Rick Santelli and the STEM Bailout

Rick Santelli loses it on-air:


Rick Santelli, like many other pundits, incorrectly predicted there would be hyperinflation as measured by bond prices, but to some extend he is right about inflation in the numerous services that aren’t tied to the treasury market such as healthcare, tuition, air travel, gasoline, food, TV & internet bundles, and so on. The bond market tells us how much demand there is for bonds, which is closely tied to inflation, but doesn’t give the full picture.

The fed does not need to raise interest rates to prevent bubbles. Treasuries keep rallying due to the huge demand by governments and institutions for safe, low yielding paper. All inflation indicators, except or food and some others, are still very low. The damage from trying to pop an alleged asset bubble is worse than letting it progress on its own.

Rick Santelli is right about the loser homeowners – people who bought more home than they could chew, bought homes in speculative areas, didn’t read the fine print before signing the mortgage or were unqualified. Mistakes were made, but it’s counterproductive to blame the fed, regulators, and congress – the very people that tried to contain the financial problem. The left’s solution is to bailout the irresponsible loser homeowners and let Wall St. fail. A while back, I had a proposal to let delinquent homeowners keep their homes under the condition that they have to be boarded up in it, like during the Black Death.

Nature-ism or biological determinism means individuals are born with original (cognitive) capacity, and while practice can help make people better at certain tasks, tasks outside of the capacity will be impossible – regardless of how much practice one does. We need polices that help winners, not bailouts and welfare for the losers that create no economic value.

Therefore, I propose a STEM bailout: graduates in STEM degrees and or individuals with an IQ above a certain threshold are eligible for a monthly government stipend. Many smart people are unable to use their full intellect because they are too busy trying to pay the bills; the stipend helps solve this by allowing smart people to focus their attention on making apps and other actives that create value, and being smart, their odds of success are greater than a typical unemployed individual. This is just a tentative idea; maybe someone else can flesh it out.

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