Politics Will Guide General Motors; Watch for Higher Gas Prices Next

[The Coach]

BEGIN TRANSCRIPT
 
 
RUSH:  So last night I was reading the Treasury department's viability report on General Motors.  It's all part of the Obama takeover which may not be a takeover, but regardless, I was reading the Treasury department's viability report.  General Motors makes 20 cars that show a profit.  Eleven of them are trucks and SUVs, and they're going to be canceled in this deal. 

Greetings and welcome, Rush Limbaugh, the EIB Network.  Great to be with you, ladies and gentlemen.  Our telephone number if you want to be on the program today, 800-282-2882 and e-mail address, ElRushbo@eibnet.com. 

Politics is going to run General Motors, not business.  That's what the Treasury department's viability report said.  Twenty vehicles that GM makes -- they make more than that, of course -- but 20 vehicles they make show a profit, and 11 of those 20 vehicles are trucks and SUVs, and these models are slated to be dropped.  In the meantime, and I have this story deep down here in the Stack of Stuff, you know what the most popular car in Iraq is, among the newly free there?  The Hummer.  The Hummer.  They love the Hummer.  They're buying Hummers, the people in Iraq who can afford it, are buying Hummers out the wazoo.  Now, I want you to do a side-by-side comparison here.  Iraq, which is just now emerging from the seventh century, thanks to us, their citizens are able to, those who can afford it, and more and more are, to go out and buy Hummers.  We, in the greatest nation in the history of the earth, the richest, the most prosperous, are preparing to tell our citizens, "You can't have a Hummer; you can't have a Suburban; you can't have an SUV.  You gotta go electric; you gotta go hybrid."  I mean the side-by-side comparison here is just stunning. 

Then there's this from the Associated Press, and I have to tell you, this report from the AP, they're giddy about this.  The headline:  "'Ford, GM to Cover Car Payments if Buyer Loses Job' -- Ford Motor Co. and General Motors Corp. are offering payment protection plans to help reassure consumers who may be putting off buying a new car because of worries about losing their job.  The offers come as auto sales have been battered by the recession and tight credit, reaching their lowest levels in 27 years.  Ford said Tuesday it will cover payments of up to $700 each month for up to a year on any new Ford, Lincoln or Mercury vehicle if consumers lose their jobs. The program runs until June 1. Hours later, GM said it will make a similar offer."

But how can General Motors do this without consulting with the CEO, Barack Obama?  By the way, Obama left the country today, folks.  How will we cope?  President Obama, The One, The Messiah, boarded Air Force One today with 500-plus staffers heading on a five-nation trip starting with the G20.  How will America cope today and for the next week with President Obama not on American soil?  Do you think there are some people here who are going to have trouble coping?  No doubt. 

Anyway, "GM said it will make a similar offer. GM's new CEO, Fritz Henderson, said the company will make up to nine car payments of $500-- " these companies don't have any money!  This is amazing!  All these institutions spending and guaranteeing all this money, and none of them have any.  We've bailed out General Motors; we've bailed out Chrysler. They still don't have any money. They are in debt up to the wazoo.  Now they're promising to make car payments if you lose your gig after going out and buying a car.  Why not just give the cars away?  How many people potentially are we talking about here?  Snerdley, I know, I know, I'm on the wrong side of this, just like I'm on the wrong side of everything these days because the vast majority of the American people are going, "Hey, what's wrong with that?  That's a wonderful idea.  Do you have to throw cold water on every good idea that comes down the pike in this country?  I think it's great that they're gonna pay for my car if I lose my job, that's only right."  Yeah.  Okay.  Well, just ask you a question here.  With whose money are they going to be paying your car payment?  Mine, dingleberry, and every other taxpayer's.  So now we're paying people's mortgages when they can't afford their mortgages, and now we're going to make their car payments when they can't afford their car payments.  I predicted it.  I've got a couple things from the archives of the program.  I predicted we'd be paying people's car payments.  Why stop at mortgages?  I remember what I said.  I'm in a foul mood anyway.  I have been in a foul mood the past couple days, and this just makes me even fouler.  You know, to realize that we're living in a country with citizens who have no concept what this country is all about or what made it.  Well, you smile and make the most of it. 
 
