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RUSH: Here in a nutshell is what’s going on. The SEC is complaining, their complaint claims that this Goldman Sachs buddy, John Paulson, the hedge fund king made a $1 billion profit from going short on these collateralized debt obligations, the pools of mortgages and subprime mortgages while the purchasers of the materials lost the same amount. There are people who thought these were good investments. So you had Paulson — and I think, was he an inside guy, was he allowed to pick which mortgages were put into the pool, and if so, was there fraud here? Was there coercion between Goldman Sachs and the big hedge fund guy, Paulson to the harm of the people who lost the billion dollars?

Now, ‘The two main investors who lost money were ABN AMRO and IKB Deutsche Industriebank,’ Deutsche Bank. ‘IKB lost $150 million within months on the purchase. ABN AMRO lost $840 million.’ Where are these people that got the shaft? Where is Seth Waugh of Deutsche Bank? Where is the CEO of ABN AMRO? Where are the screwed here standing up and saying, ‘We got screwed’? Why haven’t they been brought in to testify? Why haven’t we heard from them? I mean, maybe we have, but it hasn’t been in the news. So Goldman Sachs claims that they have lost $90 million in this deal.

‘The SEC alleged that Goldman materially misstated and omitted facts in disclosure documents for a synthetic CDO product it originated called ABACUS 2007-AC1. Goldman was paid a fee of approximately US$15 million for its work in the deal. The allegation is that Goldman misrepresented to investors that an objective third party, ACA, had reviewed the mortgage package underlying the credit default obligations, and that Goldman failed to disclose to ACA that a hedge fund, Paulson & Co., that sought to short the package, had helped select underlying mortgages for the package against which it planned to bet. The SEC further alleged that ‘Tourre also misled ACA into believing that Paulson invested approximately $200 million in the equity of ABACUS 2007-AC1 (a long position) and, accordingly, that Paulson’s interests in the collateral section [sic] process were aligned with ACA’s when in reality Paulson’s interests were sharply conflicting.’ Goldman Sachs stated that the firm never represented to ACA that Paulson was to be a long investor, and that as normal business practice, market makers do not disclose the identities of a buyer to a seller and vice versa.’

Now, the upshot here of this is that right now no criminality has been alleged. It’s a civil complaint. This is where Goldman’s going to get shafted here, folks. You may think they deserve it. I leave it up to you, I’m just telling you whenever it comes to the Democrat Party-led United States government versus anybody in the private sector, I’m sorry, I side with the private sector. They may both be a pack of thieves, and in this case I know Goldman is in the back pocket of the regime. Goldman donated a million dollars to Obama. So I got no brief for Goldman here. My problem is that nobody can beat the regime when the regime targets you, and the regime is not doing this to protect people. The regime, in essence, you have these two Deutsche Bank and the other outfit who lost a billion dollars, you could say that Carl Levin is holding hearings today to protect fat cat Goldman Sachs clients. Could you not? Okay, yeah, they’re going after Goldman Sachs, but who are they defending? They’re defending Deutsche Bank, and they’re defending this other bunch that lost 800 and some odd million dollars.

So whichever way you look at it, the government’s in bed with somebody here who is a fat cat. And the Deutsche Bank guys, your turn is next when the regime thinks that they can score some points off of you. Here’s Carl Levin. I’m going to grab a phone call real quick here because I want to address the point here that — that — oh, no. What was his first name from Lake Worth, what was the guy’s name? Doesn’t matter, we had Ray from Lake Worth, Florida, he wanted to talk to me, said the Republicans can’t win going up against Wall Street. His point was either reform package or this. His point — well, I’m assuming, I wanted to talk to him about it, his point was that the Democrats are always gonna win in circumstances like this that they set up because no matter the truth of the matter that class envy for 50 years has set it up in people’s minds that Wall Street is evil and they’re mean and they’re careless, uncaring, have no compassion, they got billions of bonuses in the recession. While people were losing their jobs these fat cats were rewarded, and his point I’m sure was going to be there’s no point for the Republicans to go against the government and defend Goldman. I disagree. This is why I wanted to take his call.

As I’ve said here constantly, I’m not defending Goldman, I have no brief for them, but I do know this, I do know that they did what they did because they were under orders to by virtue of federal regulation. I know that this whole subprime thing was created by government, by Democrats, and the purpose of it was to get people into homes who couldn’t pay for them, these people would thank government, thank Democrats for making it possible for them to have a home and that’s all this was about. The wreckage in the financial system of this country was caused by the Democrat Party. The financial wreckage in this system was caused by — I’ll give you the names: Bill Clinton, Barney Frank, Chris Dodd, Franklin Raines, Jamie Gorelick, and anybody and everybody that ran Fannie Mae and Freddie Mac. And they’re turning around now and they’re trying to blame their victims, which may be another den of thieves for all I know, Goldman Sachs, but they’re trying to blame their victims for acting independently, outside of regulation. I’ve preached to you people, I’ve asked you constantly, would you please, please try to have even half the suspicion of government that you have of any private sector company: Big Oil, Big Retail, Big Pharmaceutical, or whatever. Just have half the suspicion.

