Here’s a perfect example of why people watch cable news — and, also, why they don’t.
As TPM’s Josh Marshall describes it: “Rick Santelli, famously in 2009, by one measure launched the ‘Tea Party’ with an epic rant about how big government was crushing capitalism while it was actually in the midst of saving it. Since then he’s been wrong about every economic question worth being asked. One of the CNBCers got tired of his nonsense today and this happened.”
Or, as Vox.com’s Ezra Klein tweeted it (with a pretty perfect allusion for old school Real World fans): “What happens when CNBC hosts stop being polite and start getting real”…
Matthew Yglesias describes Santelli, in citing the video above, as a “big time inflation fearmonger” and adds that fellow CNBCer “Steve Liesman absolutely took him to school pointing out that anyone who’d listened to his inflationista advice over the years would have lost a ton of money.”
I’m not nearly expert enough in monetary policy to appreciate who’s actually right and who’s actually wrong in this made-for-cable pissing match. While I’d happily bet against the yutz Santelli on just about anything, the rest of his network has also been notoriously wrong in just about every bit of corporate log-rolling and back-slapping they’ve engaged in over the last decade or more. In any event, if you want a bit more of an explainer on what the hell these people are actually yelling about, Time’s Pat Regnier offers this one.
For all the media hype, not to mention the financial backing of the Koch brothers, it is of interest to note that the so-called “Tea Party” never secured the backing of more than 10% of Americans.
And today, the Ventura County Star reported that the Simi Valley/Moorpark Tea Party ceased to exist due to lack of membership and the inability to find a leader after its last “president” resigned after obtaining full-time employment.
Has anyone pinned down how Santellini was obviously an actor in the Tea Party launch. Remember what he was ranting about then? – a lame foreclosure help program that was a used by banksters as another way for them to fleece underwater homeowners. Yeah, that was really the moment America realized the big govt tyranny had gone way to far. They took people’s upset over economy, Wall Street corruption and bail out and re-directed towards Obamacare. As Ernest notes, not organic enough to last, but quite an effective way to bog down govt ability to do any good for majority of people and to keep rich elite away from all the attention.
On monetary policy, it’s this simple, as well argued by libertarian Michael Shedlock and rebel economist Steve Keen et al….most of money in circulation is created by private banks via loans, debt creation. Private debt so created swamps govt debt, big time, so Fed would have to print at orders of magnitudes greater than they ever have to overcome the debt deflation created by recession and banks stopping their lending. Mish correctly predicted deflation in spring of 2008 when most everyone else was freaking out about oil price and inflation. He is bearish and has been some wrong since then, but right that inflation wasn’t coming back.
Steve Keen shows how mainstream economists like Krugman are ignorant of the proven, variable in data, money creation of private banks and this ignore private debt is the indicator in our capitalist economies activity – in fact, he shows it’s acceleration of private debt. He is Doug. Cool things with dynamic modeling and has gotten into dust ups with Krugman on twitter on these issues. His models indicate money created by bank debt can be good thing for economy and created enough improvement/growth to easily pay back loans with interest, when loans are spent on innovation, improvements, development, etc…but when bank debt money goes to asset bubble Ponzi schemes (thing purchased can’t pay loan back with income it brings in, can only pay loan if it appreciates because some other sucker uses bank debt to buy) , then we get into unsustainable booms and then busts. So money creation, the worst thing in world to inflationistas, is good as long as directed toward productive sustainable investments. To me, this explains why capitalist countries with private banks actually do fairly decently for the wealth of nations but has two big flaws -1) avoidable, unnecessary boom bust cycles of financial sentiment whiplash and 2) money creation and this it’s profits, interest. is controlled by private banks,/ed, a private cartel that further enriches already rich elites, and is rewarded for volume of “sales” (loans) and this always get carried away eventually and fund Ponzi scheme asset bubbles where, like Paris Hilton, assets get famous and more expensive, because they are already famous expensive.