TIME 2016 Election

Donald Trump Surges in Latest Republican Polls

The real estate mogul is beating his rivals despite criticism from his rivals

Donald Trump is leading the pack among candidates for the 2016 Republican Party nomination in the latest batch of polls.

A CNN Poll on Sunday showed Trump leading with 18% support among Republicans. Former Florida governor Jeb Bush was second at 15%; Wisconsin Governor Scott Walker rounded out the top three at 10%. Trump’s ratings in the poll have surged 6 points in the last month, while his rivals have remained relatively steady.

And while the poll is by no means a reflection of who will take the Republican Party nomination in 2016, it suggests Republicans are excited by a Trump candidacy. Fifty-two percent of Republicans want to see Trump continue his run and 42% of Republicans currently backing another candidate want Trump to remain in the field.

CNN’s survey is in line with an NBC poll of New Hampshire voters, also released Sunday, showed Trump holding 21% of Republican support, with Bush trailing at 14% and Walker at 12%.

In an NBC poll of Iowa Republican voters, Walker is leading the pack at 19%, with trump narrowly behind at 17%. Bush follows them at 12%, then Ben Carson at 8%, Mike Huckabee at 7%, and Rand Paul at 5%.

And yet another poll from YouGov goes further, showing Republican support for Trump at 28%.

Trump’s surge came after a week of strong, united Republican rebuke on the candidate’s controversial comments on Sen. John McCain’s service and suggesting the Vietnam War veteran was “not a war hero.”

“A number of my competitors for the Republican nomination have no business running for president,” Trump wrote in USA Today. “I do not need to be lectured by any of them.”

Read next: How Donald Trump Became Donald Trump

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MONEY Income Inequality

6 in 10 Americans Will Experience Poverty

worn out dusty shoes with holes in them
Alison Wright—Corbis

It turns out there may be more fluidity between the haves and the have-nots than we previously thought.

Over a lifetime, most Americans will experience at least a year of relative poverty, says a new study.

Between the ages of 25 and 60, over 60% of the population at some point sees an annual income that puts them in the bottom 20% of earners. About 40% will live for a year or more in the bottom 10%

The study’s co-authors, Thomas Hirschl of Cornell University and Mark Rank of Washington University in St. Louis, released a somewhat similar report earlier this year that looked at fluidity at the top of the income spectrum. It found that 70% of Americans will spend at least a year in the top 20% of income by the time they are 60.

Placing the two reports side-by-side shows that income inequality isn’t as static or simple as the haves and have-nots. There are also a lot of people who can be called the have-right-nows. “I think the real danger is that people feel insecurity at the top and bottom,” says Hirschl.

That insecurity, he argues, has helped fuel two seemingly disparate movements: Occupy Wall Street and the Tea Party.

“Insecurity rules large in the human psyche,” he says. “People feel like ‘My problem is a serious problem, and I want the rules to change so I don’t have this problem anymore.'”

Acknowledging the fluidity between the upper and lower echelons of income distribution offers a more nuanced approach to conversations about inequality. “We see very clearly that people have periods of hardship,” Hirschl. “So having a way of distributing goods and services, and dealing with economic insecurity and social inequality, are real questions facing the majority,”

The study is based on data collected regularly by the University of Michigan’s Panel Study of Income Dynamics from 1968 to 2011. It’s measure of poverty isn’t the same as the government’s poverty threshold, an absolute measure based on the ability to meet basic needs. Instead, it’s a relative measure, which Hirschl says matters more “in the context of rising inequality.”

Read next: New York’s $15 Minimum Wage for Fast Food Workers Is The Latest Industry-Specific Hike

TIME Congress

Obama Moves Closer to Inking Pacific Trade Deal

US President Barack Obama speaks about trade policy at Nike Headquarters in Beaverton, Oregon, May 8, 2015 .
Brendan Smialowski—Getty Images US President Barack Obama speaks about trade policy at Nike Headquarters in Beaverton, Oregon, May 8, 2015 .

