Santelli: "What If The Fed Did Less?"

Tyler Durden's picture

The prevalence of counter-factuals or 'coulda-shoulda-woulda's in mainstream economics is stunningly biased to explaining "why we're still in the doldrums outside of course of the stock market." As CNBC's Rick Santelli exclaims, we are told at every turn that if we just do more - more stimulus, more monetization, more bailouts - then the recovery would have been better by now and will be in the future. In his typically calm and stoic fashion, the igneous Illinoisan asks, rhetorically, "What if the Fed had done less?" His answer - rather obviously - is that everything would have been different (but not necessarily worse). In a little under 3 minutes, Rick explains why "the Federal Reserve has done nothing but keep politicians from having to do anything."


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redpill's picture

Even the evil fuckers who came up with the idea of the Federal Reserve didn't expect Congress to ever so willingly cede to them every last shred of responsibility for economic policy they ever had.  Truly unbelievable.  Why do we even have a Congress at this point?  All they do is hand over their power to others.

JLee2027's picture

I don't know. Woodrow Wilson, the man who signed into law the Federal Reserve and Income Tax feared he had destoryed America. 

DoChenRollingBearing's picture

Smarty pants Woodrow Wilson...  I have no pity for him rotting away down there in the hot place.

francis_sawyer's picture

 "Why do we even have a Congress at this point?"


That's easy... So the 'families' who own the Fed can make more money...

As soon as the Fed was established we started taking on debt on a GRAND scale, starting with:


- WW2

- Korea

- The Cold War

- Vietnam


- now, the 'War on Terror', all the Bailouts, and, soon to be, SICKCARE

- might as well fatten up Congresscritter salaries and any other Federal pensions you can think of along the way... Plus ~ I guess we'll need a few of them to approve the DEATH STAR...

The Juggernaut's picture

@redpill: We have congress, representatives and a president because although the Founders wanted a country as free as possible they themselves still wanted the RESPONSIBILITY of the inalienable rights.  The next step of the Enlightenment Age is for the People to directly have inalienable responsibility to inalienable rights.  Delegating responsibilities away by voting (thus siphoning power away) will be something of the past.  Self-representation will be the future.  Each person is their own Representative.  A country's government will reflect 100% on how her People govern themselves.

eatthebanksters's picture

Gotta love Santelli...I watch him on my Macbook and by the time he's done the temperature has gone op 30 degrees and it feels like its going to explode!  

imapopulistnow's picture

Hate to troll bomb - I'm really a nice guy - you could ask my friends, if I had any....

OK, I want to agree with Rick Santelli.  His positions are fundamental to understanding how markets and economies work best without interference, without crony capitalism, without moral hazards, without artificial ceilings, floors and money.  The weak and dumb are weeded out, the strong survive and flourish.  

I just can't get there this time.  Falling wages due to globalization, shrunken mfg sector/supply chains due to China, collapsed housing prices, demographically-driven (aging) demand declines, extreme overbuilding, similar economic circumstances in all non-commodity based developed economies, not isolated to just here.  A 30s style depression, not a run-of-the-mill business cycle recession. It was 20-30 years in the making.  It will take more than a single purge to fix.

One of the differences between a recession and depression in my view:  In a recession the weak get taken out; in a depression the weak and many of the strong go out, leaving permanent scars and a weakened economy. 

I believe too many good assets, companies, technologies would have been permanently destroyed had not the govt. deficit spent (they should have used the $$ better without doubt) and had not Bernanke opened the printing presses. 

There is a time when Rick Santelli is absolutely correct and that is most of the time.  But there are those rare occasions when the conditions are truly different and the common sense solutions that normally work, won't.

I suspect that eventually economists will conclude that a root cause of our mess stems from the economic manipulations of China.  Nearly 1.4 billion people, nearly 1 billion in their labor force.  China is following Japan's mercantile policies from prior decades with one difference; China is 10X larger.  They have simply grabbed up too much, too fast of the economies of developed nations and they have responded too slow in developing domestic demand to offset and balance their own economy.

Further technology advances allowed for an accelerated rate of economic transfer to occur.  China also benefitted from a technology base in Taiwan and a financial base in Hong Kong.



Oldwood's picture

Its much more simple. Too many people buying crap they could not afford with money they did not have being loaned to them by people who faked the money in the first place Making themselves incredibly rich and powerful in the process and virtually dominating political power that might have had a chance to stop them. Put a bandaid on that.

bubbleburster's picture

Agreed and with still over easy credit the same continues on and on.  The mindset of entitlement has to fall away and another more self regulated one, governed by old fashioned and adult behavior take its place.  Do I think that this will happen on it's own?  More like that Mel Gibson will become normal before this comes about.

