RUSH: I got an e-mail last night. I’m glad I got this e-mail, ’cause I want to correct a misunderstanding apparently many of you might have. ‘Dear Rush.’ This is from a woman named Michelle. ‘I have been listening to your show for years. I have never been moved to write you, but after hearing your view regarding people that are not able to make their mortgage payments or are in foreclosure, I have to write. My husband and I are conservative. We live within our means. The economic disaster created by our politicians has pushed us into near bankruptcy. We didn’t plan on getting lymphoma, that our home in Florida would become worthless due to the recklessness of our government and investors, that the business my husband worked for for 13 years would be bankrupt due to the downturn in the economy, and my small business sales would drop 60%.
‘We anticipated none of that. We didn’t plan on any of that. You made it sound like anyone that could not make their mortgage payment was reckless and never should have been given the mortgage. I know that many people out there mortgaged their homes and made crazy purchases and have lost them. We have a 15-year loan on our home that we have less than five years left to pay off but now our income is barely enough to make that payment because of Obama rules that our bank cannot roll our note into a 30-year note which would reduce our payment by 50%. Living hand-to-mouth was not in the plans for my husband’s 65th birthday. Because of our government we have lost our retirement savings and age 65 we’re starting over. Colonel Sanders could do it, so I guess we can, too. Not everyone having trouble making their mortgage payment is reckless and living above their means.’
Now, Michelle (and to any of you who were listening yesterday and heard my comments on this), rest assured I’m not talking about you. I was talking about the subprime mortgage business, and I was talking about people who had no business having money lent to them. The subprime mortgage mess is the foundation of this debacle, this financial debacle. That’s the sole reason — well, not the sole reason, but it’s well over half of it — and it was all based on liberalism. It was all based on this notion that it’s not fair that somebody should be able to buy a house and other people can’t.
So, ‘We’re going to make it right. We’re going to make sure that people that can’t afford a house are going to live in one and we’re going to loan them money that essentially they’ll never have to pay back, and those mortgages are gonna become worthless but that’s okay. We will use Fannie Mae and Freddie Mac to guarantee them,’ and Fannie Mae and Freddie Mac are now in hock like you can’t believe and they’re the only two organizations that have been exempted from ‘financial regulatory reform’ and people that work at Fannie Mae in the upper echelons in the executive suites (Freddie Mac as well) got sweet mortgage deals from Countrywide, from Angelo Mozilo, the same way as Chris Dodd and a bunch of other politicians did. So the game was rigged in favor of the ruling class.
The first subprime mortgage loan, I think, was made in 1991 or 1993. It was a silly social program, and of course the banks were forced to do it. We’ve mentioned this countless times. Janet Reno was telling banks: If you don’t make these loans we’re going to come investigate you like you can’t believe. Well, the people that run these banks are essentially cowards, as most people are when the government comes knocking on your door. Most people are regulated one way or another by the government. Banks, too. So here comes Bill Clinton or Jimmy Carter or their emissaries Chris Dodd and Barney Frank knocking on the door; ACORN at the front gate, a bunch of ragtag advocates for the poor threatening to burn down your bank. All these people show up and demand that you essentially give money away.
Okay, so you’re a bank. ‘I gotta do this, but I have a responsibility here to people that work here. I got a responsibility to the shareholders of the bank. I just can’t give the business away. What am I going to do?’ So they went about creating a bunch of ways to make something valueless have value. Collateralized debt obligations. You’ve heard of all these new financial products that were created which were basically insurance programs. They would package mortgages together and sell ’em to unsuspecting people, and they would think that, ‘These people are going to pay these loans back and the monthly payments will roll in.’ Nobody was paying the loans back because nobody that was lent the money had the money to pay ’em back. Some people were not even asked their income!
