Rick Santelli, CNBC’s colorful on-air editor reporting from the Chicago Board of Trade, mouthed off this morning about the mortgage bailout. At one point he compared the bailout to the Cuban revolution. (And Twitter was all aflutter about it, too.)
“The government is promoting bad behavior….Cuba used to have mansions and a relatively decent economy. They moved from the individual to the collective. Now they’re driving ‘54 Chevys, maybe the last great car to come out of Detroit.”
At one point, someone screams in the background about the “moral hazard.”
Cuba. Oh, dear. Yeah, it’s fun, and colorful and the rant makes for a lot of Twitter and blog buzz. But digging a little deeper, the rhetoric/hysteria a la Fox News is damaging to national discourse.
As for this “moral hazard” business, all I can know for sure is: in my neighborhood of very modest Marin County homes, the mortgage crisis has hit the Hispanic households the hardest. They work hard. They weren’t buying luxury homes. Sure, there were a few speculators. But mostly, they just wanted a little piece of the American dream, especially good schools for their kids and closer proximity to their work.
Plus, Santelli could not have selected a less apt analogy and he inadvertently undercut his own assertions. Abject poverty and a Titanic gap between rich and poor are just some of the conditions that led to the revolution, tossing Cuba from the frying pan into the fire.
Contrast Rick’s rant with this eye-opening podcast of Robert Reich’s talk before the Commonwealth Club. Reich, named one of the top ten business thinkers by the Wall Street Journal, addresses the income disparity that has opened up in the U.S.
Click here to access Reich’s blog. Here’s what he said yesterday about the mortgage bailout:
Expect the usual grousing about “moral hazard,” especially from Republicans who normally grouse about normal hazard. government shouldn’t be bailing out bankers, either. But these aren’t normal circumstances. We’re in an economic crisis.
Click here for Rick’s rant.
Update. a few reactions on Twitter:
Rick Santelli determined to lead populist revolt, pitting his friends - those who’ve already been bailed out - against those who haven’t.
Only now heard the Santelli rant. Only imaginable reason to allow him to appear on TV is to make Jim Cramer seem measured & calm.