The media is still having trouble understanding the Tea Party movement and what it is protesting, even though its roots are clear.
On Feb. 19, 2009 during CNBC's "Squawk Box," Rick Santelli made his famous rant heard around the world, calling for a so-called tea party-style revolt. And that helped fuel the growth of a Tea Party movement that has resulted in more than 600 protests this April 15, 2010.
Santelli's call for protest wasn't about high taxes. Instead, it was a cry against the Obama administration's plan for a taxpayer-funded mortgage bailout. The very beginning of the tea parties was about bailouts and the growth of government.
But the Associated Press still seemed to miss the point about worries over an overspending government in an April 15 article by Calvin Woodward about the Tea Party rallies. In that report, Woodward defended Obama's tax policies.
"Lost in the rhetoric was that taxes have gone down under Obama," Woodward wrote. "Congress has cut individuals' federal taxes for this year by about $173 billion, leaving Americans with a lighter load despite nearly $29 billion in increases by states. Obama plans to increase taxes on the wealthy to help pay for his health care overhaul and other programs."
Is President Barack Obama really instituting "cradle-to-grave" social policies and transforming the United States into a nanny state? Well, it may not be "womb-to-tomb" yet, but he's certainly creating a welfare state for Americans beyond their mid-20s.
"I think it's more likely to be stuck," Harwood said. "Now, ultimately, the hope for Democrats, and for the president, is the actual experience with the legislation. Forget the sales job, but once elements of that kick in, especially the more popular ones, letting kids stay on their parents' insurance policies until they're 26, and preventing insurance companies from kicking people off when they hit a lifetime max - those kinds of things, they hope, will make, fuel acceptance of this legislation."
A little over a year ago, President Obama signed into law the $787-billion stimulus legislation that was supposed to prevent the unemployment rate from exceeding 8 percent. And although the unemployment has receded some from its high, it's still well North of 9 percent. So if that stimulus is given more time, will unemployment improve?
Last week's jobless claims numbers, showing a stagnant unemployment rate of 9.7 percent, didn't provide any reason for optimism. And on CNBC's April 12 "Squawk Box," host Joe Kernen asked CNBC CME Group floor reporter Rick Santelli if this economic indicator is going to be stubborn number, which would confirm a failure of Obamanomics.
"Rick, I wasn't here last week when that claims number came out. But if I could really just dig deep down into your view, do you think a year from now we're still going to be talking about a stubborn unemployment rate, Rick?" Kernen asked.
The "normal person" definition of a recession is two or more quarters of economic contraction as measured by Gross Domestic Product (GDP). This definition was perfectly acceptable to everyone until the 1970s, when the "non-partisan" National Bureau of Economic Research (NBER) was tasked with deciding when recessions begin and end.
In December 2008, the NBER declared that a recession had begun in December 2007. As I've noted several times in several places, they did this despite several contrary indicators such as positive economic growth in the second quarter of 2008, and at best inconclusive results relating to income, industrial production, and employment.
Nonetheless, the establishment media has consistently run with the NBER's definition of when the recession began. After all, they're the experts. Who are we peons to dare to point out that using the normal person definition, the recession began in the third quarter of 2008, continued for four quarters, and ended when GDP went positive in the third quarter of 2009?
In a move that one would expect is causing an excess of expletives inside the White House, NBER officials have indicated that they can't yet conclude that the recession as they define it has ended. A New York Times story carried at CNBC tells us the following (internal link added by me):
Green jobs to save the American economy? If you have listened to the various politicos on the left end of the spectrum, especially before and after the passage of the $787-billion stimulus package earlier, you would think that is the cure-all.
But so far it isn't working and there are other fundamental problems that lie ahead according to some energy market analysts, like much higher oil prices - despite the pledge by President Barack Obama to open up 160 million acres for future oil exploration and drilling. To avoid the price of $100-plus oil, CNBC's CME Group floor reporter suggested expediting the process, as was the case with ObamaCare and TARP.
"I think what you're hitting on is so important because the President of course talking about some of these jobs, but also talking about drilling," Santelli said on CNBC's April 1 broadcast of "Closing Bell." "You know, if the government was able to put forth health care and the government was able to do bailouts and TARP and stretch the rules, if they wanted to get jobs now and avoid the $100-plus oil you know that's coming they could drill quickly if they wanted to. And this is something that needs to be discussed, don't you think?"