 
BREAK TRANSCRIPT

RUSH: Let's go to the audio sound bites because CNN decided to do an in-depth expose last night to find out if anybody on the Obama auto team has any experience in the automobile business.  They talked to Austan Goolsbee, one of these economic advisors, one of these Ivy League egghead members of the Obama administration, and Blitzer's question was this: "Okay, you have 21 members in your auto industry task force.  None of them have any real auto industry experience.  Five of them are cabinet secretaries.  Nearly half of your members hold economic posts.  Seven have ties to energy and the environment.  Even the Treasury's senior advisor on auto issues, Ron Bloom, has no direct auto industry background.  One member of the auto industry task force is joining us now, Austan Goolsbee.  Is that fair that none of you has any real direct auto industry experience?"

GOOLSBEE:  I don't think it's fair.  I believe that Ron Bloom does have a significant amount of auto experience and that is within the government task force.  The other thing that I'd say is the president made clear in his remarks, the US government is not trying to get into the business of running an automobile company.

RUSH: Oh.

GOOLSBEE: The intention here is to create the conditions that will be a bridge allowing these companies to restructure and become viable enterprises again --

BLITZER:  Do you know...?

GOOLSBEE:  -- in the future.

BLITZER:  Do you know off the top of your head what Ron Bloom's auto experience industry was?

GOOLSBEE: Umm... I... No, I don't know exact--  I believe that it was, uhhh, advising the unions and in working in the auto industry, but I'm (pause) not an auto executive so I... That's not my area.

BLITZER:  All right.  We're going to double-check that.

RUSH:  Way to go, Wolf.  Way to be on the case out there, baby.  The original premise is fine. There's nobody on this task force has the slightest idea how to build a car.  There's nobody on this task force that loves cars.  There's nobody on this task force that is a car guy.  They're all a bunch of brainiac eggheads, and they're over there to assert control.  So Blitzer then says, "Well, look, has the White House been involved in the compensation package of Rick Wagoner, GM?"

GOOLSBEE:  I don't know the details on that.

BLITZER:  Would that be something logical, though?  Would that be -- given the enormous amount of taxpayer money going into GM?

GOOLSBEE: Uh, I'm not going to speculate on those matters.  I don't know anything about it.

RUSH:  You're on the task force, for crying out loud, Goolsbee!  What do you mean you don't know the details of the canning and the firing of Rick Wagoner of General Motors?  Later on CNN we go to Larry King Live where he had two well-known and documented automobile experts to discuss this: the actor, Ed Begley; and the mayor of San Francisco, Gavin Newsom.  Larry King says, "What do you make of this whole thing?"

BEGLEY:  I think there are clean technology jobs out there.  Clean tech is a -- growing, leaps and bounds every day.  I think they need to make the cleanest cars, the most energy efficient cars possible, and they can do that in Detroit and Flint and Lansing and all those places.

KING:  You made that condition along this bailout?

BEGLEY:  Yeah, uh, to do as much as is humanly possible to make those kinds of cars.  I mean all the auto companies are hurting, but Toyota is hurting a lot less, and they made the Prius.

RUSH:  Another... (laughing) Mr. Begley, have you checked the sales of the Prius?  Toyota is Lexus! (laughing)  Snerdley, sit down and calm down.  I'm already in a foul enough mood without having to deal with your hysterics in there.  I know where we're headed here.  He's an auto expert.  This is a CNN auto expert! By the way, he swerved into what's happening here.  We're going to have "green" cars. Look, do I need to go through the statistics again?  General Motors makes 20 cars that make a profit.  Eleven of them are trucks and SUVs.  They are going to be eliminated, and they're going to be replaced with smaller cars, since you will not buy a small car on your own.  We know that the tipping point is $4 a gallon.  At $2.50 cents a gallon gasoline, people are still buying trucks; they're still buying SUVs.  This does not fit with the plan the Obama administration has. 

One way or another you're going to get out of those trucks, you're going to be forced into the clean hybrids or what have you, come hook or crook.  Now, the Wall Street Journal has an interesting take here on what happened with this whole setup to General Motors exec Rick Wagoner being canned by Obama on -- I guess it happened Friday or Sunday; I'm not sure which.  But here's how the Journal reports this: "Inside a windowless, ornate room Thursday just across from the Oval Office, President Barack Obama and a group of senior economic advisers began the job of remaking the American automobile industry. ... Many of GM's problems didn't start during Mr. Wagoner's term, and most predate the economic downturn that sent car sales slumping, such as union contracts and the costs of paying for retiree health care. 
 
