RUSH: Here’s Cruz. We got these Cruz sound bites I referenced. He ended a press availability just before noon, and this is the point that I repeated he was making about Carrier, the air-conditioning company leaving Indiana for Mexico.
CRUZ: Donald Trump and Hillary Clinton respond to something like Carrier by saying we’re gonna punish Carrier. We’re gonna use government power to go and punish the corporation. We’re going to use force. That’s what Obama does as well. As president I don’t intend to use government power to punish American citizens, American companies, American job creators. That’s not the role of government, to be a bully and punish. The reason Carrier is moving those jobs overseas is that the Obama administration has driven Carrier out of America. And this is why it is so important that we have a debate.
RUSH: All right, now, folks, these are fair points. But, again, when you talk about the Trumpeteers, they want people punished. The Trumpeteer — (interruption) You don’t like Trumpeteers? Look, I got Trump people saying don’t use Trumpists, it’s insulting. I think it’s clever. Are you offended by being called a Trumpist? I know you don’t want hear Trumpbot. You don’t like Trumpeteer? I don’t like Trumper. I don’t like Trumpeter. How about, let’s see, Trump, Trump, Trump, Trump. How about Trumpatriots? You like Trumpatriots? Trumpster. They don’t like it. They don’t like Trumpster. They don’t like Trumpist.
They don’t like Trumpaneers. They don’t like Trumpers. I’s too close to thumpers. Trumpeters, don’t like that because it’s a musical instrument. I don’t know. I like Trumpist. I’ve always liked Trumpist. Sounds erudite, sounds thoughtful, sounds official attachment and so forth.
Anyway, remember, now, the take-away, the important take-away as we discuss Carrier here, the important take-away from Trump’s speech yesterday is this line: “We will no longer surrender this country or its people to the false song of globalism.” Again, just to clarify, don’t assume any support on my behalf. I’m trying to explain to the frustrated why people support Trump, why people support Cruz. I can explain it. That’s what I’m doing. And that line was all most Trumpists needed to hear.
They’re losing their jobs. They’re losing their jobs to trade, foreign trade that is not, they believe, advantageous to America. Immigration is causing them to lose jobs. Illegal immigrants are favored over native Americans. This is what they think. They haven’t had a significant raise or increase in their standard of living in 15 or 20 years. They see American corporations hiring immigrants, legal immigrants for much less money. Native American jobholders, current jobholders are being fired.
I mean, there’s some legitimate grievances here. And then they do see American companies relocating to Mexico and China and so forth. It’s been going on for many, many years. And they haven’t had anybody that they support stand up and oppose it or try to stop it. Here comes Trump. And he makes it clear that he’s gonna try to reverse it. He condemns it. He lets these people know that he understands their plight. He’s one of the few who does speak to them in terms of conveying he understands their plight, and then he goes further and offers solutions.
He addresses their grievance and promises them that something’s gonna be done about it. And when he says he’s gonna go talk to Carrier and make sure they don’t leave and he’s gonna go to Nabisco, and he’s gonna go to Ford, and after he finishes talking to them, they’re not gonna leave, people are not worried that the president doesn’t have that kind of power and may be engaging in dictatorial type power. They want somebody punished, they want a president standing up for them, and they’re not concerned with whatever the constitutional —
This, by the way, is an often-cited fear that that many people have because Obama has gotten away with it that the next president’s gonna try to and that we ought not applaud somebody giving the Democrats a taste of their own medicine the way they dished it out because it’s not helpful in terms of the Constitution. Well, I’m just telling you that the people that support Trump, they don’t care.
If Carrier is gonna leave Indiana and take their jobs and render them jobless with no hope of replacing the job and somebody can come along and save their job, what do you think they’re gonna do? They’re gonna support it. And to heck with the vagaries of the Constitution, presidential power. Besides, they’ve seen Obama get away with it and the Republicans haven’t tried to stop him. You know, so why isn’t it fair for them to benefit from some of this kind of presidential behavior.
Again, I’m not endorsing any of it. I’m just trying to explain it to people who think others ought to be able to spot it. But Cruz has an excellent point here. (paraphrasing) “IÂ’m not going to punish Carrier. Carrier’s leaving ’cause of current policies implemented by this administration. We’re not gonna punish anybody.” It’s a good point and it’s a great illustration of the understanding of the proper use of federal power, the scope of federal power, and the limits on it.
