Open Letter To CNBC
especially Rick Santelli
(2009 Feb blog post)
A few more web links and quotes of CNBC staffers may be added
as their outrageously anti-good-sense statements continue to spew.
On 19 Feb 2008, Rick Santelli, a long-time financial reporter in Chicago for cable TV channel CNBC, went on a tirade on TV about being outraged by the newly announced plan of the Obama administration for dealing with the bad mortgages clogging the credit system of the United States.
Mr. Santelli went on and on about how he did not want to pay for the bathrooms of neighbors who refinanced their houses and took out new mortgages to re-do those bathrooms. He went on to declare that he would host a tea party (like the Boston Tea Party of the 1770's) in Lake Michigan, when it got warmer.
My two cents :
A couple of the 'Squawk Box' morning show hosts seemed to agree with Santelli's conclusions and seemed to think that most Americans are outraged for the same reason as Mr. Santelli. And I am sure that Mr. Santelli's fellow financial reporters at CNBC --- like Larry Kudlow and Charlie Gasparino --- think the same way as Mr. Santelli.
Well, I am outraged too. I am outraged at the philosophy that led to this mess. That philosophy is an it's-OK-to-screw-thy-neighbor philosophy that has been literally trumpeted from the CNBC studios for about four years or more as Kudlow and Gasparino loudly talked over the voice of any guest who did not show agreement with their party-line.
I have a few questions for Mr. Santelli (and Kudlow and Gasparino and others of their species).
Where was Rick Santelli's outrage when 'corner' lenders (as well as big national banks) were advertising loans to people with bad credit and people in bankruptcy? Where was he when those lenders were advertising loans at zero percent interest and no interest payments for 12 months?
There are still some of those ads on the Internet. Where's his outrage at that?
And it's not just mortgages. My credit card company keeps sending me pleas to add more family members to my credit card. They want me to authorize my kids to use my credit card. And they keep sending me checks suggesting about five different ways to use them --- no doubt hoping I'll run up a bill that I can't immediately pay off so they can get their usurious 25-plus percent interest rates. Where's Santelli's outrage at that?
There are, no doubt, many lenders who have been hiding their quick gains (at the expense of depositors' money in big national banks, I should add) in foreign bank accounts. Swiss? Cayman Islands? What's that doing to his precious trickle-down theory? Where is Mr. Santelli's outrage at that?
Where is his outrage at lenders who told borrowers they could leave the annual income entry of the loan form blank? That entry would be filled out for them.
Where is his outrage that lenders, in many cases, were paying off appraisers to appraise houses at inflated values?
You can bet that those greedy lenders --- who indulged in all these practices (that SHOULD have been illegal) --- did not want to pay taxes on their quick gains. There are very few laws that can be used to prosecute these people, thanks to 8 years of Republicans in Congress who protected these kinds of unprincipled people. Those Congress-persons made sure there are no laws to prevent screw-my-fellow-citizen-for-the-almighty-buck behaviors.
So, due to their greed and the likelihood that they cheated mightily on their taxes, here's an opportunity to prosecute these vermin, like Capone was prosecuted when they could not find any law other than tax-evasion laws to render justice in his case. More power to the FBI in tracking these vermin down. I think a small percentage of the bailout should be budgeted for investigating, tracking down, and preparing cases against these low-lifes --- to make sure that a 'best effort' is made to bring these 'people' to justice.
I use the term 'people' generously. What rock were they living under? These lenders, and their protective Congressmen, do not deserve to be U.S. citizens. They should be given a parachute and pushed out over an Aleutian Island. They can use their financially creative energies there to build a new life for themselves --- and screw each other.
Here's something that Santelli might agree with. I do NOT think ALL borrowers should be helped. Those who were buying houses and not living in them were almost invariably gambling. They foolishly gambled and they should be allowed to fail.
On the other hand, the borrowers LIVING IN THE HOUSE --- especially those with kids and a spouse --- probably were persuaded that they could afford a mortgage. Many were 'sold' the idea that they could afford initial payments that were 40% or so of their gross income --- never mind the jacked-up payments on their variable rate mortgage, which make it more like 50 or 60%.
I can remember in the early 1970's when my wife and I bought our first house. The rule of thumb, we were told by our real estate agent, was that you could afford about 20% of your gross income.
I had no idea what a reasonable percent was. I had some idea of what monthly payments I could afford. But I might have 'caved' if I kept hearing, over and over and over, from supposedly knowledgable sources, that I could afford higher payments. Especially since it is naturally tempting to believe that I could afford to make higher payments, if I want the house enough.
Where is Mr. Santelli's outrage at the recent pronouncements, from Housing administration officials in the Bush administration, even as recently as the waning months of 2008, that 40% is their standard?
In summary, I think Mr. Santelli's laissez faire attitude, supported by predators throughout the financial industry, is what got us here. Santelli's outrage is way late and completely mis-directed.
The two young CNBC financial reporters this morning seemed very much in agreement with Mr. Santelli's logic. I was pleased, when they had a trader named 'Ben' on the show, that they could not badger him into agreeing with the Santelli illogic. He reluctantly expressed some disagreement with the direction of Mr. Santelli's outrage. Kudos to Ben. He had a thoughtful response, when under pressure to follow the CNBC party-line.
Those two young CNBC financial reporters also interviewed Ken Langone, a longtime investment manager. He told them "I get up in the morning and after about 10 minutes of listening to you guys, I'm ready to cut my throat." He also pointed out that "We, the Republicans, messed up. We were the party of fiscal responsibility and the party of family values and we failed."
I think that actually sums up why Obama won the election. There were just enough people who used to vote Republican who recognized that there was no fiscal responsibility in the approach of the Bush administration, and the same practices were likely to continue in a McCain administration.
I think those voters also recognized that those kinds of values, that led to this mess, are not compatible with the kind of family values that they supported.
I suspect that most Americans who are willing to give the Obama plans a chance to work believe this way --- namely, we need REAL fiscal responsibility and REAL family values. The people who are willing to give the plans a chance to work are just as outraged as Mr. Santelli. We are outraged at the practices that got us here. "Free market capitalism is the best path to prosperity." - Kudlow et. al. We see what free market capitalism with no checks-and-balances and with no basis in common decency gets us --- and it is NOT prosperity.
Mr. Santelli (and most of the CNBC staff of talking heads --- who, if the guests stray from the CNBC party-line, talk right over their guests --- or change the subject --- or go to a commercial) has his philosophy to blame for this mess. He is part of the problem. He needs to look into a mirror.
A concerned citizen.
Here is an address and links for the CNBC site.
Bottom of Open Letter to CNBC - esp. Rick Santelli page.
To return to a previously visited web page location, click on the
Or you can scroll up, to the top of this page.
Posted on 2009 Feb 20.