GLENN: Here's the thing. I have not been calling for the great crash of 1929. What I have said is if we don't correct our policies, if there is another load put on this table, the economy won't be able to hold it. I don't believe there has been another load put on this table. This is natural. This is -- what's coming here in the next few days hopefully, if people, you know, hold on and don't go into panic, this will be a natural down turn and it needs to purge itself to be able to reset. So this will be a natural downturn. This will be a tough spell. I think we will go into recession but if our politicians don't make things worse, i.e., The Forgotten Man, if they don't make things worse, we're going to be okay. The caveat that everybody seems to always miss is this: You have these conditions which I've been telling you we were headed for ringing the warning bell loudly since August saying, look out, bad times are coming around, really scary stuff is going to happen. Today is the day where you're beginning to really see that. I've been telling you that since August but I have also been telling you it's natural unless we have another terrorist attack or something else that is put on the table. This is where you should be worried if you're worried about the Great Depression.
God forbid we're hit by a terrorist attack now. You didn't see this, or most people didn't, didn't see this back in August or November and everybody was in denial, but these underlying things, this is what's been bubbling since last summer. They've all been there and that's why I said if we're hit by a terrorist attack, we'll hit into the Great Depression, and nobody believed me because they didn't see -- not they didn't see it. They weren't willing to recognize that this was bubbling under the surface. And what "This" is is a fundamental problem with our economy. Nobody has trust in anything anymore. And I'm not talking about you. I'm talking about the world doesn't trust America anymore. When Bernanke comes out at 8:00 in the morning and has an emergency rate cut of 75 basis points, which is a big cut, when he makes a rate cut at 8:00 in the morning and futures actually go down, that's not good. That's not good.
When the stock market says, no, I don't think that's a good move, what they're saying is let it eat itself up. You know, here's what we do all the time. When I was a kid, I used to go out and play and I would, you know, scrape my knee and I would fall down on the sidewalk or whatever and there would be rocks in the cut. What we keep doing is we keep putting, you know, Bacitracin on it and we put a Band-Aid on it right away and then we give aspirin so you don't feel the pain anymore. What we don't do is we don't clean out all of the rocks that are in the wound. We always -- because our politicians find it easier to say, hey, don't worry; nobody's going to get hurt here. They never clean out the rocks. The system must clean the rocks out. We must allow it to really clean everything up or it's going to get infected, and it is so close to infection right now because this is caused by the Fed and the politicians and everybody else trying to make up for the tech bubble.
When the tech bubble burst, everybody ran in: "Don't let anybody get hurt," because there was an election, "Don't let anybody get hurt." And so they went in and they tried to fix the tech bubble so nobody got hurt. Then we had September 11th: "Let's go out and spend as much as you can, cut the rates, don't let anybody get hurt." That's what this is caused by, never letting anybody get hurt. It's just like your kids. You know this is true. I mean, the reason why you can see these things coming, the reason why it doesn't take a rocket scientist to figure so much of the world out, all you have to be is consistent. All you have to do is understand how God parents us. If you understand how God parents us, how he lets us make our own decisions, he never withdraws, he never really gets pissed at us, we withdraw from him. We remove ourself from where he is, but he's always there and he's always there going yeah, yeah, I could have told you that one. In fact, I did tell you that one, shouldn't have done that. And then what happens? He lets us fall. And only when we fall -- and I mean all the way. There are some people that fall a little bit and then somebody picks them up and rushes to their side and says, oh, are you okay? And then they enable that person to continue to make the bad mistakes. God lets us fall. "Your choice, brother." And hopefully in my case right before death I go, "I get it." So if you understand how God parents you, then you understand how to parent your kid. You know you've got to say the tough things to them. You know you have to let them make their own decisions and let them feel -- you cannot run in and give them a frickin' trophy every time they lose. They lost! Every time they get a bad grade on their test, you can't go in and fight it with the teacher. It's a bad grade on the test. It happens in life. They are going to have teachers who suck, teachers who are against them and they're also more likely going to stink at what they do from time to time and going to get a bad grade. If you'll let them feel the repercussions of that bad grade, maybe, if they have a sense of what bottom is, they will correct that. If they don't, they'll destroy themselves, but they will destroy themselves if you enable them. You know that to be true with your family. You know that to be true universally with God. Why is it we try to make everything so darn complex when it comes to everything else, when it comes to voting for somebody for President? I don't want to babysit them. I don't want to nanny. I don't want somebody that is always there to help my booboo and put aspirin in my system and to put a Band-Aid on my knee and kiss me and make me all better, make me forget about the little booboo when there are rocks in the booboo. Let me fix it. Let me fail because if I fail, I'll only get better.
Edison was one of the greatest inventors of all time. He failed more than he succeeded. If you would have taken the failure away from Edison, you would have never had the light public. And think how green and perfectly temperature controlled this planet would be if we would have just stopped him from inventing the light bulb. And it's the same thing with the economy. You can't make everybody feel better.