With March unemployment data to be released April 2, some are anticipating what potentially lower jobless numbers will all mean for the financial markets and the economy as a whole. However, that data will come with the caveat that it will be misleading because it will include temporary jobs driven by hiring for the 2010 census.
On CNBC's March 29 "Squawk Box," CME floor reporter Rick Santelli was asked how to interpret the expected improvement. He warned it isn't the kind of job creation that is good for a sustained economic recovery.
"You know, I think it's fascinating," Santelli said. "Most experts would agree, the kind of job creation we're going to see is welcome but it isn't the kind we need in the big picture. But having said that, yes, I think that the markets will act in a way that will show a robustness if the number comes in a couple of hundred thousand and I think it's kind of silly."
Former presidential candidate and New York City mayor Rudy Giuliani minced no words when it came to the Obama administration's massive health care overhaul. In an exclusive interview with CNBC's Maria Bartiromo, Giuliani stated that, plain and simple, it "was an ideological act by the Congress" liberal Democrats "are very happy about."
"Instead of privatizing - which is what our government should be doing - we're taking major roles of the economy for the United States government," Giuliani told "Closing Bell" anchor Bartiromo. "And it is not an exaggeration to say we are starting to look more like a European social democracy than we are an American free-market capitalist society."
A self-avowed free-market advocate, Bartiromo attempted to defend the Democrats' actions for a second: "Let me take devil's advocate for a minute here and say, ‘Okay, you say socialism and we're seeing this government takeover. Well maybe some of this stuff wasn't working before, so how do we know this isn't going to work better?'" she posed.
Giuliani lamented how disingenuous Obama's entire argument about a health care "crisis" was, seeing as how much of the significant provisions do not go into effect for years - and quite possibly under the watch of a Republican president.
While a vote on health care reform legislation appears to be imminent, should it pass it could have broader economic implications, even if the bill itself won't take effect for some time.
As CNBC "Mad Money" host Jim Cramer predicted - if it passes, get ready to see a sell-off on Wall Street. Cramer appeared on CNBC's March 18 "The Kudlow Report," with his former broadcast partner Larry Kudlow. Kudlow asked Cramer to elaborate on his theory ObamaCare could send the financial markets reeling or "topple the stock market," as Kudlow described it.
"First, it is the single biggest impediment to the stock market going higher," Cramer said. "And a lot of this has to do with what's not being talked about enough with how it's going to be paid and also about what it will do to small business formation. This bill is a disaster for both."
Back during the 2008 presidential campaign, then-Sen. Joe Biden, the Democratic nominee for vice president said it was "patriotic" for people to pay more taxes, in an interview on ABC's "Good Morning America." But what if you don't have to pay more taxes legally?
Biden's reasoning was simplistic - that we all need to "jump in, time to be part of the deal, time to help get America out of the rut." But according to CNBC's Jim Cramer, based on legal precedence, the Internal Revenue Service encourages people to pay as little tax as possible, as long as it is within the boundaries of the seemingly endless U.S. tax code.
"The government has made it very clear in a series of tax rulings since the income tax started - and I learned this at law school - that it is actually well within your patriotic right to try and pay as little tax legally," Cramer said on CNBC's March 12 "Street Signs." "See, tax avoidance is actually part of the IRS - says listen tax avoidance, you can do it. Tax evasion is against the law. Tax avoidance, the IRS has always said listen you have every right to try and have tax avoidance. And believe me, I'm going to take advantage of it."
"Ah, the sound of angry white guys wafting its way through the airwaves," Moore said. "Obviously that was a pivotal moment for that, but if you notice what he's railing against is he's blaming the whole mortgage crisis on the little guy who took out a mortgage he shouldn't have taken out, living beyond his means, having a home with too many bathrooms, when in fact - as my movie points out - the FBI of all people, have stated clearly through their own investigation that 80 percent of this mortgage crisis that we've gone through has been caused by the banks and lending institutions, by the fraud committed by the banks and the lending institutions - not by the person who's living beyond their means."
Back on Christmas Eve of 2009, Obama's Treasury Dept. said it would lift the limits on what the federal government could provide in "emergency aid" to Fannie Mae and Freddie Mac - without seeking Congressional permission.
Very few reporters noticed, except for The Washington Post's Zachary Goldfarb who reported the story on Christmas Day and CNBC CME Group reporter and tea party inspiration Rick Santelli, who later pleaded for the public to take notice. With that occurrence in mind, Santelli scoffed at Sen. Chris Dodd's, D-Conn., legislative proposal of financial system reform that did not include reforms on both Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE).
