Rick Santelli "Very Proud" of Tea Parties

In a heated discussion with Steve Liesman yesterday morning on CNBC, Rick Santelli revealed that he was "very proud" of the Tea Party Movement that he helped to spawn.  In the classic debate, Liesman took the perspective of avoiding systemic risk while Santelli was the continued advocate of avoiding moral hazard.  The balance between moral hazard and systemic risk is at the heart of the debate of the roll of government in trying to salvage the economy.  Moral hazard argues against socializing losses because you remove any incentive for private parties to be cautious and prudent in the long run.  Systemic risk argues that the value of getting involved overwhelms moral hazard because the fallout of private failure will have massive social cost with collateral damage (beyond the private parties directly involved) which will result in an indirect and greater socialization of losses anyway.  From the perspective of informing the viewer, this debate was good to have.

But the missing debate was the role of the media in "creating news" by virtue of spawning a movement.  Santelli's open espousal of the Tea Party Movement (though he said he did not plan to attend any of the estimated 1700 tea parties on April 15th) reveals the complete blurring of reporting and editorial efforts.  When pressed for a moment on the issue by Liesman, Santelli said he was "very proud" of spawning the movement.  

If we compare the current economic crisis with the run up to the Iraq war (and we note that Warren Buffet has called the current crisis an "economic Pearl Harbor"), then surely the media has taken very different approaches in providing a voice to opposing viewpoints to those of the folks in control of the White House.  Both Phil Donahue and Bill Maher essentially fell from grace after making comments in reference to 9/11 that did not jive with the general war footing of the country.  Phil Donahue's anti-war sentiments did not seem to jive with the public mood (and that was likely reflected in his ratings as well).  

In contrast, within one day of Santelli's on-air rant; CNBC was running ads promoting the "Revolution" Santelli's rant was advocating.  And of course, many folks have discussed Fox's open promotion and advocacy of the Tea Party Movement through its commentators and free coverage which has morphed into advertising (though the irony of Fox picking up on a trend created by a division of NBC, the network perceived to be the den of liberal treachery, is not lost upon anyone).    That Fox runs its promotions of the Tea Party coverage with its catch phrase "Fair and Balanced" is at best an inside joke.  The network has done a decent job cleaving its news division from its heavy editorial content which dominates its prime time line up.  But that prime time coverage, in the end, serves to establish the network's conservative credentials.  The Tea Party Movement creates an event that its viewership has keen interest in.  The parties are perfect in that they create events that can be covered.  In other words, news events can be manufactured for which there is known and to some extent controllable demand.  Fox has essentially become a concert promoter.

Beyond the humours comparison with "teabagging" that have dominated the blogosphere, the media's complicity...actually open advocacy...seems to be an analog for a recent article written by Simon Johnson in The Atlantic called the Quiet Coup.  In that article, Johnson argues that a small group of oligarchs has developed an overly cozy relationship with the government.  In his discussion, the oligarchs he is referring to are influential members of the financial services industry.  Similarly, the media has started to develop cozy, deep, and institutionalized relationships with the political parties and/or political movements.  Bias is one thing, open advocacy is another.  Bias suggests a skewed lense through which events are interpreted in most cases unknowingly by the observer/reporter- a sort of Heisenberg principle of journalism.  Advocacy is different.  It's open espousal of a perspective.  That advocacy by large media behemoths has created new set of oligarchs.  Just as Wall Street has failed us, the media may chalked up as the next institution that failed America.  

Special Post Script Note:  We're not suggesting that policies not be aggressively questioned.  We could have, of course, used more of that prior to the Iraq war and during it.  In addition, we certainly are not arguing against substantial coverage of opposing view points.  Specfically, we are arguing against open espousal of a perspective unless those espousals are openly and frankly disclosed.  You can't be an open adovocate of a viewpoint and then apply a disclaimer such as "Fair and Balanced."   Similarly, you can't be the financial news network of record and then promote specific economic policy as part of your brand identity outside your editorial commentary.

Update: Both Melissa Francis and Larry Kudlow are talking up the Tea Party Movement this morning.  Francis has gone so far as making two specific points: 1. she's drinking tea all day and 2. she doesn't want to pay corporate taxes because she doesn't agree with what the government is doing.  She may have forgotten about the concept of representative democracy.

Kudlow especially talked up the bubble.  After the network was chastened by Jon Stewart on the Daily Show, little seems to have changed.  Questioning policy is one thing, open and derisive commentary is quite another.   

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