In response to Bryan Caplan’s post this morning about Hank Rearden and Atlas Shrugged, one of the commenters, Bob Murphy, made an insightful comment and another commenter, megapolisomancy, recommended the following youtube video of CNBC’s Rick Santelli. This is fresh from this morning, before the market opened. I highly recommend it. Santelli taps into the resentment of the productive class towards President Obama’s attempts to bail people out from their bad decisions. Listen to the whole thing.
I especially like Santelli’s giving his crowd credit for not being “putty in his hands,” but for actually listening to what he’s saying and responding to it.
I think it does get to something Bryan misses and another commenter on Bryan’s post mentioned: that there’s a basic unarticulated libertarianism in a large percent of the U.S. public that few people are articulating. I had an experience like Santelli’s that was not as dramatic but that reinforced my view about some basic libertarianism in Americans. Here’s an excerpt from one of my three articles (here and here) on that experience:
When I had first joined the campaign [against the tax increase for a failing government hospital], I had wondered what, if any, response I would get from my colleagues at the Naval Postgraduate School and from people generally in the community. A number of my colleagues have commented in the past, generally favorably, when I have an article in Fortune or the Wall Street Journal. But local politics is different for two reasons. First, a much higher percent of my colleagues and of my neighbors read or listen to local media than read Fortune or the Wall Street Journal. Second, local issues tend to generate more passion, I think because people feel more in control of local issues and feel hopeless about their ability to control national issues. I’m known somewhat in my town of Pacific Grove for my 10 years of coaching young girls in basketball, which began when my daughter started in 3rd grade and continued long past her participation because I enjoyed it so much. But, other than that, I’m somewhat anonymous in my community. So would people’s attitudes to me change?, I wondered.
I’m happy to report that they did. I noticed it first at a Navy school retirement party for a colleague. I went up to say hi to a senior economist colleague, one whom I’ve always liked and respected as an economist, but who, partly because he’s in a different department, I have not talked to at length for more than a decade. “I want to thank you for all you’re doing for us taxpayers. You’re performing a real public service,” he said.
I beamed and decided to say something that a fellow economist would appreciate. “You’re welcome. I’ve calculated how much money I’ve spent on this campaign and estimated the value of time I’ve put into it, and I’ve already put into it more than the present value of the amount I’ll pay in this tax over my lifetime.” We both chuckled.
A few minutes later, I approached a senior colleague from the Math department who said approximately the same thing. Although I’m guessing that I have colleagues who disapprove, they were lying low. After the campaign ended, one junior economist colleague in another department e-mailed me his congratulations and said that he thought we should have emphasized the regressive nature of the tax and, therefore, the fact that the tax would have added to the very poverty that the revenues were supposed to solve one of the effects of. I replied that he was right, but that, with a limited budget, we could do only so much. I suggested, though, that for the next sales tax fight, he write such a letter to the paper.
In the community generally, I received an even more positive response. I ran into people in my everyday life who volunteered to me that they liked what I was doing and thanked me for it. After the campaign ended, a number of people volunteered that they and their spouse had voted “No.” One woman who had a daughter attending the same high school as my daughter wrote me a nice note thanking me and when I called her to acknowledge her note, we talked for half an hour. When I called a neighbor about a completely unrelated matter, she told me she had voted No and that she had been an employee at Natividad for 20 years and it was so badly run that it was beyond hope. So one of the most positive unintended consequences was that I felt like more a member of my community and more like a respected community leader.
One last point: whenever I write a post, I have to choose a category. There’s no category that nicely fits this point. We don’t have a category for “Morality.” What does that tell you about how effectively we’re communicating to people about our deepest values?
READER COMMENTS
Joe
Feb 19 2009 at 3:19pm
Santelli is hardly a memebr of any “productive” class…
David R. Henderson
Feb 19 2009 at 3:35pm
Joe,
Yes he is.
David
Gail
Feb 19 2009 at 3:56pm
I listened to Rick this morning and he too is my new hero!!
Ted Carson
Feb 19 2009 at 3:59pm
Rick Santelli, I officially bestow upon you the honor of being a non – BS, straight talking, tell them how you see ’em Texan. I wish you were in charge of straightening this mess up.
Hal
Feb 19 2009 at 4:04pm
You know what would might work. Just wiping out a year’s worth of mortgage payments across the board for everyone. By that I mean no one needs to pay a mortgage payment for one year, no penalties, and it’s just as if they did pay it.
The the catch for that would be that homeowners would have to put a % of their income in savings and pay off % of credit card debt for that year.
It’s obvious that Wall Street and main street don’t think much of this current plan. All Wall Street is continuing to do is seek out how low it can go. I think all they’re hearing is the rush to print dollars by the FED and that’s driving up future inflation. Which explains why ExactPrice shows gold continuing to rise. It won’t be long before it’s testing last years highs and going further, I think. Right now it’s sitting at $985.60 an ounce.
Tells me that big time investors are buying it up quick as a hedge against a dollar that looks like burned toast.
b.
Feb 19 2009 at 4:12pm
I saw that and cheered as well. The best of the many times I’ve seen him speak out as a voice of reason. They need to give him much more air time.
Methinks
Feb 19 2009 at 4:17pm
Rick Santelli and the traders screaming behind him are a big reason I’m a trader. I’ve never seen such a concentration of libertarian, free market loving individuals in any other part of finance.
I only ever unmute the TV when Santelli is on.
Charlie
Feb 19 2009 at 4:17pm
I agree with Mr. Santelli 100%. If we don’t revolt now, we will end up being a socialist country. Once you take that first big step into Socialism, it becomes harder and harder to go back with each passing day. Wasn’t it Thomas Jefferson who said that in order for our government to work properly that we would require periods of revolution? Maybe we are long overdue.
megapolisomancy
Feb 19 2009 at 4:51pm
Michelle Malkin is blogging about this and other protests here
William Bruce
Feb 19 2009 at 4:57pm
To respond to Charlie’s post:
“The tree of liberty must be refreshed from time to time with the blood of patriots & tyrants. It is it’s natural manure.”
Did you have this in mind? If so, I do not think it is so much a matter of government working “properly,” as understanding that such an idea is never to be.
Unfortunately, measuring what is and is not a “big step into Socialism” is equally problematic. Even if you limit the debate to a particular species of libertarian, one will say the United States’s first “big step” was with the Civil War, another will say the Wilson Administration, others Hoover, FDR, the New Deal, and some will say the U.S. Constitution itself – vis-à-vis the Articles of Confederation. None of these answers is entirely correct, but each is illustrative of important particulars.
To work in my own humble views, I think that entire conception of the matter is improper. Freedom is not the norm, is not natural, and is certainly not a birthright. If anything, the freer societies are those that are constantly, actively stepping away from authoritarian means and paradigms. Either that, or they are living on the intellectual and cultural capital of past generations.
Evan
Feb 19 2009 at 5:10pm
Now, I would like to preface my comments by expressing how my opinions regarding the new housing/mortgage restructuring plan presented by the new administration have yet-to-be-fully-formed. There are moral hazard problems with this on a household/individual level that I have practically never seen. There is a necessity for the banks/mortgage brokers/GSEs (all the relevant players/creditors/originators/holders) to see loans paid back in full and on time. I see all that.
But, we are in a dangerous downward/deflationary spiral, or at the least there is a dangerous possibility of this happening if it has not already begun. There is definitely an output gap at this point as millions of people have lost jobs in the last year and a half. We have idle hands. And to take the Kensyeian approach, if I am not mistaken, correctly, government focused investment is to improve employment, not to necessarily foster GDP growth – though hopefully one would follow the other.
So here it is: you people screaming of socialism disgust me. Period. Your inability to even remotely understand what socialism really is and means forces you into demagoguery and shrillness. You always need an “other.” And right now, it is the hidden behemoth that is Obama’s true purpose: turning America into a socialist state. It is nonsense. Anything but strict market fundamentalism to you people is socialism. It blows my mind.
