The Chicago Tea Party
I guess this is the rant of the day: Rick Santelli on CNBC calling for a "Chicago Tea Party" because Barack Obama has the temerity to want to help underwater homeowners. Ezra Klein comments:
Santelli sells himself as a sort of financial sector Howard Beale: He's mad as hell, and he's not going to take it anymore. The financial industry is tired of having to clean up after someone else's mess!
....But watching the traders bray and cheer as Santelli calls for the streets to run green with the equity of the working class is an astonishing insight in the psychology of the crisis. These guys feel betrayed. America let them down!....They should lose their houses. Wall Street is tired of being ground under the thumb of the lower middle class. This country has coddled those losers long enough, and see where it's gotten us.
It's not fair to say that these folks only get upset when it's homeowners being bailed out. After all, there's been plenty of righteous fury over the bank bailouts too. But there's definitely a different sense to this: it's closer, more personal. Wall Street being bailed out is one thing: it's infuriating, but in the end you just shrug your shoulders and figure this is the way the world works. But homeowners? Your neighbors? The guy who installed fancy granite countertops and a new wet bar and then mocked you for carefully husbanding your money instead of living the good life? He's going to get bailed out? WTF?
This has always been the soft underbelly of bailing out homeowners. It's a good idea both on broad economic grounds and on social justice grounds, but the fact is that there's no way to make it 100% fair. There are going to be some people who get government help who don't deserve it. And some of those people aren't going to be bankers a thousand miles away, they're going to be people you personally know and loathe. And that's hard to take.
In the end, I think Santelli is channeling the reaction of a small minority. Stabilizing the mortgage market and helping people in trouble is the right thing to do even if there's no way to get the focus laser perfect. But watch out for the demagogues while you're doing it.
UPDATE: More here.