RUSH: You know, James Inhofe, the senator from Oklahoma, who is really carrying the water in the Republican Senate against global warming, came out the past three or four days and said, (paraphrasing) ‘I’m looking at this bailout and the Treasury secretary, Paulson, hell, best I can tell, he may have given some of this money to his friends.’ And I thought, hot damn. You remember when this all was going on, and Paulson was, ‘We’re going to bail out Wall Street,’ and remember, ‘We’re going to buy up their toxic assets to make ’em whole,’ which he now changed his mind on last Wednesday. And I remember saying to you people behind this very Golden EIB Microphone that what Paulson’s doing is simply making sure that his buddies don’t have to give up their homes in the Hamptons and move to Yonkers. And so here comes Inhofe saying, ‘I think he’s just giving the money to his friends.’ He can do whatever he wants with it. He has authoritarian-type power. He has been named the sole individual, whoever the Treasury secretary is, to provide for the economic welfare of the country and the American people.
Now, this auto bailout, folks, is going to be fascinating to watch here, because as we learned, we have some southern senators — Jeff Sessions and Richard Shelby from Alabama, and Jim DeMint, South Carolina, who are saying, ‘We got a thriving automobile business where we live and we’re making American cars.’ Now, they’re not Fords and Chryslers, they’re BMWs, Mercedes, Hyundai, but they’re American cars, and they’re not in trouble in these guys’ states. That’s what they’re saying. What are we talking about here? We’re talking about the United Auto Workers, which gives practically every dime in political donations to one party. I don’t think every United Auto Worker is a liberal Democrat. I know some of them are very conservative and they vote Republican. But their dues, all the money that they have to give to the union, vast majority of it goes to Democrats. And let’s face it. Where are the Big Three? They are in Michigan, specifically Detroit and the surrounding environs. Who runs Michigan? Democrats. Democrats have run the state for years, not just Michigan, but Detroit as well. You’ve got Jennifer Granholm up there, the governor, who has arguably made it worse.
Rick Wagoner at General Motors said bankruptcy is not an option, it will not work, and he gives his reasons for it. But let’s face it, you’ve got three million United Auto Workers employees that if the businesses go south or out of work, that’s three million Democrat voters. I don’t think the Democrats want to risk angering three million union people and their thug bosses, not doing anything to save not just their jobs, but their retirement, their pensions, their welfare, and their health care. So this is going to happen. Even if the Bush administration says, ‘Nope, we’re not doing it,’ Obama will just say, ‘Okay, hang tough. Give me time to be inaugurated.’ But we’re hearing the same thing, folks, that we heard before the $700 billion bailout. We are hearing they can’t make it ’til January. They can’t make it ’til February. They can’t make it, they don’t have the cash. The Big Three can’t make it. We have to do this now, just like we had to do the $700 billion bailout now, and they haven’t doled out all the $700 billion. And, by the way, another bank, what is this, Lincoln Financial Services, they have now applied to become a savings and loan. They want to become an S&L because that will allow them to apply for money from the $700 billion bailout fund, Lincoln Financial Services.
So what we’re being asked as taxpayers, those of us who may not have all the health care we want, may not have a pension the way we wanted, may not have retirement benefits, we’re being told that we can’t let the auto industry suffer here, we can’t let ’em go belly up. But what we’re really being told is that we are going to bail out these employees, these auto workers and make sure their pensions are tight and their health care holds on and retirement and all that is maintained. And I just wonder, if it were positioned that way in explaining to people why this bailout must take place, ‘We gotta save Jennifer Granholm, we gotta save Michigan,’ you might say, ‘But, Rush, but, Rush, but, Rush, the Democrats would love nothing more than for there to be three million unemployed people that vote Democrat, just turn ’em into wards of the state, welfare benefits,’ and I don’t think so in this case. Three million is a big number. The Democrats don’t want that on them. They don’t want the fact that the auto industry went down, they don’t want the fact that three million people are unemployed because they failed to act.