President Obama may move closer to a career-defining Pacific Rim trade deal Tuesday that could permanently alter the balance of power between the White House and Congress on trade issues.

The Senate is expected to approve a bill to give the president “fast track” authority to make trade deals, reducing Congress’ role to approving or rejecting the entire deal. Members of Congress would not be allowed to filibuster a vote on a trade pact, add amendments, delete parts or otherwise tweak the final version of a trade deal.

If it passes, the bill would grease the skids for Obama to finish the Trans-Pacific Partnership, an unprecedentedly massive trade pact binding the U.S. and eleven other countries, including Japan, Australia and Chile, and governing 40% of the world’s GDP.

Most trade experts agree that if the fast track bill passes, it all but guarantees that the Trans-Pacific Partnership will too.

Supporters of the Trans-Pacific Partnership say getting the fast track bill passed is crucial since, without it, Congress could muddle up a document that has been delicately wrought in private negotiations for nearly a decade.

But critics of the deal, which includes an unlikely coalition of Tea Party Republicans and liberal Democrats, argue that passing the fast-track bill is akin to signing a blank check.

Conservative critics worry that the fast-track hands undue power to a president they already don’t trust. In an impassioned plea to supporters Sunday, Alabama Sen. Jeff Sessions wrote that the fast-track bill marks a “consolidation of power in the executive branch,” by eliminating “Congress’ ability to amend or debate trade implementing legislation and guarantees an up-or-down vote on a far-reaching international agreement before that agreement has received any public review.”

Liberal Democrats, for their part, argue that the Trans-Pacific Partnership would be bad for working class Americans by shipping more decent jobs overseas. Massachusetts Sen. Elizabeth Warren has said that the Trans-Pacific Partnership will strip safeguards on the financial industry and establish a shadowy international legal system, wherein powerful corporates can sue countries through private tribunals. Senate Minority Leader Harry Reid of Nevada has promised to filibuster it if it comes to that.

Meanwhile, Obama has launched an aggressive and unusually personal lobbying campaign to pass both the fast-track bill and the final trade deal. In past months, he has met with members of Congress in the West Wing, promised allies future political support, and publicly attacked members of his own party who have been critical of the deal.

On Saturday, Obama called his one-time top ally, Warren, “absolutely wrong” in her opposition to the Trans-Pacific Partnership. “The truth of the matter is that Elizabeth is, you know, a politician like everybody else,” he said in an interview with Yahoo News on Saturday. “And you know, she’s got a voice that she wants to get out there. And I understand that. And on most issues, she and I deeply agree. On this one, though, her arguments don’t stand the test of fact and scrutiny.”

Warren responded Monday by arguing that Obama should release the full text of the agreement now in order to clear the air.

The Senate is expected to pass the fast-track bill tomorrow by a hair, although it’s hardly a slam dunk. The House, which has not yet scheduled a vote on the bill, is likely to put up more of a fight. The final language of the Trans-Pacific Partnership itself will be hammered out by negotiators in Guam this week and in the Philippines later this month.

TIME politics

How a Hug Jump-Started Marco Rubio’s Career

Marco Rubio
Joe Raedle—Getty Images Marco Rubio speaks about Cuba during a Cuban Independence Day Celebration at the InterContinental Hotel May 23, 2008, in Miami

The Florida Senator was helped along by a politically perilous PDA

Monday promises to be a big day for Marco Rubio: the Florida Senator has said that he’ll announce whether he plans to run in the next election, and for what.

It was only a little more than five years ago that Rubio took the big risk that brought him to the precipice of a potential presidential candidacy. He had spent nearly a decade in the Florida state legislature but, in mid-2009, was not in office. In mid 2009, Florida’s governor Charlie Crist seemed to have the race locked up to become Florida’s next Senator. Then, after Barack Obama won the White House, Crist appeared at an event with the new President and exchanged a hug.

