RUSH: Let’s go to the audio sound bites. This is, let’s see, Brad Sherman (Democrat-California) interviewing — or interrogating — the bank CEOs yesterday as part of the House Financial Services Committee hearing.
SHERMAN: I’d like you to raise your hand if your company currently owns or leases a private plane. Let the record show all the hands, uh, went up except, uh, for the, uh, gentleman from, uh, Goldman Sachs. Gentlemen, we know that it is extremely expensive to operate these planes, that you could sell them and generate capital for your company and that capital could be used to repay taxpayers malady. The big show of not buying one particular new plane flies in the face of how you’re really flying.
RUSH: Folks, I cannot tell you how this infuriates me. This Sherman guy obviously is a dunce. For a member of Congress to be telling CEOs of anything, they have to sell their jets? Does this guy not understand, for crying out loud, this Congress is supposed to be about creating jobs, we’re told. They’re out there trying to destroy the automobile business. Now they’re trying to destroy private aviation. Do they have no idea who it is that flies these airplanes and why? Do they have no idea who it takes to build these airplanes? The company that owns Cessna is based in Providence, Rhode Island. They just laid off 4,600 people! They just laid off 4,600 workers at the company that makes Cessna jets. Now, Cessna has one of their assembly plants is in Wichita, Kansas, of course. But the outfit that owns them is a company called Textron. Let’s see, Textron…
I think their headquarters is in Rhode Island or New Jersey somewhere, but they announced layoffs of 4,600 people simply on the basis of what is being said by members of Congress about private aviation. They are stigmatizing the purchase of a business tool! They have stigmatized these jets to the point that they’re nothing but toys for people, and that’s not the case. Now, I went through yesterday what all is involved with a private jet. It’s like anything else in business. It’s like any other product. Businesses use these things as tools to maximize the efficiency of executives’ time. They have business interests all over the world, and you say, ‘Well, they could fly commercial! I have to fly commercial.’ If they can afford a private jet, and if it makes business sense, what business is it of anybody else’s that they make the decision to do that?
And it’s certainly not those clowns in Congress. Now, you might say, ‘Well, it is now, Rush, because these guys are taking federal bailout money.’ I know. I know. I know. That infuriates me even more. But even as such, for a dolt like this guy Sherman to be standing up and demanding these guys sell their private jets? Cessna aircraft has run a full-page ad. Cessna says it’s okay to have a private jet. Their ad in big block letters says: ‘Timidity didn’t get you this far. Why put it in your business plan now?’ and it’s directed at business owners, CEOs, boards of directors. Did you get where you are by being afraid? Did you get where you are by being timid? Why be timid now? ‘A few months after lawmakers bashed hat-in-hand Detroit automakers for traveling to Washington via private plane, Cessna is making a bold case for corporate America to get back onboard.’ Cessna makes sense.
Hawker is a great airplane, too. They make Beechcraft. They ‘are launching marketing campaigns to convince executives not to let their wings be clipped,’ so to speak. ‘Timidity didn’t get you this far. True visionaries will continue to fly.’ In other words: Don’t let these little imbeciles in Washington guilt you out of a time-saving decision. ‘Support needs to be given to businesses that have the ‘good judgment and courage’ to use corporate jets not only to survive the current economic downturn but to find ways to turn the economy around, Cessna Chief Executive Jack J. Pelton said.’ This guy gets every gold star I have to offer. Jack Pelton is putting his career on the line, standing up to these people in Congress. He said, ‘The reality of business aviation is a far cry from the misconception of CEOs flying in large luxurious airplanes. Most of these aircraft are fairly Spartan, designed for business, with a cabin about the size of a minivan or SUV interior.’
