Paul Krugman at the New York Times and other fever-swamp leftists who, incredibly, are operating under the assumption that the economy has experienced an acceptable if uneven "recovery" during the five years since the recession ended are celebrating what they believe was an epic live "embarrassment" of Rick Santelli at the hands of Steve Liesman at CNBC on Monday.
A Google search shows that Mediaite ("CNBC Reporter Torches Rick Santelli"), New Republic ("CNBC's Rick Santelli Was Embarrassed on Live TV"), Talking Points Memo ("Watch CNBC's Tea Partier Get Told How Wrong He's Been"), Business Insider ("Steve Liesman Issued A Devastating Line To Rick Santelli"), and of course Vox ("Watch Steve Liesman demolish Rick Santelli's inflation fearmongering") are all piling on. Following the jump, I will show that Santelli only claimed to have been right about the direction of the economy for the past five years, after which Liesman changed the subject and hogged the microphone:
Key lines (beginning at 0:15 mark):
UNID'd CNBC TALKING HEAD: Hey Rick, you already decided that this wasn't going to work 5 years ago.
SANTELLI: And I was right! I was right! End of conversation!
Clearly, despite what the questioner may or may not have had in mind, Santelli was thinking of the economy's overall results since the recession ended. On that score, Santelli is absolutely right.
Anyone who is toasting the Fed's "success" at reining in inflation to the exclusion of everything else obviously either doesn't appreciate or refuses to acknowledge how historically weak to historically awful virtually every other economic metric (e.g., economic growth, job growth, labor force participation, household income, etc.) has been during the past five years.
To remind the other smug, self-satisfied slobbering sycophants at CNBC, let's see how the Obama economy's growth performance stacks up to other post-downturn economies since the Depression.
As I wrote on June 26, with minor edits (bolds are mine):
The post-recession Obama economy has performed barely better than the economy did during the first 16-19 quarters after the Great Depression ended. It is painfully obvious that in comparison to the other post-downturn economies seen after World War II, the Depression and Obama-era economies are in a horrible class by themselves:
In every other recovery, the economy was at least 10.9 percent larger than its pre-downturn peak 16 quarters — or fewer, in several instances when an earlier subsequent recession occurred — into their respective recoveries. But 16 quarters after their "recoveries" began, the Obama and FDR economies were only 4.6 percent and 4.3 percent, respectively, larger than their pre-"Great Recession" (fourth quarter 2007) and pre-Great Depression (third quarter 1929) peaks, respectively. That's less than half of any post-downturn economy we’ve seen since. Even given three extra quarters, the Obama economy is only halfway towards matching what the worst other post-World War II recovery achieved.
One argument Obama and his administration's defenders constantly make is that the hole dug in 2008-2009 was extraordinarily deep by all but Depression-era standards. As seen below, that argument doesn't help their cause; it hurts it:
The post-Depression bounceback was as large as it was because the economy previously contracted by a huge 29 percent. Where's anything resembling an analogous bounceback after 2008-2009, the worst contraction since the Depression? Answer: AWOL.
What has just been described is what Liesman, Krugman et al are cheering.
Sorry, guys, and sorry, American people. Rick Santelli is right that the past five years has seen a miserable post-downturn performance which has been almost as bad as that seen during the horrible post-Depression 1930s. As Santelli said: "End of conversation."
Here is what the left has pulled from Steve Liesman's change-the-subject rant, while ignoring Santelli's vain attempt to get a word in edgewise (bolds and numbered tags are mine):
"Rick, It is impossible for you to have been more wrong.... your call for inflation [1], the destruction of the dollar [2], the failure of the US economy to rebound [3]. Rick it's impossible for you to have been more wrong. Every single bit of advice you gave would have lost people money [4] Rick. ... There is no piece of advice you've given that's worked." - Steve Liesman to Rick Santelli.
Notes:
[1] — Inflation has been relatively tame (though in the minds of many, officially understated). But look at what was "accomplished" to cause that: real hits to household income, which is stuck far below where it was in 2007, and millions of Americans withdrawing from the workforce. Both of these have dampened demand for goods and services and lessened price pressures. Meanwhile, the government during Obama's presidency has run up over $5.7 trillion in deficits (through June) while adding just under $7 trillion to the national debt (through July 14), immorally pushing the obligation to pay for our profligacy onto generations yet unborn.
If you had asked any of those self-satisfied CNBCers five years ago if they thought the Fed should electronically create over $4 trillion to sop up the government's deficits and clean up bad mortgage loans during the next five years, they would have all characterized it as not only crazy, but would also have predicted that it would never happen. Yet it has, and now they're okay with it. They shouldn't be.
[2] — The dollar's status as the world's reserve currency has been and continues to be seriously undermined and isn't far from destruction. It's typically naive that Liesman and others still believe otherwise. Here's something from a February story at — you guessed it — CNBC. It demonstrates how tenuous the dollar's once untouchably dominant position has become:
(A) survey of 200 institutional investors - 100 headquartered in mainland China and 100 outside of it - published by State Street and the Economist Intelligence Unit on Thursday found 53 percent of investors think the renminbi will surpass the U.S. dollar as the world's major reserve currency.
[3] — As seen above, the economy has failed to meaningfully rebound. And it takes quite a bit of chutzpah for Liesman to presume that we're still in a "rebound" after a first quarter which saw the economy shrink by an annualized 2.9 percent.
[4] — As to following Santelli's "advice": He's a reporter and commentator, and he's never pretended to be anything else. He's not a financial advisor. As a bond guy, he's been trying to guess the direction of interest rates like everyone else. He hasn't been telling people to buy or sell.
If CNBC commentators have really been providing financial advice all these years, then Eric Holder should sue the network into oblivion for the irrational exuberance it embraced during the late-1990s Internet bubble and its failure to call the stock market's steep 2007-2009 decline.
The people who should be embarrassed are Liesman and those who believe he administered a beatdown. He did no such thing. They have to know that this economy stinks by any historical benchmark, and won't own up to it. Allegedly low inflation is no consolation. Ask Japan how low inflation and low growth have been working out for the past 20 years. We're heading towards a situation which promises to be far worse.
Cross-posted at BizzyBlog.com.
