RUSH: Folks, are you ready for the ‘Rezko Rescue’? The Rezko Rescue plan to be announced in mere moments by the Bamster, President Obama, who is staying at a foreclosed resort out in Arizona. He claims he didn’t know that it was foreclosed when the staff decided to pick the place. McCain also is going to use the same foreclosed resort to announce his campaign for a fifth term, and I assume that neither of those two guys’ staff people had any idea that this resort was foreclosed on a day that the Rezko Rescue plan is to be announced.
Greetings, folks. How are you? Great to have you here. Rush Limbaugh, the EIB Network, the Limbaugh Institute for Advanced Conservative Studies. He’s staying at a resort. Well, he’s got a big staff, gotta stay someplace, resort, hotel, whatever it is, but it’s foreclosed. The same kind of place the AIG guys go, yeah, and the same kind of place that the Citibank people go, the same kind of place people fly their private jets to when they go there, Obama is staying there. Here’s the phone number, 800-282-2882. The e-mail address is ElRushbo@eibnet.com. Now, ladies and gentlemen, for those of you along the line, the board ops at our over 600 affiliate radio stations, a couple questions today. Are you going to join in progress, are you gonna carry the Obama announcement? No. We are not going to carry the announcement. This is strategic of Obama to try to preempt this program or to get himself on this program, ’cause if he gets himself on this program, I am not on the program. I’m not going to fall for this. The timing of these press conferences, these special announcements and so forth, yesterday’s was at 2:40, we didn’t JIP that. We’ve got the statement; we’ve got the prepared text; we know what he’s going to say. Cookie and the team are rolling on it and we’ll have the sound bites.
Now, how does that happen? The New York Times just glosses over this, but how in the name of Sam Hill do you take out a loan that you were never going to be able to afford? It seems that somebody had to tell the lender to do that, and we know that’s exactly what happened. The Community Redevelopment Act started with Carter, beefed up with Clinton, it was one of the specialties of Barney Frank and Chris Dodd, it’s called affordable housing. Fannie Mae and Freddie Mac bought up all this worthless paper, started inventing all kinds of things, derivatives and you name it to try to give value to this worthless paper, and that got us largely in the place that we’re in now. Many people took out loans they were never going to be able to afford, never! That means somebody knew from day one they were never going to be able to pay back the loans. Some of these people have since lost their jobs. They are still in the homes. About three million households fall into category number one, and without help, they will lose their homes. So the first group is made up of three million people who can’t afford the mortgages, who took out loans they were never going to be able to afford.
The second group is far larger. It is made up of more than ten million households that can afford their monthly payments but whose houses are worth less than what is owed on their mortgages. In real estate parlance, they’re underwater. If they want to stay in their homes, they’ll have no trouble doing so, but some may choose to walk out voluntarily rather than continue to make payments on an investment that may never pay off. Obama has apparently decided to focus on the first group, based on the previews of his speech that his aides have put out there. So let me sum this up for you: $75 billion in the Rezko Rescue plan. It is gonna go to group one, people who couldn’t afford the house and mortgages they entered into in the first place. Group two is going to get hardly anything, maybe nothing. They are made up of over ten million people. They are making payments on their homes, but they’re underwater because of the plunge in housing prices caused by the first group. The larger group is making their payments but the value of their home’s plummeted, going to get nothing. The plunge in their housing prices, the value of their home caused by group one.
The responsible people in the second group are going to get the equivalent of diddly-squat. What Obama is going to do is bail out the first group, which has contributed directly to the misfortune placed by the second group. So to personalize this, you live in a house, you’re making the mortgage payments, but the price of your house has plummeted, it’s now worth less than what your payments will add up to. A lousy investment. You can stay in your house, but not much can be done to raise the value of your house. The first group, which had no prayer of ever being able to pay it back and is not paying their mortgages, that’s who’s going to be bailed out in the Rezko plan. Well, you in the second group, you do get eight dollars a week in the tax credit plan in the Porkulus bill. It’s not as though you’re getting nothing. From Obama’s prepared remarks, it will establish a $75 billion fund, his bailout plan here, ‘to reduce monthly payments for another three million to four million homeowners stuck in subprime mortgages they can’t afford as a result of skyrocketing interest rates or personal misfortune.’ Personal misfortune? How big is that loophole? You could fly Air Force One through that loophole.