I don’t care whether the Republicans win in this. I’m not trying to tell Republicans what to do and I am not trying to look for a campaign edge. That’s not what I do. I’m using my radio program to be honest with you about what’s happening here. We live at a time where we have a regime that’s trying to permanently transform this country into something it’s never been. This regime is in the process of destroying the private sector. That’s the place where people’s jobs come from. I had a conversation over the weekend with some friends. And, again, it was another issue that was said to be a loser for the Republicans. It’s about these pensions for state teachers and state workers, whoever they are, union people or whatever.

And this guy said to me, ‘Rush, do you understand it’s never going to be a winner for people who have multimillion portfolios or people who are successful to begrudge a state worker a hundred-thousand-dollar-a-year salary or hundred-thousand-dollar-a-year pension.’ He said to me, ‘I see all of these people in the private sector who lament that a teacher or a federal union employee has a great pension and great health care system. Whatever great health care pension they have, whatever great retirement pension they have, it’s nothing compared to the massive investment portfolios all these critics have.


So I thought about this for a minute. I said, ‘From the class envy standpoint I can totally understand.’ Am I making myself clear here, Snerdley? For example, let me try to make it even clearer without divulging any names here, because I don’t want to get anybody in trouble or focus attention on them. I know people who are very well off, and they’ve earned it, don’t misunderstand, they’re very, very well off, and they’re constantly complaining about their property taxes and everything that goes to pay for cops to get a hundred thousand dollars a year in retirement after working 25 years. And I’ve said to them, ‘Do you realize you’re going to have nobody sympathizing with you on this? Here you are with your giant house, here you are with your multiple automobiles, and you’re upset that cops or firemen or teachers might have a retirement system that pays them 70 to a hundred grand a year when they quit, when you have millions after you quit?’ And the guy said to me, ‘All well and good. The problem is we’re all paying it. Those people, the firemen and the cops are not paying me. I’m making my money in the private sector. But it’s my property taxes and everything else that’s going to provide all this and it’s out of whack. And, if we don’t get a handle on it, it’s going to bust city budgets, town budgets and state budgets,’ and about that he’s right.

If you look at California, we don’t have the money to pay these people what they have been promised. Five hundred billion, half a trillion unfunded pension liabilities just for the teachers and the public employees in California alone, and that’s just one state. It’s that way all over the place. It is the property taxes and the overall taxes of citizens that’s paying this. And this guy made a point, he said, ‘Rush, you’re looking at it the wrong way. When you say to me that people aren’t going to have any sympathy because I have X numbers of millions of dollars and I’m complaining about a retirement plan that gives a teacher or a fireman a hundred grand, you have to understand the people paying for this, a vast majority of them are not going to have retirements of anywhere near a hundred grand because they’re not being paid by other taxpayers. They’re in the private sector and they’re having to scrimp and save. So these teachers and the firemen and whoever else that have these great retirement plans, pensions, hundred grand a year until they die after working 25 years, it’s actually not being paid for by me, it’s being paid for by gazillions of people who don’t make anywhere near what they make, and that’s why it’s relevant because the people paying them don’t make nearly what they’re getting in retirement.’

This is an illustration of the class envy problem we’re up against. Okay, so here we’ve got the Democrat Party, which has made a career and a life out of bashing the wealthy when they are the wealthy; they’ve made a career out of bashing Wall Street, when they are in bed with Wall Street; they have labeled Republicans as the fat cat cronies of Wall Street and all these highfalutin big business guys when now everybody knows fat cat cronies on Wall Street and big business guys are in the back pockets of the Democrats and the regime. So a guy wants to call here and say, ‘Rush, the way you’re going about this is wrong, you’re never gonna get people to side with you that Goldman Sachs needs to be defended here.’ Well, maybe so. But I’m not going to stop trying. I am not going to stop trying to explain the facts and the truth of all this, ’cause the future of the country depends on it. This is one little small part of a giant transformation of this country. This regime’s not just going after the big guys. This regime’s going after everybody. Have you seen the unemployment rate? Have you seen the foreclosure rate?