Now I appreciate you initial post David and your overall point (I have no idea if this plan will work – I have no idea if restructuring interest rates for households with negative equity through a third party bankruptcy judge will work and actually allow people to remain in their homes), but your unbelievable snide remark about the “productive class” and your snarky response to Joe is so fitting of this current debate raged on our corporate airwaves and cathode-ray boxes. I can’t believe you don’t see it David. This is the dynamic problem between the two Americas – and yes, there are two Americas. Somebody as smart as you David (smarter than me) should be more careful to not disparage the entire portion of this country that doesn’t know what a CDS or collatoralized debt is – the entire portion of this country that actually makes stuff, with their hands.
Mr Santelli has a purpose in a market/capitalist society. He greases the wheels; he moves the capital. He is necessary; trading is necessary, and awesome. But the debate today is between people like him/you/and Charlie here (who I will get to in a moment) and people who feel/are/have-been-getting shafted by the ‘masters of the universe.’ The people most affected by the actions of others, who had their own moral hazard problems mind you, are the ones who have been getting no bailout, no help. I know bailing out the banks and making sure commercial paper can be traded overnight is not just a wall street thing, but also a main street thing, but I also know that that doesn’t help households who have unbelievable debt-to-income ratios dragging their finances into the ground. Where is the play-and-lose attitude in regards to credit-rating agencies on this blog? Where is the you-get-what-you-deserve attitude when it comes to institutions who could not see/did not want to see how lax underwriting standards were also as much a part of the problem as people/households not understanding what they were getting into on this blog?
You know David, you know, that many people can no longer afford their monthly mortgage payments for reasons beyond their control. You know that. And that’s not to say that they didn’t play the game and lose, it’s just to say that calling them irresponsible is disingenuous, not to mention callous.
I read this blog everyday and rarely comment, but I felt compelled to get into this discussion (or lack thereof). And as for Charlie and his complete misunderstanding/ironic post about Sir Thomas Jefferson, let me say this: Jefferson did believe in generational constitutional rewriting and revolution to remake what has been lost, but the funny thing is you and Jefferson would be on different sides. To reference a man who didn’t even believe in paper money or banks for that matter as a legitimate historical justification for your market fundamentalist revolution is quite funny. And we are long overdue for revolution, but it is not for the purposes of eliminating the cap gains tax or instituting a fair tax, sorry to burst your Atlas Shrugging-loving bubble.
Sorry for the length. (And excellent points William Bruce)
David R. Henderson
Feb 19 2009 at 5:37pm
Dear Evan,
You don’t need to apologize for the length of your comment: I could tell it was heartfelt.
If you check my original comment, I said that many of these people made bad decisions, not that they were irresponsible. There’s a difference. I think that government shouldn’t bail people out of the consequences of their bad decisions; I think that on both moral and consequential grounds. Among the people who should not be bailed out are the lenders who made bad decisions.
Also, I don’t see how it was “snarky” to remind Joe that there are many ways of being productive and that being a reporter on TV is one of them.
And yes, I have been saying that about the Masters of the Universe. I’ve opposed every bailout there has been and I called, in a radio interview, for Paulson to be fired. Right now, the real masters of the universe are in D.C., Albany, Sacramento, etc.
Best,
David
Evan
Feb 19 2009 at 5:53pm
Would you agree or disagree with this statement David: one of the biggest problems of our current financial crises is that the ‘masters of the universe’ truly went astray from making productive instruments.
I have come to believe that one of the main problems was the creation and dissemination of derivatives that were untenable and lacking in standards. Along with the moral hazard problem of the credit-rating agencies being paid to rate bonds by institutions whom they were rating and the pay structure on wall street being skewed to the short term, to me, this was one of the main problems/issues here – a lack of real productivity within the ibanks. Not that spreading of risk is wrong or bad or unproductive. And not that allowing investors to buy up mortgage-backed securities to grease the housing market to in turn allow those who could never imagine owning a home to actually do so is a problem. It just seems like real productivity, coupled with real standards and real understanding of risk, was lacking.
And I know Mr Santelli had nothing to do with this. He’s only a trader. But his attitude, along with the CNBC/wall street/libertarian attitude, help grow this culture of blame and derision against the helpless, and poorest mind you, that should not be present at this time and place.
I respect that you stood principally against all bailouts – all ‘socialism’, though I hope you recognize and agree how crazy the discussion becomes when it is only focused on buzz words that dramatize and stigmatize.
And I do agree about the new ‘masters’ and where they are located.
But just admit it David, your response to Joe was snarky. It’s not a bad thing. It is what it is.
Thanks for responding.
Niccolo
Feb 19 2009 at 6:00pm
So, Evan, at what temperature do we little frogs finally get to jump out of the pot?
Now, I don’t think anyone here is saying that Obama has a “grand master plan” to create a new USSR in the USA, but it does certainly seem that he has an agenda to appease a political institution that desires to gain power. If this means a USSR in the USA, then I think he’ll unconsciously do that.
I think you’re just being counter-reactionary.
As for everything else,
On the deflationary spiral, you’re exaggerating and feeding into the fear propaganda that the media sprinkles on the cake of big government to sell it to you. There is not a “deflationary spiral” coming, and even if it were, what does that have to do with fiscal policy? It’s so sad that it’s only been a few years after Milton Friedman’s death and already everyone is jumping ship for an even deader Keynes.
On the Keynesians trying to “fix the mess.” You’re wrong. Keynes was wrong. Government spending as any type of “stimulus” is wrong. It doesn’t work. Deal with it.
On the bailouts, you’re partially right. Some people have gambled and lost, others lost much more, but I hardly see how that’s relevant to this particular conversation – in fact, it’s precisely the reason to argue against more government spending and larger pressures poured onto banks to leverage back up again.
I dislike Atlas Shrugs; I agree with you on that.
William Bruce
Feb 19 2009 at 6:39pm
I find the prior discussion of moral/market praise and blame to be quite telling, so I shall articulate a few points. They are probably well-understood, but still…
To me, this discussion just reveals the rather substantial gap in the different disciplines and dimensions of value considered. Moral considerations are not prudential considerations; economic calculus is not moral calculus. I do not believe it is a coincidence that certain moral codes and cultural values produce particular economic results, but that does not mean they are not very different disciplines, domains, and subjects.
To address the issue of the libertarian “blame game,” I think the issue is more nuanced than what most libertarians or liberals will allow for. This is where my preference for Hayek (and really, Socrates) will clearly show. Markets, prices, etc., are a way of coping with RADICAL IGNORANCE. The market mechanisms reward the most rational choices, not the most rational or moral thought. Therefore, any conclusions about those who default, merely on the basis that they default, are ludicrous. We really are not, and cannot be, in a position to judge, predict, prescribe, or proscribe. None are wise.
However, associating libertarianism, especially in the public sphere, with callousness towards those buffeted by the market is somewhat unfair. Since his name came up earlier regarding this issue, I would use John Stossel as an example. His ire is almost always directed at policy makers, not policy “takers.” He understands that if a policy can potentially benefit someone, they would be foolish not to take advantage of it, as he is constantly saying as much — and admitting to doing as much. And, of course, the Shiva and Vishnu of economic libertarian discussion, Milton Friedman, was equally charitable — especially on the matter of public education, where he openly admitted to fleecing the lower classes when they paid for part of his state-school education. No doubt, other libertarian types are more judgmental: Ayn Rand’s rhetoric, at least, gives this impression, to the point that it is off-putting to many (myself included). To me, this all illustrates how precarious it can be to address the views of particular groups, especially those who might not actually identify themselves as a part of that “whole.”
Evan
Feb 19 2009 at 6:51pm
Wow. Keynes is wrong because he’s just wrong. How did you ever come up with that one Niccolo?
