Rick Santelli, the loud mouthed talking head on CNBC whom is credited as a father of the Tea Party Movement, recently evaded a very relevant question relating directly to the market's drop. by Russell G. Davis
Wednesday, August 10, 2011
In a recent interview, Rick Santelli made the assertion that it was because of the Tea Party the USA wasn't downgraded to BBB status by the same geniuses at Standard and Poors who saw Lehman Brothers and Bear Stearns as solvent companies worthy of high ratings. In the middle of another vanity rant in front of CNBC's cameras (this time filled with meaningless sports metaphors) Mr. Santelli tells us "Don’t get caught up in the minutia. All this BS." Well one man's minutia is another man's important detail. When confronted with the Conventional Wisdom world of pundits that is run by vain rants in front of cameras using focus group tested sound bites, the details have never been more important.
But this time, there is a reason that the vain elitist pundit does not want us looking at the details. According to Standard and Poors' Research Update- they lay the blame at the Republican Congress specifically the Gang of Twelve. They site failure of Republicans in Congress to raise revenues as a cause for concern that the Bonds may not be paid. In Standard Orwellian Doublethink he turned the situation on its head with an exact reversal of the facts and claimed the Tea Party was to be thanked for avoiding a BBB rating. And typical of a concise TV pundit presentation, no evidence is ever presented to back that up (although I'm sure mises.org is busy cherry picking those facts right now).
As I mentioned in my Where are we on the Deficit Football Field piece-we are nowhere near default. You can go to the CIA World Factbook and look at what our external debt is is in relation to our GDP. You can compare this with other countries. There are countries with higher ratios of external debt to GDP and they have no run on their bonds. This was an entirely contrived crisis (the goal of which is not fiscal solvency but killing socially beneficial programs) which Standard and Poors reacted to by correctly saying whom was at fault.
And if we were to go in the other direction, we could immediately do something direct about unemployment (Government workers and contractors do spend money and there is a multiplier effect). We could put people back to work repairing our infrastructure. We could eliminate many states deficits and have adequate fire, police and schools. Rick Santelli would throw a fit. But look at his behavior in February 2009 when a meager stimulus was being pushed through Congress to deal with the worst financial crisis in recent history. Mr. Santelli and others like him are going to throw fits no matter what is done (especially when cameras are present). As we recently saw in the "debt crisis" debate, there is no appeasing him or those like him, so it should not even be attempted.
At the time where Mr Santelli did his famous "Well, Mr. Obama..." schtick in front of the CNBC cameras, the think tanks that spread a message similar to his were busy rebranding the policies that had brought us to this point, and part of that playbook was saying "Failed" Stimulus instead of Stimulus especially when there were cameras shooting video. It was February 2009.
There are problems with taking the Dow as an indicator of economic health, but as a general yardstick, I'll use it now merely because it is so widely used. In Feb 2009, the Dow was at 7,600 approximately. The Stimulus failed so much that the Dow turned around and headed up to 12,500 in the space of two years. Unfortunately, it was not enough to deal with unemployment. Unemployment and underemployment are the true bites, the true measure of human misery. of any recession. To Mr. Santelli it is merely a number on a page and a higher ration of impoverished souls he must look at on his limo ride to and from the Chicago Board of Trade. He has a very important job of investing people's money until it is all gone, so I'm sure that added stress on his limo ride is very harsh on him!
But let's put a move like that in historical perspective, The Dow was at 7,600 in November 1997 and passed 12,600 in February 2007. That's some failure! Ten years (with wartime and deregulation caused housing bubble stimulus) worth of stock improvement in just 2 years is impressive. If it had been big enough to put people back to work, the Democrats would never have had to give away my Medicare benefits to Washington elitists in order pay for the Afghan and Iraq occupations.
So now, The Dow has dropped down to where it was last December. That's all the value and economic progress of this entire year evaporated because no one stood up to the "Gang of Twelve" freshman Republicans. And as a quick History lesson, didn't they welcome Obama into office with a cry of "I hope you fail!"? Regardless of the Unemployment, Underemployment and misery of their fellow citizens, they want Obama to face reelection with a poor economy even if they have to be the ones who kill the recovery personally.
As of this writing, I can't say how low it is going to go. No one can! I think I can say with some accuracy, that just as these creatures of publicity were using "Failed"Stimulus just as the stimulus was, in fact, succeeding...they will refrain from using Failed Austerity just as the Austerity they recommend is in the process of failing. It is the nature of the hypocrite.
