RUSH: I played golf yesterday afternoon with some guys that are for all intents and purposes Wall Street guys. They don’t live on Wall Street or work there but they’re in the financial business. And they said, ‘Rush, a dirty little secret, this debt’s never going to get paid down. It’s gotten to the point where everybody knows we can’t pay it down. There’s no way to pay this debt down.’ There’s no way California is going to retire its debt. There’s no way California is going to make up for the unfunded or underfunded pensions, and one of the reasons is it’s precisely because it’s so big. It’s gotten so big on purpose there’s not even a pretense of paying it down. The only thing that has to happen is for leaders to appear responsible in managing it. And they said, ‘Rush, how do you appear responsible in managing debt? You do it by raising taxes.’ This will get the approval of leftists around the world, other governmental leaders, the ChiComs and others, people who hold our debt, they’ll be happy when they see we’re trying to manage it and deal with it, after they’ve run it up to the point of stealing the wealth of future generations three and four generations down the road.
I said to them, ‘I understand what you’re saying, but this is all going to collapse at some point, it’s unsustainable. You’re talking about tax increases of the sort that are going to prevent economic growth. Look at Greece, look at a lot of these European Union nations. At some point it does come due. At some point the debt has to be paid down. At least you have to get started paying it down. If the attitude is it’s so big everybody knows we’ll never pay it down, that you’ll never even start, then we’ve got even more problems than I thought we had.’ Then we got around to talking about Goldman Sachs. And, you know, it’s amazing. These are very, very smart guys, brilliant, but they were hearing for the first time my theory that this whole thing was organized, with Goldman probably involved in it. I mean, here’s Obama seeking another pillar in his agenda, financial regulatory reform, he’s gotta demonize Wall Street. The Democrats are out saying, Van Hollen and the others are out saying that is their plan going into the November elections. They’re going to demonize Wall Street again. They’re gonna blame the Bush policies again for being responsible for where we are economically right now.
Lo and behold, after nine months of investigation, this SEC investigation, nine months, miraculously, by one of the most profound coincidences, they announce the results of the investigation, that there has been fraud at Goldman Sachs involving mortgage-backed securities, derivatives and all this sort of thing, the day after Obama makes his big pitch for financial regulatory reform and Chris Dodd’s on the floor of the Senate, and, lo and behold, by Friday and Saturday we had stories, and I’ve got ’em here in the Stack of Stuff, talking about how this might be a propitious event. I mean the State-Run Media is right in there as though this is totally accidental, totally coincidental. And I was saying to these guys yesterday, ‘Goldman would be happy to pay whatever civil fine here,’ if there even is one, they’ll be happy to pay a little civil fine here and take the PR hit in exchange for being in bed with the Obama administration for the next ten years or eight years or however long it’s going to be, six years is what they’re planning on. How many ex-Goldman people are in government? Hank Paulson was Treasury secretary. Robert Rubin, an ex-Goldman guy. There’s no coincidence, especially on the Democrat Party side and with the American left. There aren’t any coincidences in politics.
So we have the weekend. Goldman Sachs, rotten to the core, meaning Wall Street’s rotten to the core, meaning the regime has to come in here to save the day, protect us, the little guy, from these bandits on Wall Street, when in fact the government caused the problem in the first place. It was a government-caused problem. This happens frequently. Government goes in, causes the problem, and then sits back and says, ‘Whoa, look at how unfair and rotten the private sector is. Look at how bad capitalism is. Why, why, we have to go in there and fix this mess. You just can’t trust these people in Wall Street. You can’t trust these people in the private sector. I mean all this unfettered economic activity going on out there,’ like Obama said. We are the most regulated economy for a supposed free society that I’ve ever seen.
RUSH: The Securities and Exchange Commission offered Goldman Sachs a chance to take a fine over this. They refused to do that because their position is that they have done nothing illegal, and all it is is a civil fine. And they’re going to take a hit here, there’s no question, but I think they’re in on it. I think they’re happy to take the hit here, pay the fine, and roll on. They obviously have no problem with health care regulatory reform act, and one of the reasons why is it’s not going to hurt the big guys that much but it’s going to run a lot of little guys out of business. It’s going to open the market up for these big guys, and they’ve got so many ex-CEOs in and out of government all the time. There’s no way this is a coincidence, and Barney Frank is even out there saying that this fraud case will increase the chances that the financial reform bill will pass. (doing Frank impression) ‘That’s what he th’aid! He’s not even afraid (lisping) facts.’ He doesn’t even want to hide it.
