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GLENN: I want to ask you a question. How many recessions have we gone through? How many recessions, how many troubled economic times has this country weathered? A ton, right? How many just in your lifetime? How many times have we gone through a recession? How many times have we weathered the storm? How many times have you heard the argument, "Well, it’s this administration’s failed policies," both the Republicans and the Democrats, over and over and over again, right? And, "Oh, stop, they’re talking the economy down," blah, blah, blah. Okay, we’ve all lived it. Let me ask you this: How many times in your lifetime has the President of the United States given speeches at 7:30 or 7:45 or 8:30 or 8:35 in the morning directed directly to Wall Street? How many times in your lifetime have you heard the President of the United States say these words that he said today right before the markets opened?
PRESIDENT BUSH: Yesterday the house of representatives voted on a financial rescue plan that had been negotiated by congressional leaders of both parties and my administration. Unfortunately the measure was defeated by a narrow margin. I’m disappointed by the outcome, but I assure our citizens and citizens around the world that this is not the end of the legislative process. Producing legislation is complicated and it can be contentious. It matters little what a path a bill takes to become law. What matters is that we get a law. We’re at a critical moment for our economy, and we need legislation that decisively addresses the troubled assets now clogging the financial system, helps lenders resume the flow of credit to consumers and businesses, and allows the American economy to get moving again.
GLENN: Okay, stop for a second. Here’s what he’s saying. He’s saying that the financial system is clogged, and I think there’s most people — and I would love to just take phone calls today from people who are just starting to wake up and go, wait a minute, wait a minute, what does this mean. Because we and everybody on the staff here has been so into this and I’ve been whipping the research horses now for about a year, a year and a half on this very scenario and so we don’t even know anymore what most people don’t know. We don’t know what the average Joe question is anymore because I was, honestly I was walking with a guy yesterday and we were walking to a car and we were talking and just last week he said to me, said, "Glenn, I just came into some money from an inheritance." And he said, "I was thinking about putting this into stocks, what stocks do you think…" and I said, you’ve got to be kidding me, right? He said, what? I said, well, first of all, I’m not the guy to ask for investment advice and the second thing is, are you paying attention to what’s going on? Now, this is not a guy that’s associated with us at all. He said, I know there’s some stuff going on but, you know, it’s all over, right? I said, all over? It’s just beginning. He said, really?
Saw him yesterday and he said, so the stock market was down 777 points. So now should I put my money in the stock market? I said, no, no, don’t put your money in the stock market. It’s extraordinarily volatile. And he said, well, some people say it’s going to go back up tomorrow. I said, it will go up one day and go down the next day and up one day and down the next day. I said, you can’t trust it yet. He said, I don’t even know what all of this means. And I think that’s where most people are. They don’t even know what this means. And that’s what the President is in between a rock and a hard place here. Some of it by his own doing. He can’t really explain what all of this means. What he just said here is there are people that can’t get loans.
Now, a lot of people will say, well, I can go get a loan, or, I’ve got good credit, I don’t have to worry about that, I’m not doing — let me tell you something. Let me tell you something. The credit that he’s talking about is the kind of credit that businesses use and you as well. School loans, everything. You as well. What’s happened is — remember you don’t want a run on the bank. Why? You don’t want a run on the bank because then everybody takes their money and they hoard it and they put it underneath their mattress and there’s no money left to be able to loan money. Remember It’s a Wonderful Life: Your money’s in this guy’s house, your money’s over here. So you don’t want to hoard money. Well, there was a run on the bank. See, we have the trust of FDIC, so we don’t run and get our money because we know that our money is going to be returned to us. Because the federal government will just print more money if they don’t have it. They will just print it. So you get your money back. So we have that little seal on the door that makes us feel all happy.
Well, the banks don’t have that. The banks know what’s going on, and the banks don’t trust each other. They don’t know, "Wait a minute, are you good, are you bad? Are you going to survive, are you not?" They don’t know what’s going to happen next. They don’t know if the Government’s going to get involved, not get involved, seize them, do this, do that. Is the economy going to grow or expand or contract, are we having huge taxes coming, are we having huge spending still? What’s going to happen with the hedge funds, what’s going to happen with the price of oil? They have no idea. And so what they’ve done is they’ve gone to their bank, the treasury and the Fed and they have had a run on the bank and they have put that money under their proverbial mattress. So they are saying, no, no, no, I can’t loan you any money. They have got all the money they need but they are holding onto it because they don’t know, they may have to cover some assets, they don’t know what’s coming. So they just don’t spend their money. Well, that’s what happened in the Great Depression with regular people. That’s what happened with Japan with regular people. They had money and they wouldn’t spend it. And so what happens, everything stops.
