Rick Santelli

In his FNS interview today, Mitt Romney mentioned his NYT Op-ed from late last year:

Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.

While it never should have come to this, it's refreshing to hear Republicans talking about letting losers fail.  Between Romney and Dick Cheney, it's almost looking like we can get the GOP away from Bailouts.  To Paraphrase Rick Santelli, Governor Palin are you listening?!?

Soo...I go out tonight to a local bar.  I have several drinks and I'm having a good time.  The drinks are reasonably priced.

Out of nowhere, I notice a bottle of Wild Turkey 101 sitting on the shelf.

Keep in mind: I haven't paid more than $1.50 for any drink to this point.

I ask the bartender: "How much for a shot of Wild Turkey 101?"

Bartender: "$4.50"

Cahnman: "Eh, no thanks."

All of a sudden, the thought hits me: I would TOTALLY buy that shot (and probably still be at the bar instead of coming home and blogging this incident) if they were charging $2.50.

Then it hits me: Supply side economics has repercussions in daily (microeconomic) life.

For those of you who went to public school, let me explain: Price Signals REALLY matter!!!

Given the price of the Wild Turkey 101 shot(s), I chose to come home and blog about the fact that Wild Turkey 101 shots are prohibitively expensive instead of staying at the bar and drinking Wild Turkey 101.

The bar had the opportunity to, quite literally, take another thirty dollars of my money had they NOT overcharged for Wild Turkey 101.  Instead, I'm back home blogging about supply-side (micro)economic incentives.

What does this mean for national economic policy?  It means we should make good things (like Wild Turkey shots) as cheap as possible.

In the words of Rick Santelli: "President Obama, ARE YOU LISTENING?!?"

I hope this helps.

That is all.

Cahnman out.

The discussion continues. -Patrick

This is in response to two Next Right posts, one by Rick Moran titled Exploiting Taxpayer Rage Not the Way Back for GOP, and another by Patrick Ruffini titled From Rick Santelli to HopeandChange. 

Rick laments that "the problem is that mass movements based on populist rage have generally led to untoward and unanticipated consequences. History is littered with these populist outbreaks – especially those that happen as a result of great cultural and economic changes being enacted by a perceived elite."  He goes on to list the example of George Wallace's 3rd party run in the 1960's as the most recent example of such a movement, and concludes that "tapping in to the rage of taxpayers by exploiting their fears then, would almost certainly result in unanticipated problems for the GOP."  I find the argument that George Wallace's appeal to white working class males outraged over civil rights compares to Rick Santelli's appeal to outraged taxpayers specious at best, and offensive at worst.

In any event, a far more successful example of a taxpayer revolt based on populist rage comes to mind, officially titled the "People's Initiative to Limit Property Taxation" and affectionately known to many of us as "Prop 13". 

Proposition 13 was a political earthquake whose jolt was felt not just in Sacramento but all across the nation, including Washington, D.C. Jarvis's initiative to cut California's notoriously high property taxes by 30 percent and then cap the rate of increase in the future was the prelude to the Reagan income tax cuts in 1981. It also incited a nationwide tax revolt at the state and local levels. Within five years of Proposition 13's passage, nearly half the states strapped a similar straitjacket on politicians' tax-raising capabilities. Almost all of those tax limitation measures remain the law of the land today.

Patrick confirms the power of populist outrage, but I have another perspective on the fall of the Republicans in 1996, in which he states:

Republicans got more negative once in office and paradoxically ran a more negative campaign in a Presidential than in a midterm -- when the President is not on the ballot and the bar is lower. Also, populist anxiety from the early 1990s had begun to fade. Republicans were caught with their proverbial pants down by overstaying their populist welcome.

I believe that a straight line can be drawn from the chord struck by Rick Santelli and the "Rant of the Year" to the fall of Republicans again and again until we find ourselves completely and utterly rejected by the majority of Americans.  It starts with a reassessment of The American Form of Government, which is a Republic and not a Democracy.  I invite everyone to please take a moment to review this video, which I believe has a uniquely clear perspective on why we tend to think of America as a "center-right" nation.  It's not because Americans tend to vote Republican or are right-wing Christians, it's because Americans tend to prefer to be left alone by the government more than any other nation on earth.  It's in our DNA.

After watching this video, I became convinced that rather than asking ourselves to go from Rick Santelli to "HopeandChange" we should instead be asking ourselves how to go from Rick Santelli to Limited Government, Fiscal Responsibility and Free Markets.

I front-paged Rick Moran's last post not because I agreed with it entirely, but because he raises a very important point about the two-edged sword that is populism. Yes, virtually every successful political movement has used it to turn itself around and reclaim power. But it alone was not enough to get it to the mountaintop. The Rick Santelli rant is a necessary and vital part of what the GOP needs to stand for in the coming months -- giving voice to honest, middle class Americans who, in Bill Clinton's parlance, "worked hard and played by the rules" only to get saddled with the bill for those who didn't. But there's a downside if this card gets overplayed, Rick argues: 

Tapping in to the rage of taxpayers by exploiting their fears then, would almost certainly result in unanticipated problems for the GOP. But beyond that, is this the way the Republicans wish to return to power? The Rovian strategy of using wedge issues to cleave the electorate over gay marriage, abortion, and other social issues got Republicans elected but also sowed the seeds of their own destruction. By the time 2008 rolled around, those wedge issues had lost their potency and there was ample evidence of a backlash by center-right and center-left moderates against the GOP and their perceived intolerance. It was Obama who exploited this backlash by promising to govern based on not what divides us but by what unites us. His “post partisan” message – a campaign gimmick we know now – resonated powerfully with the center who had tired of the back biting and poisonous partisan atmosphere in Washington and longed for “change.”

Rick's prescription is as follows: 

The Republicans can reclaim the “feel-good” mantle by appealing to one of America’s greatest strengths; the ability of our citizens to look to the future with hope. Obama played to that strength during the campaign and is now abandoning it in favor of fear mongering. It’s s delicious political opening that the GOP ignores to its detriment.

I am very sympathetic to this, but we need to remember that political recoveries happen in stages. Barack Obama could not articulate a message of change and hope without the electorate first buying into the notion that Bush had failed. Before 2008 there was 2006, when we lost Congress? Can anyone remember the positive Democratic message in that campaign? There wasn't any. It was pure BDS. Thus, Obama could afford to run on a hopeful message because the Democrats' negative message message was already ingrained in the mind of the American electorate. 

This was the way back for Reagan. By 1980 Americans were fed up with Carter and clientilistic liberalism. And though Reagan had some great oppositionist lines ("Are you better off than you were four years ago?") the fundamental takeaway from his 1980 campaign was one of optimism and restoring America to greatness. 

Every significant party changing Presidential election in the last generation has featured an eventual winner who was less negative than he could have been -- precisely because the negative message had so permeated the electorate that they could afford to be.

Forget Mark Kirk.  Forget Pete Roskam.  Forget Mike Ditka.  Rick Santelli of CNBC is the best candidate we can possibly field for the Illinois Senate seat vacated by President Obama.

Here's Why.

Update: Apparently, KLo beat me to the punch.  I guess great minds think alike!