RUSH: Now, let me play a little game here. One of Obama’s big talking points right now is the gap between the wealthy and the poor and the wealthy and the middle class, income inequality, whatever you want to call it. Obama believes that the reason his agenda is called for here is because the distribution of wealth in this country is too concentrated in the hands of a few and that’s because capitalism doesn’t work. That’s what he believes. Obama thinks he can make the case that capitalism has failed because, look at all of the wealth held by so few, so comparatively few people. And those few people keep getting richer and richer and the middle class stagnates, and Obama thinks that years of his policies have nothing to do with it. It’s all because of capitalism, and that’s what he’s out to transform us out of.
If I were to ask you what do you think is the primary reason for this gap or this — well, we’ll call it a gap between the wealthy and the middle class that seems to be getting wider, why do you think the wealth of this country is not fairly distributed? And by that I don’t mean why isn’t government fair with distribution. I’m not talking about government distributing. I’m talking about the capitalist system. You’ve got money flowing in and out, back and forth, up and down. Why is it ending up, if you want to accept this notion, why is too much of it ending up in the hands of people who already have enough, as the Democrats would say?
There is an answer to the question, and it isn’t capitalism, folks. Capitalism’s not to blame here. Capitalism’s fingerprints are not on this gap. Capitalism is nowhere near the answer to the question, why do the rich keep getting richer, and the middle class keep stagnating. Capitalism is not a factor. So what is? Well, I’ll give you two words, but I will then have to explain why. I’ll give you four words. The reason why the distribution of money and wealth in this country is so skewed is because it’s been intended. The first two words, “Federal Reserve.” The alternate two words, although they go together, “stock market.”
RUSH: Now, just think about it. The Federal Reserve has been printing money, it’s called quantitative easing, and where have they been putting it? They’ve been putting it in the stock market. It really isn’t much more complicated than that, folks, in terms of the wealth gap. There are more details to it, but that’s pretty much the sum total of it.
RUSH: Now, there are a lot of reasons for the wealth gap, and I’d rather refer to it as “the distribution of wealth,” because that does happen. The question is, how are you gonna do it? Are you gonna let the market do it, or are you gonna let somebody like Obama, who thinks the market’s unfair, do it in the name of government? That’s socialism — and if it gets worse, it’s communism. Now, that method has never worked. Government distributing wealth has ever created a growing economy.
By definition, it can’t, because for government to distribute the wealth, government has to first take it — and once government takes the wealth, it’s gone. Government can’t create wealth. Government can only rearrange it, most often destroy it. But nevertheless we’re talking about the distribution of the wealth or the distribution of the economic output, the distribution of money in the country. It’s an age-old argument. If you look at doing it in a way that’s “fair,” then the socialists are gonna win.
If you believe that it’s got to be “fair,” however you wish to define “fair,” then government has to be the agent doing it, because the socialists will tell you that the market isn’t fair, that capitalism isn’t fair. In their world, “fairness” is pretty much everybody has the same. You have some few on the upper end — which would be them, the socialist leaders — and then you’d have everybody else. In capitalism, of course, how much you end up with depends on you more than anybody else.
That’s why the socialists claim it’s unfair.
(impression) “Well, not everybody’s capable of providing the same for themselves. It isn’t fair that some should be smarter, and isn’t fair that some should be better, and isn’t fair that some should have more talent!” So to deal with that momentous unfairness, we elect people like Obama to make it fair. And all they do, despite — even if they do have good intentions, which I reject anyway. But even if they do, they botch it up, because it’s not possible.
You simply cannot have a fair and equitable distribution of wealth handled by a central command-and-control authority or government, because they first have to take the wealth, and once they take it, you don’t have it. I mean, they have to take yours, right? They have to take everybody’s wealth. How does that promote the distribution of wealth, when government’s taking it? And then how do they give it back? How do they distribute it? Food stamps?
