RUSH: So I’m watching, Obama’s addressing the mayors today in the East Room, some mayors from across the country, and it was surreal. Everything he said about his stimulus package was a lie, and every lie that he uttered the mayors applauded. He lied about four million new jobs being created in the next two years, all the while the market is collapsing, poverty is on the increase in America. There certainly are two Americas now, and it’s shaping up as the politicians and the bureaucrats versus the rest of us. He told the mayors — get this — that he will not tolerate the waste of money, he won’t tolerate any waste of money. (laughing) The whole stimulus package is a waste of money. Last night on Hannity’s TV show, congressman from Texas said, ‘Look, if you elect us Republicans back in charge of the House in 2010, we can guarantee that 60% of this will not be spent, because 60% of it doesn’t get spent ’til after 2010, and we can cancel a lot of this and save the country a lot of money.’ It’s an interesting idea.
Meanwhile, the stock market today, what is it? Let me check here real quick, down 112.54, and they don’t care. Here’s Joe Biden this morning in the White House. He introduced Obama to the city mayors. Now, this is key. I said yesterday that I think that what’s happening here, there’s an anger, there’s a rage, and there is an effort here to totally restructure American society and American culture, that there is a desire on the part of the Obama White House, and the liberal Democrats in Congress, to expand the welfare state to include many of the middle class and even some in the upper middle class by so damaging the economy that nobody has any choice but than to take unemployment, welfare checks, what have you, in order to be able to feed their families. Here is Biden, as he addresses the mayors, while the stock market’s in free fall, the bank, Citibank is hovering around two bucks.
Now, the Citibank floor is five dollars. When stock gets to five dollars, pension plans and so forth have the option, and almost the duty, to get out of there. Now, Citibank is saying today that they are not having any conversations with the US government about nationalization and that the US Treasury has not disclosed much more to the Citigroup people than it has to the broader public about its plans for banking sector, meaning nationalization. So people are a little comforted by that, but still Citigroup hovering around two bucks. It was under it for a little while this morning. Other bank stocks are also on the way down. And here’s what Biden said. This very interesting.
BIDEN: President Obama has put our nation on a path toward greater recovery, not only greater recovery, but greater decency, greater fairness, greater opportunity along with economic recovery.
RUSH: Yeah, there is no economic recovery happening, folks, and there isn’t going to be economic recovery for a while, but we’re going to have greater decency, and we’re going to have greater fairness. Now, how would you interpret that, ladies and gentlemen? The vice president of the United States introducing the president before the city’s mayors, the nation’s mayors saying we’re going to have more decency and more fairness. Well, if you’re a leftist and you have all these different groups, say economic levels, income levels, say there are five of them, and we’ll call ’em quintiles, and the bottom is the bottom, and then they proceed upward to the top, they do not and they never have sought to elevate those at the bottom. They seek to punish those at the top and call it fairness. Biden just as well as may have admitted their objective here: fairness and decency. You have to know how liberals define fairness and decency. Fairness and decency means that the people who have traditionally been screwed, the losers supposedly in capitalism, are going to be joined in their loser status by others above them.
We’re going to spread misery equally, and we’re going to call that fairness. That’s exactly what’s happening right before our very eyes. I have mentioned on this program on several previous occasions a good friend of mine who I met while in Sacramento, professor Thomas W. Hazlett, Professor Hazlett now at George Mason University, teaches law and economics. He was an economics professor at UC Davis when I met him. I met the professor this way. There was a story in USA Today on a particular day in the fall of 1984 when I got out there and Professor Hazlett said some very conservative things and I praised him and I identified him as a conservative, which prompted the professor to call me and say, ‘Whoa, I’m a free market Libertarian. Don’t call me a conservative.’ (laughing) I was going to harm him within the faculty at UC Davis. It turned out not to, but that is how I got to know Professor Hazlett. He now remains a good friend. He sent me last night a piece that he wrote with a colleague, George Bittlingmayer, that’s posted at RealClearMarkets.com today, and it’s a fascinating piece.
By the way, I always appreciate getting praised by Professor Hazlett. He’s a brilliant economist, he really is, and I spent the last couple of days going through in-depth economic lessens, and one of the things we pointed out yesterday is the people with skin in the game after we saw Rick Santelli yesterday the Chicago Board of Trade who, by the way, took all kinds of heat on MSNBC today. We’ve got the sound bites of that coming up. But I said, ‘Look, the people with skin in the game, the people who are actually the investors, people who make the economy work, they are not buying this, they are not buying the stimulus at all.’ He sent me, ‘It’s a great economic lecture you did,’ and he sent me his piece called, ‘The Market is Shorting Obama’s ‘Stimulus.” Let me read to you key — (interruption) you know what that means, Snerdley? All right, you tell me what it means so I can pass it along to the audience. What does it mean? See, I know what it means. Yes, it means that the market, in shorting Obama’s stimulus, is pulling out of the market. They’re betting the economy is going to continue to decline, and thus they’re getting out of the market. I maintain to you that this is what Obama and the Democrats want right now. A couple excerpts from Professor Hazlett’s piece.