First off, to accuse me off being over-reactionary is ridiculous. Haven’t you been watching the news/seen Drudge? Fox is boiling over. Many people who disagree with this, whether it be the stimulus or the housing plan (and I am not sure if I’m for the housing plan) are calling it socialism, whether or not they really understand what that means. And that includes many commentators on this thread. So I don’t really get how I am the one over-reacting. As for counter-reacting, yes I am doing that. So what’s your point? Do you believe this is socialism?
Now for your argument. First I will take the supposed deflationary spiral argument. I do agree that there is a lot of fear out there and that it can have a negative feedback loop/reinforcing quality. But cmon. Inventory is sky high in retail. Mid-level loans can be made but there is no small business that has the capacity/necessity to take out a loan because revenue streams are down. Those are tell-tale signs of the possibility of deflation: more supply than demand, rising unemployment, high inventory, de-leveraging. Those things are real, not some George Soros created fantasy. I don’t get libertarians/conservatives who want to hide the truth (i.e. – getting rid of mark-to-market/bemoaning the real time influence of knowledge dissemination).
Second, it seems that you are reading a little to much Eugene Fama and Robert Barro, or not reading anything at all. Do you really think an output gap like the one we have right now (and you do believe that we have/will have an output gap between potential and real GDP growth, like according to the CBO and like everyone else, right?) has no room for public investment? Is a cap gains tax cut always the answer? Look, we have no monetary policy left. We can either act concertedly to cause an inflationary spiral, or we can spend some money on projects that are shovel ready, improve unemployment benefits, and give the biggest middle-class tax break in history a try, aka the stimulus package. (all being examples of actions the government can take with a greater multiplier than tax cuts, even if you believe the multiplier to be less than 1).
I love how you just come to your conclusion without any proof Niccolo. I would love to know who it is you can site to prove your point. Get back to me.
Evan
Feb 19 2009 at 6:54pm
Again, William Bruce, enlightening exposition. Great points. I take them into deep consideration.
Blackadder
Feb 19 2009 at 7:11pm
Prof. Henderson,
I really enjoyed the articles you linked to about your anti-tax fight. Thanks for sharing them.
Dani
Feb 19 2009 at 7:55pm
Rick Santelli is right! My neighbors stopped paying thier house payments for five months, got the mortgage reworked, lower the principle and payment. They did not give up the $700 a month SUV or the second car or their two daughters 5 and 7 years old “cheer competitions” at $600 a month. PLEEEEASEE! I pay my bills and drive my 6 year old truck that’s paid off! I’ll go to the Tea Party!
Tim
Feb 19 2009 at 7:57pm
Join the Party!
http://www.chicagoteaparty.blogspot.com
Methinks
Feb 19 2009 at 8:41pm
So here it is: you people screaming of socialism disgust me. Period. Your inability to even remotely understand what socialism really is and means forces you into demagoguery and shrillness.
Well, Evan, I immigrated here from a socialist country and what’s troubling to me is how many people scream bloody murder when they are rightly accused of descending into socialism merely because they don’t want it to be so. And, as a victim of socialism, people like you who cry for socialist policies while screeching that they are not socialist disgust me. Period.
I have come to believe that one of the main problems was the creation and dissemination of derivatives that were untenable and lacking in standards.
You have no clue about derivatives. You don’t trade them, you don’t price them and you know absolutely zilch about them. That much is obvious. So, I don’t know how you “came to believe” anything about them.
Along with the moral hazard problem of the credit-rating agencies being paid to rate bonds by institutions whom they were rating
Yet another thing you know nothing about. The government outsourced the credit ratings to an oligopoly of credit rating agencies. There was no competition. Since they were government approved, nobody thought to check (stupid to trust the government, I know – but then why the blind faith in government to dig us out now?).
and the pay structure on wall street being skewed to the short term,
Yet another thing you know jack about. The pay structure on Wall Street was such that nobody was paid cash. Nobody’s base pay exceeded $250K per year – including the CEOs. In NYC, $250K is roughly equivalent to $35K in Atlanta, GA. Nobody would work 100 weeks for that. The “bonus” was merely the discretionary part of the compensation package so that the bank could variablize its largest cost. Most of the bonus was paid in stock which vested over a period of 3 to 6 years, depending on the bank. In other words, the vesting period incentivized bankers to make long term decisions by providing a natural claw-back for their bonuses. I talked to my ex-boss at Lehman brothers two weeks before it blew up and he had already lost the equivalent of 12 years of compensation because he never sold his bloody stock when it vested and because Lehman’s vesting period was six years (if I remember correctly) and the overwhelming majority of his comp was in stock. And guess what? He had absolutely ZERO to do with mortgages.
It just seems like real productivity, coupled with real standards and real understanding of risk, was lacking.
With government guarantees of mortgages, coupled with coercion of lenders and added to artificially low interest rates provided by central banks that’s hardly surprising. To then turn it around and blame the lenders for everything takes some cheek. Mind you, I’m not for bailouts of any of these banks. It’s a risky business and everyone knows that going in. If the system is so bad that you need to destroy the whole country to “save” it, then it should be scrapped.
This is the dynamic problem between the two Americas – and yes, there are two Americas. Somebody as smart as you David (smarter than me) should be more careful to not disparage the entire portion of this country that doesn’t know what a CDS or collatoralized debt is – the entire portion of this country that actually makes stuff, with their hands.
There are two Americas, alright – the producers and the thieves. You just don’t want the thieves to be called thieves because it makes you uncomfortable. I don’t make things with my hands. I work 250 days per year – every day the market is open. I take risks every day to provide a product that the people who “make things with their hands” won’t be able to make without people like me (“just” traders) – I provide liquidity. Liquidity lowers your grandmother’s transactions costs and her risk of investment when she decides to monetize a portion of her retirement portfolio to buy you a birthday present. Liquidity ensures she gets a fair price too. It lowers the risk to investors so that more people are willing to invest in more projects so that more people can “make things with their hands”. There’s nothing saintly about manual labour, BTW. I know. I did it to put myself through college.
Those are tell-tale signs of the possibility of deflation: more supply than demand, rising unemployment, high inventory, de-leveraging.
So what? The question isn’t “are they real?” but “can government actually fix it?” There is absolutely zero evidence that it can or that it ever could, because to achieve this, the government as an individual actor in the the market would have to know more than ALL OF THE MARKET PARTICIPANTS COMBINED. Never mind George Soros. Does that make sense to YOU?
I don’t get libertarians/conservatives who want to hide the truth (i.e. – getting rid of mark-to-market/bemoaning the real time influence of knowledge dissemination).
First of all, getting rid of mark to market is not a truth. Second, what makes you think that mark to make believe is better? If you can choose to mark your book to any number that fits your liking, you are just begging for fraud. The market will become less transparent, liquidity will dry up because investors will be suspect of your marks.
Do you really think an output gap like the one we have right now (and you do believe that we have/will have an output gap between potential and real GDP growth, like according to the CBO and like everyone else, right?) has no room for public investment?
No, for the simple reason that I have no reason to believe that government can allocate capital better than private individuals who have an actual stake in the outcome. If government could allocate capital better, my country would have been so prosperous that you would have immigrated there instead of me immigrating here.
We can either act concertedly to cause an inflationary spiral, or we can spend some money on projects that are shovel ready, improve unemployment benefits, and give the biggest middle-class tax break in history a try, aka the stimulus package.
Here’s another option: don’t increase government spending and cut taxes so that individuals who are better at allocating capital than government can allocate that capital instead of government. Unfortunately, the middle class tends to spend all of its tax breaks while the high earners tend to invest most of their tax breaks. So, it’s politically popular to give tax breaks to the less productive segment of the population and take it from the segment that will naturally invest and create jobs for the middle class. It’s a politically unpopular reality, but it is a reality. And before you become apoplectic about what I just said – I crawled up from the bottom 5th of earners, so I’m not unsympathetic to the folks in the bottom four quintiles. It is because I understand that if nobody invested in businesses which created menial labour jobs for me to work in to pay for college, I would have never been able to pay for school.