He’s talking about his Cessnas. Now, the biggest Cessna private jet is the Citation X. [Ten] It is the fastest jet in the sky. I happen to think it looks like a pregnant cat. But it is the fastest jet in the sky. Arnold Palmer flies one, and I don’t hear anybody telling Arnold Palmer to get outta his. Now, I’ve been in one, and they’re fine airplanes. One seat on each side of the aisle. The center aisle is lowered from the floor so that you can stand up in there, and even at that you barely can. But when he says ‘Spartan,’ I know what he means. They are not gadzooks full of all this state-of-the-art electronics and so forth. If there is, you have to pay for it. Let me give you an example. DirecTV. You can have DirecTV in a jet if you want to. Do you know what it costs?
Would you like to know what it costs? Would you really want to know what it costs? It costs $600,000, just to have it installed. That’s for four receivers. The antenna — I’ll tell you why it costs this much and why it doesn’t cost you $600,000 at home. The antenna for DirecTV in an airplane has to be tiny enough to fit in the tail, at the top of the tail. Do you realize when you’re flying an airplane at 500 miles an hour, the challenge of keeping that antenna locked onto that satellite when you’re banking, when you’re turning, when you’re taxiing on the ground? This was a tremendous technological feat to get this done. You can now get wireless Internet in jets — and, by the way, it’s not just corporate jets that have DirecTV. JetBlue has it and a number of other airlines are now starting to put wireless Internet up there.
That costs another $500,000, and that’s tricky ’cause that’s satellite. That’s in-orbit satellite. It’s amazing the feat. Look at the people that invented it. Look at the people that designed it. Look at the people that market it and sell it. All of this is private sector stimulus. All the people that work at the plants that manufacture all of this are probably largely Democrat voters. They are the, quote, unquote, ‘little guy.’ Now, a jet just doesn’t get built. It’s got people that have to make it, design it, build it, complete it, do the interior. Do you realize the hassle that you have to go through to get one of these things certified to fly after it’s manufactured? It can take an additional six weeks just going through the FAA to get the damn thing certified. Do you know what that costs? Then after you take delivery, you have to put fuel in it, whatever that costs. Somebody benefits. There are things called fixed-base operators on airports. They are just jet gas stations.
That’s what they do, and they provide facilities for pilots to do flight plans, plan the next leg of their trip or whatever. It’s a little step up from a gas station but it’s essentially what it is. They all have employees. They all have employees, and then what do you think services this plane? When the plane comes, it’s gotta be cleaned up, and the lavatory has to be cleaned and sterilized, and then the line crew has to come out if you’re standing overnight and tow it someplace. I mean the support staff for an airplane is made up of, quote, unquote, ‘little guys,’ quote, unquote, ‘little people.’ So as a member of Congress, you start threatening these guys, ‘Sell your plane!’ you’re stigmatizing the whole corporate jet industry, and you’re going to make it tough for other people because they’re going to be guilt-laden and they’re not going to want to be conspicuous.
So park their jets or they’ll not buy new ones, and so the very people that exist to support them and keep them in the sky probably going to be laid off, too, from manufacturing on down to completion, all the way down to the FBO level. All the way down. A lot of airports, their number one service, number one traffic generator is private airports. Here in Palm Beach, in West Palm Beach, over half of the flights every year are private. The airport survives on it. It’s just now been stigmatized. There are five or six FBOs at this airport alone. They’re all over the place. This is no different than these people targeting the SUV. This is no different than the way they’re playing the global warming scam. Meanwhile, it’s okay for Nancy Pelosi to fly her 757 or whatever it is for her whole family to get from Washington to California.
It’s okay for these guys to take junkets on these very planes, by the way. It’s okay for them to take junkets or campaign trips as long as they only pay first class fare. Let’s say you get on… I don’t know what the direct operating costs of a Citation X are, but let me take a stab at it and if I’m wrong I’ll apologize later. But let’s say the DOCs per hour of a Citation X are let’s say $2,500. It may even be higher. A Gulfstream IV, Gulfstream 550, the direct operating costs back when the gas was four bucks a gallon for cars, got up to $3,500, in some cases $4,000. If you go charter one, you’re going to pay $5,000 an hour. Members of Congress can fly on these things. So let’s say you go at $5,000 an hour. If you charter you get a four-hour minimum, so it’s 20 grand minimum. Go to New York, come back five hours, something like that. Plus whatever time it’s parked on the ground out of use. Reduced rate for that.
