Cramer: Depression Comparisons are 'Scare Tactics'
CNBC ‚ÄúMad Money‚ÄĚ host Jim Cramer said on NBC‚Äôs ‚ÄúToday‚ÄĚ show Dec. 2 that comparisons between the current economy and the Great Depression are ‚Äúscare tactics.‚ÄĚ Maybe he forgot about his own reliance on the juxtaposition.
‚Äú[T]hat‚Äôs got to be taken off the table,‚ÄĚ Cramer told ‚ÄúToday‚ÄĚ host Meredith Vieira about comparisons to the Great Depression. ‚ÄúThere have been enough things done by this government to absolutely preclude that. I, myself, do not want to use that term ever again on the ‚ÄúToday‚ÄĚ show even to compare it. Things are very different. We do need help from Europe; we need help from
He was right. Comparisons to the Great Depression are way off the mark.
‚ÄúRemember, we have had declines of unemployment 33 percent in this country in the ‚Äė30s,‚ÄĚ Cramer noted. ‚ÄúWe're trying to just ‚Äď we‚Äôre flirting with 7-8 percent. That's why it‚Äôs important to keep a little calmer head.‚ÄĚ
Federal Reserve Chairman Ben Bernanke, a scholar of the Great Depression, said Dec. 1 that there is ‚Äúno comparison‚ÄĚ between the two situations.
‚ÄúDuring the 1930s, there was a worldwide depression that lasted for about 12 years and was only ended by a world war,‚ÄĚ Bernanke said. ‚ÄúDuring that time, the unemployment rate went to 25 percent ‚Ä¶ The real GDP (gross domestic product) fell by one-third. About a third of all of the banks failed. The stock market fell 90 percent.‚ÄĚ
Cramer said framing the current
‚ÄúI‚Äôm reluctant to start talking like that,‚ÄĚ Cramer said. ‚ÄúI've adopted a ‚Äėjust the facts, ma‚Äôam,‚Äô approach, kind of a little bit more of a Dragnet approach, so to speak. Because when we give those characterizations what happens is we can affect things.‚ÄĚ
Cramer seemed to echo a warning his CNBC colleague, Maria Bartiromo, issued in February 2008 that ‚Äúit doesn‚Äôt matter if we‚Äôre in a recession. We can talk ourselves into a recession, and that seems to be what we‚Äôre doing right now and that certainly begets more weakness.‚ÄĚ
But Cramer has been among the most vocal scaremongers when it comes to throwing around Great Depression warnings.
Criticizing economists who opposed the $700 billion taxpayer bailout of the financial
He made a similar claim about the financial bailout in September, arguing that if Treasury Secretary Henry Paulson didn‚Äôt find a way to get a rescue package passed, ‚Äúwe are going to have The Great Depression II on our hands.‚ÄĚ
On Nov. 11, Cramer supported another proposed bailout ‚Äď this time for the