Later, you contradict yourself. First you propose tax cuts as stimulative, then you claim that tax cuts have a lower multiplier than government spending. “Even if you believe the multiplier is less than one” is telling. That means for every dollar you spend, you’re getting less than a dollar back. How does that increase wealth?
Basically, Evan, you seem very emotional and you leap to repeat a lot of drivel written by a press and a government in search of scapegoats – whether the are I-banks, traders or derivatives. You also leap to absolve other people of responsibility for their actions because they don’t happen to have engaged in behaviours that lead to more wealth. If these people are not frauds, they are not bad people. But their goodness as people does not entitle them to empower government to rob others to pay for bad luck or bad decisions. Because, you see, once the government is so empowered, people like me (I’m self-interested and I put my family first like everyone else) will figure out how to harness that power for ourselves and the poor shlubs who were just looking for a little cash to soften the blow will be crowded out and they will find their standard of living declining while the rich get richer by seeking rents from the all to eager to create rents government. That’s how it works in every country where government is powerful enough to take the actions you want it to take. So, for the sake of the poor shlubs, to give them a better future, let them fail so that they may start again with their liberty preserved. It is liberty, not the ability to steal from one another that makes this country great and allows the average person to live in unprecedented freedom and prosperity.
Methinks
Feb 19 2009 at 8:43pm
Nobody would work 100 weeks for that
100 hour weeks (they are not a myth).
RickC
Feb 19 2009 at 9:51pm
Methinks,
Way to go. Just love your response to Evan. I’ll also back up your claim of some executives putting in 100 hour weeks. Years ago my wife worked for a firm in the D.C. area. It was her first exposure to the reality of executive work weeks. She just couldn’t get over how he boss, a VP in the firm, was in the office easily 15+ hours a day.
Janet
Feb 19 2009 at 10:04pm
Way to go Rick! It’s about time someone spoke up for the silent MAJORITY! Thanks so much!!!
Niccolo
Feb 19 2009 at 10:21pm
Wow… I really didn’t think I needed to explain why Keynes is wrong to someone who follows this blog closely.
Not even Keynesians agree with Keynes… Please, pull your head out of the media and try to at least conform to the standards that modern Keynesians have – or had given several years of less unreasonable media coverage of how we’re all going to hell if the government doesn’t buy us out.
I said you were being counter-reactionary. You admit to this, but it’s not a good thing. Reactionaries don’t think, they just talk. That’s really all I think you’re doing.
And yes, I think this is a type of socialism – I think the US has always been a type of socialism. In fact, I think everything is a type of socialism. Free markets, in the classical sense, could have been considered socialism.
If your point is that socialism is an inflated word, you missed that newsletter several centuries ago, but glad to see you on the boat now.
Also, I didn’t say there wasn’t deflation, personally, I don’t think moderate deflation is really the worst thing ever. If prices fall, prices fall, and that means prices are becoming less rigid, that could be a good thing for growth efficiency in the future. Now, what you’re talking about, spiral deflation, is obviously not a good thing, but it’s not worst than skyrocketing inflation either.
And no, monetary policy has not run out, it’s merely worked inefficiently. A top down structure for the increase or decrease in the supply of money – which should be based on the increase or decrease in the demand for money – is going to be as effective and competent as Freddie Mac and Fannie Mae were.
To say that the US federal reserve has run out of monetary tricks is merely to serve as a regurgitator of the talking-heads on TV or in the OpEd’s. If the US federal reserve cannot help the economy by monetary means, only two things can be derived from the fact,
1.) The Federal reserve is not the proper institution to increase the money supply to keep money in equilibrium.
and/or
2.) The recession is not based on money, and any concerns of deflation or inflation are misplaced anyways.
Now, to your point about who I read, I actually do read Barro, not so much of Fama, but I use neither to formulate my opinions. You see, thinking men form their own views, those that simply want to win an argument trumpet out thinking men to back themselves up in a match of wits with no one. I hope my intuition is wrong about you, but I have a feeling that, by resorting to political cliches – like, the “biggest MIDDLE-CLASS tax cut in history” – you’re of the second persuasion.
P.S. I don’t think there’s ever any room for government investment. Governments aren’t run like businesses, they don’t work for efficiency or aggregate effectiveness; they work as their own class of individuals separated from the rest of society by badges and funny rituals of pomposity. I do think, however, that there should be tax cuts, as well as an end to nefarious regulations that limit the amount of entrepreneurs that can join the economy; I also think the federal government should force states and local governments to cut the same taxes and regulations. I think this not for moral reasons, as you seem to believe, though, but rather for positive reasons.
I believe in the free market for this simple reason: It’s a fact, markets don’t work perfectly, but they work eventually; governments never work as a rule, that’s why politicians chose the job.
P.S.S.S.
I don’t like these long drawn out internet things, so take this for a final reply.
Ciao!
TonyZ
Feb 19 2009 at 10:26pm
Wow, this is a very sophisticated blog ….
Very long, & exasperating posts …. Don’t know much
about derivatives and all that other bank crap…
I do know that if I’m to bail out someone underwater, then they have to show what they have been spending their money on in the last year or 2.
Going out to restaurants weekly, big screen tv’s,
that kind of stuff … and if they have been spending irresponsibly, then … Oh I don’t know….. F.U.!!!
Howze dat fah so-fist-tick-cation.
Evan
Feb 19 2009 at 10:49pm
Methinks:
I appreciate your response. And you are right, in no way do I trade derivatives and in no way am I from a socialist country. But while you claim that I am the one distorting the actual policies by not recognizing they are socialist, you forget/don’t notice that nowhere did I out and out advocate for them. As I said before, I am not knowledgeable enough to make a decision regarding this new housing plan. I am in general for a stimulus, but that is because of me reading all sides of the debate and coming to my layman conclusion. Notice that I am writing on this site. But my overall point, regarding the discussion, still stands in my opinion. You/CNBC/Hannity/conservative movement are quick to label something that is not something. Claiming you come from a socialist country, you know this. This is a big government grab admittedly, but government has been grabbing for the last 30 years (since Roosevelt even, since Lincoln even), especially under Republican administrations which claim to love and respect the free markets. Distortions in defense contracting and tax loopholes for energy companies and unregulated shadow trading: these are distortions of the market too, just not ones you can as easily demagogue. And we have been fine, capitalism striving along nicely in fact. (With some big glitches I guess.)
But how is it that you get to label me as being shrill and go on to lambast me while not even being a part of the initial discussion. Did you read the guy(s) I was responding too? I mean, you seem to be much more knowledgeable than both he and I. My first post was in response to how the discussion goes on these topics in all mediums, not just this one. And my second post was in response to the guy who just claimed something to be because it is true because he said so, without any backup. I am at least trying to offer another viewpoint, and it is not silly, nor naive – even though it seems you want me to think it is.
In regards to some of your points:
1.”You have no clue about derivatives. You don’t trade them, you don’t price them and you know absolutely zilch about them. That much is obvious. So, I don’t know how you “came to believe” anything about them.”
-All true. But did you refute what I said? Can you? If you can, tell me. Please
2.”So what? The question isn’t “are they real?” but “can government actually fix it?” There is absolutely zero evidence that it can or that it ever could, because to achieve this, the government as an individual actor in the the market would have to know more than ALL OF THE MARKET PARTICIPANTS COMBINED.”
-That I agree with. So is the answer to do nothing? Let those who have lost health care and lost their homes due to no fault of their own just rot? Honest question. You don’t have to treat me like a child to respond to that.
3.”First of all, getting rid of mark to market is not a truth.”