Let’s say the whole trip can cost you 40 grand, member of Congress pays first class equivalent to fly on the airplane he’s now trying to get the corporate CEOs to sell. It’s the law. It’s the law. They can’t take gratis trips but they do have to reimburse at first class commercial rates for the same leg. The Citation X is the fastest airplane in the sky, if they want to really throttle it to the wall. It will outrun anything out there. Not by much. Maybe 25, 30 miles an hour, but to some people that matters who want to get where they want to go quick because they gotta get things done when they get there. The airplane has to be serviced. Every year it is federal law that you have to park the airplane for at least a week for an inspection.
Federal law, you gotta take it back to manufacturer, it gets inspected. Manufacturers have entire departments and divisions that just inspect aircraft. Once your airplane gets to 1,200 hours they have to tear it apart. They x-ray the wings. They do all kinds of inspections. These are safety regulations. Then they have to put it back together. This costs the owner. The owner pays the manufacturer, and whatever repairs have to be made, and engine. Depending on the airplane, depending on the engine, after you get to certain number of hours, the engine has to be overhauled down to zero hours, meaning rebuilt to brand-new. It can cost a million dollars an engine to do this.
Well, now, you may think, ‘Well, we don’t have a million dollars to overhaul…’ Well, somebody does and the people doing the overhaul are the little guys who are getting paid to do it. Now, all of this support system is now being threatened by the very people who claim to be for the ‘little guy.’ This Brad Sherman guy is a dolt! Who do these people think they are? If I would have been one of those CEOs yesterday, I woulda stood up and I woulda said, ‘Who do you think you are, telling me how to run my business?’ Of course the answer would be, ‘Well, you took my money. You took taxpayer money,’ and I would have had to sit down. But then I would have popped right up and said, ‘It’s the worst decision I ever made to take your money because you clowns don’t know…’ In the first place, I’d stand up and say, ‘You people put me in this position. You people forced me to make loans to people who couldn’t even repay ’em.’
You know, like I said yesterday, these guys and the CEOs yesterday, they are not the target. They are the symbols. What is on tap for everybody here is the full assault on capitalism. That’s what’s happening in Washington, DC, today. That’s what’s happening with these CEOs up there. Now, these costs that I mentioned about private aircraft? You think that’s something? Try owning an airline and having to buy airplanes that cost 70 and 80 and a hundred million each and having to maintain those according to federal regulations, then sell tickets with competitors and you’ve got your own support staff. Aviation is not cheap. Do you understand what aviation requires? Do you understand gravity? Do you know what it takes to get something that weighs thousands of tons in the air, flying 600 miles an hour?
‘Well, Rush, how come it can’t fly at 300?’ Well, it could, but you’d burn up far more fuel. You would waste fuel at 300 miles an hour ’cause you’d be much lower. You’d have much more air to fly through. Besides all of that… (sigh) Besides all that, in order to create the air pressure deferential that people call ‘lift,’ you have to have enough speed. A 747 fully loaded needs 10,000 feet of runway and it takes that much to get up to 120 miles an hour, ground speed. I think that’s their rotate speed. That’s when it will lift off but you’ve got to add speed to it to keep it there. That takes power. That takes amazing thrust. That takes all kinds of fuel. It’s amazing that it’s been invented, created, and that it works. But it isn’t cheap. I don’t care what kind of aviation you’re talking about, even if they go to little Cessna 150, that’s still…
That’s quite costly, compared to driving in a car. It’s not nearly as expensive as a jet or anything else, but the idea that things that cost a lot, that only people with a lot of money can afford to buy or use should be eliminated from our existence because not everybody can? When everybody benefits from it! You may not know a single person that flies a corporate jet, but if they are operating in a business environment, and it’s a business that you happen to patronize… The Walmart people flying around in corporate jets. They have one of the most smoothly run business models in the country. I guarantee you benefit from their employees flying around, their management flying around. You just don’t stop to think of it. But all of this is interconnected. None of it’s a zero-sum game.
