Santelli all over the airwaves. Sun Times front page has it too, plus headlines Obama's victory rally tab at Grant Park remains unpaid--$1.74 million, but he's still more popular than Jesus. David Brooks writes a column about the Santelli phenom, "Money for Idiots". Tribune question of the day, should taxpayers bail out homeowners with at-risk mortgages? Where does it end--and isn' the plan unfair to renters who were more prudent and were saving up for a house? Meanwhile the FEC confirms Obama got a sweetheart mortgage deal but closes the file.The Chicago Tea Party revolt is on its way. Here's my mini party pix.
P.S. Palin-Santelli in 2012?
More: NRO interviews Rick Santelli:
When we posted a link to the video, we were swamped with e-mails in support, including a couple from traders at the Board of Trade in Chicago, who have been saying right on. How have the e-mails that you’ve been getting, how have they been running?Heritage Morning Bell:
Santelli: I’ll be honest with you, I think I’ve gotten somewhere between 850-900, and I think I had three that were negative. ... The issue is, you can’t pick out 8 or 9 percent and give them things that weaken the 90 or 92 percent who are carrying the water. ... They need to quit picking winners and losers, and they have to quit alienating the classes. You have to figure out a way to float all boats, and I think that’s where the administration has gone wrong, and I think that’s the nerve I hit.
Santelli's criticism of the mortgage bailout plan is dead on: The plan treats borrowers who sacrificed to pay their mortgages on time the same as those who used their equity for a boat and stopped paying their loans. This moral hazard sends a clear message to our children that they can avoid the consequences of their actions. But this is only one reason the plan is bad policy. Others include:
The plan's mortgage cram down provision would only worsen the housing crisis in two ways: First it would increase the risk to lenders and lead to higher interest rates for people trying to buy homes today. Second, the policy would open the door to achieving mortgage reductions for tens of millions of homeowners who can afford their mortgage pay ments and whose homes are not at risk.
The plan will fail because too few people will qualify and many of those that do will default anyway. The housing bubble was caused in large part by speculators who bought homes planning to flip them for quick profit and other who out-right lied on their loan applications. The mortgage bailout will do nothing to stop these foreclosures. Furthermore, the re-default rates for people that have already participated in mortgage modifications show that as many as 50% of them go on to default again.
The plan risks another $275 billion in taxpayer funds. The Obama Administration claims their plan will only cost $75 billion, but that is only true if it works out perfectly. If the plan fails to stem the inevitable correction in housing prices taxpayers will lose a full $275 billion.
Closing his interview with National Review, Santelli also connected the mortgage bailout to the Obama Administration's stimulus plan:
At the end of the day, it’s simple. A lot of the president’s advisers are saying that there’s a multiplier effect to the government money, and it’s over one. Now if that’s true, then the government should spend non-stop for the rest of our lives, because we’ll get a positive return. And it makes no sense. ... I guess in the end, I believe in the founding fathers, and I believe that in America... the pursuit of happiness and to work hard and keep the fruits of your labor is something I believe in. And I’m not saying we should forget people who need help. But at the end of the day, Americans are strong and they’re charitable. I think what they have a problem with is that it’s force-fed via the government.
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