How many of us have not had personal misfortune because of all this? How many of you with kids going to college have seen your college fund cut by half? Is that not personal misfortune? ‘The initiative is intended to reach millions of responsible homeowners who are struggling to afford their mortgage payments because of the current recession, yet can’t sell their homes because prices have fallen significantly.’ Now, the text doesn’t say what he’s going to do for this group. It talks about what he’s going to do for group one. ‘But by making these investments in foreclosure-prevention today, we will save ourselves the costs of foreclosure tomorrow — costs borne not just by families with troubled loans, but by their neighbors and communities and by our economy as a whole.’ You know, it’s too bad, it’s just too bad that we all didn’t have Tony Rezko to get us a good deal on our houses like he did for Obama. Obama got a house he couldn’t afford but the way he did it was Rezko, with Rezko and his wife. So this plan, we ought to call this the ‘Rezko Rescue,’ getting a great deal on a house you could never afford, and then having a sugar daddy, in this case the federal government, come along and make it whole and make it good.
Now, if you’re in the second group — and I’m surprised, I think this group is a lot larger than ten million people who have seen the value of their homes plunder, it’s gotta be more than ten million people. You have to understand that the three to four million who can’t pay, who were never going to be able to pay, they are the ones getting bailed out. That’s classic Obama. Obama has a mind-set that this country treats the disadvantaged very poorly and does so on purpose. I think Obama has got a bug in his hair. I think he’s got a chip on his shoulder about race; I think he’s got a chip on his shoulder about poverty; I think he believes it’s caused and planned and maintained by power brokers, and I think what Obama’s doing behind all the flowery rhetoric is getting even. He’s happy to see Wall Street go to hell, he’s happy to see these big time execs, be it in Australia, be it the auto industry, he’s glad to see them come begging to Washington, he’s glad to see them hurting.
I think Obama epitomizes what I have said about liberalism: You spread misery equally. That’s how you get equality. And so now he’s the agent for people who he sees at the bottom of the scale in capitalism who are victims of capitalism, and he’s standing up for them at the expense of everybody else. The government, Barack Obama now picking winners and losers, which is one of the definitions of centralized authority, Central Planning government. What Obama needs — and this is a New York Times passage — ‘the Obama approach brings risk’ because the administration is betting that very few of you in group two, you underwater homeowners will walk away — and, by the way, a year from now, according to MoodysEconomy.com, a year from now the number of homeowners underwater — that is your payments are worth more than your house is — will number about 15 million. If those people begin to abandon their homes in large numbers, just walk away from them, they will aggravate the housing bust and the financial crisis and probably force the administration to come up with a new, much larger housing bailout down the road.
So Obama is figuring that those of you in group two who are going to sit by and watch people in group one who could never afford the loans they got, be bailed out while you’re not, they expect you’re just going to stay there in your home and continue to pour money into a losing investment rather than walk outta your mortgage or walk outta your house. That’s what he’s banking on, that you’ll sit there and basically get sand kicked in your face from the bully on the beach. ‘Frederic Mishkin, a member of the Fed’s board of governors until last year, notes that if even 10 percent of the underwater homeowners walked away, foreclosures would soar, exacerbating the economy’s many problems.’ So pressure is now going to be brought to bear on those of you in group two, while you’re seeing group one be bailed out, you hang in there and be tough, you go ahead and throw money into your losing investment. They’re banking on the fact you’re going to do this because you need a roof and because you need shelter and because you can afford the monthly payment. They’re banking on the fact that you’re going to continue to throw money into a losing investment and they’re counting on the fact that you’re going to hope and pray that over time the value of your house will come back.