RUSH: Let’s get started on the phones with Ron in Houston. Thank you for calling, sir. Great to have you with us.
CALLER: Hey, Rush. Thanks. We appreciate what you do.
RUSH: Thank you.
CALLER: I want to comment about the fact that you had mentioned that Cruz was calling out Trump for his heavy-handedness in dealing with Carrier. The fact that just like the Obama, they were gonna use executive action, that they were gonna go ahead and use his presidential power to force Carrier into staying in town. My point is that at the end of the day both Trump and Cruz are gonna do the same thing. They’re gonna deal with it the same way. They’re gonna use their power to bring an environment back into the United States through policies. They’re gonna be very similar. They’re both gonna do it that way. Trump’s not gonna create an executive action.
My concern is this is what Cruz does. This is why Cruz lost me as a supporter. Carson first, Ted Cruz and Trump was battling through but I chose to go for Trump ’cause he’s gonna tell it like it is. I think what Cruz does, he goes ahead and he plays on Trump’s strong personality. When Trump says something, he says it’s definitive and is now gonna do it. Trump doesn’t mean “I personally am gonna do it.” Trump is saying that I will create an economic environment through policies —
RUSH: No, that’s not what Trump is saying. Come on, now. I was patient. Trump is not saying he’s gonna create an economic environment where Carrier is not gonna want to leave. Trump is gonna call ’em into the White House. He very proudly tells people what he’s gonna do. You have no idea how Cruz and Trump would behave in the same manner here but you’re choosing Trump over Cruz even though they’re gonna act the same ’cause Trump calls it like it is or what have you.
This is an unanswerable question. All we have to go on, what Cruz is saying, that he would not use extraconstitutional powers. He would not strong-arm. H would not threaten Carrier. He might call ’em in and talk to ’em. He might try to figure out what the problem is, what he can do working with Congress to alleviate their problems, but that’s not what Trump is saying he’s gonna do. You’re gonna disappoint the Trumpists out there if you start misrepresenting what Trump is.
Trump is Mr. Strong-arm and that’s what they like about him and they want him to do it ’cause some of these people need to be taught a lesson. They’re like kids, and they’ve gotten away with no discipline for a while and somebody needs to rein ’em in and punish ’em, and that’s what these people want Trump to do. And they think he would be justified and validated in doing so.
Anyway, who’s next? Gary in Queensbury, New York. You’re next. Well, sir.
CALLER: Hello, sir. How are you doing? I appreciate your show and I appreciate your knowledge. You’re a very intelligent man.
RUSH: Thank you.
CALLER: You sort of just answered the question I have with the person you were just speaking to. My comment was that Cruz doesn’t really have all the facts straight. I believe Donald Trump is gonna talk to these companies, like you said, and pretty much lay down the rules for ’em and if they want to leave and become an outsider, they’re gonna be treated like an outsider. Do you agree with that or don’t agree with that?
RUSH: Is that what you think Trump will do, how he will deal with them and that’s what you think I said?
CALLER: Yeah, he’s gonna bring ’em in, like you said, and talk to ’em, find out what the situation is, if he can help, fine, if he can’t. He’s not gonna give ’em an alternative, but he’s gonna tell ’em, if you’re gonna leave the country and work from outside the country, you have to be treated like an outsider as far as importing products versus making them here in this country.
RUSH: Now, just to be clear, that’s what you think Trump will do.
CALLER. Yes, correct. I think you answered my question, what you just said. Or you agree with me on that point?
RUSH: Well, I’m still guessing, based on what Trump has said and what I know his supporters hope he’s saying.
CALLER: Oh, yeah — (unintelligible) based on what he’s saying, I understand.
RUSH: But the previous caller said that Trump’s gonna create a commission to create an economic climate to convince Carrier. That’s not at all what he’s gonna do. He’s gonna use his powers as deal maker to get ’em to stay. And your point is, if Carrier says, “Sorry, Mr. Trump, nice try, but no deal,” then he’s gonna treat ’em like outsiders after that.
CALLER: If they leave the country, correct.
RUSH: If they leave the country, then Trump’s gonna treat ’em accordingly. Well, that is the impression that Trump is leaving, yeah. That’s why you think that. Let me ask you a question. I’ve got few questions here. Gary, is that what you want him to do?