And one doesn't have to dig far to find hypocrisy behind these loud narcissistic buffoons. Going beyond Mr. Santelli, the leader of Tea Party Nation, Judson Phillips, just revealed to the world something he believes would solve our economic problems-shovel ready projects! That's right, when confronted with the possibility of going from 11 to 9 carrier task forces, Mr. Phillips turns Keynsian! He said, "Thousands of employees would be hired for the steel mills that would provide the steel for the hull and various sub contractors would hire thousands. Do you know what that means?It means they would receive paychecks and go out and spend that money. That would help a recovery. That is a shovel ready project!"
So applying that proven form of economic cure to something that helps people instead of killing them and protecting our oil empire is Socialism and we can't have that, because we'd wind up like the victims of Stalin?
Actually repairing our infrastructure so we can compete with other countries is unthinkable as long as we have this deficit?
I have to compromise my Medicare in my old age with a worthless private voucher so Defense Contractors get to keep raking in millions, while killing civilians in other countries and drinking vodka out of each other's butt?
I have to say enthusiastically and loudly HELL,NO!!
Obama and his "out of control" spending at a time when most of nation desperately needs that spending, is $2.4 Trillion. The incompetence and failure of George W. Bush (Iraq and Afghan wars, tax cuts for the rich, Housing bubble) account for $6.1 Trillion. If we absolutely HAD to cut the deficit (we don't) we could easily cut from the Bush part and still have enough money left over to put paychecks in Americans hands again and reclaim our place as the greatest nation on Earth.
Rick Santelli won't like it. Neither will Judson Phillips. But until I see them behave like loud narcissistic buffoons when a Defense bill is being considered or when a proposal to raise taxes on the people and entities who actually have money, there is zero reason to give them ANY credibility!
All revolutions provoke reactionaries. The Left should have realized this and not let them rebrand their failed policies so fast!
If Mr. Santelli wants to use Sports metaphors, here's one that should be considered. The Boston Red Sox went from being the losers everyone joked about to winning two World Series in the past 7 years when they embraced William James' Sabremetrics. It was a revolution in sports statistics that is still being felt. When Grady Little, their manager failed, they brought Bill James into the organization embraced his philosophy and have not looked back!
Mr. Santelli, Judson Phillips, Grover Norquist and others are the Grady Littles who screwed up and now feel entitled to have their jobs back even as the market is getting massacred immediately after getting precisely what they wanted!
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First, let me make clear that I am no friend of Rick Santelli, Judson Phillips, or Tea Party Nation. I don't trust any of them. However, your article's primary claim, that the S&P Research Update, calls out the tea party members of Congress on page 4, is utterly without merit.
I linked to the actual S&P report itself in the previous paragraph. You linked to a hit piece that claimed to be based on that report. I read page 4. There is absolutely nothing in there about the tea party, Santelli, or Judson. Instead, page 4 discusses the recently passed compromise (if you can call it that) in Congress and takes no position on the merits of either the administration's side of the argument or the tea party's side of the argument. In fact, it says on that same page 4 you referenced, "Standard & Poor's takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.'s finances on a sustainable footing."
I don't believe that Tea Party Nation or the other major tea party groups (the ones that don't support Ron Paul) really understand the monetary system and its consequences where the budget, deficit, and national debt are concerned. However, blaming them for something in the S&P report that isn't there is simply ridiculous.
Posted By: Bentree
Date: August 11, 2011 09:51:53 AM
It is obvious that you fell off the left side of the table, funny that didn't show up when you took the test. The S&P I believe was reacting to the obvious, we are incapable of getting our house in order, wake up. It is about spending, but you know that, it is about entitlements, but you know that, it is about the unwillingness to deal with it in Congress because of the ramifications of human nature, but you know that. Without the Tea Party BBB may be the best we could hope for, not today and maybe not next year, but that will be our future if the current socialist entitlement paradymn is not changed.
George Orwells 1984
“The power of holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them….To tell deliberate lies while genuinely believing in them.” or, Progressive Intellectual Dysfunction
Very much the point, I would suggest a good dose of introspection on you part is in order but that I fear is a dream in a pipe.
Walt, I do believe that the Tea Party members have a grasp of the Founders documents as well as their check books, family and business finances. You can look down on them all you want but they are the only ones that even had a clue. They can see the future of this country sliding away. They have come to understand the ideological gulf between conservatives and progressives can not be closed. We are to far apart. It is only a matter of time that those that fear the unknown will overcome that fear and act in their best interest and the best interest of the nation.
