Tea Partying

In setting up discussion of any subject on the air, usually the host/ess goes looking for some one to represent each side. In the case of issues like theft, sometimes it's difficult to get anyone to represent the side of a thief. Now we have one. Yesterday in a tirade on floor of the Chicago exchange, Rick Santelli let loose a tirade against those poor who have had their economic security stolen from them by letting themselves be sold toxic mortgages. Thanks, Rick, you are about to join Alan Dershowitz, representative for torture, as the one to call when you need a good villain.

Shouting that the purchasers of mortgages that are now failing ought to have to pay them like those responsible folks who didn't have an illness, lose their jobs, or fail to refinance before housing values began their rapid plunge, Santelli nominated himself for executioner of the day. If you fail, you are the Santelli version of our worst fears, the one who provides the dark side of the moon in our system. You are going to suffer, and that's what the Santelli rant demands. You get to Go To Jail, Do Not Pass Go, Do Not Collect $200. Anyone who tries to stop the downfall of the unfortunate is guilty of ruining things for those who didn't stumble, who are able to meet their obligations. In the Santelli view, there is an antihero, and that is in this case President Obama. He has the nerve to make things easier on the victim, even deny the Santelli faction their satisfaction at watching victims suffer. His advice in days leading up to the meltdown? You guessed it. Everything is going up.

...August up 1.1%, and everything before May was a negative number for years...That's a trend," said Santelli.

That's just one incidence of Santelli's advice, but let's just point out, he isn't among the Krugmans and Roubinis who put a damper on 'creativity' in inventing the mortgage bundles that are now known as toxic.

David Brooks steps up to the plate to share the glory, using the rant to make a point that almost makes even his grasping mantra look good. (I will give you the link, but if you hit on it remember that will assure Bobo that he has a slavering following.)

A few years ago, the global economic culture began swaying. The government enabled people to buy homes they couldn’t afford. The Fed provided easy money. The Chinese sloshed in oceans of capital. The giddy upward sway produced a crushing ride down.

These oscillations are the real moral hazard. Individual responsibility doesn’t mean much in an economy like this one. We all know people who have been laid off through no fault of their own. The responsible have been punished along with the profligate.

It makes sense for the government to intervene to try to reduce the oscillation. It makes sense for government to try to restore some communal order. And the sad reality is that in these circumstances government has to spend money on precisely those sectors that have been swinging most wildly — housing, finance, etc. It has to help stabilize people who have been idiots.

There you have it, the idiots are the ones who fell for the line Brooks was pushing right along with Santelli, that the economic fundamentals were sound and prosperity could be built into your expectations. If you bought into this, as did most of the world, and lost then you have become the idiots we have to pull out.

Where is the screaming at the perpetrators of this catastrophe? All in blogs like this one, who deplored the creation of a financial system where regulation was treated as a barrier to the prosperity our pundittoes insisted had arrived never to depart, as long as the voice of reason would just shut up.

This is my scream, that the tea party ought to be dumping Allan Greenspan for refusing to use the laws to stop the ratings analysts, when he knew they were lying for gain. The tea party then needs to throw in the ratings analysts who were inveigling investors who did their homework, and giving out ratings that their bundles of mortgages did not even begin to deserve. Our tea party then needs to toss in the business reporters who never looked, or if they did ignored, at the instability of bundling up bad and good mortgages and selling them as top dollar earners to investors who then showed a really sound financial picture that was really shaky to the core. The tea party can then go on to the mortgage service perpetrators that sent out their slick ads to potential homebuyers asking them to buy as much house as they wanted, without any means to pay the mortgage, and told them they could refinance before their minimal rates could readjust upward. Onwards with the tea party to the agents who sold the houses, mouthed the lines, got signatures on paper so they could get awarded commissions for their dirty work. If there's any room left in the harbor, then that tea party ought to pitch in the investors who bought as many houses as they could on that totally fabricated market, basically using funds from investors who were being swindled to finance their purchases. Then let's toss the homebuyers who were swindled and now can't meet their payments.

The idiots are the ones who ignored rational considerations to create this miasma. It wasn't great judgment on the part of those who bought in. Their judgment was swayed by seeing the big fish who were insisting that wasn't a net they were swimming toward but economic nirvana, the spiral that went up forever. Oops. It's a net. The little fish that followed the Santellis and Brooks into it are not the ones who created it. Nope. That gapmouthed screamer on the YouTubes, on the news clips, rabblerousing against the victims of his braindead economic reporting - that's the idiot personified.