CALLER: I want him to get these companies to stay, if they can. I mean, obviously it’s best for our country if most of these companies stay. If they do leave —
RUSH: I’m just gonna tell you something, independent of this campaign, independent of Trump or Cruz. If you want companies, transnational — I love the term — if you want transnationals, major American corporations to stay here, you’re gonna have to end cronyism. You’re gonna have to end the ability of some corporations to have exclusive deals with whatever president and party is in power and basically — I’m out of time — get rid of liberalism. There’s more.
RUSH: You know, we really ought to have a moderately serious discussion on what it would really require to keep American businesses in America, manufacturing plants in America. I don’t know if you learn everything if you’re gonna still support it.
RUSH: I’m gonna give a stab at this, and I’m not gonna get nearly as deep and detailed as you really need to go. I’m gonna keep this on a surface level and still try to make my point in trying to keep American jobs in America, corporations open and manufacturing in America.
There are so many reasons why this began to change. It’s not just due to trade deals, but they are a factor, there’s no question they are. But it’s not just due to that. You can’t talk about this without discussing the voluminous, punitive regulations that are on businesses from the federal government to the state government to local governments, sometimes as much as 25% or more of the cost of a product is nothing more than regulations, environmental and otherwise, that have been slapped on corporations and business practices that are not even with the force of law. They’ve just come from out of control regulatory agencies.
There’s another factor that you have to consider when talking about this, and that is unions and how they price themselves. And when you start talking about unions, you then talk about something that is really key and fundamental to this, and that is profit. And profit is the result of being able to sell something for more than the total cost in manufacturing it, distributing it, marketing it, advertising it, you name it. If you can’t turn a profit on it, then you will not stay in business. Not in the kind of economy we have. Not in a country like this. In fact, you can’t do it anywhere. You can’t prop up non-profitable businesses. Venezuela tried.
Socialism is so inept. They’ve got oil out the wazoo and they still can’t run a country. But I distract myself here. When you talk about unions and when you talk about regulation and when you talk about profit, there is one key ingredient here that you cannot ignore, and that is the retail price of whatever product that we’re talking about here. And that price, for whatever product we’re talking about here, has to be something that people can afford. This is what’s gone wrong with health care.
And, by the way, on health care, later on in the program, I have come across what I think is conclusive proof that the whole Obamacare initiative is a scam designed to fail and to get us to government-run single payer. I think I can prove it, even beyond what I already have been able to do since 2010. A lot of factors go into price. Profit, the ability of your customer base to pay for it, to afford it, your ability to market and advertise and distribute. Then you’ve got your competitors who are all not in America and whose costs for the other things that you face may not be the same, they may be less.
Folks, this is why markets work, and any time people trying to get in the middle of this and artificially tamper with and massage markets to make them more fair, you end up screwing up everything. If people would just leave ’em alone, and I don’t mean unregulated. Nobody’s talking about being unreasonable here. But we live in a country where the Democrat Party has succeeded in generation after generation believing that corporations and companies and people that make things are the enemy of average Americans.
Corporations want to kill their customers, for example, they want to poison their customers. Corporations want dirty air, they want dirty water. They want cars and trucks that explode while their customers are driving them. They want their customers to get cancer from bad drugs. It’s obscene what the Democrat Party has done. The Democrat Party has successfully, to their benefit, created this relationship where your average American Democrat voter thinks that everything in the commercial marketplace is his enemy.
That’s how the Democrats get to control them, that’s how the Democrats get to regulate them because they get public support. That’s how the Democrats get away with running around punishing all these different companies. Take your pick of whichever company you’re talking about. It’s not as simple, in other words, as going to Ford or Carrier and saying, even pleading with them. I mean, you could strong-arm ’em, you can try to persuade them, you can beg them, “Please, for the good of America, please stay here.” And they will tell you, “We’ve tried. We’ve tried.” And then they will tell you all the reasons why they cannot manufacture in America at a price that will allow them to stay in business.
The consumer will hear that and think they’re being lied to and think the corporation wants to soak ’em and wants to cheat them ’cause that’s what the Democrat Party has for a hundred years succeeded in making the average American think of the average American business, large or small. The average American business does not exist to provide employment for a community. It does not exist to provide health care for its employees.
