RUSH: Screw this Hussein business. It’s Barack ‘Hoover’ Obama. Look at this, folks. Look at the jobs numbers out here. New applications for unemployment insurance rose last week to their highest level in almost six months. It was just yesterday that Barack ‘Hoover’ Obama told us that the worst was over, that we had turned a corner. It’s like the fourth or fifth time he told us that the worst was behind us. This is a gobsmacked AP: ‘The employment picture is looking bleaker as applications for jobless benefits rose last week to the highest level in almost six months. It’s a sign’ ahem, a little indication, a hint ‘that hiring is weak and employers are still cutting their staffs.’ Really? What’s the first clue? Unemployment claims rise and the AP says it’s a sign employers are still cutting their staffs. Really? The sun came up this morning. That’s a sign that dawn happened. These people at the Associated Press are masters at figuring out cause and effect.
The Labor Department says, ‘First-time claims for jobless benefits edged up by 2,000 to a seasonally adjusted 484,000. Analysts had expected a drop.’ Meanwhile, Obama’s off to Martha’s Vineyard for a couple days to pal around with Skip Gates.
RUSH: Barack ‘Hoover’ Obama’s Summer of Recovery continues, backed up by the Vice President Joe Bite Me, who actually labeled it the Summer of Recovery. By the way, I checked. Obama has 12,386,642 people signed up on his Facebook page, but, of course, he’s giving away the store! Obama is giving away the country. No wonder he’s got 12 million suckers. And, of course, it’s just a front for his campaign, where you are expected to buy things, while he creates the illusion that he’s giving you things. And everything has the Obama logo on it, and now here in the Summer of Recovery, Barack ‘Hoover’ Obama’s Summer of Recovery, is a new way to look at his logo — that circle logo thing? It looks like the red, white, and blue going right down a drain. You check it out, check out his logo, and looks like you can see it. It looks like red, white, and blue encircling the drain, going down the drain.
RUSH: ‘Is This Finally the Economic Collapse?’ Fortune magazine, Keith McCullough. It’s depressing, folks. All the financial wizards are saying the Fed’s outta bullets, bought up some more debt, didn’t inspire any confidence. For all Obama has done, there’s still this great unknown. Businesses have no clue yet what the tax structure is going to be come January. All this talk about extending the Bush tax cuts or sun-setting them for some if not everybody or keeping them for the rich but letting them continue for everybody else, nobody knows. People are still trying to get their arms around health care costs, business-wise, what’s that going to do. You can look to the Federal Reserve and monetary policy or you can look to the regime to try to get all these positive stories which they’re really not known for. But until there is some certitude to what the future holds, and most people think they know it’s not good, you’re not going to have expansion, you’re not going to have private sector growth. And the more this goes on, the more you start to have to conclude that some of this has to be purposeful. Nobody in their right mind would continue failing programs like this unless they had some other agenda.
I remember January 16th of 2009 is when I first said, ‘I hope he fails.’ What I meant by that, I hope he fails getting health care implemented. I hope he fails with his massive stimulus plan. I hope he fails implementing socialist liberal policies. In that sense he’s not failed. He’s gotten what he wanted. What’s happened is the country is failing as a result, which is what I knew would happen, which is what I feared would happen. And now here we are with Fortune magazine: ‘The Great Depression. Wall Street in 1987. Japan in 1997. Points of economic collapse are generally crystal clear in the rear-view mirror. Professional politicians in Japan have been telling stories for 20 years as to why they can prevent economic stagnation. In the US, the storytelling started in 2007. All the while, stock market and real-estate prices have repeatedly rallied to lower-highs, then collapsed again, to lower-lows. Despite the many differences between Japan and the US, there is one similarity that continues to matter most in the risk management model my colleagues and I use at Hedgeye, our research firm — debt as a percentage of GDP. Now that the US can’t cut interest rates any lower, the only option left on the table is what the Fed just announced it would start doing — buying Treasury debt. And that could lead the country to the brink of collapse,’ because that’s the end of the bullets.
‘According to economists Carmen Reinhart and Ken Rogoff, whose views we share, crossing the 90% debt/GDP threshold is the equivalent of crossing the proverbial Rubicon of economic growth. It’s a point from which it’s almost impossible to return. … Markets trade on expectations. Yesterday’s zig-zag in the S&P 500 was unlike most sleepy August trading days in America. That’s because the ‘government is good’ crowd leaked word that this second round of ‘quantitative easing,’ known as QE2, was coming, and that Ben Bernanke was going to respond to our buy-and-hope begging.’ And that’s buying up Treasuries and mortgage debt and so on and so on. So now what? ‘With 40.8 million Americans on food stamps (record high) and 45% of the unemployed having been seeking employment for 27 weeks or more (record high), what’s left if (or when) QE2 doesn’t kick-start GDP growth.’
Folks, there’s nothing out there that’s gonna kick-start GDP growth. What this buying of Treasury bills, buying up debt is supposed to inspire Wall Street and others to go borrow themselves, that the debt’s being purchased, it’s being guaranteed, nothing better than US Treasuries. But it isn’t working. And the reason it isn’t working and the reason it won’t work is because of what I just talked about, the uncertainties that start in 2011. Right now we know what some certainties are. Right now, if things don’t change, a massive tax increase hits, because some tax cuts sunset. People want to argue about the terminology: ‘No, Rush, it’s not a tax increase, they’re just ending some tax –‘ the practical effect is less disposable income in the private sector. I don’t care what you call it, tax increase, tax cut, whatever you want to call it, January 2011 there is going to be less money in the private sector, more money is going to going to government. There’s a story in the stack today, a bunch of economists have come out and said we cannot extend tax cuts for the rich, we just can’t do it. So I read further into the story for why, why can’t we extend tax cuts for the rich? You know why? Because it will cost the Treasury $36 billion a year.