Rubio, as TIME’s David von Drehle recounted in a 2010 cover story about the changing Republican party, saw his chance:

Another Florida Republican had a different idea. His name was Marco Rubio. He was the baby-faced former speaker of the Florida legislature. Well-wired Floridians knew that Rubio was thinking about challenging Crist for a seat in the U.S. Senate, and they also knew that this was quixotic because Crist had at least a 30-point lead in the polls, plus friends and money and endorsements from powerful Republicans around the country.

But Rubio saw an opportunity in that hug. If one possible Republican strategy was to embrace the Democratic spending agenda, surely there was a case to be made for opposing it. Rubio decided to “stand up to this Big Government agenda, not be co-opted by it,” and three months after The Hug, tossed his hat into the ring. The date was May 5, 2009.

Looking back, that was the day the 2010 election truly began–not just the campaign for a Senate seat from Florida but the broad national campaign for control of Congress and the direction of the country. Rubio’s decision to wage a philosophical battle for the soul of the Florida GOP was a catalyst for the surprising and outrageous events that followed. He became a darling of the nascent Tea Party movement and a point man in the movement’s purge of the GOP establishment. Rubio led the way for a dust-kicking herd of dark-horse candidates–some thoroughbreds, some nags. And most of all, Rubio symbolized the fact that this year’s midterms have become a referendum on such fundamental issues as the role of government and the size of the public debt.

Crist eventually dropped out of the Republican field to run as an Independent, but it was too late. Rubio won the Senate seat and was catapulted to the top rung of the Republican Party.

Read the 2010 cover story, here in the TIME archives: Party Crashers

Read next: Republican Candidates Didn’t Just Talk Guns at NRA Event

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TIME politics

What Happened When Rand Paul First Got Into Politics

His rise from unknown to contender has been a quick one

With Rand Paul set to officially announce his campaign for President on Tuesday, the day will mark just how fast his political rise has been. A mere five years ago, he was an outside candidate, an underdog eye doctor running for office for the very first time.

But, while campaigning for a Kentucky Senate seat, he showed that he was serious — and also that he had a lot to learn about appealing to voters outside his core supporter group. As TIME explained in 2010:

When Rand Paul pulled off a surprise win in Kentucky’s Republican Senate primary, he bragged that he was carrying “a message from the Tea Party” that Washington was in for a shake-up. Less than 72 hours later, the ophthalmologist turned political phenom wasn’t sending out messages so much as hiding out in a state of radioactive embarrassment. A day after his win, Paul had mused that the forced integration of Southern lunch counters by the 1964 Civil Rights Act was an unacceptable federal intrusion into the private sector. The following day, Paul announced that the Obama Administration’s tough response to BP over the Gulf Coast oil spill was “un-American” and offered that “sometimes accidents happen.”

By that time, Paul himself was starting to seem like an accident. Democrats gleefully chased the media ambulances as GOP leaders scrambled to distance themselves from the gory scene. But however this newcomer performs in the coming months, the fact remains that he is part of a larger family–literally and figuratively–of like-minded conservatives reshaping Republican politics and giving an unexpectedly complex twist to the 2010 election. Even if Paul keeps stumbling over his shoelaces, the antigovernment ideas that have inspired him and fueled his campaign aren’t going away–and they may gain strength as the U.S. debt problem deepens.

But he quickly learned from the mistake, walking back (sort of) his statement about integration and demonstrating that, as TIME put it in that initial story, “he understands that politics sometimes trumps principle.”

As a 2013 TIME profile of the no-longer-new politician, at that point already discussed as a presidential contender, made clear, he was cultivating a broader appeal — something he’ll need in the run up to 2016. And that’s not the only thing about him that has evolved: at that point, when questioned about the possibility he might run, he scoffed, “Don’t believe everything you read on the Internet.”

Read the full 2013 profile, here in the TIME archives: The Rebel

 

TIME politics

Then as Now, the Tea Party Proved Divisive

Boston Tea Party
MPI / Getty Images Artist's rendering of the Boston Tea Party of Dec. 16, 1773.