“Yeah, man!” Uh, welfare? “Yeah, man!” That’s really gonna help, isn’t it? “Child education programs? “Yeah!” Head Start program? “Yeah, that’s really gonna contribute to the national wealth.” It doesn’t. But it satisfies people who think things ought to be fair. On the other hand is capitalism, and you know how it works. It’s the old saw about the American dream. You get out of it what you put into it. But sometimes not always, because you’re dealing with sharks and thieves.
The way the liberals look at it is capitalism is inherently unfair because everybody in it is a thief. “Everybody that succeeds is a crook! Everybody that succeeds is mean-spirited. They don’t share.” That’s how they have sought to diminish it over the course of the years. Okay, so given all that, there is no question the income gap… This is even according to the New York Times. The income gap has increased four times faster under Obama than under Bush.
The gap between the rich and poor — however you want to describe this — the concentration of wealth in the hands of a few, the 1%. That gap has grown, and the reason is that wealthy have gotten wealthier. Now, the wealthy always will get wealthier except on those occasions when they lose everything, because sometimes the wealthy are entrepreneurs. They make big bets. They take great risks. Sometimes they lose everything. People move in and out of income levels all the time.
The wealthy are not always wealthy. The poor are not always poor (except when Democrats run the show). The middle class is not always middle class. That’s always been what America has been about, and that’s what Obama and people like them think is unfair. So, under Obama, wealth concentrated in the hands of the wealthy has increased four times faster than under George W. Bush. Okay, now, how do you account for that?
I mean, here’s Obama who talks about redistributing the wealth and doing it fairly and doing it with compassion and making sure the rich don’t get more than their fair share. He’s taking things away from the rich by raising their taxes, and, “We’re gonna do everything we can for the middle class. We’re gonna elevate the poor.” How in the hell does it happen, then, that under this great socialist the wealthy get wealthier and the middle class stagnate four times faster than under George W. Bush?
How does it happen?
Well, there’s one glaring example right in front of our faces: Quantitative easing. And you can trace this back to TARP. You can trace this back to 2008 and the so-called financial crisis, where if we didn’t bail out banks and General Motors and what have you in 24 hours, then the world economy was going to crumble and nobody was going to have anything. So we had TARP, and we had a couple of other things that we did. We had government bailing out businesses and TARP doing this, that, and the other thing.
Part and parcel, an offshoot of that was called quantitative easing combined with low interest rates. The Federal Reserve decided that they were gonna pump money into the equities market (i.e., the stock market), and quantitative easing is what that was called. It’s basically printing money. What did they do with that money? Well, it all went to the stock market. Why did it go to the stock market? Well, because the people who had the power to print it, that’s where they are.
If you had the printing press that prints dollars, and you had total control over where the dollars you printed went, why not give them to yourself? This is essentially what’s happened here. The stock market, in the middle of an absolutely foundering economy, has grown by leaps and bounds in ways nobody has ever seen before. In the midst of a purely totally stagnant economy, over here is Wall Street, and they have just gone gangbusters.
Well, if you’re there, if you own stocks, you are sitting pretty. You are in Fat City. And if you’ve owned stocks for the last six, seven years, you are in Fat City. Folks, it just stands to reason. You print a bunch of money and you put it in the stock market, and the stock market grows, and the people in the stock market happen to be the people in the stock market. Who are they? It’s more and more what are called average Americans. I mean, you may have a 401(k).
It might be invested in the stock market, stock here, stock there, but not to the tune we’re talking about. This is the primary reason that it’s happened. There are a couple of others, too. It’s not the sole reason. But the Fed? They say it’s independent, and they say it’s not tied to any government, government official, executive branch or what have you. But it clearly is. The Federal Reserve has seen it necessary to preserve the Obama presidency.
The way they’ve done that is to make sure that single-market segments are going great guns while everybody else is stagnating. The people in the stock market, the numbers tell the tale. They have gotten wealthier and wealthier and wealthier. But it’s not because of any genius. It’s not because of brilliant investing. It’s not because they’ve got smart people that know which stocks to pick and which stocks to avoid. It’s that the stock market has been flooded with dollars that have been printed under the term of quantitative easing.
