Perhaps jealous that Limbaugh is getting all the attention, CNBC's Jim Cramer lashes out at the White House and, in particular, White House spokeman Robert Gibbs.
Cramer has been on a tear against the White House recently. Gibbs was recently asked about Cramer's criticism that Obama's budget was "one of the great wealth destroyers of all time", and he responded: "I'm not entirely sure what he's pointing to to make some of the statements… And you can go back and look at any number of statements he's made in the past about the economy and wonder where some of the backup for those are, too."
Yesterday, I noted a couple of Cramer's gloriously failed predictions. But Jon Stewart really ripped Cramer and CNBC in general last night. Enjoy:
But getting back to Cramer's rant
today, he seems to have swallowed the KoolAid that the stock market is the only
thing worth considering. If it goes down, like it has been since Obama took office, that must
mean that Obama's policies are to blame, according to the Cramer mindset.
What Cramer seems to not realize is that there are two financial realities, not one. There are the economic problems of Wall Street, to be sure. But there are also the economic problems of Main Street. The two have a complex symbiotic relationship. Cramer, of course, loves Wall Street bailouts, but when money is spent to provide jobs? Eh, not so much.
Wall Street indicies like the Dow Industrial Average fail to capture the extent of the problem. For one thing, being an average, it says nothing about the distribution of wealth in this country. And if there's one thing we have learned over the past eight years, a huge income disparity eventually comes around to bite everyone, wealthy or not, in the ass.
Furthermore, what is the Dow? Well, as Stewart reminds us, it's a number which we use to represent how the stock market is doing, but it is not the stock market. It's 30 out of thousands of stocks. And who trades on the stock market? Mostly financial wizards like Cramer. They may trade our money from our 401(k), but they still make the trades. And they buy and sell based on their predictions of what is good and bad for the "economy" — and (like Cramer) they define "the economy" as the Dow.
For some interesting reading on this, check out the lecture by Business Week
economist Michael Mandal as summarized by Matt Yglesius
. Mandal's thesis is simply this: just as real wages really didn't rise much from 1997-2007, the increases in the stock market during that time period were not really real
. There was no acculmulation of wealth from actual productivity and labor — it was largely based on phantom debt (from consumers and companies), and foreign investment in the belief
that our economy was skyrocketing through the roof].
Put another way, Cramer needs to brush up on the definition of the word "indicator", and think long and hard about what the Dow indicates, and who is doing the majority of indicating. The Dow is relevant, but it is not the singular word on the state of the nation's economy.
I don't necessarily blame Cramer for his shortsightedness. He's a financial advisor Wall Street guy. That's his balliwick; of course he's going to be Wall-Street-centric. But it's also the cause of his myopia.