Now if you’re — and you know this. If you’re a farmer, you need to go and get a loan, "I need to get a loan, got to buy my fertilizer, got to buy my seeds, start all my wages, everything else." So you go get a loan until that crop is harvest and then you pay it back. Grocery stores have to do that, get the trucks, get it all out. Nobody has the money to just put out. They have these revolving lines of credit. Well, that revolving line of credit has stopped now. So there’s no way to do business.
This is something that we talked to you about eight months ago and I said if this stops, if people can’t get loans, business will stop. They say that we’re probably around two weeks away from just business, I mean healthy businesses just not being able to do business because if — and I don’t have any information. I don’t even want to use real names. You know, if Bill’s Fabric Store has lots of fabric and they are trying to sell fabric to, you know, a name brand maker, well, that name brand maker can’t buy it because they always take out a giant loan because they don’t have money for, you know, the plaid skirts on hand. That’s what they do. That business, even healthy ones, will go down because nobody can get the short-term loans.
That’s what the President is talking about. This is why it affects you because businesses will begin to close. Healthy businesses will begin to close. You’ll — unless they operate on a full cash basis, they won’t be able to do it. Unless they are self-sufficient and have zero debt, unless — it doesn’t matter how good your credit is. You ain’t getting a loan. So unless your business has the money where they never have a revolving line of credit, they never have to go to the bank, they are not going to be able to survive. That’s why he says really big things going on, but he never really explains that in this. That’s why you have to go back and say, "Okay, wait a minute, what else did he say?"
PRESIDENT BUSH: I recognize this is a difficult vote for members of congress. Many of them don’t like the fact that our economy has reached this point, and I understand that.
GLENN: Stop. He doesn’t like — many of them don’t like that our economy has reached this point. Most Americans at this point go, you’re damn right, and whose fault is it? Instead of saying "What point," the immediate thing from every American is, "You’re damn right, and I’m one of them. I don’t like, and you guys caused it." Instead of saying, "Well, what point exactly are we at, what exactly are we facing? What do you mean by they don’t like the fact that we’re at this point?"
PRESIDENT BUSH: But the reality is that we’re in an urgent situation.
GLENN: Stop. We’re in an urgent situation. Why are we in an urgent situation? What is an urgent situation? I’ve lived through recessions before. I don’t remember ever hearing that they were so urged.
PRESIDENT BUSH: And the consequences will grow worse each day if we do not act.
GLENN: Stop. If the government doesn’t give $750 billion as a bailout — that is twice the size of prescription drugs, twice the size of prescription drugs — if they don’t implement this plan now, the problems grow worse by the day?
PRESIDENT BUSH: Dramatic drop in the stock market we saw yesterday will have a direct impact on the retirement accounts, pension funds and personal savings of millions of our citizens. And if our nation continues on this course, the economic damage will be painful and lasting.
GLENN: Stop. The economic damage will be painful and lasting. Why? Why is this different than any other, why is this different than any other recession? Okay, so you get the bad banks, the bad banks go out. Okay, big deal. We had the S&L, we had the 1987 S&L scandal. We lived through that. It wasn’t painful and lasting. You know, we got through it. What’s the big deal here?
PRESIDENT BUSH: I know many Americans are especially worried about the cost of the legislation. The bill the House considered yesterday commits up to $700 billion taxpayer dollars to purchase troubled assets from banks and other financial institutions. That, no question, is a large amount of money.
GLENN: Twice the size of prescription drugs.
PRESIDENT BUSH: This is a large problem.
GLENN: Stop. Twice the size of prescription drugs, and I know that’s a lot of money. Do you remember what it took to get the prescription drug thing through? And I know that’s a lot of money. Yeah, it’s a ton of money. Even with a large problem, he says. Again most Americans blow that off because they’ve heard this before. We’ve heard this over and over again. You want to talk about the little boy that cried wolf, this is it. This is what the average American thinks. "Really?" You know what? This problem where the President says something like this and no one listens to him starts a long time ago. It starts really, I think the seed was during the Nixon administration, when you — what? Are you kidding me? When everybody said in the 1990s, "Oh, it doesn’t matter what he does in his personal life. It doesn’t matter. So what. He was lying about sex." It does matter! You’re right, it doesn’t matter that it was about sex. It could have been about anything. It doesn’t matter about the topic. It matters about the lie. You can’t lie to people. You can’t look at people in the eye and say, "Yeah, well, okay, I was lying about that one." Because now you don’t trust. Now you’ve seen a guy put every ounce of credibility onto the table. So half the country was disenfranchised in the Nineties and said, wait a minute, it does matter. You can’t lie. And then we had the 2000 election where they were clearly lying about the recount. And then they stole the next election and then we went into Iraq, and did they have yellow cake, did they not have yellow cake. Was he lying about that, was he not lying about that. No one believes our candidates anymore. No one believes our President anymore. No one believes our congress anymore. Nobody believes this problem is real because no one has any credibility.