Dec. 16, 1773: Colonial activists dump 45 tons of tea into Boston Harbor to protest the Tea Act

Members of today’s Tea Party movement embrace as kindred spirits the colonists who turned Boston Harbor into a teapot 241 years ago. And while it’s true that both groups formed around a robust opposition to the government in power and an equally vigorous objection to the taxes it levied, it would be a mistake to say that the Boston Tea Party was triggered by a tax hike.

On this evening, Dec. 16, in 1773, dozens of colonists boarded three ships laden with East India Company tea and dumped the entire stock — 45 tons of tea, worth roughly $1 million in today’s economy — into the harbor to protest Parliament’s recent Tea Act. The act, however, didn’t increase taxes: It lowered the price of tea by allowing the struggling East India Company to sell directly to colonists without first stopping in England. This cut out colonial middlemen and essentially gave the company a monopoly on tea sales.

So, although organizers of the original tea party echoed the popular refrain of “No taxation without representation,” many were motivated by a personal interest that continues to motivate 241 years later: profit. Boston’s wealthy merchants, some of whom made a fortune smuggling Dutch tea, stood to lose big when the Tea Act was passed. John Hancock, one of the main agitators behind the tea party, was among them.

Ahough the Boston Tea Party has become synonymous with patriotism, not all of early America’s top patriots were on board. The protest appalled many colonists with its destructiveness and waste, according to Harlow Unger, the author of American Tempest: How the Boston Tea Party Sparked a Revolution. “Far from uniting colonists, the Tea Party had alienated many property owners, who held private property to be sacrosanct and did not tolerate its destruction or violation,” Unger wrote.

Ben Franklin suggested to Hancock and co-agitator Samuel Adams that they reimburse the East India Company for the lost tea. He wrote, in a letter from London shortly after the protest, “I am truly concern’d, as I believe all considerate Men are with you, that there should seem to any a Necessity for carrying Matters to such Extremity, as, in a Dispute about Publick Rights, to destroy private Property.”

George Washington was similarly disapproving. His take on the Boston Tea Party clashes with the modern-day tea party’s more reverent view — and with their claim to channel the beliefs of the Founding Fathers.

When a contemporary Tea Partier, on a visit to Colonial Williamsburg, brought up the topic with a historical interpreter dressed as Washington, he was surprised by the answer, according to a 2010 Washington Post story. “…Asked whether the Boston Tea Party had helped rally the patriots, Washington disagreed with force,” the Post reported. “The tea party ‘should never have occurred,’ he said. ‘It’s hurt our cause, sir.’”

Read more about the modern Tea Party here, in TIME’s archives: Why the Tea Party Movement Matters

TIME Congress

Why John Boehner’s Job Is About to Get Harder

John Boehner Holds Media Briefing At US Capitol
Alex Wong—Getty Images U.S. Speaker of the House Rep. John Boehner during a press briefing on July 31, 2014 on Capitol Hill in Washington, DC.

With 25 members retiring, many old moderates are being replaced by young firebrands 

House Republicans are expected to grow their majority by 5-15 seats in next week’s midterm elections—but don’t expect governing to get any easier for beleaguered House Speaker John Boehner.

Boehner lost a whopping 25 incumbents to retirement this cycle and another three in primary defeats. By comparison, Democrats only had 16 retirements, and they’re in the minority. Not only did Boehner lose one of his best friends in Congress—Iowa Rep. Tom Latham—and Majority Leader Eric Cantor, but several of his committee chairmen, including Ways & Means Chair Dave Camp, Armed Services Chair Buck McKeon, and Natural Resources Chair Doc Hastings. Many of the retirees were old lions who helped nurse the party through the government shutdown and fiscal cliffs—the adults in the room, one could say.

Ten of the 28 seats up for grabs because of retirements and primary losses are in swing districts where “Republicans have succeeded in nominating candidates who are conciliators, people who have proven that they will work with the business community, get things done,” says David Wasserman, who tracks House races for the nonpartisan Cook Political Report. “In the 18 districts that are safe, Boehner’s going to end up with his fair share of rebels, people who campaigned against the Republicans’ and Democrats’ status quo in Washington.”

