I have now seen several instances of a video clip of Rick Santelli, a CNBC reporter at the Chicago Mercantile Exchange, ranting about the government bailing out homeowners. A short video clip has no context – the various media channels of all perceived political persuasions prefer short, sharp images without context because it arouses our attention and emotions. Context engages our reason and diminishes the emotional impact. Context takes time, time in which you might get bored and change the radio or TV channel.
So here, as the veteran broadcaster Paul Harvey (he just died this past week) used to say, is the “rest of the story”.
This was part of several exchanges I saw that morning about the entire scope of the bailout. Santelli has not been an advocate for any bailout, either Wall St. or Main St. As he said that morning, homeowners were taking a risk just as much as a person buying stock takes a risk.
What kind of moral hazard do we create when we reward people who took a risk and lost? Santelli asked (and this is a paraphrase – I don’t have the transcript) “Many of us have seen our 401K become a 201K. Why don’t we get a bailout?” He continued to ask the key question, “Why aren’t we helping the people who will contribute to the future GDP of this country? The doctors who graduate with a hundred thousand or more in loans? The engineers and scientists?” Then Santelli turned back to the traders on the Chicago floor and said “Wouldn’t you guys like some help with your student loans? How many people have loans?” Most of them nodded.
According to this news release in May 2008, “the average debt for medical school graduates is approximately $140,000, according to the American Medical Association (AMA)”. The debt load makes it financially difficult for a doctor to go into general practice. In 2005, the AMA listed 885,000 doctors. Of those, only 9.3% were degreed in Family Practice or Preventive Medicine. Only 8% were in General Pediatrics. 17% were licensed in Internal Medicine, in which a physician provides both general care and specializes in one of several fields like Gastroenterology.
Our compassion is stirred when we see a family with children about to lose their home. The TV images are all too frequent. We want to lend a hand because there is real need there. Little do we see the struggles of some of our best and brightest who will be able to lend a hand to us in the future, if we will only help them.