RUSH: There's a BIG IDEA AT STAKE in the Democrat-Caused Financial Crisis

www.rushlimbaugh.com ^ | September 22, 2008 | Rush Limbaugh

[PapaBear3625]

Youtube video of CSPAN Congressional Black Caucus swearing in, where CEO of Fannie Mae calls Obama and the Dems the "Family" and "Conscience" of Fannie Mae

[AuntB]

“But why is John McCain ignoring this story?

This is a matter of TRUTH.

Why is McCain ignoring the TRUTH?

Why is McCain failing to tell the American people the simple and unvarnished TRUTH?”

If all the problems created in this mess came out, McCain would have to bear some responsibility. I think that’s why he keeps quiet about the dems involvement. Both candidates helped put the illegal aliens into homes they couldn’t afford and neither one of them want to address that fact.

[Pelham]

“Rush, you’re right ... as always!”

He is. if you ignore that he manages to get basic facts wrong.

Fannie and Freddie were listed companies on the stock exchange. Fannie began life as a government agency in the ‘30s but had been spun off as a private concern years ago. They were called GSEs, government sponsored enterprises, because of their one time affiliation with the government, but there was no requirement that the government guarantee their debt. They were private companies when they managed to dig themselves, and the mortgage market, into a big hole.

Rush likes to pretend to have much greater knowledge of economics than he does- it’s part of his “talk confidently” persona. When he doesn’t know what he’s talking about he goes to his default position of claiming every solution reduces to a conservative vs liberal or a Republican vs Democrat divide.

This fiasco has bipartisan roots, and some of it goes back to getting rid of the Banking Act of 1933 during the Clinton administration. The bill was sponsored by Republicans Gramm, Leach, and Bliley.

[Mr. Jeeves]

I thought John Denver was dead? ;)

[Pelham]

Freddy Mac had been a private corporation since the day it was created.

[patriotspride]

Looks like Nick Nolte with a haircut and dye job

[Yosemitest]

If you take the $700 Billion proposed, and divide it by the number of actual tax payers in the United States, How much does it come to ... per tax payer?

Until we punish the guilty .. the world won't take us seriously.
Not until the stinking, rotting corpses of

Bill Clinton, and Jimmy Carter,
Janet Reno, Roberta Achtenberg, Franklin Raines, Jim Johnson, and Jamie Gorelick,
Pelosi and that odious and compromised Barney Frank, Henry Waxman, Chuck Schumer, Christopher Dodd in the House and Senate leadership,

are left hanging from the trees in the Capital Mall, < br>and the entire House of Representatives, the Senate, and the entire regulatory body of the Executive Branch
... are forced to march by them and smell them every day for a month,
will they begin to understand just how angry the American Public is ...
about them stealing our future.

Newt and Rush are absolutely correct on how to solve this mess.
And I don't care what the world thinks!

[fightinJAG]

I certainly disassociate myself from your views.

[Scotswife]

“Newt’s analysis completely ignored this aspect, and, therefore, is doomed to fail.”

Rush is right - it comes down to “who do you trust?”

I like Rush, I like Newt, I like Malkin, I like freepers.

When it comes to understanding the economics of the situation - when it comes to understanding the national and international aspect - when it comes to learning lessons from the Great Depression?

I trust Bernanke.

[samtheman]

I don’t know. We’re talking about 30 years of dems pushing for mortgages for everyone, regardless of ability to pay.

Maybe McCain is complicit but the dems have the bigger share of responsibility.

[philman_36]

Freddy Mac had been a private corporation since the day it was created.

Assessing the Public Costs and Benefits of Fannie Mae and Freddie Mac from The Congressional Budget Office May 1996 (some of the other article is almost identical to the article in this link as if the author might have used it as a source...as in see source #32)
The lawful, but unbridled, advance of shareholder interests at the expense of taxpayers, however, is an essential and inescapable consequence of the choice of GSEs as a means of delivering a federal subsidy to borrowers. It is part of the price of using GSEs as an instrument of public policy. Not least, it is a factor to be weighed in any decision to continue that practice or to end it by privatizing Fannie Mae and Freddie Mac.
I guess you should notify the CBO of your factoid.
One question though, do private corporations deliver federal subsidies?

[philman_36]

Some additional reading you might enjoy...
REINVENTING THE GOVERNMENT CORPORATION
Some federal government corporations are wholly owned by the government and are clearly state actors, resembling ordinary agencies in many ways.{11} Others, however, are owned wholly or partly by private persons.{12} These mixed-ownership and private corporations enjoy[ *548] a combination of federal and private powers and obligations, and therefore may not be state actors in a constitutional sense. Thus, they may be less accountable for their actions even though they are creatures of a national policy.

Ship...In the abstract, FGCs seem to promise an alternative that everyone, from fiscal conservatives to democratic socialists, might find attractive.{75} FGCs conjure up an image of business efficiency as opposed to the traditional bureaucratic cabinet department. Proponents of small government may welcome the introduction of an element of private control into most realms of public administration as a means of preparing for the privatization of federal functions. Democratic socialists may view wholly or even partly owned government corporations as a means of capturing the rents and profits from public activities or natural monopolies for the benefit of the public fisc.

[Pelham]

“I guess you should notify the CBO of your factoid.”

There’s no reason for me to do so. Unlike you they already know that Freddy Mac is a private corporation whose stock is listed on the New York Stock Exchange.

http://www.freddiemac.com/news/corp_facts.html

“Corporate Facts
Freddie Mac is a shareholder-owned corporation whose people are dedicated to improving the quality of life by making the American dream of decent, accessible housing a reality. “

Maybe you should learn to read more comprehensively before posting some ‘nugget’ that doesn’t say what you think it does.

