This is exactly what happened to CNBC's Rick Santelli today for his indignant invective against the Obama Administration's mortgage bail-out plan.
The rebuke came from White House Press Secretary Robert Gibbs, who offered to buy Santelli a cup of coffee...decaf. Cute. Really cute.
Well, I think we should all buy Santelli coffee, whiskey, Chianti, Upper 10 (remember that?) or whatever the hell he wants to drink. Why? Because he has continued his streak as probably the most on-the-money (pun intended) financial reporter out there.
He has had it right-on over issue after issue. To wit:
- Santelli takes down the odious Jim Cramer over his market predictions in 2007.
- Santelli speaks the truth about the bank bailouts.
- Santelli calls it on the Fed and interest rates.
- Santelli explains why speculation didn't cause high oil prices last year.
Now, I know that those clips were filled with financial jargon and guys in ties yelling at each other, but I hope you can forgive me for that...it's the world I used to live in.
He was right on those issues in the past, but his insight was more technical and based on his background. This background is what make me like him so much. He cut his teeth trading bond futures at the Chicago Board of Trade. To do that well, one needs an understanding of the wider economy and enough knowledge of the credit markets themselves to trade successfully. In other words, this guy paid his bills because of how well he knew credit markets.
This time, though, he is right because he simply states the idea of moral hazard. This idea basically says that people who are sheltered from a risk behave differently than those who are not. The hazard part comes in when the party doing the sheltering has to choose who to shelter and who to leave aside.
Put very simply, Santelli, myself and I suspect a lot of people don't want to pay for the mistakes of others. People took out mortgages at insane terms that they could never pay back? Too bad...that's their problem. Banks lent too much and leveraged themselves to a ridiculous level? Tough shit, that's the game.
Now, I know what you are thinking: "Will, you always jump in to defend the big capitalist interests against the little guy. Aren't you a little guy? You aren't one of these pirates in neckties on Wall Street, are you? Why the sympathy for them? They got their bailout, now why can't we get ours?"
Well, to that I say that, in this situation, neither big capitalist interests nor the little guy are blameless. In a perfect world, I would say that we bail neither of them out. This is not, however, possible.
Why? Systemic risk. Just how this was defined and implemented (remember all the talk about "too big to fail?) was a bit of a muddle and was charged into without any idea of a coordinated plan or a desired outcome. For a great telling of that tale and it's implications, watch this great episode of Frontline from this past week.
I just thought that Santelli was expressing the frustration of people caught up in this financial crisis and also expressing the idea that was leading to that frustration.
And for that, I say, "Amen and preach on, Brother Santelli!"