Now, I’ve gotta take a break. When we come back, I want to take these numbers that we just heard about, we heard three to four million, we heard ten million, so we’re talking, what, 13, 14 million people. I want to use that number and put this $75 billion to work because basically what we’re talking about here is $75 billion to help about nine or ten million families. How does that math work out?
BREAK TRANSCRIPT
RUSH: Snerdley is telling me during the break that he bought his house at the top of the market. He’s one of these people ‘underwater.’ The bank has told him there’s no equity in his house. Now, what was your question? You want to be able to call the bank and get a lower payment? Well, now, there is a Reuters version of all this, and it’s the only version which says that some four to five million of you in group two might be offered some refinancing help. I’ll go through that in just a second, but Reuters is the only place that has that take. The New York Times and everybody else, puts these people in Group One and Two. Group One is going to get the bailout, and Group Two is going to get very little — and this is based on the pre-released, the released text of Obama’s statement.
We’ll know the facts if he’s changed it before he speaks, when he speaks. Now, CNBC, they have a reporter there named Michelle Caruso-Cabrera and she said, ‘The new Obama housing plan is going to give a break to those who least deserve it: people who bought more house than they can afford. It will reward those who made all the wrong decisions. … Think this through for a second. Your home value, along with all your neighbors, has gone down in the last year. But now your neighbor, who bought above his means and can’t make the payments, because of a reset to the REAL monthly cost of the loan, is suddenly going to get a gift. Well what about you? You did the right thing. You didn’t buy more than you could afford. But you don’t get a break.’ Now, the Reuters version of the story is this.
‘President Barack Obama on Wednesday pledged up to $275 billion to help stem a wave of home foreclosures that sparked the US financial meltdown…’ I read these sentences, and I want to go off on tangents explaining them and how they’re wrong and all that, but let me stick with the elements here. ‘The plan not only helps responsible homeowners on the vernal of defaulting, but prevents neighborhoods and communities from being pulled over the edge, too, according to a summary of the plan that Obama is delivering’ now. Now, here’s what Reuters says: ‘It aims to help four million to five million responsible homeowners to refinance and another three million to four million by lowering the risk of imminent default with a $75 billion Homeowner Stability Initiative that will help reduce their monthly payments.’
Now, let’s just wait ’til he is finished. We’re rolling tape on this, and we’ll have the definitive word when he’s finished with his presentation out there. I want to focus on the $75 billion. Reuters says it’s nine million families. Let’s round it off and make it ten. The New York Times says we’re talking about ten million who are not going to get help, three to four million who are. So we’ve got a disparity here of 13 to 14 versus nine or ten. But regardless, let’s use the nine million number. What do you think the total mortgage, what do you think the payoff for these people’s mortgage would be, max number? These people didn’t go out and buy $2 million houses. They’re buying houses that are, what, $500,000, $400,000, $700,000, three and four hundred thousand, people who could never afford it. You figure they’re in that range, okay? So let’s use $300,000.
Ninety-nine percent of the bailout families need about $300,000 to completely pay off a mortgage. I did a little research on this. Some friends of mine, they would need only $160,000 to be out of their mortgage and the equity loan we got for remodeling the house, and they’re not in Group One. These are people in Group Two. Seventy-five billion dollars and nine million people are gonna… Let’s up it to 500. Brian, do the math. And every time I do this, we get it wrong. I don’t care who I ask to do the math, it always ends up wrong, and I get scientists and mathematic people sending me e-mails with the correction. I need nine million times 300,000. I’m sure some of you wizards out there are doing this in your head, and you have come up with the number. What I do know is, it ain’t going to be $75 billion. Whatever this bailout is going to cost, it is not going to be $75 billion.