"You know, I can't believe, first of all - you said, may not be included. They are not going to be included," Santelli said on "Fast Money" March 12. "And I think to put a moniker of reform on something that doesn't include Freddie and Fannie is very disingenuous. And I think that to pass something - what I heard Mr. Dodd say, Sen. Dodd, was, you know, it's the 101st senator. In other words, you know, we'll pass anything we have to show that we're doing something, no matter if it's the right thing or not, you know, I'm not buying that again."
It's been proven time and again in over two hundred years of recorded American history, but some people still don't get it - the government is not the most efficient spender of money.
On CNBC's March 4 "Squawk Box," in the midst of reporting jobless claims and productivity data, the network's senior economics reporter Steve Liesman offered the suggestion that since some banks were increasing their stock dividend, more lending might be on the way. That could be a sign the economy is coming around, but "Squawk Box" co-host warned it could also mean banks want to pay out dividends before the taxes went up on them:
LIESMAN: Isn't right before the banks start to lend, they're going to increase their dividends first. That's the way they're most likely - KERNEN: They better increase their dividends because when the dividend tax goes back up - when does that go back up? WILBUR ROSS (Chairman and CEO of WL Ross & Co LLC): Next year. KERNEN: Next year, after taxes, they won't have the same after-tax return. If you like the wealth effect of stocks rising, it would be nice not to have to just match your after-tax returns --
President Obama continuously tries to portray himself as a friend to the little-man, middle class and small business. Hence his attacks on "fat cats" who "just don't get it," while labeling the extravagant bonuses as "obscene," and "the height of irresponsibility."
Meanwhile, members of his administration, in defending a sweeping small-business aid program Obama announced in his State of the Union, give reason to wonder if they really understand how to help small business.
Among the administration's proposals for small businesses are a $5,000 tax credit to hire new workers, elimination of capital gains taxes, and new incentives to invest in plants and equipment. At the same time, however, the administration plans to raise taxes on "the wealthiest Americans."
"Well, I'm very glad I voted for him," Buffett said. "That has not changed. I think the problems he has run into are monumental, particularly in terms of the economy. I mean - we're running huge deficits, which we should be running from a Keynesian standpoint to try and get this economy moving. But they have consequences too. I do not envy the job of being President, but I give Obama high marks."
Toyota is facing harsh scrutiny from the media and lawmakers - perhaps with justification. But there could be consequences for the U.S. economy.
And as Toyota (NYSE:TM) executives have endured two days of congressional hearings on the issues surrounding their potentially widespread defective products, the most aggressive questioners have been lawmakers from Michigan, home of the Big 3 automakers. A fact that led CNBC "Squawk Box" co-host Becky Quick to question if the federal government, with a huge stake in General Motors and Chrysler, are being a little unfair with Toyota on her Feb. 24 broadcast.
"We've heard from some congressmen, especially those later on in the show about the people and Congress people who are questioning Toyota at this point saying, they are doing this because the government has this big stake in GM?" Quick said. "To me, that seems a little crazy."
Did you think the negative economic reporting would stop once George W. Bush was out of office and Barack Obama was in? It hasn't.
Although you could argue that the press has done its best to make Obama look good despite economic troubles, as Congress debates a jobs bill and other legislation meant to improve the economy before elections in November, could the media be painting a darler economic picture than is accurate?
"I always wanted to work for Fox," Gasparino said. "That was the bottom line. And it's, you know, I don't take chances with stories, but, there is an entrepreneurial spirit in me where I want to do something different. I would like to build something, be part of building something and that is why I came."
On Feb. 19, 2009, one year ago tomorrow, Rick Santelli lost his temper while reporting from the floor of the Chicago Mercantile Exchange. The CNBC reporter was angry about bailouts of businesses and homeowners.
His passionate free market rant spoke to many Americans equally distressed about the direction of the nation. The Tea Party movement was born.
Just one day after Treasury Secretary Timothy Geithner said the U.S. wouldn't lose its "top-notch" credit rating, one CNBC guest said that ‘"all governments" will default - it's only a matter of time.
When asked by "Power Lunch" co-anchor Sue Herera if he would buy Greek debt, Marc Faber said: "No, I'm not interested in government or sovereign debts because I think that all governments will eventually default, including the U.S."
