Squaring the Culture

"...and I will make justice the plumb line, and righteousness the level;
then hail will sweep away the refuge of lies,
and the waters will overflow the secret place."
Isaiah 28:17

02/20/2009 (11:54 am)

Chicago Tea Party? I’m Loving This…

Rick Santelli of CNBC, standing on what appears to be the floor of the Chicago Mercantile Exchange, declares the nation’s disgust with the Obama administration’s plan to use their tax dollars to pay the mortgages of people who bought houses they cannot afford, and the crowd behind him approves loudly. The message: they cannot abide by a plan that penalizes those who have lived sensibly, and rewards those who have squandered. Americans instinctively know this is wrong.

Click on this link if you want to give CNBC their hit statistics, or watch the YouTube clip below.

The response to the video on CNBC’s web site, while not a scientific sample, is overwhelming enough to show how people feel:


Cue Will Smith from Men in Black: “I mean… damn.

The sensible citizen in me wants to press on the brakes. Mobs are ugly things, and usually, they produce ugly results, even if the intent arises from a sound ethic. There’s a superb and thoughtful film done by HBO called The Jack Bull that illustrates the problem profoundly, and if you haven’t seen it, I recommend you link up with somebody on Netflix and borrow it for a night. It’s a western starring John Cusack (hard to imagine, but he really does it well) and John Goodman, and it addresses the problem caused by the use of mob action to obtain justice. In the end, what it argues is that the proper, courageous, and honest execution of the law is the only barrier between civilization and anarchy.

I think Santelli of CNBC would understand this, though, and I think his call for “a Chicago Tea Party” is well within the bounds of civilized conduct. It’s good that sensible Americans would object to just, plain wrong policy in such numbers that the government might not feel entirely safe pursuing it.

Notice how carefully he circumscribes what he wants.

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 losers’ 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 that could carry the water, instead of drink the water?

Americans are not greedy people, for the most part. He doesn’t just want to keep his; he’d go along with giving folks assistance who have a chance to prosper. He’s against bailing out folks who behave irresponsibly. The folks who charge that opposition to socialism is all about greed, are simply playing a rhetorical game; the alternative to redistribution is not “greed,” it’s “responsibility.” The comments of folks on the CNBC site illustrate how well people understand this.

Why are the very people who never seem to do the right things, being rewarded with my tax dollars? This country has come to the point where there is no incentive to do what’s right! … The government should be rewarding the successful people, not making them out to be the villain and confiscating their tax dollars,to redistribute it to the people living above their means! — David

Here is the message Obama and Congress are sending: Work hard, pay your bills on time, and you will be penalized by having your hard-earned money reward those who wallow in irresponsibility and have a total disdain for those who play by the rules. — Kathy

The Obama housing plan is absolutely ridiculous. As a disabled person, I could not afford to buy a home after housing prices took off. To think that if I had bought above my means the government would have paid my mortgage makes me now feel like a jerk. — Rob

I paid off my mortgage this month. What a mistake, I should have just sat back and demanded that the government [taxpayers] help me. I’m being punished for being successful and doing what was once deemed right. — Don

There’s also a complicated question of culpability. How much of the foreclosure crisis is the result of irresponsible buyers, how much of irresponsible mortgage salesmen, how much of irresponsible bankers, how much of irresponsible housing rights activists, how much of irresponsible legislation, and how much of irresponsible government incentives? There are lots of culpable agents in the mix; but certainly, a huge percentage of the blame lands on those who simply planned badly and bit off more house than they could chew (an interesting mental image, that — chewing a house.) It is not only appropriate, but necessary for the character development of the person making the mistake, that such people pay for their mistake by the loss of the asset. I’m speaking as one who has made that mistake and paid that price personally, and I assure you: it was painful, but I survived, and it was the right thing.

So, a tea party is being planned for Lake Michigan. Will anything actually happen? I suspect that President Obama is not particularly interested in whether most Americans agree with him or not; he seems more the pragmatic type, the type who would be more worried about whether he can get away with a plan than whether most people approve of it. In some contexts, that’s not a bad thing; we might call that “a principled stand,” except in this instance, the principles on which he’s standing are insane. Among Presidents, who are responsible to the people, principled stands should be rare, and limited to those principles that are of profound worth. I don’t agree that Mr. Obama’s criteria-free egalitarianism fits the bill.

I suspect, also, that President Obama won’t change a thing until he sees that he’s actually going to suffer personally from the reaction — an impeachment effort, for instance. He may be pragmatic enough to respond to a plausible threat to his Congressional majorities, but it’s not clear that such a threat exists, nor is it clear that he would care if it did; he may just be acting out a “let’s get as much irreversible change in place as quickly as we can” strategy. There are lots of unknown quantities here; we don’t know much about the President. Thank the press.

However, protecting the legal and economic foundations of America must begin with this sort of outrage, and it’s about time somebody expressed it. Well done, Mr. Santelli.

Santelli takes an arcane shot at the very end which I’m afraid most people outside the field of finance and economics won’t get. It’s important, though: Santelli exposes the idiocy of the Keynesian notion of a government spending multiplier, the claim that whereas a dollar of consumer spending results in growth of some factor, X, a dollar of government spending results in growth of X multiplied by some number greater than 1: consumer spending X, government spending, 1.2X. If that’s true generally — as simple Keynesian models suggest — then we’d all get immensely rich if the government just spent every penny there was. It’s sheer nonsense. At best, it might be true in some narrow range of spending levels (which is not what’s claimed,) but really it doesn’t make any sense in any range. Short version, we’re not going to spend our way out of the recession. Ever. It just doesn’t work.

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