That’s not the purpose of a business. It’s not the purpose of a company. It’s not to support charitable endeavors in the community. It’s nothing of the sort. It’s a very narrow list of requirements for a business to succeed and stay in business, and all the rest of that ends up being political attachments or PR attachments or goodwill attachments, and sometimes competitive attachments. Sometimes in a different market, where employees are tough to come by, companies have to compete by offering better benefits packages than other companies do. But if left alone, the market would take care of this.
But those days are long gone.
You see the surveys, Millennials now think socialism is the answer to everything. Capitalism is rotten, they hate it, ’cause that’s what they’ve been taught. Millennials of this generation, 20 years ago the 30-year-olds of that generation thought the same thing, that capitalism sucks, it’s unfair, and you know why? ‘Cause there’s winners and losers and this is not right. Yep, everybody should win or nobody should. It’s not fair that some do better than others. It’s not fair that some have more than others.
It’s not fair that we have winners and certainly not fair that we have losers. It’s humiliating, and if a government can come in and persuade everybody, “We’re gonna take care of the losers. We’re gonna soften the blow and make sure nobody loses.” Yay, yay, so the whole minorities get taken care of and all the disadvantaged get taken care of and you end up with mass mediocrity. It ends up being celebrated, and it ends up being hailed as great. And you end up with people who think their country has seen its better days.
None of this was necessary, none of this need happen. It’s all happened ’cause government’s gotten in the middle of it, and the proof is Obamacare and health care. There’s very little in health care that the average American can afford to pay out of his own pocket. We did a Morning Update yesterday or today. Was it MarketWatch that did the survey on the 400 bucks? MarketWatch went out and did a survey and they asked people — (interruption) It’s the update for today? All right. I record these things explanation, of course, ’cause I have things to do after the program. I’m not gonna come in here at five a.m. and do these things live. So, yeah, it runs today.
But here’s the point of it. They asked people what they would do if they had an emergency that required $400 deal with it. Whatever it was, medical, automobile repair, house payment, you need 400 bucks. It was shocking, what was it, the people that could not come up with it. Forty-seven percent of people said they would have to sell something to come up with $400 to deal with an unexpected expenditure. Now, stop and think about that for a minute. That’s more than living paycheck to paycheck. There’s no savings account backing anybody up. There certainly isn’t any retirement there.
And that is why everybody has been slowly conditioned to accept everything being subsidized, ’cause there’s no way they can — health care is the great example. There’s hardly any aspect of health care that you, as an individual, can afford to pay for yourself. And there are reasons why. But take an unregulated, relatively unregulated industry and ask yourself the same thing.
Let’s say my favorite comparison here — I’m sorry if you’ve heard it before — is the hotel business. Nobody would even think of the hotel business being subsidized. Nobody would even demand it. Because you don’t need a hotel to survive. But health care is a right. Yes. And, by the way, here’s a new one for you if you haven’t figured it out. According to the Millennials of today, the sixties radicals of the sixties, and way too many people today, if it’s a right, it means the government has to pay for it, too. And never, ever has that been the case.
Never was a right something paid for by the federal government. But that’s what it’s become, thanks to our good friends, the left, and the Democrats, and the liberals. So if you have to spend the night in a hotel, there’s gonna be one within a 10 mile radius of wherever you are that you will be able to afford. Not true with medical care. There’s hardly any of it you can afford. You haven’t been able to afford it for years. Why? Because it’s so regulated, the government’s been so involved in it with so many demands, insurance.
When commodities and products and services are priced with no concern for the ability of the consumer to pay it, you have lost control. There is no market and nothing in it is fair or will ever make sense. And the people benefiting from it are few, and all at the top.
So back now to our corporation. Let’s say the XYZ Widget company. XYZ Widget company makes their widgets and they’ve gotta sell ’em in the United States at $10. And that’s based on selling so many, by the way. And if they don’t make a profit they’re in heap big doo-doo. Well, they take a look at what’s it’s gonna cost to manufacture.
What if it costs $9.50 to make it in America and $1.75 to make it in Mexico, and they’ve got competitors in Mexico, they’ve got competitors in China, they got competitors in Vietnam. But what if the American widget company we’re talking about can only make a profit, could only stay in business if they have to charge $15 for their widget in the United States?