 
"'This is Obama, and symbols of change are important,' said one person familiar with the situation." It's what we heard yesterday, that getting rid of Wagoner was simply done to show that Obama is taking action. "'This is Obama, and symbols of change are important' ...  Mr. Wagoner told GM's board Friday evening that he was asked to step down..." Get this. This is what the Wall Street Journal is reporting that Rick Wagoner told his board: "[T]he administration wanted a majority of them to resign, according to two GM officials. Several volunteered to quit over the weekend. Other GM officials speculated that they would also be asked to resign. Also expected to be on the chopping block is GM's Washington office..." That's where the lobbyists work.

"White House economic adviser Mr. Summers led a conference call at 8:30 p.m. Sunday with lawmakers who had expressed strong interest in the auto bailout. At one point during the call, Mr. Summers told lawmakers the administration was pushing for the Fiat-Chrysler deal to include 'building an energy-efficient vehicle in this country,' Sen. Bob Corker said," Republican from Tennessee. "Mr. Obama made one call himself to some of the Michigan delegation, including US Sen. Carl Levin and his brother, Rep. Sander Levin, and Michigan Sen. Debbie Stabenow. He told them that he planned to put some administration staff into the Detroit companies..." Obama told the Levins and Debbie Stabenow "that he planned to put some administration staff into the Detroit companies, according to one person familiar with the situation. 

"Sen. Corker, a Republican from Tennessee, said he told Mr. Rattner on Monday that he was alarmed that the administration would dictate what kind of vehicles would be constructed." He's alarmed?  "'Deciding what vehicles and plants will survive is setting industrial policy,' the senator said."  He's alarmed? There are some people who, by the way, ladies and gentlemen, think that this is a charade.  Jennifer Rubin, who writes Commentary magazine, thinks that this may be an elaborate charade to hide a good old-fashioned bankruptcy proceeding.  "The Obama's administration's leading plan to fix General Motors Corp. and Chrysler LLC would use bankruptcy filings to purge the ailing companies of their biggest problems, including bondholder debt and retiree health-care costs..." and the clue that she adopted, that she thinks this may just be a charade...

And of course there is this 60-take timetable now, 60-day requirement that they come back once again (General Motors and Chrysler), with a new restructuring plan.  But Rubin's point is: Why offer government-backed warranties now?  The reason government-backed warranties were offered is because people, it is said, will not go buy a car from a company that is in Chapter 11.  Even Rick Wagoner and others have said, "Why, we don't want to go Chapter 11 because we're in Chapter 11 people don't know that we're going to be around. If they don't know that we're going to be here, they won't buy cars. They don't know if they can get 'em serviced; they don't know if the warranty will be upheld," and so Obama comes out yesterday, "We'll back all of these warranties." The government will do so.  So that's an indication that some of this may just be a charade. 
 
 
BREAK TRANSCRIPT

RUSH:  So the new GM CEO says they may have to shut down even more plants.  And, of course, you watch, the new GM CEO is going to be tarred and feathered for this, but all he's doing is following orders, because yesterday President Obama, in his address to the nation on the state of the automobile industry, GM and Chrysler, announcing his takeover, announcing the creation of Obama Motors, told people, (paraphrasing) "I can't guarantee your job; I can't tell you your job's going to be there; I can't tell you that your plant's going to be there.  It's going to get worse before it gets better."  And so the new CEO, the interim CEO, Fritz, whatever, comes in here today, "We may have to shut down more plants."  Then there's this story from AP:  "Many assembly line autoworkers reacted with skepticism and anger Monday to the Obama administration's tough tactics, which stoked long-simmering feelings that the people who put the country on wheels get treated differently than the wizards of Wall Street.  'It's the age-old Wall Street vs. Main Street smackdown again,' said Brian Fredline, president of UAW Local 602 at a plant near Lansing. 'You have all kinds of funding available to banks that are apparently too big to fail, but they're also too big to be responsible.'

