Santelli's Rant on CNBC

CNBC's Rick Santelli is getting a lot of press for his rant about bailing out people with bad mortgages.

Rick Santelli says he is an “Ayn Rander.” He also touts the efficiency and fairness of the trading pits in Chicago as opposed to the unregulated markets that produced the financial meltdown.

What Santelli does not mention is that it was the unregulated markets that were supported and defended by Alan Greenspan who was suckled on objectivism at Ayn’s very own tits. When Congress asked Greenspan about credit default swaps and mortgage securitization, he testified that the markets should be allowed to allocate risks as it saw fit.

The trading pits that Santelli loves function as well as they do because they are heavily regulated. There is a centralized clearing corporation that monitors the positions and transactions of all market participants to make sure that they have sufficient capital to cover risks. All market participants can see what is trading and what the open interest is in all contract classes.

Economist Steve Liesman was correct to point out that the market got us into this problem but that it cannot get us out. Left unsupervised, the players went nuts in the markets for mortgage backed securities and credit default swaps. I don’t know whether Liesman is correct about the government being able to get us out. I hope it can.