I think the number’s $3.5 trillion now that has been thrown into the stock market since quantitative easing began. Well, look, it stands to reason that whoever’s in the stock market — and the wealthy are there, the 1%. They’re all there to one degree or another. It stands to reason that when you throw money in the stock market where people are, the things you invest in grow. That’s how it’s happened. That’s totally artificial. That’s not capitalism. Capitalism hasn’t put all that money in the market.
The stock market hasn’t grown because overwhelming numbers of millions of Americans have decided to put their money there. I’m talking about a majority of the middle class. The Federal Reserve has put the money there. There are other reasons, too, for the increasing gap. Much of which… This is not counted as part of the poor’s income, but welfare benefits — for food, for housing, for medical care, and social services like subsidized daycare — are not counted in the Census income-distribution figures.
But the amount of welfare… In other words, the amount of money that a government pays people not to work is also going to contribute to the wealth gap. You might ask, “Well, how can that be, Rush? I mean, if you’re giving people…?” Well, in the first place, the money we’re giving them isn’t counted as income, so the wealth gap doesn’t have that number tabulated. But it’s more sinister than that. The more money we give people who aren’t working, the less work they’re gonna do.
That means less productivity they are engaging in, and that means the less wealth — income — they’re gonna be creating for themselves in the first place. So if you’ve got the stock market over here, and if they’re pumping $3.5 trillion in there over the course of six years — and over here you’ve got an increasing number of people who are not working, just waiting on the government to send a check for whatever — what the hell do you think is gonna happen?
When people are not working and when they’re not producing and when they’re not creating wealth by producing an income for themselves, how in the world can the income gap close? It can only grow, particularly when you know that all these welfare benefits are not counted as income to the recipients. So there are clearly a number of factors. But it is not capitalism. It isn’t that the system is unfair and that somebody is unfairly a bunch of cheats and liars and frauds.
I mean, all that’s happening, but that’s happening because of big government. That’s happening because of massive government and government-related agencies determining where the money goes. Not economic activity. Not merit. Not entrepreneurism. Now, clearly, there are people who are doing well outside the Federal Reserve, outside the stock market. But this gap that they keep wailing and moaning about? In terms of it being related to capitalism, it’s not.
There’s nothing in capitalism that says, “Print a bunch of money and buy stocks or equity with it.” That’s something that big-government socialists and autocrats do when they have the power and authority over the money supply. Now, why did they do it? Why pump the money to the stock market? Well, they’d already created the idea that we’re gonna lose the world economy if we didn’t bail out X, Y, and Z. We also had a stagnant economy over here that was just in horrible shape.
Yet the Regime needed some sort of evidence that the economic policies were indeed working, and so, “Look at Wall Street, man! Look at the stock market, man. It’s going great guns. Why, there must be a lot of confidence in the economy. Look at all the investment going on in the stock market. Wow, this Obama economy is percolating.” No, it was all artificial. They printed the money to create the growth, while artificially keeping interest rates low for a whole host of reasons.
That didn’t help people on fixed incomes.
My only point — ’cause people are gonna argue with me, and I guarantee you from now through the weekend you’re gonna hear, “Well, there goes Limbaugh, sitting there talking about things he doesn’t really know anything about.” You’re gonna hear all that. But my point to you here is the socialists, the big-government types, use this gap between the rich and the poor and the concentration of wealth growing in the 1%, and they’re gonna blame capitalism for it.
Now, all I want you to know is you may disagree with my analysis of quantitative easing and all that money printed going to the stock market. But whatever, do not fall for the idea that capitalism is to blame for this, because it isn’t. If anything, big-government autocratic control over the money supply — socialism, whatever — is in control of this. And that’s why this gap exists. Plus all of the people — vastly, increasingly growing numbers of people — on welfare.