'But when it comes to auto manufacturing and middle-class jobs and people that don't matter on Wall Street, there are certainly different standards that we have to meet -- higher standards -- than the financials. That is a double standard that exists and it's unfair,' Fredline said.  Many workers -- not generally known for their affection toward executives -- even sympathized with Rick Wagoner, who was forced to step down. ... Jim Graham, president of a union local in Lordstown, Ohio, where GM produces the Cobalt and Pontiac G5 fuel-efficient cars, 'We knew someone was going to have to take the proverbial "bullet," and it would have made it a lot easier to accept that had the CEOs of the banks also been required to give up their jobs.'"  Now, stop and think of this for a second.  It's depressing enough to watch the destruction of the country all around us every day.  Now these people, these auto worker union leaders and members who voted for Obama are upset over the fact that they're paying a bigger cost than the people on Wall Street, that they're going out of their way to prop up the banks, make sure the banks stay open, make sure the banks do this but they're fit to be tied here over the lack of similar attention to General Motors. 
 

[The Coach]

Con't....


What would make these union people happy?  "We knew someone was going to have to take the proverbial 'bullet,' and it would have made it a lot easier to accept that had the CEOs of the banks also been required to give up their jobs." Is this what we've come to?  Yes, it is!  Happiness in the American workforce is when somebody who earns more than you do, or gets more in the government than you do, gets fired.  That's fairness!  Let's go to audio sound bite number one, as I change up in midstream.  Audio sound bite number one is Bob Pisani, who is an editor at CNBC. He was on with the Street Sweetie, Erin Burnett on Street Signs, and she had a question for him: "Even after the so-called stress test they're going to have, what, six months to raise more capital, they could do it by raising more capital, they could do it by selling things.  But now I think we're realizing maybe there isn't a whole lot of demand from buyers, there aren't a whole lot of people who want to put capital in, this is worrying people."

PISANI:  The Street basically believes that there are going to be several of them fired. At this point, we don't know who, and they may not necessarily be the biggest ones. You may see smaller ones, but the government has set up everything just like they did with the auto companies to basically start dismissing some CEOs of banks now, and I think you're going to see that happening.

RUSH:  Okay, Jim Graham, who is the president of a union local in Lordstown, Ohio, there's your answer.  Bob Pisani said yesterday that some bank CEOs are going to be canned and a lot of people are talking about it and that it's in the works.  So here we go.  We just fired Rick Wagoner and now some bank CEOs are going to be canned by the government and nobody says a word.  In fact, the Washington Post comes out with the most ridiculous poll.  Well, I don't know how ridiculous it is because the Rasmussen poll pretty much says the same thing.  Obama's approval numbers through the roof, six-in-ten people love what he's doing with the economy.  Rasmussen says that his approval index skyrocketed from plus 4 to plus 11; that they're just happy as hell with the way Obama is taking control of the economy and dishing things out.  Maybe we have descended into a nation that sort of loves the concept of soft tyranny.  Maybe we have a majority of Americans that actually like it, or are willing to support it.  And now let's go back to audio sound bites from Larry King with his automobile expert, Ed Begley, Jr.  Larry King said, "Do you think, Ed Begley, in your automobile expertise that the auto industry is ever going to come around to the kind of thinking that you have?"
 
 
BEGLEY:  I hope they do, not just that I have, but many other people have.  Now, they fought the CAFE standards for years, the high mile per gallon, they fought the seat belts, they fought the airbags, they fought the smog control devices.  We have four times the cars in LA right now since 1970, yet we have half the smog because of those pollution control devices.  We have 500 at the low end, 700 billion a year leaves this country, according to me and T. Boone Pickens that's leaving this country in imported oil.  We have more money now to deal with those problems.