The people getting hurt in this country are the very people the Democrat Party claims to stand for, the little guy. Their future’s gone. The future of their kids is gone. Their chance for prosperity, if all this stuff stands, is gone. All this debt, all this spending, all of this shrinkage of the private sector where the American dream, the opportunity for it exists, the opportunity for the American dream does not exist in a bureaucracy, although it’s coming to be that case. So you got a shrinking private sector, fewer and fewer opportunities, unemployment the regime itself says is not going to change from 10% for the next couple years, if then. Taxes are going up left and right. This health care bill is an abomination and everybody is now starting to get the truth out about that. Illegal immigrants, the way is being paved by the regime to get them all in the country and get ’em nationalized, amnesty, which is going to put even more competition — in fact, there’s a story in the immigration stack today, some company in Arizona was forced to fire 300 illegals. There was an ICE raid, the ICE people found 300 illegal aliens and they had to get rid of them, and those jobs were filled immediately by Americans who we have been told all these years would not do that kind of work. Yes. The Boston Herald has the story. Three hundred people filled those jobs immediately. So those jobs, 300 jobs being held by the illegals were denying 300 Americans jobs in a recession, and the regime has sided with the illegals. So it’s not Goldman Sachs they’re going after, it’s not Wall Street they’re going after.

BREAK TRANSCRIPT

RUSH: Ladies and gentlemen, you know I have been targeted by the regime: Dingy Harry and the famous letter to my syndicator asking them to censor me. I have been personally blamed for Oklahoma City and so forth by the regime. The difference between me and Goldman Sachs is that I had no desire to get in bed with the regime. Goldman wants to stay in bed with the regime. That is why they’ll pay the fine here, and they may even let some executives go — and the executives will start their own hedge fund companies and be worth $25 billion pretty soon. They’ll be sending chocolates and flowers to Obama very soon to stay in good graces with the regime. I have no desire to get in bed with the regime. These other guys do.

I’m not a crony capitalist.

They are.

Now, I’m concerned. I want to go back to this public pension system, public employee pensions, medical coverage. I’m concerned about it not because it affects me directly. I’m not upset that teachers and cops are getting a hundred grand a year or whatever they’re getting. That doesn’t bother me. It’s because the system can’t sustain it. The money isn’t there to pay all of this. The people who are paying it are overtaxed as it is. We don’t have a way of paying these pensions. So the system is going to collapse. It’s gonna destroy the society and our system if these obligations are met, which means nobody is going to be escape it, folks. The fact that a wealthy person like me brings it up and addresses it is not because I’m directly affected in a seriously adverse way, but because it’s destructive of society and eventually almost everyone in it. My concern is for the people who actually pay the taxes and pay for all this — and we now know that despite these high levels of taxation, the money isn’t there.

It may never have been there in California. None of this may have been real. In order for UAW workers to get their pensions, look what’s had to happen! The regime had to take over the car companies, for crying out loud. Well, do you want the regime to take over California schools? Do you want the regime to take over every other unfunded obligation? Look at Social Security. We’ve all been talking about the unsustainability of that for years. It doesn’t have any measurable impact on me. But the fact is, it will horribly affect millions of people who aren’t wealthy. It will drag down the whole system. It will destroy the golden goose. I love this country. I can’t sit here patiently and say, ‘Just because it isn’t going to affect me, I’m not upset about it.’ It destroys me; it rips me apart. The greatest country on earth is being systematically dismantled right in front of our eyes, and the Republicans getting blamed for it at the same time. It’s absurd.

BREAK TRANSCRIPT

RUSH: Ladies and gentlemen, all of this that we are discussing today is why this class warfare strategy is so destructive. Class warfare is used as an excuse or even a justification for a leftist agenda that will destroy our society: Rich, poor, everybody in between. The leftist agenda is destructive; it is underway right in front of our faces. It’s not even being disguised anymore. This class war strategy is used to further it. The argument today is not about rich versus poor. Where we are right now in our nation, we’re in a battle over freedom versus tyranny. Liberty versus tyranny. It’s not rich versus poor. Because everybody in the capitalist system is under assault here by this regime. Now, speaking for the Republicans…. No, no, no! No, no. As to the Republicans, those of you who think that they can’t win on this, when average Americans find out that government workers’ compensation is now close to double what the average private sector compensation is if you count all salary and benefit and retirements, millions of people will join the GOP on this — if the GOP has the guts to use this as an issue. Because who is it that’s paying these people, and what are these people contributing to the output or the gross domestic product of this country? Nothing! They are a drain on it. The larger the government gets as a percentage of gross domestic product, the less production we have. There is no productivity. Paper shufflers, regulators, paper pushers — and they’re making more than the people paying them! That can’t stand. That isn’t sustainable, either. Here is Rose in Flint, Texas, as we start on the phones. It’s great to have you here and hello.

CALLER: Hey, Rush, it’s an honor to talk with you.

RUSH: Thank you very much.

