Traders on the floor at the Chicago Mercantile Exchange go crazy about Obama’s stimulus plan.
The one doing most of the talking is a chap by the name of Rick Santelli. It’s all delivered in the best ‘gangster’ accent, and if nothing else is a rapid-fire introduction to the concept of ‘moral hazard’.
Highlights include:
“How many of you people want to pay for your neighbor’s mortgage that has an extra bathroom and can’t pay their bills? [Boos on the floor] President Obama, are you listening?”
“Do you think I want to take a shower every hour? The last place I’d want to live is DC.”
A tip of the hat to Jakob for the find.
UPDATE: Jakob has swung by and pointed out the Obama administration’s response, available here.
Santelli has responded to the response here.
The whole spat is getting nasty, with people arguing that the White House is directing personal attacks at members of the press (and private citizens, too). Gibbs does come across as a precious little snowflake. And he clearly doesn’t get the concept of moral hazard.
12 Comments
I don’t mind (socialist me!) taxpayer dollars helping to put a roof over the head (up to $21000 per house from Canberra for those who can AFFORD a house: only benefits upper and upper-middle classes and inflates the housing bubble), but the “extra bathroom” comment hits the nail on the head, pointing to the increasing policy brain-damage from state and federal governments over the last 10 years or more.
I wouldn’t mind so much (in free-market mode) if the grants gave the government equity in return for funds – so at least the taxpayer class got value for money.
When we got our first home-buyers’ grant, I remember thinking what a bad idea it was, even though it benefitted us (we bought in the country). It distorted the market such that it contributed greatly to the housing bubble, and yet policy-makers appeared not to notice. I remember LE commenting that Ob-gyn fees had gone up enormously after the introduction of the baby bonus.
We never learn, it seems.
SL@2 “Ob-gyn fees had gone up enormously after the introduction of the baby bonus… We never learn, it seems.”
Actually, my guess is that anybody who thought otherwise didn’t learn early secondary school economics, supply and demand and all that.
(Personally, I’d give a small bonus for females of child-bearing age that DIDN’T get pregnant in any given year – it’d probably help housing affordability and teenage pregnancy rates)
Skeptic – I doubt the Grant benefitted you that much. In itself it did virtually nothing to increase the supply of housing, so the effect was to jack up prices by an amount almost equal to the Grant itself.
Actually, on reflection, that probably isn’t right. It would assume that from now on, people will only buy one house in their lifetime, and therefore only receive one Grant. But if the average homebuyer gets, say, between one and two houses, then a certain proportion of house purchases will be unsubsidised – suggesting that the increase in demand for housing (caused by the Grant) will not be uniform.
Still, I wouldn’t be surprised if the price increase was at least half of the value of the Grant.
This is very funny, even the White house thought it had to respond.. possibly because the rant really did hit home.
I loved his comment which is actually true… if the multiplier is over one we should be doing a spending package every day..
Here’s Santelli attacking Cramer, who really deserves a thorough kicking as he’s so dishonest about his views.
http://www.youtube.com/watch?v=sSS1EV-7QV8
Santelli is actually the only sane person of the US CNBC segment. The rest are shockers. They’ve been bullish on stocks since the ride down and always bringing people in to give a positive spin.
The show is worth watching as it’s hilarious.
Here’s cramer doing a flip out.
http://www.youtube.com/watch?v=GY5nfytTQT8
Cramer used to run a hedge fund and he was a total dick.
He did currencies at times at used to tell the sales guy at our firm that he would come up to the trading room and publicly “ape-rape” him if he didn’t get a good fill.
I actually think Gibbs is pretty smart and amuzing. I don’t agree with him, but I find it amazing that after a pretty nasty attack on the President’s plan, they are crying about unprecedented attack on the press etc. Evokes your strong views, SL, about the media and how they believe they are above criticism…
I thought they will actually be happy that the White House had responded. Thus CNBC response amounts to hypocricy. But jc is right. The grace period for Obama is over. Which is a good thing, regardless of one’s political positions.
Sorry, just back from cricket training and had to let everybody out of the spammer — it’s like Catallaxy, and sits on your first comment until somebody releases it, and has even been sticking legit comments from regulars in the spammer.
And yes, Santelli is playing the special little snowflake game too, but at least he’s a funny special little snowflake.
Yeah the Popakid and Getindebt grants were DUMB. And I guess I can understand the outrage expressed.
But at the very same time the so called avatars of a so-called free market carry a lot of blame for this disaster. And they were outraged when Congress balked at the rescue package – for the banks.
It was really interesting how the mea culpa in that quarter lasted about five minutes before the economic rationalist self-righteousness came back.
I’d like to see a little more soul-searching.
Michael, our first home owner’s grant went straight to the State Government’s exorbitant stamp duty fees – why not get the Feds to pass the money straight to the State govts, rather than indulge in the fiction that we’re getting it? Really stoopid.
Anyway, my view on all these rebates is here. The classic was the childcare rebate – the week after rebates were raised, our creche sent a letter home to say that fees would be rising – coincidentally, this corresponded with exactly the increase in rebate…