-Either I didn’t explain myself clearly or you misunderstood. I am not advocating fair value accounting over mark-to-market; I’m just saying that those who advocate vigorously for mark-to-market are overwhelmingly conservative. There is more room with fair value to pump up the value of an asset, am I wrong? With that said, the more truthful way of looking at an asset right now would be to peg it to the actual market, especially if banks are truly insolvent and these assets worthless, no?
4.”No, for the simple reason that I have no reason to believe that government can allocate capital better than private individuals who have an actual stake in the outcome. If government could allocate capital better, my country would have been so prosperous that you would have immigrated there instead of me immigrating here.”
-Where is the refutation of the output gap? Government can’t allocate capital better at full employment, or near full employment – I didn’t argue that and never would. But overall capacity is down, right? What should we do? Cut the cap gains tax? Personally, I don’t thank that will help put people to work who are out of work right now. I could see an argument for it, but I don’t buy it.
5.”And before you become apoplectic about what I just said – I crawled up from the bottom 5th of earners, so I’m not unsympathetic to the folks in the bottom four quintiles.”
-Good for you. Did anywhere in my argument I claim that I disagree with division of labor or that allocating capital comes from the middle class? I’ll answer that for you, no. Again, I am not some shrill socialist. I don’t know as much as you, but I do know a good amount for a layman.
6.”Later, you contradict yourself. First you propose tax cuts as stimulative, then you claim that tax cuts have a lower multiplier than government spending. “Even if you believe the multiplier is less than one” is telling. That means for every dollar you spend, you’re getting less than a dollar back. How does that increase wealth?”
-I didn’t propose anything. I was just stating what’s in the stimulus bill. “Even if the multiplier is less than one” was to say that a mixed package (tax and spend) at the least, would be more effective to stimulate and put unemployed people back to work as compared to the Demint or McCain amendments. I could have been more clear in that. And I thought I mentioned that Keynes general theories about government spending to curb deflation were directed at employment with the understanding that growth may not occur, the mitigation of loss being the primary purpose. Am I wrong about that?
7.”So, for the sake of the poor shlubs, to give them a better future, let them fail so that they may start again with their liberty preserved. It is liberty, not the ability to steal from one another that makes this country great and allows the average person to live in unprecedented freedom and prosperity.”
-I totally agree. But where you see theft, I see investment. You may know the history of unfettered socialism, but do you know the true history of unfettered capitalism history in this country? I don’t claim to know more about trading and finance than you, but I guarantee I know just as much if not more about the history of this country than you. We have had many gilded ages. We have had many crashes. Every time, people picked themselves back up. I agree. Government doesn’t need to expand into everyone’s pockets, but it does need to exist. But every crash, people suffered. People die. When you say let them fail so they can start again – well, many won’t be able to start again. As the most derided economist on this blog so prophetically said: in the long run, we are all dead.
I respect the work that you do. As I said in my first post about Mr. Santelli, a trader: “He greases the wheels; he moves the capital. He is necessary; trading is necessary, and awesome.” So I get it, but I don’t get how you can be so stunningly forceful in your arguments against socialism when it is so clear that we are nowhere near socialism – we are just moving away from the market fundamentalism of the last eight years, and that scares you and most people on this blog I think.
Awaiting your response. Thanks for caring.
Bill D.
Feb 20 2009 at 12:06am
Can you please show all the tapes where Santelli was talking about what great shape the market was in and how it is a “buyers” market about 6 months ago? Or how about when he was going on about the great real estate boom 2 years ago.
Chris Rasch
Feb 20 2009 at 12:22am
we are just moving away from the market fundamentalism of the last eight years, and that scares you and most people on this blog I think.
Of course it scares us. Growing government is easy; shrinking it is hard. If we can’t even get rid of Korean War-era mohair subsidies, what makes you think we’ll be able to get rid of boondoggles and bad programs that are being established now?
Let those who have lost health care and lost their homes due to no fault of their own just rot?
No. You can do a lot, from donating money, to taking relatives into your own home, to volunteering for local charities.
Of course, the more money the government takes, the less you’ll have to do all those other things.
Let’s assume that the government offered you a $1000 tax rebate. You could either give it back to the government, or your could spend it on something else. Would you give it back? If not, why do you think they should have it in the first place?
Methinks
Feb 20 2009 at 12:25am
Evan,
I’m brusque, but don’t take that the wrong way. It can come across as mean in written commentary but it’s not meant to be.
I see you are genuinely tortured by this (and aren’t we all?). But, this is much more common sense than you are making it out to be. You seem like a person who can think. So, don’t let someone else do the thinking for you. Stop accusing me of agreeing with Hannity and the conservative movement because I have no idea what Hannity or the conservative movement or anyone else has to say about it. If there are points of agreement, they are accidental. The discussion should be the merits of an idea, not the merits of a “movement”. Yes, Republicans (with the brief exception of Reagan who only managed to stem the growth for a bit) have grown government too. Some more than others – especially the two Bushes with Bush II growing government like a South American dictator (OK, hyperbole, but you have to inject humour). This is not a Republican vs. Democrat debate. Right?
Distortions in defense contracting and tax loopholes for energy companies and unregulated shadow trading: these are distortions of the market too, just not ones you can as easily demagogue.
Tax loopholes exist because the whole tax system is so Draconian and messed up that loopholes exist to get people to invest. Beyond that, I can’t even begin to address this sentence because you made up the term “unregulated shadow trading” and forgot to tell me what that means to you. I have no idea which “loopholes” you’re talking about for energy companies or how any of that can be demagogue. I can tell you that distortions in the market occur because of government regulation. When the distortion becomes apparent, the government tries to fix the distortion with loopholes. I can talk specifics if you want. You don’t have to be an expert in the subject, but you have to be clear about what you mean if you want a clear response, otherwise it’s hard to write a meaningful response.
Also, if you’re so ill informed on matters like derivatives and Wall Street compensation, how can you possibly say that you’ve come to the conclusion that those things are to blame? It’s fine that you don’t know, but how can you draw conclusions from ignorance?
But how is it that you get to label me as being shrill and go on to lambast me while not even being a part of the initial discussion.
Did I label you as shrill? I labeled you ignorant, not shrill. When you publish comments on a board open to the public, your comments are open for response from anyone. I didn’t need to be part of the original discussion to lambast your comments just as you don’t need to be part of the original discussion to lambast mine.
and it is not silly, nor naive – even though it seems you want me to think it is.
You start out by saying that you’re a layman who doesn’t know much about any of this to form an informed opinion and then you tell me it is not silly or naive to form opinions rooted in ignorance of the facts? How does this make sense to you?
OK.
1.) -All true. But did you refute what I said? Can you? If you can, tell me. Please
I can’t refute what you said because what you said is gibberish. It makes no sense, which means that whatever conclusion you came to in your mind makes no sense. First of all, are we talking fixed income derivatives or equity derivative? What do you have a problem with? CDS, swaps, swaptions, floors, caps, digitals? Which derivative bothers you and why? If you want a general discussion and education and to challenge your opinions, then I’ve got the time in the next few days. However, it’s a long discussion way beyond a message board. I can email you.
2.)That I agree with. So is the answer to do nothing? Let those who have lost health care and lost their homes due to no fault of their own just rot?
Yes, I know it’s an honest question. Let me put it to you this way: through no fault of their own, lots of people get into lots of bad situations. Through no fault of my own, not all my trades are winning trades, for example. Should you be forced to subsidize my losers? Perhaps you want to subsidize my losers and you start a charity that helps people who have sustained losses. That’s fine. That’s admirable. What’s not admirable is forcing OTHER people to subsidize your conscious. Think about it. Also, very few people lose their homes (health care is a longer discussion, not for this comment section) through absolutely no fault of their own. They entered into a transaction and it was there responsibility to make sure they can afford it. Plus, when you have zero equity in a property, is it really yours? They will simply rent, but they will not be homeless.