Here's what happened. The Fed tried to make everything better by cutting the rates. All of these banks said, "Whoa, there's so much money here, what do we do with it? Let's just start giving it out." They made money because money was so cheap. So they started giving it out to everybody. Everybody was on the bandwagon. George Bush wanted to make sure that everyone who never had owned a home before could own a home. The Democrats, "That's right, oh, look at the minorities that have never have chance to own a home; they can own a home. Look at all of the poor people all around that can own a home." There's a reason sometimes that poor people, white, black, yellow, purple, don't own a home. "Look at all the people who have made horrible mistakes in their life but now suddenly can get credit again because credit is just so easy now."
Meanwhile Wall Street and the banking industry, "Look how great this is. We can just make numbers up. Oh, credit problem, he's got a bad credit problem? No big deal. Think of the money we'll make." So everybody had a stake in making money. Politicians, they kept their power because politicians could tell everybody, "Look, you, too, can have it. Even though you've never been able to get it before because common sense was the rule, you cans it now. Look, it's practically free. We'll pay you to live in this house... temporarily." People who just wanted to have a house, people who wanted to -- you know, I read this great story in the New York Times about why African-Americans spend so much money on really expensive sneakers, et cetera, et cetera. It's not an African-American thing. It's all races. All races do it. And what it is is you're modeling up. It's just more accessible to poor African-Americans than it is to poor whites because poor whites generally don't live in a whole area with a bunch of poor whites. They live with whites that are not -- they are not at the poverty level. They're just a little above. They are the lower middle class. This is what the article says. So when they want to model up, shoes won't do it. They can't afford to model up. They can't afford to appear to be wealthier than they are to their neighbors. But African-Americans, according to the "New York Times," they can model up because they're surrounded by poor and so somebody can buy $150 sneakers and they can afford that and they can, you know, cheat on healthcare or education and they can buy the sneakers because that way they can look like the neighbors.
Well, that's what everybody's doing. Everybody's been modeling up, except everybody tries to model up, I believe to television. Everybody models up to what people, what lives people are living on television. That's the way the -- that's the average American. That's the way it's supposed to be. Well, it's not! And so everybody went, "Well, I'm in this position. I can -- now the money's so cheap, I can model up to here." And the Government is doing the same thing. "We only have this much money but, gosh, let's spend money like we have this much." And because everybody modeled up, because the politicians wanted to make you feel good, they wanted to hold onto their power and because the banks and the credit industry and the insurance industry all wanted just to make money, you are going to pay the price. And here's the beginning of it. Here's the beginning of it. And the best thing we can do was to not cut the rates.
I know anybody who is a financial guru or on Wall Street or anything else, they will talk to you about, oh, no, you've got to cut the rates because people have got to be able to lend money to each other. Yeah, you're right. Short-term, what is it called, paper is really tough and what all that is, if I'm a farmer and I want to be able to plant my field, then harvest it and get it to market, I've got to take a loan out. It's short-term. I buy it, I take the loan out, I buy the seeds, I'm able to hire all my people and then at the end when I get it to market, then I pay the bank back. It happens all the time. That's the way business in America is done.
Now, you go to any bank today and they will come up with some reason why, well, it's a little slow right now. Well, I'm not really sure. But short-term paper is very difficult to get and it's only getting more difficult to get because there's not enough money because nobody knows what's coming next. Nobody knows. They are all hanging onto their money because, for instance, CitiBank, they write off, what was it, $5 billion and they say, that's it. And then there's another few billion and then that's it. And then it's $19 billion and then that's it. Well, how much really is it? The problem is everybody's so interconnected with each other, they don't know. You know, on The Real Story last night, I told you a little bit about the insurance companies, these bonds, these municipal bonds. This is where the city says, I've got to take out a loan, I'm going to issue a bond because we need to fix our sewer system, we need to fix our bridges, whatever. Well, just when you take out a loan, they require mortgage insurance. Same thing with bonds. I don't trust city -- well, to be honest, I don't trust the City of Philadelphia to be able to pay their bills if something goes wrong. I want to make sure this bond is secure. So they have bond insurance markets, and these insurers go out and they say, great. I'm making numbers up here, but a lot of these insurance companies went, oh, money's so cheap and everything's going to be so great, I've only got a billion dollars in cash and assets to be able to cover stuff but I'm going to insure $200 billion worth of bonds. Well, now the billion dollars is gone. How much more am I going to need and where do I get the cash. And that's what's happening. Everybody's holding onto their money because they don't know what's coming. People are freaking out in the stock market because they don't know what's coming.
Don't freak out on the stock market. You know what's coming. A big tightening of the belt, a natural correction. What you don't know is if there's another shoe out to dry. There are a lot of bad things in the economy that is going to cause this to look, I believe, like the 1970s. But we made it through the 1970s. What we don't know is who's going to be controlling congress, who's going to control the White House. Is it going to be Jimmy Carter? And we also don't know is there going to be a spike in terror or anything else? If that shoe drops, then we're in real trouble.