02/24/09 Baltimore, Maryland It seems I’ve touched a nerve.
The comments queue for my musing yesterday titled “Why I’ll Sit Out the Chicago Tea Party” was filled with people heaping invective on me because I said CNBC’s Rick Santelli failed to take a vigorous stand against bank bailouts, even as he gained fame for opposing homeowner bailouts.
Au contraire, I was reprimanded. “You’re just plain wrong,” said one of the gentler comments. “You might want to check on Rick Santelli a bit more carefully,” said another.
And so I have. I’ve double-checked my homework. I have searched long and hard for the sort of full-throated condemnation of the $9.7 trillion of bailouts, guarantees, backstops, etc. for irresponsible financiers that Santelli gave of the $275 billion bailout for irresponsible homeowners.
And I’m just not finding it. A lot of his defenders in the online universe (and one of the commenters) point to this video from late September, in the thick of the debate over the first bailout bill.
Yes, Santelli acknowledges the big banks are insolvent, which is more than a lot of pundits were willing to acknowledge at the time. But right there at 6:17, he says, “I do agree, something needs to be done,” i.e. government needs to do something to intervene. He was merely offended by the pressure Hank Paulson was exerting on Congress to pass a taxpayer shakedown quickly without deliberating the precise terms of said shakedown.
I’ll repeat what I said Monday: “Where are the YouTubes of him calling for a taxpayer revolt when the banks were getting bailed out?”
Defenders of Santelli would then no doubt point to the interview he did with Kudlow yesterday, in which he said “I think the government should stay out” of the banking system. But then he says, “There should be some type of special bankruptcy organization that the government set up so if the banks go down, they do their best to organize it – make it so that it’s not going to make the system collapse, guarantee, get the FDIC.”
OK, I don’t know how I can make this any clearer: The mere existence of deposit insurance and the FDIC is the antithesis of the free market. For a guy who likes to talk about moral hazard, Santelli seems oblivious to the suggestion that if Big Daddy Government will step in to make depositors whole, it only encourages the banks to take risks with depositors’ money they otherwise wouldn’t take.
Yes, Santelli recognized the emperor had no clothes. Bully for him. But rather than overthrow the emperor, he wants to stich new garments.
It’s painful to watch so many smart people adopt this partisan hack as the new patron saint of laissez-faire.
If Rick Santelli wants a real Tea Party worthy of the memory of Samuel Adams, he should demand an end to fiat currency and the Federal Reserve. As it is, he can’t even bring himself to say the free market should be allowed to do its work with the banks so as to flush the rot from the system and start fresh. And this is the guy who’s going to lead a popular revolt against the powers-that-be? Give me a break.
Dave Gonigam
Treading a fine line between contrarian thinking and conspiracy theory, Dave Gonigam explores the nexus of finance, politics, and the media for Agora Financial's 5 Minute Forecast. He joined kindred spirits at Agora Financial in 2007 after a 20-year career as an Emmy award-winning writer, producer, and manager in local TV newsrooms nationwide.
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My problem with yesterday’s column had nothing to do with your indictment of Santelli. He’s an opportunist just like every other TV pundit. My problem was the way you towed the Obama line by spreading the myth that the mortgage bailout has anything to do with bailing out “the little guy” who got in over his head. Its another bank bailout plain and simple. The majority of those homeowners who would be “bailed out” own little or nothing of “their” actual home, their bank does. If they get foreclosed on, they can simply walk away and rent like a prudent person living within their means. I know their credit would be severely injured for the next 7 years, but frankly, that’d probably be a good thing for most of these people. Think of the horror of actually having to live within one’s means!!! No more credit cards, new cars, and houses they can’t afford. Of course, Obama spins it as a bailout for the little guy to gain public support, but let’s be honest and accurate here. The banks need/want more money, and foreclosing doesn’t pay. Not to mention how completely BS it is that the government sees fit to essentially price fix home values through this bailout. I want my bailout for being prudent and not getting in over my head in the form of realistic home prices! But I guess the message the government would rather send is, “be irresponsible, follow your every consumer appetite, run up a tab, live beyond your means, we’ll be there for you”…
Well, as far as adopting a hard currency and ridding the world of the scourge of the Federal Reserve system, I’m right there with you. But perchance is it just a bit too much to ask of a mainstream pundit to follow the decidedly non-mainstream, albeit correct, line of true free market thought championed by Mises, Hayek and Rothbard? In other words, the lack of ideological purity notwithstanding, thank God for small victories. Additionally, the hatchet job by HuffPo is lacking any credibility whatsoever. So for you to cite it as a gotcha and as evidence that Santelli played into the wily Obama Rama Lama’s hands is more than a stretch.
When the blogosphere finally sees someone lash out against the stupidity of all these bailouts we tend to unite around the one who takes our stand. So when you lashed out against our god with feet made with clay, it was only natural for us to defend him till death. I personally don’t follow Santelli at all as I hate to watch the Main Stream Media (MSM). So when I saw his rant, I could only assume he was in the “IN” crowd. Thanks for the illumination. Your article from yesterday now makes a bit more sense. I suppose it will be his future remarks that will be the tell of his cards.
