Santelli vs Liesman On "Who Pulls The Levers"
It would appear, judging by the following discussion that the mainstream is so far down the rabbit-hole of central-planning bias that, as CNBC's Rick Santelli exclaims, "you can't imagine it any other way." In a brief 60 second screamfest, Santelli and Liesman battle over just who (or what) should be in charge. Santelli's free-market perspective that markets will set the equilibrium prices is entirely lost on a bleating Liesman who, when addressing the question of what would happen without a 'Fed', utters the following serf-like phrase, "but, who would pull the levers?"
The first 4 minutes or so are spent addressing differences over the 'structural vs cyclical' aspects of unemployment (Santelli: "firms have entirely figured out that they can rack up record corporate profits without hiring record amounts of people - and I don't see that changing any time soon.", how low capital costs provide for corporate profits over jobs, job quality differences, and the real difference between employment rates and unemployment rates.
The fireworks begin when Liesman discusses concerns that the Fed can directly impact the unemployment rate through their policies at around 5:30 and Santelli notes that the Fed will never step away from their ultra-accomodative stance until they break the markets or get push back by a new congress - "you can't keep these programs going on forever if the issues that they are trying to correct are not correctable in a tight time frame... and they don't seem to be."
At 6:40, Wilbur Ross adds - reflecting our view - "if the only thing keeping the economy together is $85 billion in bond purchases, then we are in bad shape!?"
Then at 6:50, Liesman comes over the top, "So the other option is 'not doing it' - that's a little bit crazy isn't it?"
Kiernan asks "why not let the economy stand on its own?" - maybe maintaining this extreme policy action means "it will hurt more later?"
Liesman responds "why would that clear the system?"
Santelli blasts "it's been so long they don't even remember"
Ross sums it up perfectly "At best it is curing the 'effects'; it is not curing the problem"
Then at 7:40, Liesman asks "What would the Fed leaving, help?" - noting the well-held view that "[the Fed] should withdraw to force the fiscal side to make changes..." to which the Fed's rote response is "it is not our job to treat the politicians like children."
Santelli "They are treating them like children - by always giving them an exit - they are doing things that keep congress (and many other people) from understanding the issues of the day by pushing them forward in time."
Liesman: "But, if not the Fed, Then Who Would Pull The Levers?"
Fade to black...
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