This was all because of the pressure of people like the Reverend Jackson and others had brought to bear. You might remember the term ‘redlining.’ It was unfair! Redlining was racist. It was ‘rich white bankers deciding that black people, just because they’re black, were not gonna get loans.’ It wasn’t because of that at all. It was because they didn’t have the money to pay it back — and it wasn’t just black people, but they made it racist and so nobody wants to be called a racist, so bammo. They start giving the money away from the bank, and all was hunky-dory, selling these rigged financial products to give themselves insurance, to try to give valueless paper some value. Everything was fine as long as the value of homes kept rising, but when that stopped and when the bubble burst, shazam! Everything went to hell fast.
That’s the foundation of the economic crisis that we’re in, and the very people that caused it are giving themselves standing ovations for creating a ‘financial regulatory reform’ bill. The very people that caused it are the very people that investigated what went wrong. They didn’t investigate themselves (naturally), so here we are. So my rant yesterday was not about people who are still paying the mortgage or who are barely able to pay the mortgage. I was not talking about people who took out a loan and never intended to pay it back. I was talking about politicians yesterday — and Obama? When he talks about this, he talks about the very people I’m talking about as having been ‘tricked’ by bankers into taking mortgages that the bankers knew they’d never be able to pay back. Because, folks, there is nothing free.
At some point, I don’t care what kind of insurance policies these bank and financial people write themselves. If you are in a house for which you can’t make a payment, at some point you’re not going to be in that house. Somebody’s going to pay for it, and if it isn’t you, somebody who is paying for it is either gonna own it and kick you out or live in it themselves. Pure and simple. But the good old Democrat Party tried to convince everybody, ‘You can have a house for free! It’s called affordable housing, and you vote for us because we’re the ones that put you in that house,’ and now look where we are. They look at market forces and say, ‘Markets are unfair, markets are prejudiced, markets are biased,’ and they’re not. Markets are essentially fair. Left alone, they take care of themselves.
Just like any other activity, you’re going to have bad actors in them and you have to have regulations to take care of them. But this whole thing was used to trash and destroy the whole financial system and definition of this country: capitalism. It was almost as though this was done on purpose. ‘See? See? Capitalism doesn’t work. See? It leaves out the people at the bottom. It hurts the people at the bottom. Capitalism has no compassion. It doesn’t care about people.’ Well, this was not capitalism that failed. This was liberalism that failed. It was pure, unadulterated, central planning socialism that failed. The subprime mortgage crisis was not capitalism. And yet capitalism is what’s being tarred and feathered. Left alone, markets are more fair and more blind than justice is, but people just can’t leave ’em alone. So, Michelle, I wasn’t talking about you and your husband and so forth. I was talking about people who had no business being lent the money in the first place. Sorry you misunderstood.
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RUSH: To illustrate my point even further: ‘Subprime mortgages accounted for 9 percent of all mortgage originations from 1996 through 2004.’ But that 9% became 21% from 2004 to 2006, 21% of all mortgages were subprime. Twenty-one percent of all mortgages were essentially money given away to people because they were loans made to people that everybody knew going in would never pay them back. And that 21% of the mortgage market being subprime equaled about $600,000 billion in 2006, which was at the time one-fifth of the US home loan market. And just to prove that there is no winning with some people, here’s Obama, he says, ‘There are people like the couple I met in Las Vegas who were tricked into buying a house they couldn’t afford and are at risk of facing foreclosure.’
It’s an out-and-out lie. They weren’t tricked. They were pawns. The banks were forced into making loans to people. And even after all of that, the NAALCP turned around and sued 12 mortgage lenders for tricking blacks into subprime loans, and there was no trickery going on. That was March 13th of 2009, the NAACP said bank giants steered blacks to bad loans. I mean, you want to talk about a conspiracy? This is exactly what it was. It was a giant conspiracy, and all of these elementary parts of the left were in on the game from the get-go, follow the money. (interruption) What, Snerdley? What is it in there that you want to ask the program host about? Nothing? Fine and dandy.