To put things in perspective, one of the first votes of this current Congress was to fund the government for the rest of fiscal year 2013. That measure squeaked by the in the House 230-189. All 28 of the retirees and primary losers voted for the measure. If Boehner had lost just 12 votes—never mind 18—the government would have shut down.

“With 25 Republican members of Congress retiring, years of legislative expertise and wisdom are lost,” says James Thurber, head of American University’s Center for Congressional and Presidential Studies. “Deep knowledge about lawmaking and policy will be replaced by highly ideological amateurs. This is a perfect formula for trouble for Speaker Boehner. He loses knowledgeable and trusted friends for an unpredictable and ungovernable caucus.”

Of course, the new class of firebrands in the next Congress will be offset by Republicans who will have beaten Democrats to win their seats, and all of those will be more moderate, having to defend more competitive seats. Republicans could pick up as many as 10 Democratic seats, or as few as a handful, depending on how the election goes.

And Boehner, who may also face a leadership challenge from Texas conservative Rep. Jeb Hensarling, has had a lot of practice dealing with recalcitrant members. “We live in a big country and it has bunch of different perspectives,” says John Feehery, a former top aide to ex-House Speaker Dennis Hastert. “Boehner is pretty good at managing those perspectives and by letting the House work its will.”

Plus, Republicans elected Rep. Steve Scalise, a former head of the conservative Republican Study Committee, as House Majority Whip, the No. 3 position in leadership. The leaders hopes Scalise will act as a bridge to the conservative wing of the party.

Still, with Republicans poised to potentially retake the Senate, Boehner will have his hands full managing expectations. “Boehner’s biggest challenge is to manage the disappointment that will inevitably come from the Senate, especially if Republicans are in charge,” Feehery says. “They won’t be able to jam anything through the Senate and that will anger a lot of the new members.”

TIME republicans

Sarah Palin Knocks Obama’s ‘Latte Salute’

And knocks the “lamestream media”

Former Alaska Gov. Sarah Palin needled President Barack Obama for his now-infamous “latte salute” Friday, haphazardly raising a Styrofoam cup to her head after thanking U.S. troops.

Palin took the stage at the Values Voter Summit to much pomp and circumstance, rousing the largely Christian conservative audience to uphold the values she said liberals and the “lamestream media” have tossed aside.

“The media is trying to say our basic core values divide,” the 2008 GOP vice presidential candidate said. “How about truth and liberty and opportunity and life. … Do they divide?”

The part pep talk, part liberal media roast included questions like“why are the liberals so intolerant?” and “do you think it’s time to abolish the IRS?” Palin also got the address of the White House confused, referring to “1400 Pennsylvania Avenue” (it’s 1600). Palin later had fun with her mix-up on Twitter.

TIME 2016 Election

Why Rand Paul Is Schmoozing in Silicon Valley

Faith And Freedom Coalition Holds Policy Conference
Chip Somodevilla—Getty Images Sen. Rand Paul (R-KY) addresses the Faith and Freedom Coalition's 'Road to Majority' Policy Conference at the Omni Shoreham hotel June 20, 2014 in Washington, DC.

As Kentucky Senator Rand Paul heads to San Francisco Thursday for a series of events over the weekend, he’s looking for two things above all: cash and geeks. Paul hopes to dip into the wealth of deep pocketed tech entrepreneurs, like PayPal co-founder Peter Thiel who donated more than $2.7 million in support of his father Ron Paul’s 2012 long shot presidential run. He also hopes to recruit tech savvy talent to work on his campaign, reports Politico.

As the scion of the country’s most prominent libertarian, Paul may find Silicon Valley to be fertile ground. Though the Silicon Valley tech scene has tended to support Democratic candidates and champion socially liberal causes, the libertarian streak that runs through the community has deep roots.

Many in the tech world embrace what author Steven Levy dubbed the “hacker ethic,” a value system stemming from the earliest days of computers that prizes transparency and voluntary collaboration and fundamentally distrusts any central authority.

