10 Comments

1. nemov February 19, 2009 at 17:52

   It’s funny reading some of the people on the left who are upset about Rick Santelli’s statement. Talk about unhinged.

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2. jmcnamera February 19, 2009 at 18:08

   I like this article, basically why should the majority who live responsibly be forced to pay for those who didn’t. Worse, our kids will be spending because of these idiots.

   http://housingbubblecasualty.com/rip-personal-responsibilitythe-guvment-is-in-charge-now/

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3. Jim Duncan February 19, 2009 at 18:27

   I try not to think of this as a “left” or “right” issue – and it’s a shame that it’s perceived as such (not directed at you, nemov) –

   This is an issue of behavior and government’s role in our lives – the intended consequences are minimal relative to the scale of the problems and the unintended consequences haven’t even been considered.

   Sadly, politics and party interfere in what should be rational, calm decision making – the rush to do something – anything, something! – clouds logic.

   Virtually every word Mr. Santinelli said rings true, and sadly hollow to those who are in Congress.

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4. Mark February 19, 2009 at 20:46

   What the gov’t is doing is ensuring massive Democratic losses in the 2010 mid-terms. The GOP was smart as hell to unanimously oppose the stimulus. Dubya tried to buy votes with the Medicare drug entitlement and it didn’t work. Now the same party who shrilly warned us that Bush was using scare tactics to extend government’s security apparatus is fear-mongering us into an unprecedented central economy.
   That fact and the volume of ignoramuses calling this “the worst economy since the Great Depression” just goes to show you that those who don’t know their history are doomed to repeat it.

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5. Anonymous Coward February 21, 2009 at 16:28

   Well, let me go out on a limb . . . and say two things:
   First, Rick Santelli is completely out of touch. He’s a former derivatives trader, and lord knows we don’t need economic advice from that quarter. And the entire CNBC attitude — no systemic problem here, just some people that got greedy — is just BS and people know it.
   Second, you guys are about as bad as Santelli. Mark tells us that the Dems are going to have “massive” losses in the 2010 mid-term elections. Oh geez, give me a break, Nostradamus. If the economy stays as crappy as the GOP left it, then maybe. If not, then no way. I don’t know, and neither do you. Jmcnamara complains that responsible people shouldn’t be forced to pay for those who made stupid bets. Ok, where was the ire then when the banks — the world’s nerve-center of stupid bets — got their $700B bailout? That’s 10x what Obama has pledged for mortgage relief, and I didn’t hear Santelli jumping up and down then. Nor any of you.
   Third, you’ve got the economics wrong. Foreclosure is a problem not just for the people who get kicked out of their houses — many of whom, I will certainly agree, made some very bad bets. Foreclosure also has very bad knock-on effects for the communities around the foreclosed houses — not least by further depressing the price of houses in the surrounding areas. You want people defaulting on loans? Well, allow a high foreclosure rate in their community to put them further underwater on their house so they can’t take advantage of low interest rates to refinance.
   Think, people. AC

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6. Anonymous Coward February 22, 2009 at 20:51

   One bit of late-breaking news: Citibank is negotiating for *another federal bailout* — this time for the extra billions the gov’t will end up owning up to 40% of the bank.

   I hope that blowhard Rick Santelli will throw a televised hissy fit about this as well, but I’m not holding my breath. The CNBC principle is that federal bailouts are only objectionable if they don’t go to rich people.

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7. Andy K February 23, 2009 at 08:53

   I’m with you A Coward. I immediately wondered what Santelli’s thoughts were on the TARP bailout compared to his reaction on the mortgage bailout.

   It’s clear that many talking heads (especially if they were previously employed in the financial field) don’t have much venom about the TARP, but as soon as tax payers start to help other tax payers they are against it.

   It’s clear that many of these banks are insolvent and will stay that way even with more taxpayer dollars. Citibank and BofA have already been guaranteed $400 B taxpayer dollars and now Citi wants more. The only way out is to nationalize and break up these big banks. They are black holes and will keep sucking up all taxpayer money thrown at them.

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8. Jim Duncan February 23, 2009 at 10:17

   I’m on the record as thinking that the bailouts for the autos, banks, etc are wrong. We’re playing with fake money – and very little of it means anything anymore.

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9. Anonymous Coward February 23, 2009 at 11:43

   Well, Jim, unfortunately that may put you in the Hooverite camp. Liquidate capital, liquidate labor, liquidate homeowners, liquidate the banks. We employed those principles 1929-1932, and they helped to turn a stock-market rout into a national economic collapse. We’re not going to follow that path again — Obama won the election, not McCain.

   That said, I think that you and I are likely to agree on a lot — at least in terms of what has happened thus far. While I’m not against bailouts per se, I am against bailouts in the form that the TARP has taken — i.e., bailouts in which we simply give money to insolvent institutions, in the hope that they’ll somehow magically do better while leaving the current managers and incentives in place. As Exhibit A, I give you the fact that Merrill lost billions of additional dollars *after* it took its first TARP payments by taking big bets on a revival of the mortgage-backed derivative market.

   I think now that some form of bank nationalization is quite likely — although nothing in this crazy political climate is ever fully predictable.

   I’m mystified by the reaction to Santelli’s so-called “populism”. It isn’t populism to cheer the bank bailout and stoke resentment because someone in your neighborhood might get help not defaulting on the mortgage.

   Finally, one fact that I think it’s important to bear in mind. Most people who end up in foreclosure get there because of job loss. Right now we have a horrible run of employment figures — employment is cliff-diving. These job losses are not the fault of the folks getting fired — and neither are the resulting foreclosures. These people deserve help in any event.

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10. Jim Duncan February 23, 2009 at 14:37

    AC –

    I think you’re right, and I don’t necessarily advocate for liquidating everything. What I do object to is tossing more and more of our money into bottomless pits of irresponsibility.

    I’m too big to fail, as are most Americans, and I think we’re all just looking for where it’s going to end. And that’s the question – where do we draw the line?

    (I’m starting to think calling a “do-over” on the economy is the way to go – wipe out all debt – for everybody – and start over.)

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