Now, stop and think about this. It will cost the Treasury $36 billion a year. And that’s why we cannot extend tax cuts for the rich. So they’re saying we need that $36 billion taken away from the millionaires and the well-to-do and we need to put that in control of the government. Now, how does that help us? The government just spent $26 billion that it doesn’t have to shore up the pensions and retirement funds and health care of teachers, on top of a trillion-dollar Porkulus bill a couple years ago, year and a half ago. And yet keeping $36 billion in the private sector, we can’t have that. That will destroy the country because the government’s not going to get its hands on that $36 billion? Everything’s out of whack here. We’ve already robbed the private sector. This regime has already waged war on the private sector, has already depleted the amount of capital in the private sector. There will be no GDP growth whatsoever if the only growth is in government, ’cause they don’t make anything. All they do is redistribute and destroy wealth. They do not create wealth. Well, even that’s not so much true anymore. I mean if you work in the right places in government you will get rich. But it’s not moral, and it’s not just.
Stop and think of this, though. There is an activist move to prevent these tax cuts from continuing, because it’ll cost the precious government $36 billion. (gasping) The government, why we can’t have that, the government will be starved $36 billion, and they’re positioning it by saying, ‘Yeah, yeah, well, it’s either that or leave that money in the hands of millionaires.’ We’re supposed to think, ‘Millionaires, ooh, yuk, yeah, we hate millionaires.’ Well, given where we are right now, who would you rather have that money, the wealthy, who are gonna spend it in the private sector, called stimulus, maybe hire people. Whatever they do with it, even if they bank it, it’s gonna employ people. Or would you have that money in the hands of people who are already making this country worthless, whose policies are already causing greater harm and more damage?
Back to this piece in Fortune magazine: ‘Before the Fiat Fools — Hedgeye’s name for political actors and bankers who have placed their hopes of economic recovery in printing endless supplies of new cash — run out campaigning for QE3, maybe they should analyze some real time market results to yesterday’s announcement of QE2,’ which is buying up the debt and take a look at what happened to the stock market: It didn’t work. Normally the market opens down; by noon it starts to tick back up. It didn’t. It continued to fall, finishing down 265 or something yesterday. Today it’s also down. So what Bernanke did yesterday did not work. They’re running out of bullets. The evidence, I think, is pretty clear. After a year and a half of stimulus here and bailout there and stimulus over there, can we conclude it doesn’t work? We’ve been told how many times we’re back from the brink; we’ve been told how many times it would have been much worse if we hadn’t done what we’re doing. How can it get any worse? It has gotten worse ever since this regime assumed office.
Now, we’re coming up on two years, and this regime is going to continue to try to blame Bush. That’s the only option they have left. And yet, on the ground, reality is that their way of stimulating, growing economic activity does not work. We don’t even need to rely just on these 18 months. There is enough world history to show that command-and-control economies do not grow. They do not expand. They don’t create private sector jobs. All the government can do is confiscate wealth, take wealth, steal it, whatever you want to call it, tax it, and redistribute it, in the process destroying it. They destroy not only wealth, but they damage the opportunity for wealth creation on the part of the vast majority of American people. There’s just no other way to look at this. Thirty-six billion dollars, no, we can’t let that stand in the hands of millionaires, they’re the ones that got us in the problem in the first place. Right.
The American people, I don’t care how much they have, the American people with money in their pocket, that’s what Obama wants you to believe is the cause of where we are. If they want to tell you that Bush economic policies put us where we are then what they’re telling you is, you keeping more of what you earn led us to this precipice, because you keeping more of what you earn starved the precious beast of government. And yet it didn’t, did it? The precious beast of government is eating and eating and eating, whether we have tax increases or tax cuts, guess what happens? They’re just printing money that they don’t have, borrowing money that we don’t have. Government’s not starving. No matter what tax policy is, government is not starving, especially not under this crowd. This government is drunk. They stopped eating long ago. Now they’re drinking it all.
RUSH: Remember, my friends, the rich are not all millionaires, especially as this regime defines them. This regime defines the rich as any of you making $200,000 a year or more, and in some cases you can earn less than that and be called rich for their purposes. Yet they use the word ‘millionaires’ in this story: let the nation’s millionaires hold onto this $36 billion. The more accurate question would be, do we want to leave that $36 billion in the hands of America’s small business? But even at that, even if you don’t look at it that way, where have we gotten to the point that all money has to go to government first and then government sends it out to where it needs go? That’s a crock. Eric Cantor the other day, paraphrasing, said, ‘We’re going to have to decide whether the private sector exists simply to support the government or whether the government exists to support private sector.’
Can you believe we’re even asking this question? Yes, I can. ‘Cause I knew this is who we were electing. United States of America, we gotta ask ourselves a question: What’s the purpose of the private sector, to support government? And, yes, it is. That’s the answer if you’re a Democrat today. If you’re an American liberal, a leftist, or what have you, the private sector is the golden goose that they’re killing to support them, bunch of lazy idiots. Many of them don’t want to really work. Nonprofits, siphon contributions as their salaries and so forth and think of themselves as good people, charitable people. I mean these people are rapists in terms of finance and economy. The financial sector, the private sector of this country is being raped, is the way to look at this, plundered, whatever.