Sunday, March 21, 2010

Santelli on Predatory Lending: ‘You can’t cheat an honest man’

By Matt Taibbi

Look at about the 5-minute mark of this video — Janet Tavakoli debating
Rick Santelli about predatory lending. You basically have a whole panel of
CNBC goons pooh-poohing the idea that predatory lending took place,
setting up the inevitable revisionist history that the 2008 crash was
caused by individual homeowners borrowing beyond their means.

My favorite part of this comes roughly at the six-minute mark. Tavakoli
has just deftly explained how a lot of the predatory practices worked —
people with limited financial literacy were presented with long and
complicated mortgage deals, and told they would have a fixed payment in
perpetuity or a guaranteed re-finance, or were nailed by fraudulent
appraisals. Then she mentioned the big one, the fact that investment banks
then took all these mortgages and with eyes wide open securitized them and
sold them off as worthy investments to suckers on the other end of the

While she's saying all this stuff, Santelli, who is one of the fathers of
the Tea Party movement, is shaking his head furiously, video-scoffing at
everything she's saying. When he finally does get a chance to speak, this
is what he says:

Here's my problem with this. It takes two to tango. You can't cheat an
honest man.

You can't cheat an honest man? What the fuck does that mean?

This whole scene sort of encapsulates what's wrong with the Tea Party
movement. The movement, and let's admit this, has some of its roots in
legitimate grievances about government waste and some
not-entirely-inaccurate observations about what's left of the American
welfare state. Of course what resonates most with the suburban whites who
mostly make up the Tea Party are stories about minorities and immigrants
using section 8 housing, food stamps, Medicaid, TANF and other programs,
with the Obama stimulus being for them a symbol of this ongoing government
largess. The heat of the Tea Party movement comes from the racial
frustrations that actually exist out there, in the real world outside New
York and LA, as urban expansion and immigration increasingly throw white
and nonwhite communities together, with white Tea Party types more and
more often blowing gaskets over increased crime rates, declining school
standards, and mislaid or wasted tax revenue.

That this perception that minorities are the prime or sole consumers of
government entitlement programs is absurdly inaccurate — white people, for
instance, are overwhelmingly the largest nonelderly recipients of
Medicaid, making up 42.8% of the program's rolls nationwide, compared to
22.2% for blacks and 27.9% for Hispanics — is beside the point. The point
is that the Tea Party is built largely on this narrative of "personal
responsibility," where the central demons are unwed black and Hispanic
mothers and absent black and Hispanic fathers, who are, let's face it, not
uncommon characters in the American melodrama.

Which is another subject for another time, but let's just say this: the
Tea Party movement contains a lot of people who are far more impressed by
what they can see with their own eyes than with what, for instance, they
read about. I've been to Tea Party events where global warming was
dismissed by speakers who, without irony, pointed to the fact that there
was snow on the ground outside. And while very few people have ever
actually seen a CDO manager or a Countrywide executive, or were aware if
it when they saw them, the Tea Party folks sure as hell have seen who
their neighbors in foreclosure are.

The Fox/CNBC types have very cannily latched on this narrative to rewrite
the history of the financial crisis. They know that Tea Partiers will go
for any narrative that puts blame on poor (and especially poor minority)
homeowners, because the idea of poor blacks and Hispanics borrowing beyond
their means fits seamlessly with their world view. But this is a situation
where poor minorities were really incidental to a much larger fraud scheme
that culminated in a welfare program — the bank bailouts — that dwarfs the
entire "entitlement" infrastructure. But the millions of people who are
actually in the Tea Party movement seem to have absolutely no idea that
their so-called leaders, the Santellis of their world, are shilling for
tax cheats and crooks and welfare bums of the sort they would despise
(perhaps even more than their black and Hispanic neighbors), if they could
actually see them.

But thanks to people like these CNBC goons, they don't see them, and
probably won't. The further we get from the crisis, the muddier all of
this stuff is going to get.

p.s. I seem to be getting a lot of mail from Ron Paul supporters about
this, claiming that I'm overlooking the early Ron Paul tea parties and
suppressing his message. I actually like Ron Paul and have said nothing
but nice things about him. I talk to people in his office regularly. But
the Ron Paul tea parties and these post Feb-2009 Tea Parties are two
different things. Certainly the current Tea Partiers see it that way.
While these folks may have lifted some of the Paulian themes, they're just
physically different people. They're mainstream Palin supporters, and the
reason I find them ridiculous is because I was covering these people while
the bailouts were happening and remember what was actually on their minds
back then. Does anyone remember what the cause of the day was when the AIG
bailout took place? It was the uproar from Palin supporters about Obama's
"lipstick on a pig" comment.

The reason I've always respected the Ron Paul people is that, even though
I don't always agree with them, they're intellectually consistent and
motivated by actual policy issues. These Teabagger types on the other hand
are just a giant herd of video sheep being jerked around by snickering
DC-New York types, who are very skillfully playing on their cultural
paranoia and their economic and racial frustrations. When they were told
to flip out about Obama's "lipstick" comment, they did. When they were
told to flip out about the bailouts, they did. I'm not saying that some of
these people weren't frustrated about the bailouts, to the extent that
they even knew about them, before Obama got elected. But they did not
coalesce into a mass movement against them until part II of the bailout
was passed under Obama's watch, and one should note also that their
keynote speaker in Nashville a few weeks ago, Palin, was a bailout

The Paul people were upset about deficit spending and Fed corruption
throughout and ardently opposed Bush's policies throughout his presidency.
These Teabaggers did not. They were the people inside the rope-lines at
McCain and Romney and Rudy events, complaining about "those people"
consuming social services money, while the Paul people with their protest
placards were physically barred from coming near the events. I must have
seen that dynamic a dozen times during the campaign. So to all those Paul
people, I hear you. I'm not trying to say you weren't on these issues
beforehand. What I'm saying is, this new Tea Party thing, it's different
from your protests, not necessarily because the message is so different,
but because of two things. One, it was inspired by major-network media
figures. Two, the people at the protests are overwhelmingly different
people. They're dupes; the Paul movement is more like a real grass-roots


1 comment:

  1. I listen to CNBC, and they have looked at the issue 360. The CNBC talking heads never mentioned minorities, blacks, or Latinos. The writer whose story that you are redistributing is the one to hold accountable for taking a debate and turning it into a racial issue. Taibbi is working to that stir up a racial climate that doesn't exist. You can tell a racist a mile away, they are the ones pointing out the race at fault and then pointing at someone to blame it on. I wish Taibbi would shut his big fat racist mouth. Taibbi is narcissistic at best, using race to gain attention, at all of our expense.