CNBC's Santelli Rebuts Lou Dobbs' Populism

Now that former CNN host Lou Dobbs has been freed of his duties with his former network, he has been making the rounds on other networks – Fox News “The O’Reilly Factor,” Comedy Central’s “The Daily Show” and now with his long-time rival’s show CNBC’s “The Kudlow Report.”


One of the issues debated among a panel consisting of Dobbs, host Larry Kudlow, former Clinton Secretary of Labor Robert Reich and CNBC CME Group reporter Rick Santelli on Nov. 19 was the issue of wage stagnation – which Dobbs blamed on outsourcing, immigration policy and technological advancement.


“I believe that the issue of unemployment in this country and job creation fundamentally will have to be taken on as a matter of government policy,” Dobbs said. “It will also have to be taken on as a matter of business leadership. As to the idea that wages have been stagnant in this country for 35 year, point of fact, we have to understand what the causes are.”


“And we have to look at what the – the contributing factors are,” Dobbs continued. “I believe those contributing factors are in part increased technological advancements, which has led to productivity. I think it's also without question trade policies which have led to, frankly, an immigration policy that has permitted the competition between our middle class and the cheapest labor in the world. And until we deal with the issue of outsourcing, we are going to be in significant trouble.”


Reich contended the answer to the problem was dumping more taxpayer money into the American education system.


“I think raising outsourcing and talking about what we ought to do about outsourcing is a very, very complicated dilemma, but you know as well as I do that a lot of Americans are being – are losing their jobs, not to outsourcing, but to software, to labor-saving machinery, to numerically-controlled machine tools,” Reich said. “We've got to upgrade the quality of our workforce and provide better education. Our schools are falling apart, Lou.”


Kudlow disagreed with Dobbs’ and Reich’s arguments that wages have stagnated, lending to the notion that the standard of living in the United States has remained the same. But Santelli poked holes in their arguments and said there is empirical evidence Americans are better off based on the technological advancements alone.


“Listen, I look all of my neighbors that are middle class,” Santelli said. “Larry, they have Plasma TVs, They have at least two cars, maybe three. They all live in houses that have indoor plumbing. I think anybody on this panel who can't look around and see that the standard of living, the way an average middle class family has lived has improved over the last several generations has got blinders on.”


And Kudlow cited The Wall Street Journal’s Daniel Henninger, who noted that Thomas Piketty and Emmanuel Saez, French economists described by Henninger as “rock stars of the intellectual left,” have complied data that shows real median incomes have increased.


“It was two French socialists, Piketty and Saez, who created the data which has become the Democratic Party mantra,” Kudlow said. “You know, 24 percent increase just in the last 10 years on real median income. That number just came out, I know there are lags. And by the way, some of these numbers show the bottom quintiles have risen the most. We still can climb the ladder of opportunity in this country, Lou.”


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