You can't analyze his comments like they were a PHD dissertation. He was speaking of the cuff in front of an impassioned audience. He did hit home the major theme of personal responsibility against the power of the Government.
I do not think Santelli thought this idea up on his on. Meredith Whitney former Oppenheimer analyst has been pushing this idea as a productive way of getting capital into the system. Money given to the big zombie banks is much like throwing good money after bad. Whitney's point is, that banks without the solvency problems such as the regionals she is talking about, have a business model in place that would probably lend money not only to those who need but who also are credit worthy because that is how they stayed out of trouble in the first place. Your euphemism remark reveals your misunderstanding of the banking crisis. Not all banks sinned equally. But the Gubmint incompetence so far, has it looking like the Gubmint is picking who will survive and will not survive, and that is being done with little regard on who deserves to survive, but on the "too big to fail" standard. Whitney's strategy will not solve the crisis, but it is a better use of capital than what we have seen so far. The Gubmint did a bait and switch on the TARP plan as originally presented. They saw the British do a straight bailout, and understood that was the easier road to go down. Of course, since then it now has been revealed the UK has the worst economy on the other side of the pond, and their bailout plan is not showing any more signs of success than what we have seen here.
... and what was World War II? The biggest government stimulus package of them all: massive government spending orders for planes, ships, raw materials, and so on. Plus WWII soaked up surplus labor and gave young men government jobs (aka soldiers). This is why I agree with Paul Krugman when he says Obama's stimulus package is too small. An economic stimulus should be like a defib machine -- it needs to deliver a big, big jolt to the economy.
I think you are uninformed as to how the TARP funds work. In order to get funds the banks have to give the Treasury preferred shares. This is a loan with security. The expectation is the money will be repaid. Contrast that with the lets give the lying and irresponsible homeowners and the complicit mortgage lender some free money plan. The govt. gives some "incentives" ($$$$$) to the lender to reduce the interest rate and/or the principal amount of the loan. The govt. then also gives the homeowner some annual $$$$ for being good little homeowners and not giving the keys back to the bank. Santelli's position seems perfectly logical to me.
For the 10,000th time, the Housing Plan is a whole lot more about the BANKS than it has to do with the homeowner that is underwater and thinking about bailing on his mortgage. I am at a total loss as to why people here on this thread (and ET in general) are unable to grasp this!
World War II was a win. Big time. We were the only ones left standing. Winners get the spoils. We, along with the Russkies, ran the world for 50 years with Arabs and Japanese occassionally butting in. How you get that kind of economic stimulus again, I don't know. Can't do it domestically, no matter what you do or how much you spend. Surely you're not suggesting we do another World War and win it -- unscathed. Lots of shovel read projects around the world after that scenario, which is what World War II was for us basically.
Of course its about the banks. What people are pissed off about is that our tax dollars are going to be given to undeserving lenders and homeowners. What part of that don't YOU grasp?
I am leaning toward this view as well. What exactly will happen that is so bad (compared to what has already happened) if we let CITI go under? And people who can't carry underwater debt for a few years (or more than a few, unfortunately) simply do a Chapter 7. Sure, lots of shit will happen. But lots of shit is already happening and will continue to happen if we keep throwing good money after bad trying to move a massive blow out off the banks (consumers) books and hide it somehow. Is 12 percent unemployment much worse than 9. Do we need CITI and BOA? Why? How? Somebody tell me what will happen if they fail like Bohunk Savings and Loan and the FDIC, or some new RTC like body, has to clean up the mess. Hey, I own a couple hundred shares of CITI, but I'll take my hit for the good of the country.