Terry Connelly is dean of the Ageno School of Business at Golden Gate University and is frequently quoted on business, financial, and economic issues by Bay Area local, as well as national, news media.
When the Italian poet-laureate first scripted the banner ad above the gates of the Inferno – “Abandon Hope All Ye Who Enter Here’ — little did he know he was referring to the US stock market this President’s Week.
Snatching the anti-Obama mantle from the unsuspecting Fox News, CNBC (a/k/a “Contant Negative Barrage of Criticism”) managed to become the Passionaria of Pessimism about all Obama economic policies, culminating in the rant by Rick Santelli from the the floor of the Chicago trading pits that the housing relief plan proferred by the President was a slap in the face to those who played by the rules in the “free market” — including presumably those like himself who enjoy the government’s tax subdidy of mortgage interest payments.
Similarly, the morning host Mark Haynes quickly categorized the idea of adjusting mortgages in bankruptcy as “immoral” — the same Haynes who daily rants that GM and the bad banks ought to allowed to go bankrupt and have their debt instuments “immorally” discharged. Apparently the great principle of ”sanctity of contract ” at CNBC only applies, in the immortal words of Leona Helmsley, to the “little people”.
Indeed when semi-regular guest commentator Barton Biggs, a respected Wall Street vetertan, dared to opine that the Administration’s housing plan was a pretty good set of policies, he was quickly cut off at the knees by the moderator; only pessimism allowed.
Now it’s understandable that it’s much easier to make a name for oneself today on cable TV or YouTube by keenly observing that nothing will work, that all plans are flawed, that the “free market” is being ruined by government intervention, etc. But, may we ask, where’ s your plan? At least Santelli has the intellectual integrity to stand up for doing nothing and letting housing and the related toxic assets on bank books find their own bottom, letting the chips fall where they may (but not, presumable, in his neighborhood).
Actually, David Brooks’ column (he’s a non-Wall- Street based conservative) in today’s (Feb. 21) NY Times, answered Santelli’s rant quite well enough. (Sometimes we do have to give help to idiots — in Barney Frank’s phrase, they’re the “collateral beneficiaries” of things we have to do to spare the ecomomy a depression.)
What the country needs now is to recognize that stock markets cannot exist where there is no hope; long positions in markets are indeed, like the proverbial second marriage, the triumph of hope over experience; it’s interesting to note who’s really “shorting America”.
Perhaps I misperceive, but it’s not my impression that the country voted in November its renewed faith in free market capitalism and the derivatives traders in Chicago. I thought another Chicago fellow got the nod. Who elected Rick Santelli?
