CNBC's Santelli Corrects Ezra Klein's Economics
CNBC's Rick Santelli had to explain the economy to MSNBC contributor Ezra Klein on today's Morning Joe (h/t Hot Air). Klein argued that another recession would "move money around in ways that are unfair."
An exasperated Santelli concisely described what was wrong with Klein's characterization of what recession does to an economy:
"First of all, money doesn't move around in ways that are unfair. Money moves around because people that have it, control it or invest it, it's theirs and they put it places that they deem appropriate, and any outsider looking at that process using adjectives like unfair just don't understand markets and capitalism."
Santelli then reiterated the same points he expressed in his impassioned rant on the floor of the Chicago Mercantile Exchange in 2009. "We have a bunch of entities that should have failed it would have brought religion to the system, it would have been a good thing." He also opined on how he thought an economic recovery could play out:
"I think an involvement by outsiders, feds, European central bank isn't going to help, no. I think we should let this play out as it's playing out, and once we come to a new normal or a new stable foundation, maybe at lower equity rates, maybe at lower interest rates, that at that point maybe we can actually see congress, maybe it would be after 2012 elections, but we could see, you know, maybe they can pull out knees crazy Dodd-Frank bills that nobody can understand, maybe we can cleanse the system of everything that seems to be slowing it down."
A transcript follows.
MSNBC
"Morning Joe"
08/05/2011
8:12 a.m. EDT
EZRA KLEIN: Hey Rick, I'm not as with you on the cleansing analogies, which I think can go a little bit too far. I just mean as - recessions I don't think are periods of cleansing fire, per se.
RICK SANTELLI: But they are.
KLEIN: Ken Rogoff and - well, we can agree to disagree. Ken Rogoff and Carmen Reinhart have done, I think most people agree, the best work on financial crises, and they've said that we got this wrong from the beginning, which I think is somewhat what you're talking about -
SANTELLI: I said that in '09, didn't I?
KLEIN: Sorry?
SANTELLI: I said that in February of '09, didn't I? I was a bit early.
KLEIN: Well, I guess we can go back to the tape. Anyway -
SANTELLI: We certainly can. About 3 million people have.
KLEIN: What Ken Rogoff thinks is in order to get past this, we're going to need a round of significant inflation, and what Ken Rogoff has argued, and other people have argued, is we keep sitting here and saying "what is Congress going to do, what is the legislative going to do, what are the politicians going to do?" In Washington, in the media generally, we often tend to overlook the role of the Federal Reserve. And if he thinks and Reingart thinks that we're going to have to go through a period of recession and that's going to be painful and it is going to move money around in ways that are unfair, is it time to just speed that along, is that simply the only hope?
SANTELLI: Well, first of all, money doesn't move around in ways that are unfair. Money moves around because people that have it, control it or invest it, it's theirs and they put it places that they deem appropriate, and any outsider looking at that process using adjectives like unfair just don't understand markets and capitalism.
[CROSSTALK]
KLEIN: - increase inflation believes the shift of wealth from one side to the other on creditors and debitors, they believe that to be unfair.
SANTELLI: And that's why the Fed's got it wrong, all of their assumptions are wrong. That's silly, that's why the programs haven't worked.
KLEIN: But it seems sort of beside the point, what you're saying, you're saying we shouldn't use moralistic language, but that doesn't change the question of whether or not we're going to have inflation.
[CROSSTALK]
SANTELLI: - let's get the inputs right. What we have we have a bunch of entities that should have failed it would have brought religion to the system, it would have been a good thing, but we prohibited that from happening.
JOE SCARBOROUGH, host: Going to Ezra's underlying question, do you believe that needs to be sped along now?
SANTELLI: I think an involvement by outsiders, Feds, European central bank isn't going to help, no. I think we should let this play out as it's playing out, and once we come to a new normal or a new stable foundation, maybe at lower equity rates, maybe at lower interest rates, that at that point maybe we can actually see congress, maybe it would be after 2012 elections, but we could see, you know, maybe they can pull out knees crazy Dodd-Frank bills that nobody can understand, maybe we can cleanse the system of everything that seems to be slowing it down, let the entrepreneurs invest and maybe we'll be able to deliver promises to people that are having rough times today.
SCARBOROUGH: All right, Rick Santelli thank you for your cleansing thoughts. We appreciate it.
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Comments
Was John F. Kerry still on
Submitted by Reaver on Fri, 08/05/2011 - 2:09pm.
Was John F. Kerry still on hand for this? Clearly Rick Santelli should not be allowed to speak. Saying crazy talk like “money doesn’t move around in ways that are unfair”. Obviously Santelli should be banned from all media, after all he is credited with starting the tea party movement. It just doesn’t get any crazier than that. Just think if we had done that back in ’09.
It would be interesting to see what followed
Submitted by bkeyser on Fri, 08/05/2011 - 2:10pm.
I wouldn't be surprised if the entire cast of that MSNBC sitcom just laughed it off and rolled their eyes and said something like, "Well, that was interesting. (Hahahahaha) Moving on to reality now..."
I'm hearing more and more people say one of the quickest ways to spur growth is to repeal in it's entirety, Dodd-Frank. I don't know enough about this legislation to judge it, but coming from those two, I can't foresee anything that would be remotely beneficial for capitalism.
BK, As far as Dodd-Frank is
Submitted by Scuba Dude on Fri, 08/05/2011 - 2:37pm.