It is apparent to me that progressives have nothing to add to the argument except failed policies and centrist's, if true centrists, just can't understand this. They must believe they will be safer in the middle.
Bentree, I didn't say that the Tea Party doesn't have a grasp on check books, family, and business finances. I said that they don't really understand the monetary system and its consequences to the national debt. There's a difference.
I also don't look down my nose at the Tea Party. That's your snide description. What I said is that I don't trust Tea Party Nation and the other large tea parties that don't support Ron Paul. Lack of trust does not equal elitism.
I also think it is significant to note that Tea Party Nation does not tolerate dissent within their ranks. I brought up the whole question of monetary policy at their forum and was kicked off for my troubles. All I said was that Phillips and co. should be paying more attention to it. That was enough for them to kick me off their boards.
In contrast, Tea Party Nation members are welcome to contribute here.
Posted By: Russell G. Davis
Date: August 12, 2011 03:28:53 AM
When the report says things like- "we have changed our view of the difficulties in bridging the
gulf between the political parties over fiscal policy, which makes us
pessimistic about the capacity of Congress and the Administration to be
able to leverage their agreement this week into a broader fiscal
consolidation plan that stabilizes the government's debt dynamics any
and-"we believe that the
prolonged controversy over raising the statutory debt ceiling and the related
fiscal policy debate indicate that further near-term progress containing the
growth in public spending, especially on entitlements, or on reaching an
agreement on raising revenues is less likely than we previously assumed and
will remain a contentious and fitful process."
and "The statutory debt
ceiling and the threat of default have become political bargaining chips in
the debate over fiscal policy."
do these things occur in a policy vacuum or do they have a cause?
They do have a cause. It's the political fantics on the Right (or the faction that accepts the label Tea Party) who is enthusiastically encouraging a default. Ms. Bachman said as much today! Tea Party wants a default. Standard and Poors cites that a reason for the downgrade.
Like it or not you own this downgrade and resultant dip in the markets, not Obama. Obama has many faults but it was never realistic to expect him to accept the agenda of people who didn't and will never vote for him!
So when S&P list "We have changed our assumption on this because the majority
of Republicans in Congress continue to resist any measure that would raise
revenues,..." on page 4 it is very clear whom they think the culprit is.
Bentree-Tea Party zealots are advocating default and chaos in the Bond Markets in order to prevent default and chaos in the Bond Markets!...some day..maybe. Seems like classic Orwellian Doublethink to me! And I looked in the report I can't find anything that says "The USA would be rated BBB if not for the Tea Party. When a claim that is made by you or Mr. Santelli it is difficult to check (being as how it was pulled freshly out of the ***!)
As for so called "failed" ideas...I adressed these in the article. And it is more important for you to take a good look at the year's worth of growh that was wiped out by the Tea Party Downgrade, contemplate what it may mean to your fellow citizens, many of whom could use a shovel ready project or two! You think of the low wages, the unemployment, the human misery that might caused by recent plunge and the zealots cheering default who brought it on. You think of them and if you have any decency at all you'll STFU!
Posted By: Bentree
Date: August 12, 2011 07:04:20 AM
STFU, Great, another example of progressive/marxist think. I don't want to deal with it, a rhetorical off with their heads. Eventually if allowed to progress, I'm sorry, that is the way progressive/marxist deal with the problem, that being, that nothing they believe works to the benefit of man. It is only through rhetorical, then in practiced brutality, supported by evil and greed that marxist/progressive socialism advances itself.
For the record I do not belong to the Tea Party, they are not conservative enough for me. I am a Constitutionalist. Now, I did have a distant cousin that brewed tea in Boston Harbor.in the late 1700's.
STFU, I like that, STFU, so defining, wouldn't you say? I really like the moral outrage also, too. Decency from a progressive, rrrrright!
Posted By: Russell G. Davis
Date: August 12, 2011 11:49:18 AM
Yeah, I saw that article where you advocated forced relocation to central Nevada for having the wrong political beliefs! What a Constitutionalist! If they are liberals, then we can ignore their rights, eh Constitionalist? But Mitt Romney's instant donation corporation has to be treated like a full fledged human being!
The US Constitution is more than a mere slogan for reactionaries! We all saw how thin the devotion to the US Constitution was when the 14th amendment was brought up as a solution to the debt crisis. Clearly the US Constitution says that the debts of the USA must not called into question except when a small group of pinheaded morons want to push their agenda.