Shocked, Herera replied, "What! Whoa, whoa, whoa." Co-anchor Dennis Kneale asked for clarification, "All governments?"
"Mhmm. All governments," Faber, editor of the Gloom, Boom & Doom Report, explained. "Some like Singapore that have basically no government debt and have huge reserves ... in general the problem is the emerging economies today are financially much sounder in terms of debt to GDP than the developed world, including the U.S., Western Europe, the U.K. and so forth.
Rick Santelli is the star of perhaps the most politically consequential online video, viral to the extreme, of the past year (right). On February 19, 2009 he let loose on the Obama administration's economic policies on CNBC's "Squawk Box", calling for a "tea party", and inspiring millions of Americans to speak out against what he and many others see as collectivist economics policies pursued by the President and Congress..
“That was spontaneous, absolutely,” he said in an interview with the Daily Caller. “It was also from the heart, and I had no idea of the direction it would take or the response it would get.”
Almost a year later, Santelli is widely seen as the godfather of a large political coalition that, according to some polls, rivals the two major parties in popularity. The Tea Party protesters staged 48 simultaneous protests on tax day last year, a rally on the lawn of the Capitol with hundreds of thousands, if not millions of attendees, and will hold its own convention this week, with Sarah Palin giving the keynote address.
As the old cliché goes, you don't use a sledgehammer to crack a nut, but according to Rick Santelli, that's exactly what it appears the Obama administration is doing terms of financial regulation and fiscal discipline.
On CNBC's Feb. 2 broadcast of "Fast Money," host Melissa Lee proposed that taxing the wealthy is not the path to "economic prosperity and fiscal stability." Santelli, the network's CME Group floor reporter, agreed.
"Well, you're right," Santelli said. "But I also think you're going to see when the Bush tax cuts expire, a lot of middle class write-offs and exemptions and various tax benefits will also fall by the wayside. Not the least of which to mention, I have so many friends that work for the financial industry. And they've learned from the government, even if you only make $25,000 to $125,000 a year, one firm says if you leave to go into another job or whatever, anything outside retirement, they're going to keep 10-to-20 percent of the stock they took from you following the government's directives."
The government's traditionally enforced safety standards on automobiles sold in the United States. But the government didn't always own a car company. So you'd expect the media to take a hard look when the government's roles as regulator and competitor converge.
"We've got a fabulous Toyota engine plant in Alabama," Sessions replied. "They've been doing very well. It seems that they've recognized they're going to fix this problem and it's going to take some effort."
President Barack Obama encouraged some business interests by mentioning nuclear energy and offshore drilling during his Jan. 27 State of the Union speech. Those less popular energy solutions joined the usual alternative rhetoric of wind, solar and bio-fuels.
But on CNBC's Jan. 28 "Street Signs," Jim Cramer, host of CNBC's "Mad Money" noted something was missing - an important onshore energy source, natural gas. And as for the nuclear energy signals - he wasn't convinced Obama was serious.
"I mean, I want to point out I thought the nuke thing was just the boilerplate nuke," Cramer said. "[Energy Secretary Steven] Chu is a research director, the Energy Secretary, really is more of a professor. Offshore oil and gas, the issue is onshore. Natural gas wasn't mentioned, got to be really careful about that."
It was initially thought the election of President Barack Obama was just going to hit your pocketbook in the form of higher taxes. But if the past several days are any indication, the president has found another way to hit it - by attacking your stock portfolio.
On CNBC's Jan. 25 "Mad Money," host Jim Cramer advised his viewers to be aware of this and to strategically position their stock portfolio with an eye on Obama and Washington's expanded role in the private economy.
"In the last week the world of investing has been turned upside down by Washington," Cramer said. "We can no longer afford to look at stocks the same way we did before the GOP upset in Massachusetts. With the Obama administration now on an anti-shareholder rampage, we now have to factor in political risk when we evaluate different sectors. And the risk may be higher than anytime since Jimmy Carter, who truly hated profits, especially if they were big. In the midst of earnings season, suddenly politics has become just as important as revenue growth or market share gains or earnings' beats. So we need a new prism for valuing stocks."
It's curious to see people in the mainstream media try to make sense of the Tea Party movement. The New York Times, which once called the Tea Parties a psychological phenomenon rather than a political movement, has now changed its tune.