RUSH:  Well, I'll tell you what I think is going to happen.  I read an Investor's Business Daily editorial today, and thought I put it near the top of the stack, but I didn't.  It's a fascinating little editorial about some of the plans the Obama administration has for energy in this country.  And when I read this editorial, one of the things that I concluded was -- here's what it is.  "The House of Representatives approved already a Senate-passed omnibus bill --" now, follow me on this "-- that puts two million more acres of energy rich land off-limits.  Last Wednesday, the House of Representatives passed on a 285-148 vote the Omnibus Public Land Management Act of 2009 (S.22), which confirms our theory that no good comes from legislation labeled 'comprehensive' or 'omnibus.'  S.22 is a smorgasbord of 160 bills totaling more than 1,300 pages and, no, we're not sure how many who voted for it actually read it. A stimulus bill it is not, for it locks up an additional 2 million acres to the 107 million acres of federally owned wilderness areas. That total is more than the area of Montana and Wyoming combined," that are now off-limits for energy production. 

Some of this area that has been placed now off-limits is among the most energy-rich in this country.  It's being placed off-limits.  Now, we know that the Democrats are opposed to new drilling offshore.  They're opposed, as is Obama, to the creation and discovery of new domestic energy.  Now, stick with me on this because this dovetails with the takeover of General Motors and Chrysler and the dictates that will result after whatever happens, either they take 'em over, there's bankruptcy, restructuring, what have you.  Obama knows that the tipping point to get you out of big cars is four-dollar-a-gallon gasoline.  Obama said when the price of gasoline last summer got up to four dollars, he didn't have a problem with it, he was just upset how quickly the price increases took place.  So, Democrats and Obama restrict more of our own natural energy resources, placing discovery and usage off-limits, take over the automobile industry, say to General Motors, "Okay, 11 of your top 20 sales vehicles are showing a profit are SUVs and trucks but we're going to change that with a political decision, not an economic decision." 

It seems to me that what's going to happen here, contrary to Mr. Obama's assertions, is that his administration is going to increase our dependence on foreign oil by eliminating our discovery and usage of our own energy resources.  I'm talking about fossil, like oil, shale oil, natural gas.  As more of these lands are placed off-limits, guess what?  We have less of our own.  We need more from elsewhere.  So after this, I'll betcha there's going to be a big push -- mark this projection, March 31st, 12:43 Eastern Daylight Time -- next will come a total cutoff, maybe happen in stages, a total cutoff of offshore oil, new discoveries and productions.  This will cause the price of gasoline to increase dramatically again, and the cars that Obama wants you driving will thus have a market.  He does want, and he needs four-dollar-a-gallon gas or higher.  He wasn't kidding.  Now that he's going to be running the car companies, energy policy just got a lot clearer, and guys like Ed Begley, noted automobile expert out of Hollywood, are going to be throwing parties and celebrations because every one of you are going to be forced into driving little Smart Cars, lawn mowers with seats on them, getting rid of your trucks and so forth.  You might even be paid to do so, since we're paying people to do everything else these days, from the federal government. 

These things work hand in hand, taking over automobiles, denigrating trucks and SUVs, demanding new clean energy, setting natural energy resources off-limits raises the price of energy, the price of energy forces the American people to make cheaper alternatives, that means smaller cars, yada yada yada.  So we're going to have higher gasoline prices, and it isn't going to be long, lock in your bet on that.  And what will it mean?  Guess who's going to get the blame when the gasoline prices go up?  Big Oil is going to get the blame.  More anger and hatred directed at the oil companies 'cause nobody's going to know about this omnibus land grab bill that came out of the House and Senate last week.  Because the media is derelict in telling people what's going on in their own government.  Only you are going to know this and the people who read Investor's Business Daily. 

So, as I predicted yesterday, the next big, quote, industry that's going to get hit is oil, and it's coming soon, because the price of gasoline, we're getting now into the spring and close to the summer driving season, you mark my words, prices are going to go up because that's what President Obama wants, because they are a means to an end.  And what does all this mean?  It means more populism, and that will lead to further erosion of free market capitalism, it will lead to further erosion of your individual liberty and freedom to drive the car you want and the public's permission to nationalize.  Health care is about to become a huge crisis, too.  Don't be surprised if you see a bunch of horror stories start popping up in the press about that.  'Cause you see, we can't have this kind of massive change without a villain.  We need a villain.  General Motors is a villain, Rick Wagoner's a villain, SUVs a villain. 

