health of our financial institutions.’ And so whatever this bank was in California, people started a run on it because a United States Senator on high-ranking committees had told ’em their bank was worthless. And I’m just wondering — of course, this cannot be proven. It was IndyMac in late June. All right, so it was preconvention, and that’s when all of this started, when people started losing faith in their own bank, ‘Oh, my God, Indy bank in California, Indy bank?’ And there was a run with people standing in line, started by Chuck Schumer, and he was asked about it, and he denied it, ‘No, we’re just trying to protect the solvency and the safety of Americans’ assets out there.’
Within days of Chuck Schumer starting this run on IndyMac, $1.3 billion had been taken from the bank, people had taken that much out, the Feds, the FDIC had to step in there and stop it to save the bank, because there was such a run. It was started by Chuck Schumer. Now, just cut to the chase here. Back to this October Surprise. I am just wondering — as I say, it can’t be proven — I’m just wondering if a lot of this was by design, to create economic panic, remember now, the Iraq war had dominated everything, and the economy was said to no longer be an issue in the campaign, for the first time. Corruption, other things were, ethics, when the Republicans had those problems, but the economy wasn’t. They wanted to create economic crisis, a mind-set of this. So Chuck Schumer goes out, starts a run, a $1.3 billion run on IndyMac, and then all of us, look what we learned, all these mortgages are worthless, all the mortgage derivatives and the mortgage backed assets, they are worthless, everything was worthless, there was no ‘there’ there. Every institution, every guy in the institution was an empty suit, and we had to bail out this and bail out that and it didn’t help.
I just wonder if what was a planned attempt to scare people economically, start a little run on a bank and do this, that, and the other thing, has now spun so far out of control, it’s gone so far beyond what the intention was, just to win an election, that nobody knows what to do about it now. The only mitigating argument against that is that the number one, the primary beneficiary of this — and you have to look, even in an economic collapse like ours, there are beneficiaries. Who’s benefiting? Who is benefiting? Aside from the people being bailed out, the Democrat Party and Barack Obama are benefiting. They got elected, they increased their numbers in the House, they increased their numbers in the Senate, they got the White House now, and they’ve got a crisis that people think can only be fixed with the almighty and powerful government interceding to save this or to save that or to do whatever when in fact the government is going to nationalize the automobile industry, gonna nationalize some banks, is gonna nationalize the mortgage industry, and may end up nationalizing the automobile industry. And everybody is sitting around arguing on the merits, ‘Oh, God, glad they did it, oh, I’m glad they did it, oh, thank goodness, they saved the UAW, they saved the auto companies.’
Everything has been presented to us, ‘We can’t let this fail; it’s the end of America.’ We recently learned also that the Treasury secretary, Hank Paulson was cited talking about how bad the economic conditions were, was wrong. The numbers that he was given to cite how rotten the economy, they were wrong just before we did the $700 billion TARP bailout. But doesn’t matter, we’ve done it, and now TARP has become United Auto Workers bailout. People are sitting by letting this happen with great hope, by the way, that it will fix what’s wrong. Miraculously the stock market will rebound. So the Obama team and the Democrat Party are benefiting tremendously from this, even if it has spun outta control. If it’s spun outta control they’ll make due with the new crisis they’ve created a la Rahm Emanuel. But the reason I think it has spun a little bit out of control and gone a little further than they intended is that even the Obama people are saying, ‘Hey, it’s going to be really bad for a really long time.’
RUSH: Here are the details: ‘Pasadena-based IndyMac, with $32 billion in assets, was seized by the government Friday.’ This is an LA Times story, July 13th. ‘The loss-ridden mortgage lender had faced an outflow of deposits since Schumer on June 26 made public a letter he sent to the Office of Thrift Supervision and the Federal Deposit Insurance Corp., saying he was ‘concerned that IndyMac’s financial deterioration poses significant risks to both taxpayers and borrowers.” Now, here’s Chuck Schumer, Senator from New York, who sends this letter and then makes the letter public, and this causes a run on IndyMac.
‘Schumer’s decision to go public with those comments,’ I’m reading from the LA Times, ‘triggered a firestorm in Washington. Regulators on July 2 said he was contributing to ‘rumors and innuendo’ about the bank that could hasten its demise. On Friday, regulators specifically fingered Schumer for IndyMac’s failure.’ So regulators say that a Democrat Senator caused a bank failure in late June that transpired into July, into the conventions and into the campaign. So I’m thinking October Surprise, and I’m thinking it has spun outta control. It’s gotten worse than any of these people thought it was going to get and they don’t know what to do now. Well, they do know what to do. Spend, spend, spend, spend! ‘Heeeey, look what we’ve got here. Crisis! We can maximize it.’