With startups like Uber and Airbnb recently encumbered by regulatory moves at the state and local level, Paul’s libertarian vision of limited government oversight in the market has appeal. And Paul’s public displays of opposition to the National Security Agency’s domestic surveillance programs speaks both to Silicon Valley’s libertarian bent and to concern for the bottom line of tech titans like Google and Facebook, both of which could see business hurt by NSA snooping.

But Rand Paul is a Republican, not a registered Libertarian, and he has staked out positions that put him at odds with Silicon Valley big wigs, most notably on immigration. Paul voted against last year’s grand “Gang of Eight” compromise on immigration reform, a measure championed by Fwd.us, the Silicon Valley lobbying group led by Facebook founder Mark Zuckerberg, who would like to see more visas available for the kinds of highly-skilled workers Facebook likes to employ.

“So far he’s tried to have it both ways,” Republican pollster Whit Ayres told TIME. “There might be some alignment on some libertarian issues but there certainly is no alignment based on immigration reform.”

With unaccompanied minors flooding across the U.S.-Mexico border in recent weeks, a Gallup poll out Wednesday reveals that immigration now tops the list of problems Americans see facing the country. If he is to make powerful allies among the tech titans of Silicon Valley, Paul will have to strike a delicate balance between the Zuckerberg set and the Tea Party border security hawks that first propelled him to national prominence.

In recent days, the Senator has reportedly met privately with both Thiel and Zuckerberg.

“Maybe they’re trying to woo him to their side,” Republican strategist Michael Hudome said. “He’s not to be underestimated.”

MONEY

Here’s What Rick Santelli’s Latest CNBC Rant Is Really About

Risk Santelli’s crazy-eyes routine on CNBC today, complete with theatrical camera walk-off as he shouted “Hasta la vista!”, is certainly something to see. But, um, what was Santelli actually arguing about? And what point was he trying to make?

If you don’t watch CNBC regularly, you may find even its normal trader banter difficult to decode. But Santelli gets worked up in a lather so quickly that some backstory needs filling in. Here’s the full 12-minute exchange and, below that, our best shot at translating the passion of Santelli:

(00:00) “I think we ought to get back to a more steak-and-potatoes, mundane, less-volatile form of central banking.”

There’s no doubt that what the U.S. central bank, the Federal Reserve, has been doing since the financial crisis is pretty exotic, i.e. the opposite of steak and potatoes. In addition to cutting short-term interest rates to roughly zero, the Fed has bought up trillions of dollars worth of bonds in an operation called quantitative easing. Economists debate exactly how and to what extent QE works, but the Fed is basically telling businesses and the market that it is going to keep its foot on the economy’s gas pedal at least until unemployment is running at 6% (we’re getting close) and inflation at 2%.

Santelli thinks this intervention is distorting the market. That’s not an especially unusual view among Wall Streeters. The other side of the argument, of course, is that without these inventions, the economy would be in even worse shape. And that inflation, the main thing we’re supposed to worry about when the Fed makes money too “easy,” is still very low.

(00:18) “Equity traders don’t seem to be bugged because they know in the end easy money will outlive any headwinds to the economy.”

He’s saying the Fed has pumped up the stock market artificially. This echoes the old idea that there was a “Greenspan put”—a common belief by bullish stock traders that past Fed chair Alan Greenspan would never let the stock market fall too far. Again, not an unusual thing to hear on the Street.

(2:29) “C’mon, Steve, be objective. You’re talking about feedback loops!… We’re in a managed setting. If a baseball league puts in his crummiest players, what’s the feedback loop for the talent?”

I don’t get the baseball thing, either. But he’s saying, I think, that it’s been so clear that the Fed would keep money easy that the market isn’t doing its job of pricing risk correctly.

And this is where the fight really starts. CNBC economics reporter Steve Liesman–possibly goaded by Santelli saying he’s not objective–pushes back by asking, essentially, if Rick Santelli is right and the Fed is obviously leading us toward disaster, why aren’t more investors fleeing the stock market? It’s a good question.

