Double-Checking My Homework
by Dave Gonigam
by Dave Gonigam
It seems Ive
touched a nerve.
queue for my musing
yesterday titled Why Ill Sit Out the Chicago Tea Party
was filled with people heaping invective on me because I said CNBCs
Rick Santelli failed to take a vigorous stand against bank bailouts,
even as he gained fame for opposing homeowner bailouts.
I was reprimanded. Youre 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.
Ive 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
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.
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.
what I said Monday: Where are the YouTubes of him calling
for a taxpayer revolt when the banks were getting bailed out?
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 its not going to make
the system collapse, guarantee, get the FDIC.
OK, I dont
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 wouldnt
recognized the emperor had no clothes. Bully for him. But rather
than overthrow the emperor, he wants to stitch new garments.
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 cant 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 whos
going to lead a popular revolt against the powers-that-be? Give
me a break.
Gonigam [send him mail]
joined Agora Financial in 2007 after a 20-year career as an Emmy
award-winning writer, producer, and manager in local TV newsrooms
© 2009 Daily Reckoning