RUSH: Here’s Rose in Williamstown, West Virginia. Great to have you on the EIB Network. Hello.
CALLER: Hello. Thank you for having me. First of all, I want to say I’m a Licensed Practical Nurse. I got my degree in the eighties and then went back, got my business degree as a nontraditional student 10 years ago, and I’m 58 years old. And I want to say kudos to you for finally somebody shouting from the rooftops about quantitative easing affecting everybody’s income. I have been waiting and waiting for finally, for the “S” to hit the fan, and every time the Fed says, “No, we’re not gonna raise interest rates, no, we’re not gonna raise interest rates.” I remember the eighties when the interest rates were so awful and the economy was awful, too. So thank you very much.
RUSH: Well, you’re more than welcome. To me it’s common sense. I can’t recall what even got me thinking about this. It was one night at home this week. I’ve been pondering a lot of things. I read something or saw something, I don’t remember what it was, that was the spark. But it was something that really ticked me off about some liberal explanation for the wealth gap and why the rich keep getting richer, and it was all because of capitalism.
I blew a stack sitting there, and something just hit me, well, what the hell do you expect to happen when we’re printing three and a half trillion dollars, whatever, over the course of six years and pumping it to one place, and that place happens to be going gangbusters, therefore the people at that place are going gangbuster. It seems common sense to me. And then to have all that blamed on capitalism is what set me off. So, Rose, I’m glad that it made sense to you.
RUSH: James in Reston, Virginia, you are on Open Line Friday. Great to have you with us, sir. Hello.
CALLER: I don’t worry about artificial intelligence; I worry about genuine stupidity.
RUSH: (laughing) Well, yes. Absolutely. Stupidity or ignorance, exactly right.
CALLER: I will believe in artificial intelligence when a machine winges it’s being worked too hard and doesn’t get enough vacation days or pay.
RUSH: (laughing) Yes.
CALLER: This is regarding your earlier discussion of quantitative easing.
CALLER: The division between the rich and the poor is that the poor have their wealth in cash, and the rich have their wealth in things. Quantitative easing, you’re sucking value out of cash, you’re sucking value out of the currency. You’re doing debt monetization. And they’re sucking the value out of the cash and putting it into things, therefore transferring wealth from the poor to the wealthy.
RUSH: Okay, keep going.
CALLER: On top of that, something like two-fifths or three-fifths of dollars, US dollars, are not held by Americans. So this is also in fact a tax on everyone else in the entire world. Now, the UN wants to be able to tax the United States to pay their thing. Well, in fact the United States is taxing the entire world in order to pay for things that Americans want, and this is also sucking the dollars out of poor who have the cash as US reserve currency in the various poor countries around the world.
RUSH: Are you suggesting that we continue this, that we raise taxes on the poor? Is that what you mean?
CALLER: No, I’m suggesting we go back to the Constitution, which says the government isn’t supposed to be allowed to do this. That the currency should be actual money, which is precious metal, and not fiat currency printed by the government.
RUSH: So you mean return to the gold standard?
CALLER: Well, that’s what the Constitution says we’re supposed to have been doing.
RUSH: True. But here again, here again —
CALLER: The notion of the Federal Reserve is actually — has some merit if you have an economy that grows fairly rapidly. But the Federal Reserve was originally established to keep the value of the currency stable, and it hasn’t been doing that. It’s been assigned all these other tasks like, oh, what was the thing —
RUSH: No, no, no, no. Wait, wait just a second. It has not been assigned tasks. It assigned them itself. It’s a classic example of absolute power corrupting absolutely. They were put in charge of the money. What would the average human being do with it? It’s a big pile of money. I’m gonna take it. I’m gonna use it the way I want to. Anyway, I get your point. But that isn’t gonna happen, so we gotta have some other alternative of fixing this. Maybe it should, but I don’t ever see going back to the gold standard.