In the wake of the stunning upset by Scott Brown in the Jan. 19 Massachusetts special election to fill the seat vacated by Ted Kennedy's death, the Times is attempting a more analytical look at the so-called "tea party tiger." Specifically, the Times looked at some key figures in the movement, Sen. Jim DeMint, former Alaska Gov. Sarah Palin, Fox News host Glenn Beck and CNBC CME group reporter Rick Santelli.
CNBC ‘Squawk Box' co-host Joe Kernen told Santelli about the Times story on Jan. 25.
CNBC "Squawk Box" co-hosts Joe Kernen and Becky Quick get it. Unfortunately, their CNBC colleague that covers Washington, D.C. for the network doesn't.
On the Jan. 22 broadcast, Harwood appeared on the program to give a status report on the current version of health care reform being negotiated in Congress and what it means in the aftermath of Scott Brown's filibuster-proof busting election victory in Massachusetts on Jan. 20. Kernen suggested that the health care bill might have been forced through if not Brown's election and the public fervor it revealed.
"I think it's unbelievable that it would have gone through and they would have definitely jammed it through if this weird, serendipitous seat hadn't opened up and if there hadn't been a special election, 17 percent of the economy - based on what they wanted to do, based on what these elected officials wanted to do, against what the public wants - they would have just rammed it through, either way," Kernen said.
During the 2008 presidential campaign, Americans were treated to a number of populist sermons on the "special interests" who would oppose "reform" at any cost to maintain the "status quo" from which they "profit financially or politically." The drug companies, the energy companies, the Wall Street bankers, and the health insurers were the corporate enemies of a just and harmonious America, or so one might have gathered.
Obama was at the vanguard of this populist charge. But since his election, he has proposed health care legislation that would subsidize Pfizer and PhRMA, a cap and trade plan that would drive profits to General Electric, and Wall Street bailouts that lined the pockets of the same Goldman Sachs bankers he so reviled during the campaign. What happened?
Washington Examiner columnist Tim Carney exposes and investigates this monumental disconnect in his new book "Obamanomics: How Barack Obama is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses." Carney explores the "political strategy of partnering with the biggest businesses in order to create new regulations, taxes, and subsidies." Those measures, he argues, actually benefit the biggest businesses by crowding out competition, consolidating market share, or giving billions in subsidies directly to those companies.
"These bank bonuses, I would say, are a sin of Biblical proportions," Wallis said. "But to pick on the banks alone misses the point. It's a symptom, I think of a real erosion of societal values because new maxims have taken us over - ‘greed is good,' ‘it's all about me and I want it now.'"
We don’t yet know the outcome of the Jan. 19 Massachusetts Senate special election. But the very fact that the Democrats could lose the seat formerly held by Sen. Ted Kennedy to a conservative who’s made blocking healthcare reform a centerpiece of his campaign, has liberals sputtering implausible explanations.
On Jan. 19, former Vermont Gov. Howard Dean and liberal radio host Nancy Skinner appeared on CNBC with Larry Kudlow to discuss the ramifications of the election for healthcare. Both suggested that Democrat Martha Coakley was in danger of losing to Scott Brown is because Democrats hadn’t been liberal enough on health care.
Although he predicted Coakley would hold Brown off, Dean said, “Let me agree with something Larry said (far be it from me to ever do such a thing). But I do think this is clarity – about clarity of message and I think the Democrats haven’t had a clear message.”
The problem, from Dean’s perspective, was that compromise had watered down and complicated the health care bill. “Look at what we’ve done. We’ve passed this health care bill, which has, you know, just been a very messy, ugly process – or we’re about to pass a health care bill,” he said, predicting it would pass with or without a Coakley victory. “The best way to [have a bill that works and can refute GOP arguments] was to pass an extension of Medicare to people below 65. Everybody knows what Medicare is, it’s easy to understand, you don’t have to make deals with the health insurance industry. So this is about clarity of message, and Scott Brown has a clear message and the Democrats don’t.”
Former Barack Obama supporter Jim Cramer on Friday said the stock market would have a huge rally if Scott Brown defeats Martha Coakley in Tuesday's special senatorial election in Massachusetts.
"I think investors who are nervous about the dictatorship of the Pelosi proletariat will feel at ease, and we could have a gigantic rally off a Coakley loss and a Brown win," said Cramer on Friday's "Mad Money."
"It will be a signal that a more pro-business, less pro-labor government could be in front of us."
The often outspoken CNBCer marvelously declared it a "Pelosi politburo emasculation" (video embedded below the fold with partial transcript):