bubbleburster's picture

Good post/reply.  I think that Santelli has dropped the ball on this particular counterfactual and I'm quite surprised.  Given all we know after the fact for him to posit that the FED should have done less or almost nothing and just allow the (forrest) fire of the century to burn its way out on its own, sounds ridiculous and wreckless.  Were the FED and Treasury to have done nothing to save the collapse of Wall Street banks/brokerage company's, I now believe that the implosion would have been a collapse that the entire global financial services industry would not have survived.   It would all have fallen into a black hole and the artificial connections would have fallen apart.  We forget because it's so predominant, how interconnected our planet is.  It is easy to suggest that nature will heal on its own and that real forrest fires are supposed to be good for the long term health of the econsystem of a forrest.  Not the same with humans and aggressive, deep and wide economic collapses.  Humans have a great need for the obvious: reliable sources of food, fuel, medical care and fresh water.  Have a system implode and you'll have mass anarchy in days, no matter what country and even more so in the gun capital of the world (USA).  So, I think that Rick got this wrong.  I do not know if the FED has been correct in all that it has done and I don't think I'll live a long enough life for some genius to publish his PhD thesis on an answer.  I do know that in America that the Obama administration has taken a hands off approach to holding the masters of the disaster accountable.  Watch the PBS Frontline documentary "Untouchables" says it all. 

StychoKiller's picture

To continue yer analogy:  Obamatron and Congress have let the dead wood sit there in a pile, while the Fed pours more tinder and other combustibles on the pile.  Who's got a match?

bubbleburster's picture

Oh heck, this goes back way before Obama joined Congress.  The US has been living way beyond it's means for decades.  It worked for them when they went into debt during WW2 but at some point, don't know when, maybe post-Vietnam, the debt started to become cancerous.  Now, God help them, I have no idea how the country will ever deal with it in the near future. 

This book came out in 1988 and was an early warning that no one took seriously.

I should take my copy down off the shelf and re-read.

Papasmurf's picture

Gotta love Santelli...I watch him on my Macbook and by the time he's done the temperature has gone op 30 degrees and it feels like its going to explode! 

Get a windows 8 PC.  I starts off running hot, so you'll hardly notice the increase in core temp when Santelli's on. 

jimijon's picture

If you really think about it, it seems as though England conqured us again back in ol' 1913. And the proof? We have been fighting all their wars. Even Vietnam was just a continuation of the opium wars.

Go Tribe's picture

Fed money and war leave the rest of us poor.

Shizzmoney's picture

I love how all of these guys like Wilson and Eisenhower and Churchill and even Sandy fuckin' Weill get all contrite on their political and actual know, years after the damage has been done (and beds full of pussy won).


ATM's picture

Wilson was contrite right after signing the bill into law. He knew he was fucking his country over yet did it anyways. That is the worst kind of traitor.

Mr. Hudson's picture

No, they knew that one day the Fed would have total control, but it would take time, and the gefiltefishes running the cartel would have to be patient. Every catastrophe that the Fed helped to create made the Fed stronger and stronger. Rome wasn't built in a day.


Darth Rayne's picture

The Financial Elites are patient. One hundred years is of no consequence. The Rothschild are European financial Elites and have been for at least four hundred years.

Do 'they' care if America fails, succeeds, lasts till 2013, 2113 or longer? No. They will keep getting richer regardless. All they needed to do after 1913 was keep quiet and wait. The Global financial System is designed to funnel money to the European elites. At least the western money. I can't be bothered to determine if 'they' are scamming China. Other than all the fiat currencies (promises to pay what exactly?) China has collected in exchange for actual stuff.

At this stage all 'they' care about is 'their' position. Money has meant nothing to 'them' since the start of the 20th century. 'They' just wish to retain their influence and power. perhaps, more importantly 'their' heads! They will keep quiet until the oil runs out. (I've said too much.)

By 'they' I clearly mean the 'Llizard people' as revealed by David Icke. Not the Rothschilds, obviously. Many Americans have told me, quite aggressively, that the Rothschilds have no interests in America. Who am I to disagree?

Please be aware that I make all this shit up. Especially any statistics. I have a job and I am not paid $124,000 for each 'report' I fabricate.

I could sort all this lot out, if you allowed me to but 'they' would make me a better offer. Who wants to be Emperor of Earth anyway! You are all whinging pussies, no wonder God never calls in. lol

Mr. Hudson's picture

: "By 'they' I clearly mean the 'Llizard people' as revealed by David Icke"

Are you talking about the Alpha Draconians, or their offspring, the Reptilians? Or, the Reptilian’s offspring, the Reptoids? Did you know the blood type of the Basque people of Northern France is Rh - ? That is the same blood type of the Reptoids.


Ruffcut's picture

How about the fuckfed do less stealing and ass raping?

Landotfree's picture

"What if the Fed had done less?"

Rick does not see the forest for the trees.  The Fed was put in that position to sustain the system as long as possible, the Fed not was put in that position to stop the collapse, as that is impossible, as one would need unlimited power.   

redpill's picture

Whether he does or not is beside the point, CNBC is calling the shots here.  His script has a pretty limited number of lines.  Just enough red meat to keep agitated investors watching the channel.

Landotfree's picture

Maybe so, but at the end of the day he is complaining about the symptom instead of the problem.   