Yes, the answer is to do nothing. That is for the GOVERNMENT to do nothing. YOU can start pooling money together from private individuals. One the thing I love about Americans is they give more to charity than any other country on earth. By doing nothing, the government is getting out of the way of the 300 million individuals in this country to do everything. Who do you suppose cares about your next door neighbour more and knows more about what he needs? The government or you? Who do you think will be better able to help him more efficiently? I have a friend who works with NGOs. If $0.20 of every dollar taxed away from you to help your neighbour actually makes it to the neighbour, it’s a miracle. Government is just that wasteful. By contrast, you can choose to donate privately to non-profits where $0.99 of every dollar makes it to the intended target. We would all love to believe that government can just come in and fix this. I understand the sentiment, Evan. I’m not knocking you for that. I’m just saying that given the fact that government is an inefficient behemoth with less information than the combined market participants, it’s not capable of producing the results you want it to produce.
3.) I’m just saying that those who advocate vigorously for mark-to-market are overwhelmingly conservative.
Didn’t know that, but so what? Why do you get so attached to which side of the isle ideas come from?
With that said, the more truthful way of looking at an asset right now would be to peg it to the actual market, especially if banks are truly insolvent and these assets worthless, no?
No. Assets are worth what the highest bidder will pay for them. THAT is mark to market. Pegging to the actual market means mark to market. How is “pegging to the market” different from marking to market? If bank assets are truly worth zero, then they should be marked as such. The whole reason they don’t want to mark to market is because the market value of their assets is very low and they would like the freedom to mark their books much higher. In other words, lie about the value of their assets. If they lie about the value of their assets, they will appear to be less leveraged than they are. But, it’s a lie. They, in fact, have more leverage than their books imply.
4.) Where is the refutation of the output gap?
There isn’t one from me. I haven’t thought enough about it, so I won’t argue that.
Government can’t allocate capital better at full employment, or near full employment – I didn’t argue that and never would.
What makes you think that government can allocate capital better at less than full employment?
But overall capacity is down, right?
Well, you’re arguing that overall production is down relative to capacity (negative output gap) right? So, if capacity is down, then we may not have a gap at all, right? Perhaps you didn’t mean capacity?
What should we do? Cut the cap gains tax? Personally, I don’t thank that will help put people to work who are out of work right now. I could see an argument for it, but I don’t buy it.
Listen, I can put a lot of people to work right now. Give me 10 giant bats and I’ll get kids in the neighbourhood to destroy cars and windows. Tons of people would be employed fixing the damage by tomorrow. Or we could just have another war between the North and South. Lots of people would be put to work rebuilding. But, somehow, I think you’re smart enough to know that productive work comes not from destroying things and rebuilding – or digging ditches and filling them up again. When people invest in productive enterprises, they need people to work in those enterprises and that’s what creates jobs.
I think government spending should be rolled back and both income tax (particularly employment tax) and cap gains taxes should be cut. A cut income taxes reduces the punishment for working and a cut in cap gains taxes reduces the hurdle rate for investing in productive enterprise. Both encourage work and investment which lead to job creation.
The problem with government creating jobs is that government doesn’t create wealth. Therefore, it relies on private, wealth creating enterprises to create the wealth which it then taxes to pay the government employees. But if government crowds out private investment with stimulus, then there will be less wealth creation in the future and less to tax to pay government employees. Soon, we will find ourselves in Russia’s situation where, as Gorbachev put it “our workers pretend to work and we pretend to pay them.”
5.)Did anywhere in my argument I claim that I disagree with division of labor or that allocating capital comes from the middle class?
Nowhere. The real question is where in MY argument did you think I claimed any of that?
Again, I am not some shrill socialist. I don’t know as much as you, but I do know a good amount for a layman.
Look, I don’t know how much the average layman knows, so claiming to know more than the average is really not helpful to me. Plus, I never called you shrill socialist. Your leaning is toward socialist ideas. So maybe you’re an ignorant socialist, but not a shrill one (you know I’m just kidding with you!).
“Even if the multiplier is less than one” was to say that a mixed package (tax and spend) at the least, would be more effective to stimulate and put unemployed people back to work as compared to the Demint or McCain amendments
You assume that the option is Demint & McCain or Obama and co. I’m saying there’s a third option: neither. Plus, that wasn’t my larger point. Please reread what I wrote about the multiplier. That’s the salient point, not which political monkey wrote which populist proposal.
And I thought I mentioned that Keynes general theories about government spending to curb deflation were directed at employment with the understanding that growth may not occur, the mitigation of loss being the primary purpose. Am I wrong about that?
Evan, the question is not whether you’re wrong about it but if Keynes was wrong. He was wrong.
I totally agree. But where you see theft, I see investment.
Okay. Well then, if I come over to your house and rob you at gunpoint and then employ my housekeeper for an extra day every week with the stolen property would you see that as investment?
Government doesn’t need to expand into everyone’s pockets, but it does need to exist.
We have no argument there. My argument is that meddling in the economy is not government’s forte, not that it shouldn’t exist.
But every crash, people suffered. People die.When you say let them fail so they can start again – well, many won’t be able to start again.
Evan, Life carries risks. Bad outcomes exist and government is powerless to stop them. It sucks that some people are born ugly or with horrible genetic diseases and some businesses fail while others succeed. But, you can’t fix that. You can’t make everyone the same and you can’t make all outcomes the same because people have different wants and needs, motivations and risk tolerance. Is it any more fair to confiscate the wealth of a prudent man who carefully saved and was careful to take a loan he made sure he could pay off to pay for the imprudent decision of his neighbour? Is it fair to confiscate it even if his neighbour fell on hard times even though he was prudent. I’m not saying we shouldn’t help our neighbours. I’m saying we shouldn’t use the coercive force of government to achieve that end.
As the most derided economist on this blog so prophetically said: in the long run, we are all dead.
Evan, I have no idea what that has to do with anything you said before this sentence, but if that’s how you feel what do you care if people die in recessions?
but I don’t get how you can be so stunningly forceful in your arguments against socialism when it is so clear that we are nowhere near socialism
First of all, that’s not true. We have far more socialist institutions than you think. Secondly, does this country have to be completely socialist for me to argue against socialism? I don’t understand your logic there.
we are just moving away from the market fundamentalism of the last eight years, and that scares you and most people on this blog I think.
Bush has expanded government and done more to kill free markets over the past eight year than any president since Nixon. Where is this “market fundamentalism” that you speak of? Please provide some evidence of free market practices in the Bush years.
Also, you speak of “free market fundamentalism” as if it’s a real term. In fact, it is a term dreamed up by socialists to deride free markets and to paint them with the emotional brush of “religious fundamentalism”. The scary thing is that people like you, who do not consider themselves to be socialists but definitely lean toward statism the way Christians lean toward Jesus, pick up the language without thinking about its meaning.
Free markets don’t promise an unattainable security or utopias. What they promise is the liberty to enter into uncoerced arrangements with other willing people without the intrusion of a state which has no stake in your well being. Please tell me what is so horribly wrong with that idea and please give me ONE example of a country that has practiced economic intervention where the outcome has been better than countries that didn’t. I’ll give you a hint – for non-interventionism look to the depression (all recessions were called depressions before the Great Depression) during the Coolidge administration, for interventionism look practically everywhere.
Also, if you want further discussion, let’s go to email, because my post really took over this comment section.
Methinks
Feb 20 2009 at 12:26am
Evan,
I wrote a post the length of the bible. It’s currently caught in the spam filter. Hopefully, Lauren will dig it out sometime tomorrow. Good night.
Methinks
Feb 20 2009 at 12:29am
Also, I didn’t say there wasn’t deflation, personally, I don’t think moderate deflation is really the worst thing ever.