Oh any by the way-STFU is protected Free Speech under the first amendment to the Constitution as well. So STFU!!!
Posted By: Bentree
Date: August 12, 2011 04:56:36 PM
Section 4 of the 14th Amendment states:
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
It in no way states that the legal borrowing power of the US must be increased in order to pay those debts. Since the funds were and are available it would be a mute point. It would seem to me that the 14th. would put those payments right up front, first in line, numero uno so to speak. You can probrably figure out the rest for yourself.
Whats wrong? You don't find Nevada appealing, the high desert can be quite beautiful during parts of the year. There is an abundance of gold and silver, hot springs along with mountain streams and vista's. Although boulders have been known to come rolling down the street in Austin but there is usually fair warning due to the preceding flash floods. Rhetorical hyperbole, maybe just trying to make a point. Actually you would have to actually vote for a left wing, whoops.
I have no problem with what you think, say or do except when you have to violate my rights in order to accomplish your do's. Say, take away my right to choose a healthcare provider or force me to pay into a ponzi scheme, social security, withholding, unemployment, medicare, compliance with arbitrary rules and regulations, those devilish details that the lovely Ms. Palosi has so eloquently elucidated. Capiche
Lets see, do you have the right to plan a robbery of my home, well, yes, as long as you don't conspire to do so, grey area, Do you have the right to stand on the sidewalk and gaze greedily upon my property? YYYes, well, progressives have programs to pay for don't they? When you step on my property, thats when everything changes, albeit in varying degress. Depending on where you are standing, say in the house, I do have the right to deal with you in a lethal manner and at that point, the option of central Nevada may look pretty darn good. In fact at that point you might just up and volunteer. You know sittin around the camp fire with your didgeridoo, a wombat on the ole barbee singing,........ you not the wombate. Sure would beat the hell out of laying on the floor exsanguinating. What I am describing is self defence. Why? Because you did not seem to get it the first time.
All kidding aside, I have faith that hyperbole is your game and you are just trying to make a point of some sort.
Posted By: Bentree
Date: August 14, 2011 12:10:26 PM
When ever some one says to me I, I really don't think you grasp it or that you are generalizing, it sounds a lot like intellectual snobbery. Sometimes but not always I assume a level of knowledge or experience on the party of the second party and we all know about assumptions. Now I know you are a smart guy and your passion is the Fed and monetary policy but like I have found, it is that one persons passion is not universaly or neccessarily shared. One of the best examples of this is a city counsel meeting. Listening to what other people are concerned with drives me crazy, I sit there and mumble to myself, thats not what is really important here, why are you wasting your time, my time on that issue? I guess my point is that everyone brings a different Ox to the trail.
While not a member, I have been impressed by a relatively single minded focus on spending, taxation and the Constitution by the Tea Party, and I know that the Christian thingee is worrysome, but first we must cure the progressing cancer, then we can go about healing the body. The banking system, the nations debt and the present state of the currency are but manifestations of the illness.
In his book "Economics and the Public Welfare", 1949, D. Van Nostrand. Benjamin M. Anderson wrote:
"It is the duty of a lender to an embarrassed debtor to see to it that the debtor mends his ways and reorganizes his affairs so that the loan may be a good loan"
The question of the S&P downgrade, S&P is a relied upon member in the loan path, is not new and the deflection by progressive's that S&P had given the Fannie & Freddie securities their blessing. The facts are that we were not in a recession and our national debt had not soared into the stratosphere and after all they were quasi government entities. Right now who caused this and I do have an opinion? Is mute, except for who we should appoint to deal with it.
At the end of WWI rather than beginning to rebuild their manufacturing base, European countries borrowed and spent money on imports. Money borrowed from their central banks, the banks then printed banknotes to cover these expenditures, their currencies were in choas and as long as other countries would accept the currencies there was no incentive for those counties to get their financial houses in order.
Posted By: Russell G. Davis
Date: August 27, 2011 05:04:50 PM
Actually Bentree, I'm writing from Nevada. Western Nevada to be specific. What was being criticized was your advocation of forced relocation to Central Nevada...or anywhere. AND SOMEHOW YOU HAVE TURNED THIS INTO A SELF DEFENSE ISSUE!!
Yes Amendment 14 says that our debt shall not be questioned! And if we have to borrow more to insure that the validity of our debts is not questioned then that's what the Constitution endorses!
You seem to be an profoundly stupid hypocrite and the world is a better place when profoundly stupid hypocrites STFU! So once again STFU!