Cutting Through Rush’s Bull

Last night on CNN’s “No Bias, No Bull” program, Campbell Brown put Rush Limbaugh in her crosshairs over the comedian’s attack on business reporter Ali Velshi (who’s Canadian, btw) after he’d criticized parts of Limpballs’ recent Wall Street Journal article.

Here’s the transcript of the rest of the exchange between Brown and Velshi:

Brown: All right. So, he argues the economy much worse in the early ’80s than it is right now.

Does he have a point?

Velshi: Yes, I mean, I don’t want to get into a “My recession is worse than your recession” argument, but ultimately, I am going to have to interject with a few facts that he might have to think about.

We have — unemployment was higher back then than it is today. It was 10.8 percent. It’s 7.2 percent right now. But 2008, we saw the price of a median single family home drop 15 percent. Never before have we seen that on record. Industrial production, which is the measure of how much we actually make in this country, has never been lower than it is right now.

Personal income, adjusted for inflation, was higher then than it is today. Personal savings — right after Reagan got elected, people were socking away 12 percent of what they made, today, virtually nothing, which means we don’t have anything to get us through a recession.

But put all of the economic talk aside for a second. Ultimately — we have talked about this many times — this is an economy that is based on people’s willingness to spend money, more than any other economy in the world. People are not willing to spend money.

And just to give you the one indication of this that we always talk about, and it’s consumer confidence. Inconveniently, for Mr. Limbaugh, the standard for consumer confidence was set in 1985. So, 1985, whatever consumer confidence was back then is considered 100. Today, it is at 38. It is the lowest it has ever been.

Until consumers start buying, businesses will not start investing. You can give them all the tax cuts you want; they can’t.

Now, he is right about something. Reagan cut taxes from 70 percent to 26 percent. They’re 35 percent right now, the top marginal tax rate. So, we don’t — we can’t halve them. Back then, when you took them from that rate over a course of years, down to 26 percent, even if you didn’t believe in tax cuts, you would really believe that that would be stimulative.

So, ultimately, there are two schools of thought, cut taxes or stimulate the economy another way. Virtually nobody falls into one entirely camp or the other. I, too, would like to pay lower taxes.But, ultimately, the facts are the facts. But maybe it was worse for a lot of people. Every recession is hard on — on some people. But we are in a very dire situation right now.