Especially when you’re talking about a deflating asset bubble.
Evan
Feb 20 2009 at 1:41am
Deflating the housing and finance bubbles are necessary. And I am against any distortion that would impede upon that such as the Isaakson amendment that was gutted from the stimulus that would have given 15,000 dollar tax credits to new home buyers – the swapping houses with your neighbor amendment, as I like to call it. There is a difference though between the deflation in those sectors/industries and the results that we would incur from a deflation of say groceries or mattresses or TVs or cars, no? Those industries/products were not part of the bubble.
And Niccolo, cmon dude. Of course I know that there have been major restructurings/reinterpretations of Keynes – most notably done by Mankiw. But why do you put up this front? A real man makes his own arguments? I couldn’t disagree more. IMHO, a real man admits he reads people more intelligent and knowledgeable than he to back up his assertions. I mean, did you just learn about monetary policy without reading anything? It is so disingenuous for you to suggest that my understanding of the situation/finance in general is lacking because I read. You do the same thing, whether you admit it or not.
And if you are on my side regarding the screaming of socialism thing, why act like it is so passe? My whole point is that people are quick to act reactionary, so I don’t see why being counter-reactionary is so negative.
Now you want to limit the regulations in place that prevent people from joining the entrepreneur class, but you don’t admit that the output gap right now may be the biggest impediment to social/economic advancement. How can a family move on up to the eastside so little Jimmy can attend a better public school if daddy doesn’t have a job on the factory lot right now? And you may claim this to be a free market distortion (like, if the project could be funded/was economical, it would be funded), but I don’t think that that is true. If it was shovel ready 14 months ago and has been held up by our current situation and no amount of private lending is in existence, why can’t (not why shouldn’t) government fill the potential capacity? And I don’t think government can make better decisions and price better than the market/individual, I am just not as dogmatic about it.
I am willing to admit that I only know of what I read. I see no other way of obtaining knowledge. I would never deride you for gathering information Niccolo. And btw, the biggest middle-class tax cut in history was included in this bill, fact, political cliche or not.
Randy
Feb 20 2009 at 3:51am
Methinks,
“…people… who cry for socialist policies while screeching that they are not socialist disgust me.”
Amen to that. But what I wonder is why such people are ashamed to admit it. I mean, they base their entire philosophy on the supremacy of “society” (more precisely, on the supremacy of those who claim to speak for society), but then get upset when called on it.
Rick Santelli Tea Party
Feb 20 2009 at 6:04am
### Rick Santelli’s Tea Party website has been launched:
http://www.reteaparty.com/
##############
Babinich
Feb 20 2009 at 6:14am
“You/CNBC/Hannity/conservative movement are quick to label something that is not something. Claiming you come from a socialist country, you know this. This is a big government grab admittedly, but government has been grabbing for the last 30 years (since Roosevelt even, since Lincoln even), especially under Republican administrations which claim to love and respect the free markets.”
There is a difference between a Conservative and a Republican.
What is it: “something that is not something” or “This is a big government grab admittedly”?
It is something: excessive spending, fear mongering, and the extension of promises that cannot be substantiated.
POTUS: “Now, despite all of this, the plan is not perfect. No plan is. I can’t tell you for sure that everything in this plan will work exactly as we hope, but I can tell you with complete confidence that a failure to act will only deepen this crisis as well as the pain felt by millions of Americans.”
POTUS: “And that is why the single most important part of this economic Recovery and Reinvestment Plan is the fact that it will save or create up to 4 million jobs — because that’s what America needs most right now.”
POTUS: “My administration inherited a deficit of over $1 trillion, but because we also inherited the most profound economic emergency since the Great Depression, doing a little or nothing at all will result in even greater deficits, even greater job loss, even greater loss of income, and even greater loss of confidence. Those are deficits that could turn a crisis into a catastrophe. And I refuse to let that happen. As long as I hold this office, I will do whatever it takes to put this economy back on track and put this country back to work.”
emphasis mine
Create or save: how does one prove that jobs have been saved?
No problem, just keep throwing money at the problem without having a creditable metric in place to determine the effects of such actions.
Rick Santelli is spot on…
Here you go: http://www.youtube.com/watch?v=JfdRpyfEmBE
whippoorwill
Feb 20 2009 at 7:15am
I have read with interest the foregoing exchanges..have not heard rick santelli’s comments/initiatives…and I do not know much but I know this much…if those who are upset at obamma’s actions to date want to see who is at fault they need to look in the mirror…we are all at fault for not involving ourselves in the political process at the ‘pick and shovel’ level all the way thru to the national…we were ‘fat and happy’ for many good years…thinking that nothing was going to change as long as we held on to the white house…during those ‘fat and happy’ years…those who believe in ‘government first’ solutions to everything were eating away at the foundations of our freedom like termites….and here we are now with a ‘leader’ who has no basic philosophy surrounded by those of the same ilk who are making it up as they go…yes politics doth make strange bedfellows…liberals plus the welfare millions…poor,corporate,middle class…all who are hooked to the government tit joined hands to take power…those of us who resent what they have done have got to stop whining/intellectualizing and generally complaining and go to work in the political trenches…long hours and dirty hands on work..to take back our country…and we need to start NOW…lets face it we are all tainted with socialists leanings because that is what is taught in public screwels,public universities and the major media…as leonard read taught some of us…’ we all leak a little’…whoever ignites the grassroots fire for freedom and responsibility will get my participation and money….mr santelli tell me what to do and where to send my contribution…
Joe the Plumber
Feb 20 2009 at 8:22am
Santelli’s rant is PROOF WALL STREET opposes MAIN STREET
Carlos M
Feb 20 2009 at 8:53am
Rick Santelli speaks for the majority of people whom Obama ignores when we say that personal responsibility is what makes a person successful, not government involvement.
I’m there w/Rick Throwing over the barrels full of bad loans and mortgages into Lake Superior. Let them sink.
People should have known what they could afford and not afford! Banks should not have given bad loans! The Clinton Administration should not have forced banks to give crappy loans!
read the following NYTIMES article about how Clinton caused the mortgage crisis.
http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260
jon
Feb 20 2009 at 9:24am
We have nationalized the UAW car companies. We have or plan to nationalize the banks. We plan to nationalize the health care system. We have essentially, via Fannie Mae and Freddie Mac, nationalized the real estate business.
And yet, so many people object to the notion that Obama is/could be a socialist. Why is that so shocking? He was the most liberal member of the U.S. Senate. He comes from the left-wing of the left wing party. How can Evan be so sure that Obama is a capitalist? I mean, how well do we know this guy?
Also, there’s nothing wrong with referring to people as members of the “productive class.” Democrats are always accusing Republicans of favoring the “rich.” They talk dismissively of “trickle down economics.” Republicans need to make clear that they stand should-to-shoulder with TAXPAYERS, members of the PRODUCTIVE CLASS. They oppose the Free Lunch party, the Robin Hood Party, the Santa Claus Party. I say “tax cuts for taxpayers.” (I guess I just hate poor people and favor the “rich.”)
Most of the people who are facing foreclosure today took a gamble. they are now demanding that members of the productive class bail them out with 2 percent mortgages. I resent that.
I scrimped and saved for years to buy my first house in an inner city neighborhood for $97,000. I am 44 years old and got my first cell phone this year. (MY sister put me on her family plan.) I drive a Scion. I do NOT own a plasma TV. I have always denied myself the luxuries that other people take for granted. And now I am being asked — no, I am NOT being asked — to subsidize people with bigger houses in better neighborhoods than mine. Damn right, I’m angry.