RUSH: By the way, folks, one more thing on these private jets, two things. One group I keep leaving out are the pilots. You need pilots to fly these things and they’re not raking in huge bucks. I mean, they make more than national average by a lot, but you still need people to fly these. They have to go to school to stay upgraded and updated on the latest navigation systems or what have you. They have to constantly get recertified. There are people that run those schools. They get paid for pilot recertification. This is like this yacht business. You know, they raised taxes on the yachts and people went out and bought yachts outside the country, and the people that make the yachts lost their jobs. The yachts were sold elsewhere than here in America.
They repealed that tax, the luxury tax on the yachts. In addition, some of these corporate jet owners charter their jets when they’re not using them. A lot of jet owners figure out, ‘I got nothing gained by this airplane sitting on the ground.’ So they will charter it when they know they’re not going to use it and they’ll try to defray. You don’t make a whole lot of money chartering. You can if that’s all you do, but at least you defray your own operating expenses. The people in businesses, it’s like anything else. These people are not… It’s not, ‘Hey, let’s go by a big corporate jet! I’m a big CEO. I’m going to fly around.’ There are business reasons why this is done, in most cases. Look, they’re bad actors throughout business and I’m not trying to make a brief here for every corporate exec as being clean and pure as the wind-driven snow, but I’ll tell you something.
I know for a fact, folks, that I would trust and I would work for and I would promote and I would sponsor your average small businessman far more than I would want to go work for somebody in Congress running a business. You know, we Americans used to be proud that we built things. We used to be proud that we generated a national wealth and a gross domestic product that created opportunities for prosperity for anybody who wanted to access our great capitalist system. Anybody could take their shot at it. And we’re stigmatizing that whole thing. We are being told that the achievers — the builders of great things, the achievers — they are somehow now to be suspected. They’re suspects. We’re to be ashamed of them. They are giving the world the wrong impression of America and so forth. I tell you, it frosts me. Just this whole business yesterday frosted me.
RUSH: One more thing about the private jet business from the standpoint of employees. In the case of a Gulfstream, it can take about 100 to 115 days to make an airplane, to build it. It’s called a green airplane, before any interior is in it and before it’s painted. It comes out of there in a hundred days, it’s ‘green.’ It can take another 150 to complete it; meaning complete the interior, paint it, put all of the electronics in, everything that’s going to go in this thing. It’s able to fly, but when it comes out of the manufacturing plant but it’s not able to carry passengers. It’s not certified for anything other than test pilot activity. Now, the people who complete these airplanes and the people who make them — they’re two different plants at most manufacturers, Gulfstream example manufactures in Savannah, Georgia; and I think someplace else in Georgia, but they have completion centers in Appleton, Wisconsin; also in Savannah; and in Long Beach, California.
So when the thing’s done they fly it because it takes longer to complete, they need more completion centers than they do assembly lines. To the people that do all this work, to them it’s a work of art. They take their job as seriously as anybody else, and it’s crucial. They’re dealing with something that people are putting their lives on the line with. They’re trusting their lives to these people that manufacture these airplanes. These people that work on these airplanes, inside and out, know that firsthand. They consider what they do to build these aircraft, works of art. They are not rich people. They are manufacturing types. They’re assembly-line people. They’re highly talented and gifted. They’re woodworking specialists. They are electrical specialists, avionics specialists, but at the same time… They’re in the process now that everything they do is being stigmatized by a bunch of dolt members of Congress who are trying to destroy them.
