Is it my imagination, or has the anti-poor rhetoric of some conservatives increased now that Obama’s stimulus package can no longer be called the Bush stimulus package? There are a lot of reasonable reasons to criticize the original Bush $700 billion bailout plan, but conservatives such as Rush Limbaugh seemed unusually quiet while financial giants like AIG took the cash and ran. Now that Obama has adjusted the focus of government stimulus to prevent individual foreclosures and create jobs, however, some conservatives appear to be mad as hell and not taking it anymore.
One such individual gaining attention is a reporter for MSNBC, Rick Santelli who, egged on by traders on a Chicago floor, went on a rant against the entire principle of the stimulus package. And whereas financial payouts to giants AIG were hardly criticized by people like him, now his ire goes out to average Americans.
Consider the text of his rant:
“The government is promoting bad behavior… I’ll tell you what, I have an idea. The new Administration’s big on computers and technology. How about this, President and new Administration, why don’t you put up a Web site to have people vote on the Internet as a referendum to see if we really want to subsidize the loser’s mortgages, or would we like to at least buy cars and buy houses in foreclosure and give them to people who might have a chance to actually prosper down the road and reward people who actually carry the water instead of drink the water…”
“This is America. How many of you people want to pay for your neighbors’ mortgages that has an extra bathroom and can’t pay their bills?”
Stopping foreclosures is “promoting bad behaviour”.
My problem is that there is very little parsing in Rick Santelli’s rant. If you have a mortgage and you are receiving subsidy from this bailout package, you are a “loser”. Rick doesn’t mention the financial executives who took bailout money and paid out excessive bonuses to their upper management. He doesn’t mention the traders behind him, who invested in mortgage funds that many people knew and warned long beforehand were on shaky ground and unsustainable. He doesn’t mention any Republicans, like John McCain, who as late as October swore up and down that the fundamentals of the economy were strong and we didn’t need to worry about a meltdown.
No. Santelli specifically refers to “your neighbours”, which means average individuals like you and me. If they receives funds to save themselves from foreclosure, they’re losers. Regardless of whether they were speculators banking on property values rising forever, or flippers renovating for profit, or just average individuals struggling to put a roof over their families heads, who were laid off through no fault of their own. Rhetoric blames all these individuals equally for entering into mortgages at the edge of their affordability, for hoping that their jobs would actually last, or for entering into interest-only mortgages, leaving no blame for the banks that sold these mortgages, who largely failed to explain the problems of an interest-only mortgage, and who were sometimes given cash rebates to push these mortgages. It leaves no blame to the traders behind Rick that invested in mortgage funds that perpetuated this corrupt system.
And make no mistake: this is a failure of the deregulated American system, of greedy corporations. Remember, the big reason why Canada does not have a mortgage crisis is because government regulations prevented our banks from being as reckless. Interest-only mortgages are not allowed, and the one attempt to copycat the American mortgage market — the 40 year amortization rate — was quickly dropped by the Harper government this past year. So if the banks are blameless; if all of their decisions were made based on sound market advice, why did it take the intervention of our government to prevent our banks from experiencing the problems American banks are experiencing down south?
Nope. In Rick’s world, it’s caveat emptor. Blame the poor for their own poverty and their own bad luck. Let the rich off the hook, because that’s who’s standing behind Rick in this picture, and he’d be a fool to antagonize them. That’s the type of person Rick Santelli or Rush Limbaugh is — they’re in no danger of losing their home. That’s the type of people who blast Obama’s attempts to stop the flow of foreclosures are. Let the poor suffer, they say. Let the poor collapse. Because we’re not poor. Human suffering doesn’t bother us. Let us pick upon their carcass (by “buy[ing] cars and buy[ing] houses in foreclosure”) like the vultures we are.
“This is America”? “How many of you people want to pay for your neighbours mortgages”? In Rick’s world, helping his neighbours is suddenly unAmerican?
Republicans like Santelli must find it a profound relief to find themselves in the opposition rather than actually in the government’s chair doing something about the economy. Not only do they seem totally inept at the job, but the task of providing help to average citizens seems unpalatable to them. Better that they just retire and heckle from the sidelines where there’s no pressure for them to actually deliver.
Unfortunately, unlike principled conservatives, Santelli’s form of opposition offers very little constructive debate to the task of governing, and there is very little honour in taking the attitude that they have. In an era when people have to pull together, they are a polarizing influence, turning neighbour against neighbour on the most spurious of reasons, speaking for no principles other than their own self-aggrandizement.
Yappa Ding Ding links to this article which suggests that the current financial crisis in the United States has some of its roots in the Savings and Loan debacle of the late eighties, early nineties, and the regulator brought in to make sure what happened didn’t happen again, the Office of Thrift Supervision, wasn’t much of a regulator.
In Yappa’s words:
The reason for the insanity at OTS? OTS is essentially partly privatized: it is funded by assessments on the banks it regulates, with the most of its budget coming directly from the banks. The banks were its customers. The entire problem was systemic, preventable, and foreseeable. And it wasn’t like screwing up O-rings on the space shuttle: the Republican-dominated congress that forced all this deregulation on the country did it to enrich their donors.
They could have paid for regulation by increasing taxes and it could have been exactly the same cost to the banks as lower taxes plus regulatory fees, but the ideology dictates that taxes be low and services be paid by user fees. It’s one of those subtle differences that spells the difference between a system that works and a system that fails, in this case spectacularly.
Now note the timeline: the OTS existed throughout the Clinton era, and thus the Clinton Administration should not be exempt from all the blame here. However, lest Republicans get too cocky, let us not forget that their crew with their Contract on America were in charge of the House and, I believe, the Senate for three quarters of Clinton’s time in office.