I wonder how many of you people remember, back in 1997 when I first saw the Sierra Club come out against SUVs, and I raised the red flag, and I said, "They're going to do their best to demonize this car and get you out of it."  "Awe, come on, Rush, you're overreacting."  Look where we are today.  The government has taken over two automobile companies for the express purpose of getting rid of SUVs and trucks.  They have.  The same thing is going to happen with health care, 'cause you can't have a change without a crisis, without a villain.  Obama has to always be portrayed as the hero.  Phony outrage fueled by all the president's men, the Drive-By Media will turn the country upside down.  We are Venezuela in the early years.   
 
 
BREAK TRANSCRIPT

RUSH: Ed Begley, Jr., the noted automobile expert and part-time actor in Hollywood, was on Larry King Live last night and said, among other things (paraphrased), "Look, it's good we're going to get rid of these big cars and trucks. We just had to get rid of these SUVs and so forth.  General Motors is in bad shape, and Toyota is doing better because they got the Prius."  Now, Ed, Prius hybrids have become a drag on practically everybody that makes them, particularly Toyota.  But that won't be for long because the Obama administration is going to get rid of a bunch of lines that are very profitable at General Motors.  Twenty vehicles they make show a profit, 11 of them are SUVs and trucks.  Now, let me ask you people a quick question.  How many of you know what it was that led the automobile industry to "invent," quote, unquote, the SUV, the sport utility vehicle?

Brian, you got any idea? (interruption) None whatsoever? (interruption)   Dawn, you have any idea what it was?  (laughing)  First time I've laughed all day.  Thank you.  It's (laughing) the second time I've laughed all day.  The SUV was created because it looks more masculine than what? (interruption)  Than a mini-van.  No. Actually what led, ladies and gentlemen, to the invention of the SUV was the noted CAFE standards, the Corporate Average Fuel Economy Standards.  Automobile manufacturers have to have their entire fleet meet an average miles per gallon, emissions, all that stuff.  However, when the first CAFE standards were written by the Wizards of Smart in Congress, light trucks and trucks were exempted.  So the automobile manufacturers, to avoid CAFE standards, simply put five seats instead two of on a truck chassis.  And they put a body up there that made it look like it was a car, leading to the sport utility vehicle. 

It was exactly how entrepreneurs escape and get around onerous government regulations.  To give you another example of how this happens.  Back in the early seventies when Richard Nixon was president, we had, what, 3% inflation and unemployment was around five or six percent. Nixon panicked and instituted wage and price controls.  Now, these never work.  The wage controls do because, you know, management loves to say, "Hey, I'd love to give you a raise, but the government says I can't!" But the way that preferred employees were given pay increases was to change their compensation from wages to "bonuses." So this is how management took care of itself and its preferred employees.  On the price side: Yes, price controls were put into place, so everybody thought they were going to be able to go to the grocery store and prices were not going to rise. 

I think there was a... I'm not quite sure, but I think there was an allowable 1-1/2% or whatever inflation rise allowed, but no direct price increase above the rate of inflation -- and I'm not even sure about that.  So if you go to the butcher section of your local supermarket, they have various cuts of beef, as you well know.  Well, all of a sudden all they had to do was invent a new cut, like the "quadruple double rib eye," and they could charge for it whatever they wanted because it was not subject to price controls, because it didn't exist when the price controls were put in place.  Wage and price controls never work.  The CAFE standards were simply onerous, and the automobile manufacturers found a way around them -- and so government didn't like that!

When Barney Frank and his ilk found out they had been outsmarted then the CAFE standards eventually began to apply -- and then the PR campaign against the SUV kicked into high gear with the Sierra Club starting it about 1995 or 1997, and we are where we are today where 11 of the 20 most profitable vehicles GM makes are SUVs and trucks, and the Obama administration says they have got to go. (interruption) What's the question, Mr. Snerdley? (interruption)  Mmm-hmm. Mmm-hmm. I know. I mentioned this in the first hour.  I warned people. I remind people of this all the time. When the Sierra Club first started targeting the SUV -- (interruption) Carl Pope, that's right, at the Sierra Club -- I warned you people what was going to happen, where this was going to lead.  And everybody said, "Oh, you're overreacting. They're just a bunch of environmentalists, and all they do is they just care about the planet, Rush."  Wrong!  They are liberals, and they are going to -- if they can -- dictate to all of us how we should live, and we should live the way they say we should.   
 
 
END TRANSCRIPT