An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Tuesday, June 5, 2012
CNBC On-Air Kerfuffle on European Sovereign Crisis
Intense discussion on CNBC this morning over the European sovereign debt situation.
Steve Leisman takes the minority position suggesting an IMF intervention for the good of the global economy and social stability, in the face of German intransigence.
Rick Santelli literally suggests sending in 1,000,000 copies of the book "Altas Shrugged" written by the now deceased deranged sociopath Ayn Rand. Santelli continues to be a disgrace and what should be an embarrassment to the CNBC network.
Do they really not know that they're totally discrediting themselves, and guaranteeing eventual loss of their meaningful audience?
ReplyDeletePretty soon, their own advertising surveys will tell them that only the unemployed are watching CNBC.
I just had an email exchange with Liesman, where I said to him that we CANNOT help Europe because we do not issue euros. For us to have euros to "lend" to Europe, the ECB would have to create those euros (a loan, for example). So at the end of the day it's once again, teh currency issuer (the ECB) helping Europe. Liesman agreed. Liesman also pointed out that there are lots of bad dollar loans in Europe and I countered with, that's the reason the Fed has been doing FX swaps for the past three years, although doing so is really just a means to defend libor rates, which is ridiculous.
ReplyDeleteI may tend to follow other economists more than Liesman because of my MMT education but he is one of my favorite people.
ReplyDeleteGood job, Mike. Lots of problems undersatnding--Dean Baker said yesterday that the Fed should intervene in Spanish bond mkt, for instance.
ReplyDeleteScott,
ReplyDeleteLiesman came back to me with this response: "Interesting points."
The comment seemed genuine. I guess he really doesn't understand.
When you're still working in terms of an epicycle-based theory that presumes circular orbits, it is difficult to get a more parsimonious, explanatory and predicative theory based on laws of planetary motion using elliptical orbits. It's Ptolemy v. Kepler. Even Copernicus, who realized that the planets orbit the Sun, was still stuck in epicycle theory.
ReplyDeleteBTW, although Copernicus discovered heliocentricity, he did not publicly announce his findings until close to his death due to his being monk and Church's doctrine contradicted this. It was left to Galileo to get behind it publicly and we all know how that worked out for him.
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"
Upton Sinclair, I, Candidate for Governor: And How I Got Licked (1935), repr. University of California Press, 1994, p. 109.
http://en.wikiquote.org/wiki/Upton_Sinclair
Anyone catch Santelli a few weeks back, subtly citing Mises' Human Action (or Austrian catalactics or whatever the hell else one might pompously call it) while waving around a piece of raw meat? He used it to make the point that bankers are just rabid dogs and will do everything in their power to devour the "meat" offered by financial regulation. In other words, bankers' bad behavior is also regulators' fault, not just poor regulations or lax enforcement. It reflects the prevailing myth on the right that no ethics is good ethics. I can't imagine Reagan and Thatcher endorsing that view (though plenty of people who worked for them have lived it...).
ReplyDeleteNo one at CNBC bothered to point out the holes in his analogy that bankers are to regulators as dogs are to dog owners.
He's only gotten shriller and stupider with time (though to be fair, he's half right with the TEA Party silliness -- we are overtaxed). But rather than CNBC being embarrassed, I suspect they milk him for all he's worth. Capitalism rules! :)