The Transformative Power of Rick Santelli's Rant

Polls are open in 11 states as I write, with full results unavailable till after my deadline, but it seems that some lessons can already be drawn from this political year. Incumbents are not popular, especially Democratic incumbents. Democrats' big-government programs are hugely unpopular. Economic distress has made Americans yearn not for more government but for less.

How to explain something contrary to the New Deal historians' teaching that economic distress increases support for big government? Clues can be obtained, I think, by examining what amounts to the founding document of the Tea Party movement, Rick Santelli's "rant" on the CME trading floor in Chicago, telecast live by CNBC on Feb. 19, 2009.

That was less than one month into the Obama administration. The stimulus package had been jammed through Congress almost entirely by Democratic votes six days before, but the Democrats' health care and cap-and-trade bills were barely into gestation. Chrysler and General Motors had received temporary bailouts, but their bankruptcies were months in the future.

"The government is promoting bad behavior," Santelli began. The object of his scorn was the Obama administration's Homeowner Affordability and Stability Plan providing aid to homeowners delinquent on their mortgages.

"This is America!" Santelli declared. "How many of you people want to pay for your neighbor's mortgage that has an extra bathroom and can't pay their bills?"

Taking money away from those who made prudent decisions and giving it to people who made imprudent decisions is casting society's vote for imprudence and self-indulgence.

Granted, the words are not as elegant as those of Thomas Jefferson or John Adams. But the thought is clear. Santelli was arguing that the people who, in Bill Clinton's felicitous phrase, "work hard and play by the rules" shouldn't have to subsidize those who took on debts that they couldn't repay.

This was both an economic and a moral argument. Economic, because subsidies to the improvident are an unproductive investment. We know now that very many of the beneficiaries of the administration's mortgage modification programs ended up in foreclosure anyway. Subsidies just prolonged the agony.

But it's also a moral argument. Taking money away from those who made prudent decisions and giving it to people who made imprudent decisions is casting society's vote for imprudence and self-indulgence. It mocks thrift and makes chumps out of those who pay their own way. We should, Santelli argued, "reward people that can carry the water rather than just drink the water."

While scarcely taking a breath, Santelli went on to denounce the Keynesian economics administration economists deployed to defend the huge spending in the stimulus package and in the budget the new administration was preparing.

"They're pretty much of the notion that you can buy your way into prosperity. And if the multiplier that all of those Washington economists are selling us is over one that we never have to worry about the economy again, that the government can spend a trillion dollars an hour because we'll get 1.5 trillion back."

The reference is to the argument made by administration spokesmen that every dollar of government spending would put something more than a dollar into the economy. Past research, including some Obama's chief economist Christina Romer, cast doubt on that theory.

Now we can check the results and the research seems to have been right. The administration said the stimulus package would keep unemployment under 8 percent. It's been at 10 percent, rounded off, for 10 months now. About 95 percent of new jobs in May were temporary Census Bureau positions.

"Cuba used to have mansions and a relatively decent economy," Santelli went on. "They moved from the individual to the collective, and now they're driving '54 Chevies"--which left him unable to resist a dig at GM and its co-owners-to-be the United Auto Workers--"the last great car to come out of Detroit."

"If you read our Founding Fathers, people like Benjamin Franklin and Jefferson--what we're doing now in this country is making them roll over in their graves." No one would mistake Santelli's cri de coeur for the prose of the Founders. But their grievances against Britain, like Santelli's complaints about the Obama Democrats' policies, were rooted in moral considerations as well as economics.

"We're thinking of having a Chicago tea party in July," Santelli said. As it turned out, thousands of previously uninvolved citizens flocked to tea parties all over America even sooner, and now they're making their mark in primaries and special elections. New Deal historians can't explain that. Rick Santelli's rant does.

Michael Barone is a resident fellow at AEI.

Photo Credit: iStockphoto/Mark Evans

Also Visit
AEIdeas Blog The American Magazine

What's new on AEI

AEI Election Watch 2014: What will happen and why it matters
image A nation divided by marriage
image Teaching reform
image Socialist party pushing $20 minimum wage defends $13-an-hour job listing
AEI on Facebook
Events Calendar
  • 20
    MON
  • 21
    TUE
  • 22
    WED
  • 23
    THU
  • 24
    FRI
Monday, October 20, 2014 | 2:00 p.m. – 3:30 p.m.
Warfare beneath the waves: The undersea domain in Asia

We welcome you to join us for a panel discussion of the undersea military competition occurring in Asia and what it means for the United States and its allies.

Event Registration is Closed
Tuesday, October 21, 2014 | 8:30 a.m. – 10:00 a.m.
AEI Election Watch 2014: What will happen and why it matters

AEI’s Election Watch is back! Please join us for two sessions of the longest-running election program in Washington, DC. 

Event Registration is Closed
Wednesday, October 22, 2014 | 1:00 p.m. – 2:30 p.m.
What now for the Common Core?

We welcome you to join us at AEI for a discussion of what’s next for the Common Core.

Thursday, October 23, 2014 | 10:00 a.m. – 11:00 a.m.
Brazil’s presidential election: Real challenges, real choices

Please join AEI for a discussion examining each candidate’s platform and prospects for victory and the impact that a possible shift toward free-market policies in Brazil might have on South America as a whole.

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.