The basic format of the United States Government consists of a corrosive military stretched across the planet on the one hand and on the other, a consumptive bureaucracy of cause and effect averse functionaries led by floor-flushing Freedom Bolsheviks on the permanent hustings. Accordingly, the very last thing we’ll see with this Authoritarianism for Idiots is any abandonment of the Fiat money regime. A proper accounting will not do for this bunko operation because nobody would ever keep a straight face if it was clearly understood what is gained for the funny-money spent. Fiat money has the government it deserves. Penury is the mother’s milk of the Bureaucrat, it admirably maintains the charade because fiscal crisis…and hence a massive governmental stimulus is the end game.
What would happnen to company payrolls if some of these huge banks go under?
I’m not for the bailouts (not even a smidge), but it would seem that this would need to be addressed. Could companies switch banks quickly enough? Would it disrupt paying employees? Or would it not effect things that much.
You sound like a little child ranting about someone you’ve seen two videos about and have made your quick, ignorant judgement. It’s people like you – ones who stamp on people standing up for the rights of Americans – which is why our system is bad.
Piss off jerk! I’ll stick with reading Bill Bonner.
Bitching about FDIC insurance? Good lord, that’s simply out of touch with reality, FDIC insurance is not going anywhere short of literal anarchy. The equity and debt holders can be wiped out(that’s happened sometimes, sometimes not) and executive managements and directors imprisoned and impoverished(still waiting-a big reason for the ever-rising anger) but depositors are simply not going to be wiped out.
Santelli is no perfect spokesman, nor may his past or present prescriptions be perfect either, but compared to the rest of the MSM, particularly to the ignorant shills that comprise the rest of the financial MSM(his own network being the most prominent in this crowd), never mind the hacks and bull!#*^ artists of the Obozo crowd(and decades of his predecessors), Santelli’s highly knowledgable and credible.
Making ‘better’ the enemy of ‘perfect’ usually just makes things worse.
here’s a simple test. did the investor take a risk?
putting money in money market is not taking a risk. buying treasuries is not taking a risk. so you’re arguement about FDIC falls flat.
Buying CDOs on the other hand is taking a risk. Buying real estate is taking a risk.
Let’s segregate using common sense who should be included in any bailout (insured up to a certain amount) and who should pay some price.
The problem is that the govt. wants to protect the wrong class of investors. they want to protect the creditors when they should actually ask the creditors to write down some of their receivables (a la bankruptcy).
Won’t happen politically unless enough Santelli’s make enough noise…so far though they’re trying to paint him as an out of touch derivative trader and not an ordinary american…this is class politics at its most lurid…as far as i’m concerned, go Santelli!
The point of my comments yesterday was to suggest that you save your invective for the folks actually SUPPORTING the bailouts with whom you, yourself, disagree.
Why are you calling this man out for saying what you would acknowledge is correct – namely: that it is unjust, unwise and a moral hazard to penalize those who act uprightly and wisely to bailout those who did not…?
You called this man a “chump”.
I’ll welcome every voice on my side of this THING going on… I’m not going to help squash such a voice because he’s not an ideological libertarian for heaven’s sake!
No wonder our side never gets anywhere…
Very fuzzy logic Dave.
What I’m equally pissed about today is the ‘seems I’ve touched a nerve’ comment (with the barely disguised implication being ‘I’m always correct but look at these crazies on my case’ – not good.
Next time, try beating the right guy.
Change? The plutocracy has different spokespeople, but the message is the same: “Either you’re with us or you’re against us”. If Rick Santelli got “played”, then hope is pronounced “duhope”. I suspect Santelli is bothered most by the manipulation of the bond market, where money is printed to bid up prices/bid down rates in order to sell more unborn American souls to the Chinese. Hey, how ’bout a little Feral (sp?) financing MY casket?
I agree 100 % Dave where has this moron been for the last trillion of bail outs? Maybe on G Gordon Liddys show whining ? What a coward!!!! The Daily Reckoning rocks has been the best read of the last 10 years refuting the CNBC and Fox News talking head idiots. Keep up the good work !!!!!
Actually, the guy leading the popular revolt is Ron Paul. Check out HIS YouTube stuff sometime. Rick Santelli is speaking truth as much as he sees it in any moment….much more than any other talking head on TV.
Dave Gonigam, you are right. Santelli is not the standard bearer for free market capitalism. But at least he got one thing right.
I think he deserve a pat on the back.
you *so* missed the point of most of the comments regarding your RS tea-party spew yesterday… and RS has nothing to do with it.
try again.
but keep carrying the flag against fiat currencies and for the free market, hooray!
Unlike some, most of us DR readers support moments of wisdom, regardless of the lunacy that may come along with it.
–ikk
Nothing quite like being wrong, reviewing the situation and insisting you’re not. Oh look, everybody’s out of step but my little Johnnie!
Well, Beulah the Buzzer blew once again. You’re off the show.
But stick to your guns. One day, and that day may never come, some one will inquire: How’s that working for you?
@DiverCity: It WAS HuffPo’s “gotcha”, not Gonigam’s. Politics is perception (the clichés are generally true) & it’s people like Santelli & Greenspan who hurt us terribly. I don’t think I have to elaborate to you how. “Impure”? More than a little “impure”.