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RUSH: This is Bob in Lordstown, Ohio. Bob, you’re first. It’s great to have you on the Rush Limbaugh program. Hello.
CALLER: Brother Limbaugh, mega dittos. I’m sitting on the front porch smoking a Hoya de Monterrey Excalibur, natural wrapper, of course.
RUSH: Way to go, sir, way to go.
CALLER: Let me tell you tomorrow’s news today, Rush. Americans don’t want electric cars. It’s some pink pantywaisting brie set politician in Washington’s wet dream. Just what I want, a car I gotta plug in that has batteries that are totally against everything that these people stand for as far as the atmosphere, as far as the ability to recycle this particular kind of product, and on top of that it’s going to cost me $40,000. You’re a pretty smart guy. You tell me, how much gasoline can I buy for 40K? A lot, yes?
RUSH: Exactly.
CALLER: And I’ll tell you something, out here in Lordstown we build gasoline powered vehicles. General Motors gasoline powered vehicles. That’s what the American people want, brother Limbaugh, they don’t want electric.
RUSH: Exactly, because that’s what they’re buying when they have the money to buy them. Not only is all of that correct, $41,000 for a Volt, but they know you’ll never pay that so there’s a $7500 come-on, a credit if you buy it. It will actually cost you $7500 less than $41,000. Then you go plug in the baby, for 40 miles round trip, a 40 mile round trip on a charge that takes three to four hours. How long does it take you to drive 20 miles? Where are the charge stations? The charge station will be your home, right? Now, what happens to your electric bill? You have just gone out and you forked over $41,000 for an electric car that gets 40 miles to the charge and with a backup gas reservoir to give you 375 miles to the tank. And that’s the backup. The primary is 40 miles to the charge.
You plug it into your garage and you wait until you see your electric bill. And all of this is what Bob’s talking about. All of this is supposed to reduce a carbon footprint. Ha! You are expanding your carbon footprint, and all the while Obama has promised to put the coal industry out of business. So where are we gonna get the electricity to charge these things? ‘Rush, didn’t you feel guilty turning down the General Motors advertising?’ No, I really didn’t because I was turning down an advertising contract from Obama. It was not really hard to do, folks. I couldn’t come here in good conscience and start blabbing about Obama manufactured cars, just like I wouldn’t become an endorser for Obama health care. I’m not a sellout. Let other people do it.
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RUSH: An executive for Obama Motors said the Volt is a game-changing product. The iPhone was a game-changing product, and it didn’t need a tax credit. Game-changing products do not need tax credits, folks. No way. An e-mail said: ‘What kind of anchorman are you not carrying the water for Obama and Obama Motors?’ The kind we used to have is the kind of anchorman I am.
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RUSH: To the phones we go. Scott in Virginia Beach. I’m glad you waited, sir. You’re next on the Rush Limbaugh program. Hi.
CALLER: Rush, it’s an honor to speak with you. I just wanted to add another layer to your subprime premise. If you remember ten, 12 years ago prior to the buildup of the real estate and the mortgage boom, consumer credit was at an all-time high. And if you remember, it was gonna undermine the country and everybody was panicking and I think a lot of what we’re talking about, they just connived to come together and rolled all the consumer credit into mortgages, and I know tons of people who did that.
RUSH: Yeah, that’s exactly right. Consumer credit card debt was just rolled over into mortgages.
CALLER: That’s all, and we just extended ourselves another ten to ten years of an inevitable outcome which we’re now facing. So…
RUSH: Yeah and what was the purpose of that? There was a political purpose of that. What was the political purpose of that?
CALLER: Probably just, you know, everybody was upside down. I mean, even consumer spending.
RUSH: The political part of this was to ensure that Democrat voters never had to pay their bills. Pure and simple. So in effect here we had subprime credit cards, subprime car loans, subprime mortgages — and it all came to a screeching halt. The bubble burst. Thanks, Scott, appreciate it.