But down the road you can get China’s widget for 10, Vietnam’s for eight. You can get somebody else’s for seven or whatever. They may be a different quality. But the American-made widget company just can’t sell it for that price because it’s union payroll, requires a minimum of $15, whatever it is, whatever requirements have been plowed on that business.
My point is there are market reasons why this stuff happens. And it is businesses reacting to regulations and mandates and government pressures that have been placed on them. And I’m not denying that there’s been some greed on the part of some corporations. Nobody’s clean and pure as the wind-driven snow on any of this. But I’m telling you one of the primary guilty parties in all of this that escapes total blame all the time is your buddies in Washington, DC, both parties.
The regulatory agencies, the massive federal government, whoever benefits from having corporate crony relationships with people that run these corporations, of all the people that get blamed for whatever economic mess we’re in, the government always, the president if he’s a Democrat always manages to escape having any blame assigned to him whatsoever.
There’s another thing, too. If you’re going to stay in business, you’re gonna have a business in America and it’s a business where you manufacture a product, and you have employees, well, you have to have another consideration. Your employees have to be able to afford it, too. Everybody, depending on your market, the people you’re marketing whatever your product, whatever their income rage, they’ve got to be able to afford it. You have to be able to pay your employees enough that they can live and maybe buy your product. It’s a measuring yardstick.
This all breaks down with the introduction of international competition and a whole lot of factors. The only way some of these corporations can be made to stay is if somebody, the federal government subsidizes ’em and makes up for the profit that they cannot earn on their own.
Now, one of the things Trump says he’s gonna do — I read extensively his plan — is if he fails in convincing, say, Carrier or Nabisco or Ford to stay in America and if they do indeed go to Mexico, like Carrier, he says, fine, I’m gonna slap a tariff on every air conditioner you ship into this country, and you’re gonna pay through the nose for leaving, except Carrier won’t pay diddly-squat, because corporations don’t pay taxes.
What would happen with that tariff? Carrier would put that tariff somewhere in the price of that air conditioner. They would add a little bit of it at the wholesale level. They would add a little bit of that tariff at the retail level. They would take a little maybe out of their marketing budget, whatever, but they would not pay the tariff when all is said and done.
They might write the check to the government, but the money to pay it is gonna come from the people at the end of the line, which is the consumer. And if the tariff makes the product too expensive and the consumer can’t buy ’em, then there aren’t gonna be Carrier air conditioners in America and there isn’t gonna be any tariff and there isn’t gonna be any money raised and there isn’t gonna be any punishment and nobody’s gonna have a Carrier air conditioner.
RUSH: Look, folks, there are exceptions to everything. Like Reagan, Reagan placed a tariff on the Japanese to save Harley-Davidson, and it worked. But he only did it once. Now, I didn’t mean to be able to explain everything, answer every question in that little monologue. The primary point that I wanted to get across is that the loss of American manufacturing jobs is not exclusively due to the fact that corporations are mean, evil, rotten, because, after all, corporations are not people. Doesn’t the left tell us that? How can a corporation be mean and rotten, have rotten people, if they’re not people?
But when markets are interfered with and some are subsidized, some businesses, some have close crony arrangements with government, other companies in the same business are not allowed to, you have unequal competition, it’s massively complicated here. I’m not opposed to saving American jobs. I was not defending any of it. I’m trying to explain how it happens and to give you an idea how intricately woven — it is complicated. It’s not just that American corporations are evil.
Now, I’ll tell you this. Having said that, it used to be that most American industry, Big Business particularly, was devoted to free markets. And that’s not the case anymore. They have figured out that it’s much easier to compete against their competitors if they can sidle up to government when their competitors can’t. So the idea that Big Business is a bunch of free market conservative Republicans, cutthroat guys, that’s not the case anymore.
Liberalism, Democrat Party politics corrupts practically everything it seeks to dominate and control, because, by definition, the Democrat Party and liberalism is not a hands-off affair. They don’t trust you to do anything. They want to control virtually everything you do for one reason: their own power and securing votes. They will make anybody they have to an enemy, and they will create adversarial relationships with voters and companies if they can in order to get people voting for them. That’s where this ultimately is gonna get fixed down the road, if you ask me.
