“Like all such ‘good’ things, the latest rescue plan originated with a Republican. Only a week or two back, minority whip Sen. Mitch McConnell proposed a similar scheme whereby the government would lower home-loan interest rates and guarantee the loans. …
Only a few months back, Republicans now baying about Obama’s spending voted for Bush’s $750 billion bank bail-out, and, earlier last year, for his ‘Stim.’ As did they go along with the trillions Bush poured into wars and other welfare. …
If party Republicans wish to convince conservatives of the seriousness of their recently discovered fiscal conservatism, they must stop pretending socialism began with Obama; they must quit making hyperbolic, false statements about Obama having killed capitalism. Acknowledge they must that America has been flouting the free market for ages; that Americans labor under a highly regulated economic system, which combines elements of socialism, fascism, and capitalism.
The GOP must first avow this state of affairs, then disavow it and vow to correct it. …
Said Saint Augustine: ‘The confession of evil works is the first beginning of good works.’ The Republican Party has done the devil’s work. To embark on the good, it must come clean about the bad.”
Hooray to a revolt on the floor of the Chicago Board of Trade! The magnificent Rick Santelli of CNBC rails against having to bailout mortgage delinquents; reminds “President New Administration” that 90 percent of homeowners in the country pay their mortgages; invokes images of Thomas Jefferson and Benjamin Franklin rolling in their graves at what the country has become; mentions “moral hazard,” gets the entire floor booing; hollers, “This is America”; restores my faith in this country. Watch Rick rock the floor:
“’The government is promoting bad behavior… do we really want to subsidize the losers’ mortgages… This is America! How many of you people want to pay for your neighbor’s mortgage? President Obama, are you listening? How about we all stop paying our mortgage! It’s a moral hazard” [Via Drudge]
Update II (Feb. 20): The machine goes after The Man, Rick Santelli. Robert Gibbs, Obama’s press primp himself lashed out:
“I’ve watchedMr. Santelli on cable the past 24 hours or so. I’m not entirely sure where Mr. Santelli lives or in what house he lives but the American people are struggling every day to meet their mortgages, stay in their jobs, pay their bills, send their kids to school,” Gibbs said. “I think we left a few months ago the adage that if it was good for a derivatives trader that it was good for Main Street. I think the verdict is in on that,” the press secretary said, poking directly at the cable journalist, who reports from the trading floor at the Chicago Board of Trade.
The media machine was even worse. Rick’s colleagues were aghast at his hopeless audacity. Today, anchorwoman Tessa Brewer, a large faced, childish, lip smacking simpleton, attempted to make fun of a trader sitting by Santelli. The venom with which the establishment is going after Trader Joe is the very same bile they reserved for Plumber Joe. The anonymous trader was asked condescendingly by Brewer whether he was having his 15 minutes of fame. The guy remained stoic and serious, and asked the silly sow whether he could get a bailout if the “bets” he places do not yield profit. Rick was quick on the draw: He told his trader buddy that “they are being rude to you,” and went on to stick up for yet another ordinary Trader Joe making a living.
If anyone can locate the YouTube for the last exchange, do send it along. I’ve been unable to find Santelli’s appearance on Hardball yesterday. Mike Barnacle, sitting in for “trickle down the leg” Chris Matthews, told Santelli: “you speak for many, Buddy.”
Here’s Santelli on Today. Some predictable backing down in the face of peer pressure, but he comes up with good, libertarian lines/principles: the government is “legislating your choice away.” “Do not break contract law.” “The market is us, people.” “Give us a tax holiday.” “We are spending money we do not have.”
Santelli also countered on Hardball yesterday the foolish and flimsy argument that bailing out the minority delinquent mortgage holders is justified because, if not done, “the value of your home will decline with his.” Santelli made the point we’ve often discussed in this household: your home is where YOU LIVE. Quit viewing it as an investment; stop borrowing against it. it’s your abode!
“After more than a decade of unsustainable borrowing and spending, the private sector is currently attempting to restore balance through reduced consumer and mortgage credit, greater savings, and lower asset prices. With its trillions of dollars of credit injections and stimulus programs, the government hopes to allay this process by force-feeding Americans a diet of more borrowing. They feel that a restored securitization market will help. It won’t. It will just grease the skids for a quicker collapse.
Credit, whether securitized or not, cannot be created out of thin air. It only comes into existence though savings, which must be preceded by under-consumption. Since savings are scarce, any government guarantees toward consumer credit merely crowd out credit that might otherwise have been available to business. During the previous decade too much credit was extended to consumers and not enough to producers (securitization focused almost exclusively on consumer debt).
The market is trying to correct this misallocation, but government policy is standing in the way. When consumers borrow and spend, society gains nothing. When producers borrow and invest, our capital stock is improved, and we all benefit from the increased productivity.”
Updated (Feb 19): “All credit is debt,” explained the brilliant Henry Hazlitt. “All loans, in the eyes of honest borrowers, must eventually be repaid. Proposals for an increased volume of credit, therefore, are merely another name for proposals for an increased burden of debt. They would seem considerably less inviting if they were habitually referred to by the second name instead of by the first.”
Luo Ping, a director-general at the China Banking Regulatory Commission, was speaking at the Global Association of Risk Management’s 10th Annual Risk Management Conventions. Said Mr. Luo: “We hate you guys,” by which he meant Americans, toward whom Chinese are increasingly hostile for trashing the dollar.
“Once you start issuing $1 trillion-$2 trillion, we know the dollar is going to depreciate, so we hate you guys, but there is nothing much we can do. Except for US Treasuries, what can you hold?” lamented Luo. “Gold? You don’t hold Japanese government bonds or UK bonds. US Treasuries are the safe haven. For everyone, including China, it is the only option.”
I suspect dethroning the dollar from its status as world reserve currency would be a wise move. You gotta stop enabling the addict (USA).