This homeowners (“renters” who the government is rewarding) bailout, combined with “cramdown” insure that we will all pay higher mortgages in the future. Hooray for America!
antieconotisticguy
Feb 20 2009 at 10:17am
I think he is way to selective in his concerns. He should also not like the bad behavior of people putting more than $50000 inthe bank Why did the Feds increase to $250000 FDIC not just bail out bad behavior. Also, people know moneymarket funds are at risk why did the Feds need to guarantee the money for a time. That was bailing out bad behavior. BE CONSISTANT.
antieconotisticguy
Feb 20 2009 at 10:24am
By the way if the goal here is to talk about personal injustices, I had my money in gold. So the Feds action hurt me from reaping my entitled gain
JSF-ESQ
Feb 20 2009 at 10:30am
It is high time that we embrace the belief that it is o.k. to express our enormous anger over the rush at lightspeed into socialism.
Santelli said what the overwhelming majority of productive Americans feel.
Individual responsibility is the cornerstone of this country – the concomitant risk of individual failure is what makes most of us act responsibly.
This is a nation of pilgrims, pioneers, patriots, and individualists. I foresee a 21st century “1776”; this time without a shot fired.
K. McCullo
Feb 20 2009 at 10:46am
Thank you Santelli for being our voice!!!
Here is a quote that applies to us now from
The late great preacher Dr. Adrian Rogers (1931 to 2005)
“You cannot legislate the poor into freedom by legislating the rich out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend is about the end of any nation.
I’m a nurse (not some big corp. executive) and I believe in that quote and in Santelli!
Joe
Feb 20 2009 at 1:41pm
It reminds me of the old Donald Trump problem. You we teh banks a million, you are in trouble, but if you owe the bank a billion, the bank is in trouble.
So millions of american should walk away from their houses, and leave the bank with the mess. Both parties entered into an agreement where the value of money borrowed was secured by the underling property, and therefore a nonrecourse loan. One party, should walk away from the contract. Unfortunately, it is the neighborhoods, societies, and peoples best ineterst for that not to happen. The cost, both economic and social/familial of foreclosure are enormous. I feel for every single person who has a family that is ripped up and removed from their home, and I beleve that 90% of those who enetred into band mortgages were not gambling, but did not fully understand the risks/rewards involved in the contract.
Maybe we should have a society where 20% of US families are homeless. Sounds like a great place to live.
Joe
Feb 20 2009 at 1:43pm
David Henderson,
No, he is not. He is a paper shuffler like the rest of our society. Me included. He just gets to be on TV.
Joe
Eric Ebert
Feb 20 2009 at 3:10pm
Amen Rick. Let the people that are in these huge houses and lose them go back to living in an apartment for awhile and maybe after a few years they’ll be able to afford to move back into a more modest home. I don’t believe for one minute these people would end up living on the street. Start selling your fancy cars and boats and other assets to pay for your high standard of living that they’ve bought into. Personally, I think they have some nerve to ask me to pay for their poor judgement.
Eric
P.S. Hey Joe, these people got in way over their heads when they bought too big or for too much. That does not in any way entitle them to my money or yours for that matter. If you want to give them something why don’t you move out of your home and let the homeless move in. You probably have enough smarts to get into another house without going into forclosure.
antieconotisticguy
Feb 20 2009 at 3:47pm
Hey Eric, I trust that you were against the Feds action protecting money market funds back in Sept. If you want to protect go ahead but don’t put my money at risk.
joe
Feb 20 2009 at 5:26pm
Eric,
Not everyone bought too big for too much. I know many people who bought an affordable house, now underwater, and both earners have lost their jobs. It is not that uncommon. There are others who had their mortgage misrepresented (Variable Rate…of course you can afford it). And yes, I have opened my door to neighbors/friends/family in trouble. Maybe I am dumb, but humanity travels far, and I get tremendous value from being able to help. Unlike Arnold Kling, I think trying to keep people in their homes is a tremendous public good. Keeping neighborhoods from deteriorating and families from being destroyed is a huge positive. Keeping foreclosed home from keeping neighborhoods from deteriorating is a plus.
Methinks
Feb 20 2009 at 5:44pm
meh…my encyclopedia length response to Eric’s post has not been dug out of the spam filter yet. Boo hoo. It took forever to write!
Amen to that. But what I wonder is why such people are ashamed to admit it. I mean, they base their entire philosophy on the supremacy of “society” (more precisely, on the supremacy of those who claim to speak for society), but then get upset when called on it.
Because if Socialism is called Socialism, then Socialists would have to reconcile their support for Socialist policies with the failures of the same Socialist policies in the past.
Before the fall of the Soviet Union and Europe’s dismal socialist experiments, Socialists were willing to be called Socialists. That was the case when I arrived in the United States in the mid-70’s. Since the fall of the Soviet Union, a huge re-branding effort has been underway. socialist ideas are re-branded, as “environmentalism” (to the chagrin of real environmentalists) and other euphemisms or minute and inconsequential tweaks are made to past Socialist ideas in an attempt to pass them off as something entirely different. When somebody astutely points out the obvious, they scream that the policies are NOT socialist, they are (____fill in the blank___) and you calling them Socialist is reactionary. Although, I hope and think most people understand that poo by any other name smells as putrid.
Methinks
Feb 20 2009 at 5:54pm
Unlike Arnold Kling, I think trying to keep people in their homes is a tremendous public good. Keeping neighborhoods from deteriorating and families from being destroyed is a huge positive. Keeping foreclosed home from keeping neighborhoods from deteriorating is a plus.
Joe, If I may be so bold as to interpret Arnold’s thoughts…. I don’t think Arnold Kling is at all opposed to you privately choosing to open your home. Nor do I think he opposes you starting a charity that helps these people out. What people who think like Arnold oppose is government taking it upon itself to this. First of all, government is less informed about your neighbourhood than you. Second, government is inefficient at allocating resources. For example – look at the speed with which private charities are building homes for the victims of Katrina while the government funded effort builds virtually nothing and wastes all of its budget on administration. And, of course, no government spending is free of either politics or pork which means that only pennies of your taxes taken on behalf of truly needy people will actually make it to them. It’s just cheaper and more efficient for you and me to write a check directly to these people so they can make their mortgage payments.
I believe it’s good to help neighbours in trouble too (although, not the ones who were careless – they need to suffer the consequences of their mistakes and learn). However, government has not been able to accomplish that and never will.
Ray Haines
Feb 20 2009 at 10:45pm
I just want to tell you we are ready for the tea party. I work
everyday, I bought a house I can afford and the Feds are in ruin. RIck
Santelli is right on the money. You can bet America heard every word
and is hungry for more from RIck Santelli’s Listening to baby huey @
the white house was a laugh. They cannot hide the RIck Santelli truth.
I am so proud of this guy who finally stood up and said what I have
been feeling for months. Don’t ask me to pay for my neighbors
prolbems. We are behind RIck 110% and are begging for more. Tell it
like it is brother and break it off in the whazoo of the current
adminstration with a red hot poker.
WE LOVE RICK!!!!!
Per ardua ad astra
Feb 21 2009 at 9:59am
To Evan: Hooray! You speak with clear logic and reason! You are a true patriot, sir! Thank you for your public service and taking the time to explain our current economic situation and why Santelli’s rant is toxic to the American economy and the American way! Here, Here! I think most people get it, and your posts certainly make logical sense.
bob
Feb 21 2009 at 10:44pm
What did Santelli have to say about the bank bail-out?
Hundreds of billions for banks and rich bankers is fine, but $75 billion for the middle-class is an moral outrage?
marie
Feb 22 2009 at 2:15am
Joe, yes Santille is a member of productive class. Since you seemed to disagree, would you call those people who contribute little or nothing to society a productive class?
Cuneiform1
Feb 27 2009 at 12:37pm
Marie,
Point me in the right direction…who qualifies as members of the “productive class?” How does society determine “those people who contribute little or nothing?” This is that almighty slippery slope often mentioned. It’s not time to reward those who select not to contribute, nor is it time to reward those who manipulate the rules under the cover of darkness.
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