RUSH: I just want to share with you before we get back to the phones what Trump has said about making sure that American manufacturing jobs don’t leave and how he’s gonna do it. And basically he said he’s gonna raise tariffs when it comes to Carrier air conditioners and cars, say Fords, if they’re made in Mexico. He did an interview with Trump Bart — sorry — Breitbart. Breitbart News Daily. And from that interview he said, first of all, you’re gonna have to look to lower taxes for those who do business inside the United States.
So American corporations that stay here, they’ll be rewarded ’cause they’re gonna get a tax cut from Trump. And he said we may very well have to charge taxes at the border when somebody drives a car through the border to sell in the United States or brings an air conditioner across, we may have to charge taxes at the border, i.e., a tariff.
But he said, “Look, weÂ’ve closed our plants. WeÂ’ve lost our jobs. TheyÂ’re not going to build cars in Mexico and sell them in the United States, okay? We can lower our taxes, and weÂ’re probably going to have to charge a surtax at the border. Otherwise weÂ’re going to lose a fortune. And that will help Ford and other people make a decision to buy in the United States, to build in the United States.”
Because we’re gonna tax ’em to the point that it’s not gonna be profitable for them to leave. If they go to Mexico and they want to make cars to sell in America, we’re gonna make it so cost prohibitive they won’t be able to sell ’em here and so they won’t leave.
Reuters reporting on it said Trump would tax Carrier air-conditioning units from moving to Mexico, said he would “impose taxes on Carrier air conditioning units manufactured in Mexico in light of the company’s decision to move production from Indiana, a position in line with his strong opposition to international trade deals.”
And during a CBS News debate in February Trump said, “I’m gonna tell ’em, I’m gonna get consensus from Congress and we’re gonna tax you. If you’re gonna leave, we’re gonna tax you. So stay where you are, in Mexico, or build in the US, because we are killing ourselves with trade deals that are no good for us and no good for our workers.” So in in in the debate he even talked about working with Congress to get these tariffs imposed.
And just as an aside I have a little interesting economic fact, factoid. During the break Mr. Snerdley said to me, “Well, wouldn’t Trump’s idea be effective, I mean, if Carrier doesn’t sell air conditioners, worried about their market share?” And, you know, market share is one of the most misunderstood barometers of business success. Market share is one of the — in some cases it means a lot. In other cases it means nothing.
Let me tell you about Apple for a second. Apple, even considering this last quarter that they just reported their financials, Apple earns — are you ready for this? — over 90% of all profit from the sale of smartphones worldwide, 90% of the profit worldwide Apple earns. You know what their market share is for iPhones? In your mind, take a wild guess what Apple’s market share is. It doesn’t even hit 20%. Worldwide market share, they sell 230 million phones a year.
Samsung makes that many that they give away in Bangladesh, in India. Samsung manufactures 94% of all cell phones sold in the world. They have a 94% market share, and they’re losing money. They are showing maybe a 2% profit. So ask yourself, how can a company with 20% market share get 90% of all profits in the smartphone — this doesn’t include iPads or any of the other things. This is just the cell phone business. And one of the reasons is, Apple does not have a cheap version.
Apple average retail selling price is so high, their margins are like 40, 45%. They don’t make phones that they sell for 150 bucks. Now, you can get a three, four-year-old phone on contract for nothing, but it’s a three- or four-year-old phone. But they have carved out a specific way of doing business, and it doesn’t depend on market share. It’s totally, totally focused on profit and average selling price.
When you tell people that, they’re shocked, because everybody’s been conditioned with the limited economic education they’ve had, to believe that market share is everything. And you can do anything you want with statistics. Radio or TV ratings, you know, ratings versus profits versus market share, you could do the same thing. It depends on what your objective is in terms of your business objective, what you want to achieve and how you want to maximize it, what you’re really trying to accomplish.
And for some people it isn’t profit. Some people they admit profit’s not what they’re pursuing. They’re pursuing hip. They’re pursuing buzz. On certain things they’ll take a loss leader on it and they’ll try to earn the profit somewhere else, like Guiding Light, but they’ll lose money on Colbert just to say they’ve got the hippest late-night show. Very, very intricate, complicated. You talk about a spider web of intricately woven potential possibility trying to unravel some of this stuff. It’s fun, it’s fascinating.