(3:55) “Do you want to hear social policy from the head of the largest central bank, who controls $4.5 trillion of American’s money?”

By social policy, he presumably means the Fed targeting low unemplyment. For the record, the Fed has a legal mandate to target both stable prices and high employment.

Remember, this is the same guy who rocketed to fame during the financial crisis with a rant about the government bailout subsidizing “losers’ mortgages.” In fact, the bailout mostly helped banks. Help for defaulted homeowners was comparatively small and slow to arrive.

(5:35)”Those young demographics don’t have money, don’t have jobs, they’re living in their parents basements, and less than half of Americans own stock portfolios. So who are we helping here?”

This is in response to a challenge from Josh Brown, who seemed to be saying that stocks are actually good investment if Santelli is right. After all, if the Fed’s wrong, and there’s inflation, you’d rather have stocks than low returning bonds.

Santelli’s response doesn’t really answer that. But hey, it’s live TV and it’s CNBC, so he’s got half a dozen people talking into his earpiece. Anyway, there’s a kernel of a solid point here: The Fed’s policy, if it’s propping up asset prices, doesn’t do much for people who don’t hold assets.

But if that’s true, that could help explain why inflation has been so low–the economy is a long way from overheating. So Brown asks how a different monetary policy–presumably, raising rates to slow growth–would possibly help this.

(6:00) “Here’s what a Fed chairman needs to stand up and do: ‘Congress, we’ve done the most we can do! … Now there’s a feedback loop—a big ruckus in November. Problem solved!”

You know who agrees that Congress should do more to stimulate the economy? Paul Krugman and every economist influenced by John Maynard Keynes ever. And the Fed, too–they point this out all the time. But something tells me that Santelli’s idea of what Congress should do is rather different.

(6:27) “If I’m a bank, why would I lend at sub risk-reward rate just because the government subsidizes it?”

He’s saying the Fed’s efforts to lower rates has made banks not want to bother lending. Huh? Nodody’s telling banks what rate they can lend at.

Then we get back to Santelli complaining about the Fed’s social engineering. Liesman asks: “Should the Fed make policy for you and the traders in Chicago.” (Santelli reports from a Chicago trading pit, where he is often cheered on by traders.) Translation: Who’s not objective here, Rick?

(7:27) “TRADERS IN CHICAGO NEVER CONTRIBUTED ONE PENNY TO THE CREDIT CRISIS!”

Sh– just got real.

(8:58) “I don’t care about the general consensus! I don’t care that Europe offers entitlements! We’re America!”

USA! USA!

The trader crowd cheers.

(10:00) “We’d be healing! Three years into a recovery. That’s what I say. Disprove it!”

This is what Santelli thinks would happen if rates were higher. It really is hard to imagine how higher rates and tighter money would make the economy stronger right now.

Stanford University economist John Taylor recently testified before Congress in favor of a law that would force the Fed to follow more predictable rules. His case is that markets need certainty to operate effectively.

But even if you accept that idea as matter of long-term policy, it’s kind of hard to see how the market would feel more certain and confident right now if the Fed were to suddenly swing to tight money.

Then, Brown says Santelli has been saying this stuff for five years.

(10:52) “AND I WAS RIGHT! End of conversation! Hasta la vista!” [Walks off camera.]

Or, as Kenny Powers says, “I’m not going to stop yelling! Because that would mean I lost the fight!”

But we’re not done. Now Liesman wants to tell viewers that listening to one his financial-news network’s stars would have lost of them money. Because if you thought the Fed was wrong, you would have bet against bonds, which have rallied, and on high inflation, which hasn’t materialized.

[Santelli returns.]

(11:10) “I wasn’t wrong on inflation. I didn’t know policy would be so bad that we’d get no velocity after five-a-half years.”

By velocity, he basically means that no one is spending money, even though the Fed’s QE program has, in a sense “printed” a lot of it. Santelli has claimed before that he didn’t actually predict high inflation. As Business Insider has pointed out, the record says otherwise.

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