Well, they are in the process of damaging, whether they’re trying to or not, all of these industries that all these ‘little people’ who are supposed to benefit from all of this stimulus are working at. I just find it so strange that these people in Congress have no more respect for the people who do the real work that makes this country work, and yet they say they stand for ’em and they represent ’em when they are in the process here of targeting them. Maybe indirectly, but if you fix it so that nobody’s got the guts to buy a jet, well, then nobody’s going to have to build one and nobody’s going to have to complete one and nobody’s going to have to service one, and then the layoffs start — and that’s called ‘compassion.’ I want you to listen to this. After this dolt Sherman from California told these execs, ‘Well, you can sell all your jets, and you could put that capital to work for…’
By the way, this notion that they have to sell the jets ’cause they might have bought ’em with TARP money — and they didn’t. Nobody. Bank of America, Citibank did not buy their jet with TARP money. They ordered it four years ago. It probably cost them more money to not take it than to take it. The penalties for refusing delivery (snorts). I could go on and on and on about this. But they didn’t use taxpayer dollars, but even if they did, what the hell’s Barney Frank living on? What the hell’s Nancy Pelosi living on? Obama? Every damn one of them’s salary is taxpayer money, and they have all these perks and junkets and benefits. They dare sit there and tell private sector people what they can and can’t do with private sector money? I tell you what. I damn well would love to be able to convene my own hearings and find out what all these people in Congress are doing with our taxpayer money and pass judgment on their use of it, just as they’re passing judgment on everybody else’s use of their own private money! All of their money that they live on and pay themselves is ours that is taken from us in taxes. Somehow ‘taxpayer funds’ become holier than thou, except when they’re in the government, why, there should be no questions asked! There shall be no doubt whatever. They are the modern-day royalty. Listen to the CEO of Citibank [Vikram Pandit], this is his opening statement yesterday.
PANDIT: I would also like to say something about the airplane that was in the news. We did not adjust quickly enough to this new world and I take personal responsibility for that mistake. In the end, I canceled delivery. We need do a better job of acknowledging and embracing the new realities.
RUSH: This is… He doesn’t mean a word of that! He is just saying this to satisfy these nabobs up there. ‘We need to understand the new reality,’ and the new reality is that you’re not going to let us buy these jets. The new reality is the government is going to tell us what we can and cannot do — and that plane was purchased with money that that company earned or had or whatever long before TARP came long. Here is a Republican, Walter Jones of North Carolina, warning the bankers to show compassion.
JONES: At this time, to help the image of the banking industry, show compassion. Show compassion for that American citizen that’s out there losing their jobs, having a cut in pay. You need to nationally speak to some of these things, all of you, if you issue charge cards, and say that, ‘Yes, we’re going to suck it up, too, by the way, Mr. Taxpayer; and we’re going to take less in interest so you can have a better quality of life and maybe meet some of your bills.’
RUSH: ‘Have compassion.’ That’s a Republican lecturing these guys. Now, I want you to listen to this next bite. This is… I know it’s torture. This is Ruben Hinojosa (Democrat-Texas). He had this exchange with the bank of New York Mellon’s Robert Kelly, State Street Corporation’s Ronald Logue, Morgan Stanley’s John Mack, Ken Lewis of Bank of America, and John Stumpf from Wells Fargo.
HINOJOSA: What type of outreach have all of you and your companies made to help home owners on the verge of losing their homes?
KELLY: Congressman, we’re not in the mortgage business.
LOGUE: Congressman, we also are not in the mortgage business.
MACK: Congressman, we’re very small in the mortgage business.
LEWIS: Congressman, we do have an outreach program, had it so some time.
STUMPF: Congressman, we service one-in-seven mortgages in America, and we have doubled our staff to 6,000 people who spend — make thousands and thousands of calls a day contacting people who are either past due or potentially would become past due.
RUSH: Okay, so the wizard of smart there, Democrat congressman Ruben Hinojosa, ‘What are you doing? What kind of outreach to help homeowners on the verge of losing their homes?’ We don’t sell mortgages, Congressman. We don’t sell mortgages. We don’t sell mortgages. Oh, we have a bill outreach program. Just idiots. They’re just grandstanding idiots.