RUSH: Now, we went back, Washington Examiner piece, November 21st, 2008. Here’s the headline of this piece: ‘Goldman Sachs Will Be Sitting Pretty With Emanuel in the Obama White House — Goldman Sachs always has clout in Washington, as evidenced by the firm’s alumni serving as Treasury secretaries under both Presidents Bush and Clinton. Today, in these tumultuous times of bailouts and meltdowns when the investment banking leviathan needs Washington more than ever before, Goldman can leverage its most valuable asset yet — incoming White House chief of staff Rahm Emanuel.
‘Goldman Sachs is the giant of Wall Street, and more than any other investment bank, Goldman is surviving the current financial storm. Traditionally a Democratic booster, and one of Barack Obama’s top sources of funds in this past election, Goldman has always had some particularly strong allies within government. Emanuel is one such ally.
An interesting early chapter in the Goldman-Emanuel relationship took place in the setting of Bill Clinton’s campaign for the White House in 1992. Clinton hired Emanuel as his chief fundraiser. At the same time, however, Emanuel was on the payroll of Goldman Sachs, receiving $3,000 per month from the firm to ‘introduce us to people,’ in the words of one Goldman partner at the time.’ This story appeared right after Emanuel was picked to be Obama’s chief of staff, November 2008. My guess is that Goldman will miraculously escape any real punishment for this fraud that they’ve been accused of by the SEC. This is a strange coincidence indeed, nine months this investigation has been going on. Last week, the day after the big push begins for financial regulatory reform overhaul, bammo, the SEC just does exactly what Obama and Barney Frank and they all wanted, they charge Goldman Sachs with fraud, and it allows Obama and everybody to say, ‘See? We need to reform Wall Street. They are evil up there. Look at all the billions they’re making in defrauding innocent people.’ And right on cue, ‘Honest Obe’ to Cooper Union on Thursday in New York.
The New York Post on Saturday: ‘Wall Street Suspects Goldman Charges ‘Not Coincidental’ to Financial Reform Effort.’ And there’s an interesting little tie here. John Paulson is the hedge fund guy who was allowed to pick the mortgage-backed securities that Goldman was going to package, and then this guy was allowed to go short on them, he bet that they were going to fail, he bet that whoever bought these as investment vehicles would lose money, and Goldman let him pick part of the portfolio. And he won, or scored a billion dollars when he was right. That’s what all this is about. This guy, John Paulson, not related to Henry, this guy has not been charged at all. He’s the hedge fund guy. Some vice president somewhere in Europe has been charged. But guess who’s in bed with John Paulson? That would be Chuck Schumer. ‘[Hedge fund billionaire John] Paulson goes to Goldman Sachs and asks the investment bank to create mortgage-backed bonds that he could short. Goldman Sachs agrees, taking a $15 million payment from Paulson for doing so. But Goldman goes a step farther by allowing Paulson to pick the mortgages that would be bundled into bonds — the mortgages that Paulson thought would be most likely to fail. Goldman then sold those tainted, Triple A-rated bonds to unwitting Goldman clients, collecting another hefty fee in the process. Like Paulson, it too placed secret bets that the bonds it had sold to trusting clients would fail.
‘Paulson and Goldman are alleged to have created the investment vehicles to fail — they went short and Goldman got to sell them to investors who were long.’ Some might say that this is a little conflicting. ‘John Paulson, the hedge fund short-artist in the middle of today’s SEC suit against Goldman Sachs, recently helped raise money for Sen. Charles Schumer (D., N.Y.), referring to the Senator in a fund-raising letter as ‘one of the few members of Congress that has consistently supported the hedge fund industry.” You know who else was very close to Madoff was Chuck-U Schumer. So Senator Schumer is theoretically very close here to John Paulson and Bernie Madoff. But, my friends, a tough sell, because, remember, the Democrats are for the little guy. The Democrats are out there looking out for the little guy. Oh, yeah. ‘Sen. Chuck Schumer (D-N.Y.) Monday led a long list of officeholders and groups expected to give up more than $430,000 in political contributions from Bernie Madoff and his family… ‘My money, I’m returning,’ Schumer said… The $100,000 Madoff donated to the Democratic Senatorial Campaign Committee, run by Schumer until last month, should also be returned, but ‘that is their decision,’ Schumer said… A spokesman for the committee, now headed by Sen. Robert Menendez (D-N.J.), said, ‘We’re reviewing it.” But, remember, the Democrats are for the little guy, folks.
And let’s see, the Los Angeles Times: ”Goldman Sachs Case Could Help Obama Shift Voter Anger’ — The fraud charges may strengthen the president’s campaign, against Republican resistance, to tighten regulations on Wall Street,’ when everybody involved in this either privately or politically is Democrats. Somehow the Republicans are getting tarred and feathered here. I don’t know that the Republicans run Goldman Sachs. I don’t know that the Republicans run this hedge fund. But somehow this is a Republican problem now.