CNBC’s Rick Santelli vs. WaPo’s Ezra Klein on government intervention in the economy

Jeff Poor Media Reporter
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Throughout Thursday on CNBC, network CME Group floor reporter Rick Santelli referred to turmoil in the financial markets as cleansing with “a giant enema.” That is, Santelli claimed that despite all the government’s efforts to prop up the failing economy, the truth eventually comes out.

On Friday’s “Morning Joe” on MSNBC, Santelli, who is given credit for inspiring the Tea Party movement in 2009, put his theory up against Washington Post blogger Ezra Klein, who insisted government does play a role in the nation’s economic engine:

KLEIN: Hey Rick, I’m not as with you on the cleansing analogies, which I think can go a little too far. I just mean as recessions are periods of cleansing fire, per se.
SANTELLI: But they are.
KLEIN: Well, we can agree to disagree. Ken Rogoff and Carmen Reinhart, I think most people agree have done the best work on financial crisis to end. They said we have said we got this wrong from the beginning, which I think is somewhat what you’re talking about.
SANTELLI: I said that in February of ’09, didn’t I? I was a bit early.
KLEIN: Well, I guess we can go back to the tape. Anyway
SANTELLI: We certainly can. About 3 million people have.
KLEIN:  What Ken Rogoff thinks in order to get past this, we’re going to need a round of significant inflation. What Ken Rogoff has argued and other people have argued, is we keep sitting here and saying what is Congress going to do, what is a legislator going to do? What are all the politicians going to do? In Washington, in the media generally, we overlook the role of the Federal Reserve. What he thinks and Reinhart thinks is we’ll have to go through a period of recession and that’s going to be painful and is going to move money around in ways that are unfair. Is it time to speed that along? Is that simply the only hope?

Santelli first responded to Klein’s philosophical view on how money moves around. “Well first of all, money doesn’t move around in ways that are unfair,” Santelli said. “Money moves around because people that have it control it or invest it. It’s theirs and they put it places they deem appropriate. Any outsider looking at that process using adjectives like it’s unfair just don’t understand the laws of capitalism.”

As for Klein’s underlying suggestion, the CNBC CME floor reporter explained the process the economy is undergoing now is necessary.

“I think any involvement by outsiders, Fed, European Central Bank isn’t going to help, no,” Santelli said. “I think we should let this play out as it’s playing out. And once we come to a new normal or a new stable foundation, maybe lower equity rates or lower interest rates, at that point maybe we can actually see Congress, maybe it will be after the 2012 elections, but we can see maybe they can pull out these crazy Dodd-Frank bills that nobody can understand. Maybe we can cleanse the system of everything that seems to be slowing it down and let the entrepreneurs invest and maybe we’ll deliver promises to people that are having rough times today.”