Santelli on AIG bonus rage: "You know, $165 million is like worrying about 16.5 cents, while $165 maybe necessitates a little more outrage"
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From the March 17 edition of CNBC's Squawk Box:
SANTELLI: Hey, Joe -- Joe, Carl.
CARL QUINTANILLA (co-anchor): Yes.
SANTELLI: What do you guys think about the AIG story? What do you think the big issue there is that it's getting all the press?
QUINTANILLA: Well, I think, you know, there is a -- I don't know if you've noticed -- some populist outrage, Rick, about -- about -- the bonuses. And you've got some -- some politicians now --
SANTELLI: But what about the political outrage? There's some political outrage, too, right?
QUINTANILLA: In what sense?
SANTELLI: Well, I mean, it seems as though the administration really hit this one head on. They're not happy about it, right?
QUINTANILLA: The president has registered his anger. We've been --
SANTELLI: Big time, right? Wouldn't you say big time?
QUINTANILLA: The Fed chairman says he --
SANTELLI: Wouldn't you say pretty big time?
QUINTANILLA: -- has slammed down the phone a couple of times.
SANTELLI: Now, think about it this way. Maybe I'm missing something. But the outrage seems to be about Ms -- millions of dollars, right? $165 million, OK?
But I would think that it should be looked at as a pretty big positive, because when you go from the M, maybe you should try to go to the Bs, which is the billions of dollars, and maybe that's going to even enlighten for the T -- trillions of dollars. You know, 165 million is like worrying about 16 and a half cents, while 165 maybe necessitates a little more outrage.
BECKY QUICK (co-host): Hey, Rick, I think --
SANTELLI: What do you guys think?
QUICK: -- I think the real idea here is just the idea of rewarding bad behavior, which is something you've spoken out against in the past. The idea that anybody should --
SANTELLI: No, I guess what I'm saying it's an order of magnitude. Don't you think that this dynamic that the average guy reading his newspaper is really starting to be in tune with -- with this?
And I think bonuses really strike a chord as to the dynamic you're talking about. But there's many degrees of intensity if one really wants to shine the light on the money that's being scrutinized. You know, there's M, there's Bs, and there's Ts. I just want to know what people think.
QUICK: But there are -- there are some cases that just stand out as such an abhorrent --
SANTELLI: Well, they're the catalyst. But I guess I still think -- and a lot of people I talk to think -- 16 and a half cents may be important. But 165 and a half dollars is pretty darn important, too.
QUINTANILLA: I don't think anyone's arguing that it's not important. I don't think the argument that we're --
SANTELLI: Well I guess, why isn't the --
QUINTANILLA: -- somehow not upset about the billions -- I don't think that's true.
What....you mean they're not losers being bailed out ?
My understanding is each bonus is a million dollars to 165 brilliant folks who brought down the financial system who should be in jail.
Writing insurance that you cannot cover is insurance fraud.
Funny how these financial predators are always defended by the same people who attack home owners and auto workers.
The one thing Santelli will never understand is that AIG is being rewarded for failure, whether it be M's, B's, or T's. If people are so worried that Obama will punish the rich for their success (*cough*V.J.*cough*), then the outrage over the reward for failure should be many times louder than that.
It's basically giving your kid his allowance after he has burned part of the house down.
This is an argument that gets raised on both sides at the most opportune times (or inopportune if you're the opposition). The President's focus should be entirely in the macro. That is, he shouldn't get hung up in individual cases of anything and make policy based on emotion.
The macro is the world of billions and trillions and national direction. It is here, where a country's rank in the world is secured or compromised. It is here that every decision affects every individual, if not in the short run, in the long run. In the micro, people are profoundly affected by pro-life/pro-choice debates. In the macro, Presidents deal with the resulting overpopulation, food shortages, education deficits, work shortages, and other national problems.
In my opinion, this is a waste of effort and political capital from President Obama who has significant macro-issues to deal with. If the administration fails to resolve the bonus issue with 100% confidence of the American people, it's simply going to leave the Hannitys, Limbaughs and Becks of the world more ammunition. Therefore, I fear there is more to lose than to gain. The administration has done well to this point. I hope I'm wrong and this decisions makes the Obama case even stronger.
The immense problem with Santelli's argument: I would still be outraged if I was stiffed 16.5 cents. I would just be completely full-tilt ready-to-kill-someone incensed if someone tried to milk me out of $165.
Moral? If AIG had given out $165B to their employees instead, the outrage would be a thousand times bigger. Considering how big it is now...AIG's HQ would probably be smoldering if that were the case.
Barry O. knew about the retention bonuses a year ago. Why all the outrage now?
Fake outrage over AIG
Now Schumer, Dodd and frank are taking issue with the bill they NEVER read? THAT is all that I can possibly derive from their reactions.
This is absolutely despicable of the democrats to play dumb now that this BIG chicken has come home to roost.
Hmm...so let me get this straight. When it comes to helping homeowners, Santelli is outraged, but he's fine with these bonuses? I thought Santelli was angry about "rewarding bad behavior" because the homeowners supposedly took loans they couldn't afford. Yet AIG derivatives traders took on risks they couldn't afford, and Santelli is ok with them getting $165 million in bonuses?