They run Congress now. I mean, at this moment, they don’t have the 60 votes, but you get into January-February, and it’s theirs. Nobody can stop them. They can do whatever they want to do. And if they don’t do something to bail out the circumstances and keep these people employed, they don’t want to deal with the flak that they’re going to get for that. So this is going to happen. You heard it here first. It may not happen until Obama gets into office. But it’s going to happen. How can it not? How can it not happen? Somebody explain to me how this can not happen. You can have as much public outcry against it as you had against the Dubai Ports deal or amnesty, it’s still going to happen. It is still going to happen and the theory will be that, well, people will forget about this in two years for the midterms, they’ll forget about it in four years for the next presidential election. I went back and I found a story from a place that archives news stories, and this story happens to be from October 10th of 2007, 13 months ago. And here is a pull quote from this story. The quote is attributed here to a man named Daniel Brooks, who is a professor of supply chain management at the W.P. Carey School, and he was asked to look at the United Auto Workers contract a year ago, 13 months ago from a broad perspective of risk, and they wanted his comment in the story.
Here’s what he said. ‘The union targeted GM –‘ now, remember, this was a union contract that featured basically job training, and as the assembly line modernized, it was job training for union workers, but, of course, the modernization eliminated some work, but did not eliminate the jobs. And the union specifically targeted General Motors to get this aspect of a new contract for all three eventually of the Big Three, and here is what Daniel Brooks said in his analysis, 13 months ago. ‘The union targeted GM because they have some cash. On the other hand, GM also famously spends over $1,600 per vehicle on the healthcare costs of current and retired US workers while Toyota pays about $200 per vehicle. Although GM also pays about another $1,000 per vehicle on holiday pay, work rules, plant-shutdown-pay and line-relief to UAW workers — expenses Toyota, for example, does not have — these costs were not as much the focus of these negotiations,’ because the irony here is that the UAW targeted GM for this new contract because they had the cash. Do they have the cash now? We found out that they’re going through billions every quarter, six billion, four billion, whatever it was.
So it’s not just that there’s $1,600 per GM car for health care, for current and retired auto works. There’s another $1,000 per vehicle for holiday pay, work rules, plant-shutdown-pay and line-relief. So $2,600 per car coming out of General Motors that Toyota does not have to spend. So that leads to the figure that we shared with you last Wednesday, the hourly cost of doing business at General Motors is $73 bucks and some change. At Toyota it’s in the forties, or maybe even less than that. But nobody’s even close to General Motors’ 70, 71. Now, you might say, ‘But, Rush –‘ and certainly if you’re an autoworker, you might say that the company agreed to this. I mean, they made the deal. It’s up to them to honor it. Yes, they made the deal. They’re telling us they don’t have any money and their balance sheet looks like they don’t have any money. Now, they did make the deal. Did they have a gun to their heads? Were they told, ‘We’re going to strike and put you out of business?’ Who knows what goes on behind closed doors at these negotiations. But if they had the money back then, they had the money, but they don’t now.
So if you don’t have the money, how do you fulfill the promise on making good these payments to retirees? I can understand paying health care for your current employees, but the deals that were made for never-ending health care, retirement, pension, and all this on retired workers who are no longer productive, that just economically will not work. It just cannot work. You just can’t pay that many people who are not producing anything for you. I mean, the bill has to be paid at some point, kill the golden goose, the whole thing. Now, the only way for the commitment to be made apparently is for a bailout, $25, $50 billion. And you have to ask yourself, let’s say they’ve got the bailout tomorrow, and, by the way, it’s going back and forth between 25 and 50. Already got $25 billion to retool and modernize plants and that sort of thing. So we’re talking about an additional $25 to $50 billion on top of that. Tell me how the US auto industry is fixed, quote, unquote, transformed, whatever is wrong with it, how does that get fixed with the infusion of $50 or $25 billion in the next six months, year. I mean, if you’re going to throw money at this, there has to be something you get in return and don’t tell me, well, if they come back to profit the American taxpayers will benefit. That’s the biggest scam in this whole mess. The government may prosper. It doesn’t mean we are.