At some point, the walking unfunded liabilities will have to be liquidated off the balance sheet, of course I would not be surprised by a 50-70 year liquidation process this time.  Last time was only about 20-25 years or so, depending on how you measure it.

ParkAveFlasher's picture

How many views does CNBC get from Santelli distribution here on ZH?

SmallerGovNow2's picture

Personally, the only time I watch CNBC is when there is a Santelli clip on ZH or other reputable finacial website...

francis_sawyer's picture

Mandy Drury could change all that by going topless...

francis_sawyer's picture

Look! I got junked!... Sorry Becky ~ I guess your bee stings would do in a pinch... 

ATM's picture

Mandy is a troll.

Jackie DeAngelis or Kelly Evans are a different game altogether.


redpill's picture

I like Rick but I don't need to watch his vids anymore, unfortunately it's just the SSDD.

ParkAveFlasher's picture

I'm just saying. 

I do notice they don't put Rick on with Lies-Man anymore after Rick dropped trow' and skull-f'd Lies-Man on live TV, from the floor of the exchange.  So I no longer have any need to watch Rick.  I can just read KWN pre-options expiry when I'm down in the dumps and need tits and gold.

redpill's picture

If he gets into it with Liesman again I'll watch the clip for sure just for the entertainment factor.   Last few times I've seen him it's just been opposite some pursed-lipped host with a blank expression waiting for him to finish his rant so they can ask their next puppet guest what today's "hot stock picks" are.  It's like watching someone bang their face against the sidewalk in front of a crowd of blind people and wondering why they aren't getting a reaction.

RockyRacoon's picture

Santelli liked the corporate bailout and the backing of accounts by the Fed.  That's half-hearted and a cop-out.

Rick ain't my hero no more.   Remember the original rant about how the lazy-assed homeowner taking out re-fi funds to go on vacation?   That's where the money was SUPPOSED to go, but didn't.   It only bailed out the banks.  So, his original rant was based on a lie and he fell for it.   I hesitate to say it, but he has become just a shill for the status quo.  Sorry if I stepped on a couple of toes here, but ANY support for what the Fed does is not justified.  He liked it when the Fed saved HIS bacon.

bigkahuna's picture

If toes were stepped on by this, to heck with them.

redpill's picture

"If toes were stepped on by this, fuck 'em."


Mr. Hudson's picture

True. The Fed has the power to keep the Ponzi scheme going on and on, and that's what it is doing. Rick has a very vivid imagination.

ATM's picture

The Fed game most certainly has an end point. How long that will take is anyone's guess but it is getting closer with each new $85 billion dollar monthly print. There are so many dollars all over the world that it will only take a single spark to set off the hyper inflationary spiral.

What and when that spark occur is anyones guess. I had thought a decade off until recently. Now I think less than that.

marathonman's picture

The world financial system would have collapsed.  The US would have looked like the Soviet Union about 20 years ago.  Now the US looks like the Soviet Union about 90 years ago with the Reds in power preparing to purge the resistant populace to the Gulags.  Sigh....

NoDebt's picture

Thanks to ZH, I now find nothing shocking or enlightening in Rick's comments.  Glad there's somebody out there shouting it to the CNBC drones, though.  Who knows?  Maybe he'll reach somebody who wouldn't have been reached otherwise.

 You know he reads ZH, too.  Could never admit it, but you just KNOW he does.

Hi, Rick.  Keep up the good work.

Winston Churchill's picture

He does read ZH.Admitted itn on air about a year ago.

So does he posts comments?

Out of the closet Rick,whoever you are ?

CDNX fan's picture

Why do you think CNBC got sold recently?

Theta_Burn's picture

Incredible hind site as usual Dick

Unprepared's picture

"hind site" is that special code for deer slaughterhouse?

Ruffcut's picture

Hind sight is when you try to see out from having your head up in yo ass. Turn your brown eye to poo.

q99x2's picture

That is what banksters do. They bribe politicians to commit treason against the citizens of the United States of America. It wouldn't have worked the other way.

ebworthen's picture

Addict behavior.  Dysfunctional government and markets.   Enabling.

These things end much more tragically because of the delayed reality.

Rather than the addict jones'ing at $500 in debt and getting arrested for shoplifting - the enabler gives the addict more time to build a greater addiction.  Before long they are $50,000 in debt and it is a hostage stand off in a bank with a shootout and dead people.

helping_friendly_book's picture

Now there is an analogy I can understand.

I never let my custys off the leash to accumulate so much debt. My guy would have cut me off for sure.

I was always conservative and had very little bad, uncollected, debt. It was a lot of hands on management, but I made money for my guy and made  as much money for myself. 

Put myself through University and was always welcome at all the partys.

He got a nice house with all the updates, new kitchen, finished basement, river house. I got a degree.


adr's picture

If the Fed would have done less most of my dad's Jewish friends wouldn't be as happy as they are.

Theta_Burn's picture

Including Dick Santelli himself...