This is what I was talking about yesterday when I said that the states and the federal government have boatloads of money. It’s just being spent in wasteful, stupid ways that nobody ever questions. You just say, ‘Okay, we’re going to bail out, what, nine million people? Well, that’s wonderful. We don’t want people to suffer, Mr. Limbaugh. We want people to have a fair shot, just like you have. It’s been unfair, Mr. Limbaugh, that you’ve been able to acquire so much, and so many people have so little. So what we’re going to do, is the only fair thing to do.’ All right, fine. Nine million mortgages, $300,000. I still don’t have the number! It’s called a calculator. Twenty-seven plus 11 zeros. I’m going to do this myself. I’ve got three people working on this. (interruption) It’s 2.7 trillion? (sigh) Well, this just makes it even more ridiculous if that’s like the right number.
BREAK TRANSCRIPT
RUSH: So if we’re going to take nine million of these people who overstepped and took out loans they had no chance of repaying. Of course, I don’t think that’s the actual number now, according to the New York Times, because the stories are conflicting. I just listened to Obama a little bit. Da-da-da-da-da-da. Shoo-shoo-shoo-shoo. I guess it’s three to four million people that we’re going to bail out. And he just said that Group Two, if you are in Group Two, there will be some homeowner stability. They’re gonna help you refinance your mortgage. They’re going to have a judge do this, but not all of you in Group Two. They don’t have the money. They’re going to do all of you in Group Two, but three to four million of you he’s calling ‘responsible homeowners who played by the rules and the value of your home has plummeted,’ they’re going to find a way, he says, to help you refinance.
He’s going to do all this for $75 billion. Now, we just, as you know, ran it is numbers, and just using the numbers here in the Reuters story: if nine million families were helped out in toto and just using a mortgage figure of 300 grand — if the government came in and just paid off every troubled mortgage in this category we’re talking about — it would cost $2.7 trillion. Obviously they’re not doing that. They’re spending $75 to help nine million families. Now, this is gonna work out to about $8,000 a family. If you divide 75 billion by nine million, and you’re a little bit over, what, 8,000, doing the number in my head here? Now, something here is not working out about this. Look at it this way. If you got nine million families in trouble, just give ’em each a million bucks.
What have we spent, $9 million. If you have nine million homeowners in trouble here, and you really want to get this problem off the books, give ’em each a million dollars — I’m not advocating this; I’m running some numbers here — and we could save a boatload of money. Looking right here. Seventy-five billion to help nine million families, nine million, one million each. What would that be? Oh, yeah, that’s right, nine trillion. We can’t do that. The point is, the numbers, no matter how you crunch them, they don’t add up to offering anybody any serious relief here, the way we figure it, without knowing the values that we’re talking about in mortgages that either people are never going to be able to repay or the second group that’s not going to get much of a bailout at all. So $75 billion divided by nine million, somebody run that. I’m figuring that’s going to be around 8,000.
I’m doing that in my head. I know you’re saying, ‘Why didn’t you do this before the program began?’ ‘Cause I didn’t think about it before the program! I do my best thinking when I’m on the air, and sometimes it causes us to go through these machinations. I really didn’t think about it, I was focusing on other areas of this, which are this. The bottom line here, folks: You played by the rules, and you’re going to get shafted. The people who didn’t — the people who were given these loans who never, ever had a prayer of paying ’em back; who should not have been given the loans in the first place but were, because of Democrat Party politics — are now gonna get totally bailed out. We are bailing out the losers in Obama’s plan. There’s a pattern here: whatever it costs and whatever the thinking behind it, we are bailing out losers.
And there has to be a reason for this — a strategic reason, perhaps a political reason, ideological reason — and I think I know what it is. I have — I have studied what Obama has said. I’ve studied where he came from. I’ve studied those things that he was exposed to when he was growing up. I think race is a central factor in determining Obama’s worldview. We heard him talk yesterday from 1998 about welfare reform, and he clearly believes that welfare reform was designed to punish black, inner-city families and people. I think he believes that capitalism — and he believes it on his own or he’s been taught it and believes it or it’s a combination of things. But he was raised, he was raised by people who have a huge chip on their shoulder about achievers. He grew up that way and he became radical, ACORN and so forth.