Our taxes aren’t going to get cut if General Motors repays these loans. Our taxes didn’t get cut when Chrysler paid its loans back. And that’s the only way it pays off for the taxpayers. Don’t tell me that the taxpayers benefit because the government gets so much money they can start a new social program that’s going to put us in the red somewhere down the line. That’s just another one of these insulting to your intelligence kind of statements. But I’ll also tell you this. It isn’t enough that the General Motors executives and the Ford execs and the Chrysler execs will agree to limit pay for executives. That isn’t going to make cars any different. They’re going to limit golden parachutes. They’re going to do all these things that the class envy crowd cares about, fine and dandy. It isn’t going to make the cars that they produce any better. So just more class envy stuff. And these execs right now are at wits’ end, saying they’ll agree to all these new restrictions on how much they can make, golden parachutes, this sort of thing. It’s sort of like people are happy when the rich get a tax increase. Yeah, yeah, yeah. Does their life change any? Arguably it probably gets worse the more taxes the rich people pay in this country, depending, of course, on how you define rich.
RUSH: This is Mary Ellen in Endicott, New York. Nice to have you on the EIB Network. Hello.
CALLER: Oh, my God, Rush, I can’t believe I’m talking to you.
RUSH: Well, I know it’s exciting and I’m thrilled that you’re here.
CALLER: Hey, how was your golf game? How’d you hit ’em?
RUSH: Oh. You know, the first day — I hadn’t played in many, many moons because —
CALLER: That’s hard, too.
RUSH: — I had been devoting my full energies to saving the country during the campaign. So the first day, the whole day, when you haven’t played in a while and you go out and play, I shot an 82.
CALLER: Wow, that’s good!
RUSH: It was, and the guy I’m with, we had a little side bet in addition to the three foursomes that we had, and I’m taking him to the cleaners. And I said, ‘Don’t worry about it, pal, I’m going to be horrible tomorrow.’ What happens is you play well the first day after a long layoff, next day worse, next day worse. And it’s what happened. I got some blisters that I had to cover up with Tiger Woods white duct tape and had to wear a glove on my right hand and that kind of got in my way on Friday and Saturday sorta came back.
CALLER: Ooh, you got a tight grip.
RUSH: Yesterday another 82.
CALLER: No duh!
CALLER: I’m shooting like 86.
RUSH: Good for you. What tees?
CALLER: Oh, reds. But I play a real professional course.
RUSH: Yeah, uh-huh.
CALLER: And it’s really hard and I’ve had to tell you I’ve had more men quit because I’m beating them than you can shake a stick at.
RUSH: Oh man, if you were beating me I’d never quit.
CALLER: I don’t. I’ve had many of them stop playing with me, just pack up.
RUSH: That’s not where they’re stopping. I mean you got some chauvinists out there, but that’s not where they’re stopping. Anyway, we’re running out of time here, Mary Ellen. What was it that you wanted to know?
CALLER: Well, I just wonder how many cars do they expect us to buy? They put out a lot of cars —
RUSH: You think we’re making too many cars? We’re glutting the market with new cars?
CALLER: I think so. I mean I bought a Dodge Intrepid, had 53,000 miles on it and the tranny went. I gave it to the guy that was going to fix it.
RUSH: She said she bought a General Motors —
CALLER: Brand-new, 1998 —
RUSH: No, she didn’t say Dodge, I heard her say General Motors. She bought a General Motors — oh, no. No, no, no. It was a Dodge, the transmission went out at 53,000 — oh, yeah, of course it was a Dodge.
RUSH: Of course it was a Dodge.
CALLER: So my theory is that they make cars that really don’t last, it costs a fortune.
RUSH: No, that used to be the case. They’d make a car that would expire as soon as you’d paid it off.
RUSH: But they last longer than that now. They really, really have improved, but I know exactly what you’re talking about. It’s a cycle. You know, new cars, you can go by some lots today and you’ll find a lot of full lots, used car lots as well. But they make ’em to market demand. They do. It’s a fascinating complicated business, obviously. Mary Ellen, I have to run.