[fightinJAG]

I’m also not going to ask Rush his opinion of my child’s brain surgeon. You know?

[philman_36]

Unlike you they already know that Freddy Mac is a private corporation whose stock is listed on the New York Stock Exchange.
I know that Freddy Mac is listed on the New York Stock Exchange. I contend the meaning of "a private corporation" is all.
I'll ask it again...do private corporations deliver federal subsidies?
And adding to my argumanet I give you this by Peter J. Wallison a resident scholar at AEI.
The Public Trust of a GSE
In other words, while the subsidy realized by the Federal Home Loan Banks turns out to be a subsidy to public at large, the subsidy realized by Fannie and Freddie is the worst kind of corporate welfare--a transfer of wealth from the taxpayers to both the generally well off (Fannie and Freddie's investors) and the genuinely wealthy (Fannie and Freddie's managements).
See that "taxpayers" word in there? Where is my return investment, and every other taxpayer's return investment for that matter, if I'm not a stockholder or shareholder yet MY money is still being used? Shouldn't I get a check somewhere along the line if I'm paying for this "private company" to do business?

[Scotswife]

“I’m also not going to ask Rush his opinion of my child’s brain surgeon. You know?”

Exactly.

Which makes me wonder - I’m sure Rush has a capable financial advisor.
I wonder what he’s been advising Rush to do with his money these past couple of weeks?

[Pelham]

“See that “taxpayers” word in there? Where is my return investment, and every other taxpayer’s return investment for that matter, if I’m not a stockholder or shareholder yet MY money is still being used? “

You mean the taxpayers described here?:

“Freddie Mac is not an agency of the Federal or any state government nor does Freddie Mac receive federal funds. “

Hunh. Imagine that- Freddy Mac’s own website doesn’t know that they are receiving your tax money:

http://www.freddiemac.com/corporate/company_profile/faqs/#BM6_

“6) Is Freddie Mac a government agency?

No. Freddie Mac was chartered by Congress as a private company serving a public mission; however, Freddie Mac is not an agency of the Federal or any state government nor does Freddie Mac receive federal funds. In fact, Freddie Mac is one of the nation’s largest federal taxpayers. Freddie Mac is owned by its shareholders and, like other corporations, is accountable to its shareholders and a board of directors. Freddie Mac’s enabling legislation calls for our Board to have 18 directors, five of whom are to be appointed by the President of the United States. Anyone can own Freddie Mac stock, which is traded under the stock ticker symbol “FRE” on the New York Stock Exchange; in your local newspaper, you’ll see our stock price referenced as “FredMac.”

Now maybe Freddy doesn’t know its own business and Wallison over at AEI knows better. Maybe the taxpayer subsidy is cleverly hidden in their balance sheet. I looked and couldn’t spot it. Maybe you can find what Wallison thinks he found:

http://www.freddiemac.com/investors/ar/2007/14_03.htm

[Pelham]

Rush’s version of what is going on is a confused mishmash of fact and misinformation. McCain may well be “ignoring the TRUTH”, but if so it isn’t because he is ignoring what Rush is claiming.

[fightinJAG]

I thought a lot about your post last night for some reason. Its simple truth kept resonating with me.

It’s not that I advocate blindly following the “experts.” It’s more that I am concerned to see people blindly following the amateurs!

What really gets me is someone like Rush, as much as I love and respect him, using his bully pulpit to go so far as to preach that “we don’t need the bailout.”

I can see arguing about how the bailout should be done, even, and of course about who is to blame for the situation (though I do think that discussion should be reserved for the day after this crisis is addressed). But to think our extremely limited understanding and experience in global economics gives us a leg to stand on in telling Bernanke, Paulson, et al. that they are wrong in their fundamental assessment that we are facing a huge crisis is just . . . crazy.

Worse than that, I fear it could be dangerous.

As I said elsewhere, I don’t want this once-in-a-century crisis decided by a popularity contest. Someone said, well, 60% of Americans are against a bailout. My response was *if* 60% of Americans are against doing what turns out to be the right and necessary thing, then I don’t want our leaders to cave to that. I want our leaders to take on the task of educating and persuading people on the necessary action.

However, such leadership is difficult in the best of times. When time is short and you have highly influential people popping off at the mouth on fundamental issues about which they have no way of knowing, such leadership may be impossible.

IOW, I am concerned that fundamentally ill-informed pop-populist blathering will lethally undermine the ability of those who do know what they’re talking about to at least get agreement that we have a crisis that demands immediate action.

Rush was talking yesterday that, oh, we just need to lift cap gains taxes for two years and the market will take off. Lifting cap gains taxes is ALWAYS a good thing. However, that is unlikely to cause this market to recover. Why? Because cap gains affect sellers. But this market has no money to lend-—credit is completely frozen (according to Rush’s buddy Jack Welch)-—so no one can buy stuff anyway.

Giving the seller a tax break upon sale of an asset doesn’t help produce the buyer to make the sale in the first place.

Anyway, I rant.

[Scotswife]

“Worse than that, I fear it could be dangerous.”

It is dangerous.
Alot of arrows are being slung around, but no one is addressing the main issue as to why Bernanke is freaking in the first place.
And anyone who takes the time to do a quick readup of Bernanke’s opinions concerning the Great Depression will see why he is freaking.

Bernanke wants to keep the banks from failing, and he wants to get the bottlenecked credit flowing.

The republicans are offering good ideas that may have worked a little while ago - and it is a shame it has come to this hotpoint.

I haven’t seen republicans explain why Bernanke is wrong.

There’s a good reason he wound up getting that job in the first place.

In wartime there can only be one general.