BK, As far as Dodd-Frank is concerned it should be repealed. Just look at the 2 authors of it: Barney Frank - did everything he could to prevent FNMA and FHLMC from tougher regulation. A couple of months before they were taken over by the Government he was saying nothing is wrong with them. His boyfriend worked there. How many favors do you think he did for FNMA because of that?
Chris Dodd - corrupt politician, a friend of Angelo Mozilo, former CEO of Countrywide who gave Dodd one or two sweetheart mortgage deals. NEVER provided the documents on the mortgages even though he said he would.
Both these corrupt pieces of scum should be sitting in a jail cell but instead they are free.
Any bills from these pos's should be repealed and abolished.
Mika
Submitted by Gat New York on Fri, 08/05/2011 - 2:48pm.
"laughed it off and rolled their eyes"
That is usually reserved for Mika who has the role of treating guests as the village idiot.
While I never agreed with her father, he is an intelligent man. What happened to her?
To Ezra Klein, any movement
Submitted by tcm14 on Fri, 08/05/2011 - 2:17pm.
To Ezra Klein, any movement of money that does not involve government redistribution is unfair.
Jefferson wrote in 1821...
Submitted by rbosque on Fri, 08/05/2011 - 2:31pm.
Jefferson wrote in 1821... "There does not exist an engine so demoralizing of the nation as a public debt. It will bring on us more ruin at home than all the enemies from abroad against whom this army and navy are to protect us."
Need for Renaissance
Submitted by Gat New York on Fri, 08/05/2011 - 3:01pm.
I'm glad you brought this forward.
The problem we have is not resolved with a debt reduction bill or even a balanced budget amendment. We need a re-engineering of the federal government.
Not a single founding father would have endorsed the kind of federal government we have had since the imposition of the New Deal and we have done nothing to change that in the decades since - democrats and republicans.
Jefferson and others studied past powerful civilizations and concluded that power must remain with the people and not with a central government. Until FDR that was the case.
The worldwide problem we and other western countries have is that our central governments have all gotten too big and have taken on too much responsibility that they canot manage or fund. And there is no long term plan to fix that.
What we need is an innovative plan to re-engineer the Federal Government and the top entitlement programs. Right now I don't see anyone that has that or understands it.
And to listen to Sen. Lurch...
Submitted by almostacowboy on Fri, 08/05/2011 - 4:29pm.
I mean, Sen. Kerry, droning on about "the system isn't broken. It's the same system we've had. (no paraphrasing) It's those TEA Party guys in the House who were hoping to have the nation go into default".
No, Sen. Kerry. This current system of government is broken, and men like you on the left, and John McCain just to your right, are preventing it from being fixed.
It'll be a great day when
Submitted by rbosque on Fri, 08/05/2011 - 2:58pm.
It'll be a great day when journalists stop pretending to be economists. They are just confusing the misinformed and terminally stupid.
Even worse than journalists pretending to be economists:
Submitted by SickofLibs on Fri, 08/05/2011 - 3:18pm.
Professional Racists pretending to be economists.
On Morning Shmoe today, the panel discussing the debt ceiling and BBA included, wait for it - Sharpton.
And we all know how well Sharpton handles his own finances.
Yeah, I'll give the edge to the ex-derivatives peddler Santelli
Submitted by Jer on Fri, 08/05/2011 - 3:49pm.
over the career race hustler Sharpton...barely. Neither one of these carnival barkers should be dispensing economic advice and fordamnsure none of us should be following it.
Jer
"But, but...it's not FAIR!!"
Submitted by johnsonl on Fri, 08/05/2011 - 4:27pm.
Sometimes my jaw drops when I hear these idiots talk.
Ezra Klein
Submitted by cobokat on Fri, 08/05/2011 - 4:29pm.
Ezra Klein is nothing more that a punk! I wish Rick Santelli would go to Fox Business where he would truly be appreciated.
OK, for a second there I
Submitted by amyshulk on Fri, 08/05/2011 - 5:44pm.
OK, for a second there I thought I was going to be interested in this episode, but Sharpton? AND Kerry? Ick.
Ronald Reagan
Ezra Klein is nothing but a
Submitted by Barack Must Go on Fri, 08/05/2011 - 6:51pm.
Ezra Klein is nothing but a left wing, incorrigable little parrot, including the part about working for peanuts.
Klein even unwittingly let slip his true intentions..
Submitted by big.league.slider on Sat, 08/06/2011 - 1:49am.
Here's the disgusting truth about TARP, Porkulus, QE1, QE2, etc. When the fed prints dollars and adds them to the money supply, it devalues the cash savings of every private citizen.
Here's the scam Obama has been running on Americans with cash savings: He and the Dems in Congress want to raise your income taxes, but they can't do that if you protect your money by putting it in the bank. And they cannot get away with simply stealing the cash from your savings account. So what they do is have the fed simply print a trillion dollars, and then give those dollars to his political cronies such as the UAW, GE or the NEA. The instant net effect is that the value of the dollar is reduced by 30% or so, which means the value of your savings is also reduced by a similar amount. So in essence, Obama has stolen 30% of your cash savings and given it to his cronies. And there's nothing you can do about it.
Hot Air has the VIDEO of the Rick Santelli and Ezra Klein
Submitted by Rush Fan on Sat, 08/06/2011 - 7:27am.
dustup HERE.