Ralf Rangnick labelled Liverpool's 4-0 win as "extremely embarrassing" for Manchester United but accepts Jurgen Klopp's team is a much better side at present.
Two goals from Mohamed Salah and strikes from Sadio Mane and Luis Diaz sent the Reds to the top of the Premier League as they recorded another memorable win against their fierce rivals to make it 9-0 across the two matches between the clubs this season.
Liverpool were far superior across the 90 minutes as Klopp's men dominated proceedings to go two points clear of Pep Guardiola's Manchester City ahead of their visit from Brighton on Wednesday.
PAUL GORST VERDICT: What Paul Scholes did when Thiago left the pitch sums up Liverpool masterclass
LFC RATINGS: Thiago Alcantara perfect and five others superb against Manchester United
YOUR SHOUT: Rate the Liverpool players after 4-0 win over Manchester United at Anfield
Rangnick believes Klopp's six years at Anfield and the club's shrewd work in the transfer market has allowed Liverpool to surge ahead of United as he reflected on a deeply disappointing night on Merseyside.
"Jurgen came in six years ago and you compare the squad he inherited and finished eighth and this is roundabout where we currently are," Rangnick said. "But with every transfer window after that they develop the kind of squad they have today. I am not blaming anyone but look at the squad they have available the players not even in the squad.
"Firmino, Oxlade-Chamberlain, Minamino, Elliott this shows the quality and team they have built together. It is not just the quality of players but what kind of mentality they have. I would say they have 25 Formula One racing cars in their squad.
"I don't think that nobody has mentally checked out, it's just a different level. They have better players than we have and that is reflected in the result. There will be a rebuild for sure, but that doesn't help us now. It is extremely embarrassing and you just have to admit they are better than us."
He added: "We have to be critical with ourselves. The way we played in the first 45 minutes was in no area what we wanted to see or play. Since we had all our defensive midfielders not available we decided to go with the back five.
"Norwich had five or six massive opportunities to score and had it not been for David de Gea we could have conceded with three or four. I don’t think the first half had anything to do with our formation.
"The way we conceded the first goal was definitely not part of our gameplan. It affected our confidence. The first half was not good enough, We changed from a back five to a back four.
"The first 25 minutes of the second half was much better but the story of those 25 minutes was we didn’t score a goal. The third goal was on the blacklist of what we shouldn’t do against Liverpool."