CALLER: I am a recovering Democrat, and I thank you for all that you’re doing. My husband has been a big fan of yours for over ten years. This Goldman Sachs business. You know, they gave money to Obama during the campaign.

RUSH: A million dollars worth total.

CALLER: You know, you would think he would look on them a little bit lightly. But apparently it didn’t matter and they’re accused of all this manipulation. Well, there’s another name that comes to mind from a manipulation standpoint, especially — currency-wise, global-wise — George Soros. Why is he never looked at?

RUSH: Well, it’s a good question.

CALLER: A lot of people suffered under him, and he made much, much more than Goldman Sachs has.

RUSH: I know. He has profited from it. He’s profited from the decline of the British currency.

CALLER: Right.

RUSH: He has stated over and over again that this is his life’s achievement, is wrecking the US and the world economy. He profits from it. You talking about going short?

CALLER: Exactly.

RUSH: George Soros. There are people who think that Soros is in bed with the American left to bring all this about. I mean, a lot of people don’t like this country. A lot of people don’t like what it’s done in the past. They don’t like the way it is now. But, look, by definition here, Rose, this regime is not going to go after its patron saint.

CALLER: But he’s a huge capitalist. They want to bring that down. I understand exactly what you’re saying, Rush, but if they’re taking on Goldman Sachs —

RUSH: ‘He’s a huge capitalist’ is the wrong way to put it. He is an industrialist wrecking capitalist societies he doesn’t like. George Soros made $2.8 billion in 2008 alone shorting American housing. That was the second biggest profit made throughout this country: George Soros, $2.8 billion in 2008 shorting American housing, the housing bubble. Now, $2.8 billion? I don’t care what Goldman Sachs did. It pales in comparison here. And Soros is out there, and he supposedly went into retirement and has now gotten back in the game because he’s so excited about the opportunities present. Soros is a guy that profits amidst decline. He made $3.3 billion last year, in just one area of the market. That’s not his whole annual take. Rose, thanks.

BREAK TRANSCRIPT

RUSH: You know, Snerdley happens to love this line that I came up with, having reporters tell the truth about the regime is like asking Satan to tell us the truth about hell. Well, here, there’s a big story, the Heritage Foundation’s Morning Bell today makes a great point about Obama’s deficit reduction committee headed up by ‘Irksome’ Bowles and Alan ‘Babe’ Simpson. The point that the Morning Bell makes and one I’ve made frequently about a lot of other things, base closings is, this is nobody’s responsibility but Congress. The deficit is what it is because of Congress and the president. We don’t spend a dime in this country unless Congress authorizes. There’s not a tax law passed unless Ways and Means comes up with it and originates it, and yet we’ve got this massive debt problem and all of a sudden we get to farm it out to a commission headed up by ‘Irksome’ Bowles and Alan ‘Babe’ Simpson. And they get to come back with all the recommendations of a VAT tax and this tax increase and that tax increase, and as usual, the guilty, the members of Congress who drove all these deficits up, the people that voted for them on the basis of wanting handouts and the presidents of the United States who agreed on all this get to act as innocent bystanders? (impersonating Clinton) ‘Why, that’s right, Limbaugh, I had no idea. You know, I’m sitting here, I got all kinds of things going on. I had no idea the deficit got out of hand. In fact, I left this country with a surplus.’ You did not do any such thing. They get to act like spectators so they get to not do their jobs. They get to pass off the dirty work to somebody else. It would be like Satan appointing a commission headed up by somebody totally unrelated to him to explain how hell happened.

Jerry in Portland, Oregon, thank you for waiting, sir, great to have you on the EIB Network. Hi.

CALLER: What an honor, absolute honor to speak with you.

RUSH: Thank you.

CALLER: Hey, I believe strongly that this Fannie Mae thing is a smoke screen or the — I’m very nervous. I’m not usually — the Goldman Sachs thing is a smoke screen for Fannie Mae. My wife actually worked in the disclosure department at Fannie Mae during the Franklin Raines era, and she was a forensic accountant, and there’s actually more to this. When these derivatives were sold to Goldman Sachs and the other banks, they packaged them up into really large groups, and once they’re packaged they have a disclosure like any investment, and they were actually double counting the revenue on the disclosure statements. So Goldman may have discovered the double counting, but the government’s going after Goldman because if it was really found out what really happened, then it was the disclosures that Fannie Mae was putting together that —

RUSH: Yeah, if that’s true, if that’s true, it doesn’t surprise me at all. It fits right in with the general operating procedure here, the standard operating procedure from the regime, that is, okay, we will screw it all up, and we’ll do it on purpose, and then when the hell hits the fan, he-he-he-he, we blame other people. And we can sit around and act like spectators and then we get to crucify other people for causing the problem and ostensibly fix it, while appearing to stand up for the little guy. Not surprised at all.

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