They’re mad, irrationally so. Obama does a good job of masking his rage, but look at his preacher, Jeremiah Wright. You talk about angry? Look at Father Pfleger and William Ayers, angry at the inequities and the unfairness of capitalism. Blow up the Pentagon. You know, all these things we tried to say during the campaign mattered. Everybody said, ‘No, no, no, no! They’re ancient associations. Obama didn’t know these people. He can’t be held responsible.’ Wrong. We’re now watching it play out in front of our eyes. We’re watching the results of anger at what these people considered to be the inequities and the unfairness of capitalism, get squared way. The Porkulus bill contains many things identical in principle and how they work to this whole housing bailout thing. Look at who the focus is on. The focus is on people who never had a chance of paying back the loan.
To them, to Obama, these people are victims. They’re victims. They’re victims of ‘predatory lenders.’ You know, Obama does not stop to think — or doesn’t want to admit — that predatory lenders were made predatory by acts of Congress and by pressure from Congress, by pressure from the Clinton Justice department, name of Janet Reno. So all of these people that have no business being in a house based on their ability to afford it, are now in the housing slump and the overall economic decline, being foreclosed on, which is the normal thing to do. ‘Oh, no! We can’t have that, can’t have that. We can’t kick these people out of their homes because of the actions of others. We can’t kick these people out of their homes because of the achievers. We can’t let predatory lenders kick these people out of their homes. It isn’t fair! These people were entitled to homes just as you people who can afford them are entitled to them.’
I’ve thought about this, and I really do believe that there is a reservoir of anger that is behind every Obama legislative initiative and idea. He keeps slamming George Bush. He said we gotta send 17,000 more troops to Afghanistan. Why? ‘Cause we haven’t been bold enough and smart enough in Afghanistan. We haven’t done that right. Everything that he is doing, he’s blaming on Bush and claiming that, without saying the words, that Bush was incompetent. He didn’t do enough here, didn’t do enough there, even though the spending was record. So there’s anger behind all of this that he camouflages exceptionally well, that he masks very well. He comes across as something far more than angry. People don’t even see that about him. But when you boil this all down, the housing bailout, there are two groups, and in that group that paid nothing — couldn’t afford to pay the loan from the moment they were granted the mortgage — they are the primary recipients of the bailout money.
BREAK TRANSCRIPT
RUSH: My blood is boiling. I just listened to a little bit of President Obama during the break. We’re in the midst of doing a bailout. We’re going to bail out millions of people who never, ever were able to pay back their mortgages. They were never, ever, ever going to be able to repay the loans, yet they got them. How does that happen? Obama just said that it is time banks and lenders begin to accept their responsibility for this crisis. And then he admonished everybody to start living within their means, and the crowd went nuts. He actually said this. ‘The days are gone where you can assume that when you buy your house, it’s just going to increase and increase and increase in value. You can’t live your life as though that’s going to happen.’ Okay, great, Bamster. You sit there and talk down the economy all you want, and you know who he’s aiming this at?
Every speech he makes is aimed at people who think they are victims of this country. And he is their champion. And he is not going to make their lives any better ’cause it’s not possible. We don’t have enough money to give everybody to make their lives better. He’s gonna punish the people he thinks are responsible for them being victims, and that includes the banks and the lenders, and the car companies, and the predatory this, the predatory that. I didn’t realize until this day, perhaps because I didn’t want to believe it, but I didn’t realize — and I’ve only heard three or four minutes of this speech in the midst of commercial breaks — I didn’t realize the rage or the anger that is propelling the policies of this man and his rhetoric. His audiences in Fort Myers, the town meeting, wherever else he was prior to that, and then today, it’s the so-called victims of society, the losers in life’s lottery, people who by no act of their own end up getting the shaft. That’s who he’s aiming at, that’s who he’s telling life is gonna get better, and how is it going to get better? Because the predatory people, they’re going to get theirs. Little code language that these victims understand, banks and lenders have to accept responsibility, Wall Street executives have to accept their responsibility for this crisis.