This article is an excerpt from the Shortform book guide to "A Promised Land" by Barack Obama. Shortform has the world's best summaries and analyses of books you should be reading.
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What was the Rick Santelli rant about? How did it affect Obama’s strategy in the 2008 financial crisis?
Rick Santelli’s rant happened when Santelli, a conservative commentator, went on CNBC and complained about relief programs for struggling homeowners. It proved that wealthy CEOs saw themselves as the victims of the crisis, not the creators.
Read more about Rick Santelli’s rant and what happened.
Rick Santelli Rants on CNBC
Despite these early successes, organized opposition to the Obama administration was mounting in the spring of 2009. Although it was not politically or economically feasible to enact a “Main Street bailout” for hard-hit small businesses and individuals (as many critics on the left urged the administration to do), Obama’s team still recognized that it was important to provide targeted relief to struggling Americans.
This was a particularly grim time for U.S. homeowners, who’d seen 20 percent of the value of their homes wiped out in the housing market crash. The American landscape, especially in the Sun Belt States of Florida, Nevada, and Arizona, glittered with abandoned homes and ghost-town subdivisions, whose owners had simply walked away from mortgages worth more than the value of their homes.
Accordingly, the Obama Treasury Department introduced initiatives like the Home Affordable Modification Program (HAMP) designed to help distressed borrowers refinance their homes, reduce monthly payments, and avoid foreclosure. While these programs could not make those with underwater mortgages completely whole, they could help reduce a great deal of financial stress for working families. Moreover, they would benefit those homeowners whose mortgages weren’t in trouble—after all, everyone’s property values suffer when a neighbor defaults on her mortgage.
Still, there was concern from political operatives like David Axelrod and Rahm Emanuel that even mild, ameliorative programs like HAMP could spark a conservative backlash. Those homeowners who deemed themselves to be “responsible” might blanch at the idea of their taxpayer dollars being used to “bail out” the distressed mortgages of their “irresponsible” neighbors.
The Rick Santelli Rant
These sentiments were given voice on February 19, 2009 on the financial news network CNBC, on-air commentator Rick Santelli delivered a blistering criticism of the administration’s relief programs for distressed homeowners.
In his remarks, Santelli said that the federal government was encouraging irresponsible behavior by providing relief to those who’d taken on risky mortgages. In his view, this would only encourage more recklessness by unqualified borrowers—whom Santelli characterized as “losers.” Perhaps most importantly for the future, Santelli called for a “tea party” of aggravated taxpayers to protest against what he saw as the government’s wrongheaded spending priorities.
It was a similar phenomenon to Obama’s experience with the Wall Street CEOs: wealthy, powerful (and predominantly white) conservatives who believed themselves to be the victims in a crisis that was largely of their own making.
Obama and his political team recognized that this form of resentment was a powerful and effective staple of right-wing politics going all the way back to the anti-welfare politics of figures like Richard Nixon and Ronald Reagan in the 1970s and 1980s. Underneath the demagoguery about “undeserving” recipients of government programs and “welfare queens” was an implicit message: White taxpayers were being robbed of their property in order to give unearned handouts to African-Americans.
Obama knew that this racially infused “beggar-thy-neighbor” style of politics had always posed a threat to American liberalism—and that such attacks could have a renewed salience because of his race.
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Here's what you'll find in our full A Promised Land summary :
- How Barack Obama went from relative obscurity to the first Black president
- What principles guided his political leadership style
- Why Obama retained an unshakable faith in the potential and promise of America