Why did Rick Santelli Explode on TV today? Maybe it’s idiotic ideas like this…


by John Galt
July 24, 2012 22:00 ET


On CNBC today, Rick Santelli let loose with another epic rant:



Why is he so disgusted? Perhaps it’s idiotic ideas like this one presented by Steve Clemons and Richard Vague in The Atlantic on July 22nd:

Economic Growth Idea: Forgive or Restructure Debt U.S. Citizens Hold


Ah yes, the grand social experiment proposed by Marxists for over a century to eradicate the greed and sins of capitalism instead of punishing the stupid and inept who made decisions that they want the rest of us to pay for. Within the article linked above, the idiots make the following statement:


The best alternative for reducing debt levels without the economic contraction caused by paydown (as during the Great Depression) is restructuring loans.


Dollar for dollar, a restructuring of problem loans — with appropriate moral hazard consequences intact — would provide as much or more stimulus than government spending, without the GDP-suppressing effect of additional government debt. A trillion dollars of private debt restructuring of loans could provide as much stimulus as a trillion dollars of government spending.


In other words these authors may have missed the memo or perhaps already ignored the consequences of the idea they present. First and foremost, the TARP program allowed banksters to hide their defaults under the protective cover of the taxpayer, who in the end has restructured the debts of companies like AIG, General Motors, General Electric, etc. instead of allowing them to fail and new, stronger corporations to emerge and purchase those failed company’s assets.


Then there is the restructuring at gunpoint created by the government itself to allegedly “save” the housing industry. The HAMP program which was designed to restructure problem mortgages has already resulted in a massive re-default rate far beyond the original program design yet the banks are being forced via regulatory edict to continue engaging in the futile exercise instead of allowing the American economic system to work as designed with default and reduction of losses via reinvestment. Apparently the idea of “failure” is far more terrifying than enforcing the rule of law and making up the rules as one goes along is much more fun anyways.


Which is why their final idea is even more insane (from the same article):


In ancient times and as recorded in the old Testament of the Bible, the Land of Israel forgave all debts periodically, and the economic basis point for lands and slaves was reset in what was called “Jubilee.”


Perhaps the economic system we have built today that seems addicted to ever higher levels of private sector debt, not to mention public debt, needs a modern Jubilee as well — and whether they are working Americans facing impossible economic hurdles or Greek citizens facing a future as permanent serfs in a Germany-dominated Europe, finding a way to restructure and write down debt held by financiers and banks is the fastest and most effective way to bolster healthy economic growth.


No, perhaps a better idea is to allow Americans to learn how to lose again so they can remember the sweet taste of victor when they succeed. This would be a good lesson to learn so Mr. Santelli’s head will not explode on the air one morning and the system our Founding Fathers envisioned might work to protect everyone’s rights and enforce the law equally for and against all citizens and corporations across the land.


3 Comments on "Why did Rick Santelli Explode on TV today? Maybe it’s idiotic ideas like this…"

  1. goldstockbull | 25/07/2012 at 03:28 |

    I don’t think the idea is as idiotic as you make it out to be. Fiat bank debt was never entered into under good faith and there was no consideration on the part of the bank, so there is some moral and legal justification for citizens to walk out on their loans. Additionally, the banking system was designed specifically to entrap people and soak up their wealth, as paying off all debt is mathematically impossible. I understand the moral hazard, but cancelling the debt is the only real solution at this juncture.


    • It is idiocy. It abdicates personal responsibility for the borrower AND the banksters. Everyone who got in over their head deserves to fail. Which means the banks especially so.

      • livermore10 | 26/07/2012 at 09:43 |

        Letting banks fail and auctioning off their assets is the same as debt cancellation; this was the remedy of the last Great Depression. Since the banks have captured our politicians, they haven’t been allowed to fail here or in Europe; instead their debts were transferred to the central banks and hence onto the taxpaper’s backs. The debts have to be cancelled, or their will be unrest until change is made. Count on it.

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