Revisiting the “Financial Crisis”

RUSH: TARP money. I know there are people who disagree with me. I have friends on Wall Street, ‘You’re wrong about this, Rush. They needed that money. If we didn’t infuse that capital, it would be like not calling the fire truck when your house is halfway burned down, it would be just the same.’ People are going to disagree with it, but one thing, and this is another thing I thought about after I watched the show, and I’m not criticizing myself, folks, don’t misunderstand here, I’m not beating myself up, but I always recognize that no matter how good something is it can always be better the next time. And another thing I would have loved to add, ‘Okay, maybe we need to do infused capital, I’ll grant you that just for the sake of discussion. But the way to prevent this from happening again is not to start capping how much people earn.’ And that’s what we’re doing. I mean it was all over the Washington Post, USA Today, New York Times, last weekend and into Monday. New limits on what people on Wall Street and related type firms can earn. It’s none of Obama’s business, and this includes, by the way, companies that are not even taking and did not take bailout money. None of his business. Capping what people earn is not going to prevent another meltdown in the banking system or on Wall Street. That is not the solution. They’re not fixing what’s wrong.

BREAK TRANSCRIPT

RUSH: Okay. One more thing here on the financial crisis and then back to the phones. Now, one of the things that happened — this, by the way, is true. Now, we can argue whether they needed the TARP money. People respectfully disagree over that. But most of the financial people I talked to, and most of the financial media people just bought Paulson hook, line, and sinker. ‘We gotta have it or we’re going to die, the country is finished, world financial crisis, it’s over. We gotta fix it!’ What was going on was this. The people that were running banks and investment banks were able to leverage up their balance sheets by 30 times. Now, one of the ways that they did this and one of the things that led to them doing it was the subprime mortgage crisis. They had a bunch of horrible debt out there, worthless paper. And so they created new investment opportunities or products to insure against the failure of that bad paper. And then they started selling and buying and trading those things.

They had on paper all of this future money being repaid, all this money that they had lent, look at all the interest we’re going to make but it was never going to happen because they were lending money to people that couldn’t pay it back because of Barney Frank, Chris Dodd, and Bill Clinton. And then these same people were running around saying, ‘Don’t worry, if the money doesn’t come in they’ll bail us out.’ And Chuck Schumer and Barney Frank and Chris Dodd said, ‘Yeah, we will bail you out,’ and people were saying, ‘No you won’t get bailed out,’ but the Democrats, I mean this was their hook, line, and sinker into getting more votes from poor people and illegal aliens and minorities, get ’em into houses they can’t afford, make sure the Democrats get the credit for it, we’ll pressure the banks to lend the money and if it doesn’t work out we’ll bail ’em out. And it’s exactly what happened.

No other business is able to leverage up its balance sheet by 30 times. You own a radio station, you cannot legally run your books in such a way that your radio station’s worth 30 times what it is, but this is what these investment bank guys were doing and then they were paying themselves on that basis which upsets guys like Leno. The only reason they were allowed to get away with it was Democrats in government, folks. Chuck Schumer big. These guys in New York, the senators and members of Congress, they’re in bed with these Wall Street types. Everybody thinks these Wall Street types are big Republicans. It’s the exact opposite. Anyway, you start talking about what people earn, the bottom line in preventing this from happening again is not in any way related to capping how much people earn at a bank or on Wall Street.