‘The election marked a turning point. Investors looked forward to the economic policies crafted by Democrats in Congress and the White House,’ because everybody was so disappointed with Bush. ‘The Republican ticket, McCain-Palin, was a 50-50 bet on Sept. 15; by Oct. 15 it was a 5-1 long-shot. Voters saw the carnage: the Dow Jones Index lost 17% of its value from Sept. 2 through Nov. 3. In a flash, Americans lost years of toil, and Republicans the election. Decisively. The election marked a turning point. Investors looked forward to the economic policies crafted by Democrats in Congress and the White House. More pointedly, they wanted decisive, well-crafted action on the banking crisis. Hence the Dow soared 6.5% Nov. 21 on news that Timothy Geithner,’ the tax cheat, ‘was Obama’s pick for Treasury Secretary.’ I added that. The professor didn’t. Professor didn’t put that in there. ‘Yet, from Nov. 4, 2008 through Feb. 12, 2009, the DJI overall fell 18% — a larger drop than during the Sept-Oct plunge.’ Do you realize that? Since Obama’s election through about a week ago, the Dow Jones Industrial Average has fallen more than it fell during the September-October plunge when everybody panicked.
‘In January, when the Obama plan, promising far greater deficits than the two much smaller ’emergency stimulus’ plans signed by Pres. George W. Bush in 2008, was unveiled, the market tanked — the worst January performance in 113 years. More pointedly, key political victories for the Team Obama spending plan have not been viewed as buying opportunities on Wall Street. A string of negative market reactions began with the December 18 announcement of a stimulus bill of $700 billion (Dow down 2.5%), continued with the January 7 announcement that the actual plan would be ‘on the high side’ (-2.7%) and continued with last week’s 61-36 Senate vote supporting the Administration’s fiscal plan. The White House victory and the new bank bail-out plan announced the following day by Treasury Secretary Geithner were met with a 5% wipe-out in the DJI, and a decline in Treasury bond yields, indicating a ‘flight to quality.” And they have a chart here in the piece that chronicles every event and the market drop accompanying it.
‘There are many problems with Keynes’ ‘stagnationist thesis,’ as Joseph Schumpeter called it, not the least of which is that it didn’t test so well when applied by New Dealers. US unemployment was perniciously high throughout the 1930s, peaking at 25% in 1933 but still over 17% in 1939. … The only thing guaranteed by the spending stimulus is more national debt. One stroke of the presidential pen has now increased it by $800 billion.’ Let me give you another statistic. You could spend a million dollars for every day since Jesus Christ was born and not reach the size of the stimulus package. The stimulus package passed and signed by Obama is larger than the federal budget in 1982. ‘Democrats recently screamed about W-era profligacy. On July 28, 2008, Sen. Kent Conrad (D-ND), Chair of the Senate Budget Committee declared, ‘If they gave out Olympic medals for fiscal irresponsibility, President Bush would take the gold, silver and bronze. With his eight years in office, he will have had the five highest deficits ever recorded. And the highest of those deficits is now projected to come in 2009, as he leaves office.’ Kent Conrad was right. The projected 2009 deficit then stood at $482 billion.’
He was talking about the worst deficit ever at $482 billion, not even half the size of this stimulus. ‘In January it was forecast by the Congressional Budget Office at $1.2 trillion. Pres. Obama’s new plan now ups that to $1.7 trillion,’ three times the deficit that Obama inherited. ‘If W got the gold, the new Administration has landed the Platinum in just its qualifying heat. A couple of more interesting excerpts from this, but this is a great piece that chronicles the absolute fall, the fallout on the market, in the market since Obama was elected. It’s down over 2,000 points. You can chronicle each plunge with stated, announced, or completed Obama policy. The market is plunging. Investors are shorting it. They’re not putting money in the market. The economy is getting worse. This is being done on purpose, I believe, just as they are trying to sink the stock market.
Back in a moment.
RUSH: How hilarious is it that Bill Clinton, the author of the phrase ‘The worst economy in the last fifty years,’ is now admonishing Obama to start speaking hopefully about the economy? Obama is the man of hope, ‘hope and change!’ and Clinton says, you better start sounding more hopeful about the economy. Why do you think he’s doing that? Who else is ripping Obama for down-talking the economy? Moi, ladies and gentlemen. No question, Clinton is responding because he knows I’m right. Look, Clinton at least when he was talking about the worst economy of the last fifty years was campaigning.
He didn’t talk about it so much when he was in charge of it, which tells us that Obama still is in a permanent campaign mode. Back to Professor Hazlett here: ‘If historic US budget deficits are any indication, the economy is already ‘stimulated.” How much more stimulus is needed to show that it doesn’t work? ‘The predicted 2009 federal deficit stood at 8.3% of GDP before Obama’s package sent it to about 12%. This is a stunning level of debt, double the previous post WWII high when Reagan’s 1983 budget deficit amounted to 6% of GDP….
‘We do, however, know the accounting trends: our government faces massive new spending increases as Baby Boomers retire and their Social Security and Medicare bills come due. Market investors are wary of new spending, guaranteeing either future tax increases or inflation, as a run-up to the demographically guaranteed spending spiral. The quest for ‘shovel-ready’ projects makes one think, Where’s Senator Ted Stevens when we need him?’ We need him back in the Senate authoring all kinds of bridges to nowhere bills! Anyway, ‘this fiscal bridge to nowhere is not spurring markets. … [T]he best forecast currently on the table [for the economy] is the one made by investors risking their own money,’ which they are not. ‘They are shorting the stimulus.” They’re pulling money out of investment.
RUSH: A stunning statistic relayed to you by me by way of column at RealClearEconomics.com, Thomas W. Hazlett. The market plunges during the last two months, three months under the influence of Bush administration — well, September-October in the Bush administration — have been dwarfed by market plunges since Obama’s election. And everybody still blames Bush. Everybody still blames Bush. Some facts here for you, ladies and gentlemen. We did not ‘bail out’ Wall Street. Lehman Brothers is bankrupt. We did not bail out General Motors. General Motors went from over $90 a share to under $2. How can you say that these companies have been bailed out? We didn’t bail out AIG. AIG was at a hundred dollars a share now under one dollar. They’re still around. What do you mean, we bailed ’em out? A little language reality check here. We didn’t bail out banks like Citicorp. They were over 50 bucks a share when all this started. They’re hovering around $2 a share now.
Yet, we’re being Obamaboozled into hearing that we bailed out Wall Street. ‘Why not bail out Main Street? What about the little guy? We gotta stop bailing out the CEOs!’ It’s just words. This is truly the Just-Words President. We haven’t bailed out anybody. It has taken Obama, Pelosi, and Harry Reid less than a month to wreck the US economy. And it looks like yet another pounding for people with skin in the game today as the market is down 112 to 120 points right now. The threat of nationalizing banks is scaring the hell out of investors who are shorting the stimulus and pulling their money out. It’s gotten so bad that Bill Clinton’s begging Obama to at least stop the destructive rhetoric. (doing Clinton impression) ‘Can’t you say something nice out there about the economy? You gotta build people up out there. I give you some lessons on how to do it, but you gotta speak positive. You gotta come out there, and you gotta give people hope.’ Let’s go Obama from his speech today, his meeting with the mayors in the East Room. (laughing) This is the bite where he says he’s not going to tolerate any waste.
OBAMA: I’m assigning a team of managers to ensure that every dollar is spent wisely. I want to be clear about this. We cannot tolerate business as usual, not in Washington, not in our state capitals, not in America’s cities and towns. If federal agency proposes a project that will waste that money, I will not hesitate to call them out on it and put a stop to it.
RUSH: This is unreal!
OBAMA: I want everybody here to be on notice that if a local government does the same, I will call them out on it and use the full power of my office and our administration to stop it.
RUSH: Well, his administration is engaged in the worst example of waste we have ever seen. You know, when you listen to Obama you have to assume the opposite on veritably everything he says. Does anybody really believe that he’s going to call out any federal agency that wastes any money? His whole plan is to waste money. His whole plan is to deficit spend. His whole plan is to bankrupt agencies. Look, Mr. Hazlett is right. Social Security, Medicare, all these things coming up for the Baby Boomers? Where’s that money going to come from? You’re going to have to add it on top of all the deficits that are mounting up now. Nobody with a brain would be doing this on purpose if their aim was to assist, if their aim was to fix what’s going on.
We’ve heard it all our lives, ‘We need Social Security reform because we’re not going to be able to afford it. It’s going to be bankrupt in 2020, 2030, whatever.’ We’ve been hearing this. It’s the same with Medicare, Medicaid. Bankrupt? We’re bankrupt now. How can we pay for what we’re already promising to pay, and we’re shoring up losers in the process? None of this is shoring up the economy. None of this ‘stimulus’ is going to people who actually make the economy work. It’s breathtaking. And to sit there and listen to Obama talk to people like this, and they give him this (clapping) the shouts of applause and so forth, it’s scary. So you got two Americas. You’ve got politicians and bureaucrats against us.