CNBC's Caruso-Cabrera Blames Govt Spending for Europe's Economic Problems

By Brad Wilmouth | September 05, 2011 | 21:07

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Appearing on Monday's NBC Nightly News, CNBC's Michelle Caruso-Cabrera blamed decades of overspending by European governments and borrowing to help provide promised benefits for the continent's current economic problems.

She said "a lot of governments in Europe for many decades now have borrowed a lot of money in order to give very generous benefits to their workers and their retirees. They thought that they would grow enough to generate enough revenue to pay back those debts. That hasn't happened."

The CNBC correspondent - known for her libertarian economic views - went on blame the day's stock market drop in Europe on Italy's refusal to cut its own government spending in spite of promising to do so in exchange for receiving outside assistance in dealing with its national debt:

Europe's central bank stepped in and said we will help you, Italy, we will help you keep your interest rates low, but you've got to promise to make changes like balancing your budget, reducing the size of your government, which is very bloated, passing a balanced budget amendment.

So far Italy has failed to do all those things despite getting the help, and over the weekend leaders of the European central bank made very clear they're unhappy with Italy.

Below is a complete transcript of the segment from the Monday, September 5, NBC Nightly News:

KATE SNOW: Wall Street was closed on this Labor Day holiday, but other financial markets around the world took a beating today. Worries about the economy here at home with that job number on Friday saying job growth flat-lined and fresh anxiety about a possible debt disaster in Europe smashed stocks there. Germany's main stock index fell 5.3 percent, France was down 4.8 percent, and, in London, stocks fell 3.6 percent today. CNBC's Michelle Caruso-Cabrera joins me now. Michelle, why such steep drops in Europe today?

MICHELLE CARUSO-CARBRERA: Well, the general concern, Kate, is that a lot of governments in Europe for many decades now have borrowed a lot of money in order to give very generous benefits to their workers and their retirees. They thought that they would grow enough to generate enough revenue to pay back those debts. That hasn't happened.

The immediate concern right now, the reason the market sold off today is Italy. It is the most indebted nation in Europe, and the situation grew so grave earlier in the summer that investors started to treat Italy like a sub-prime borrower, pushing its interest rates up very, very high. Europe's central bank stepped in and said we will help you, Italy, we will help you keep your interest rates low, but you've got to promise to make changes like balancing your budget, reducing the size of your government, which is very bloated, passing a balanced budget amendment.

So far Italy has failed to do all those things despite getting the help, and over the weekend leaders of the European central bank made very clear they're unhappy with Italy. The sell-off you see comes from the concern that if Italy doesn't keep receiving help, if they were to default on their debts, you would see bank failures across Europe. And that would be problematic. European banks are the ones that have lent Italy all that money.

SNOW: And bank failures does not sound good for anyone. What does that mean for American consumers, for all the rest of us?

CARUSO-CABRERA: Well, if there were to be bank failures in Europe and a banking crisis, you can be sure that the European economy would go into a recession. Think about this: When you put all the countries in Europe together collectively, their economy is bigger than the United States. An economy that big going into recession is problematic overall. and then, remember, they buy our products, they are one of our biggest trading products. They buy Ipods, they buy cars from General Motors. It would hurt us in our economy as well, plus we can expect our stock market to fall pretty sharply in the morning.

SNOW: Something we'll continue to watch, especially tomorrow morning. Michelle Caruso-Cabrera, thanks so much.

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Comments

Go MCC

Submitted by kch50428 on Mon, 09/05/2011 - 9:09pm.

Nice to hear a money-honey finally get to an obvious truth.

MCC (Brains and beauty)

Submitted by Unsane on Mon, 09/05/2011 - 9:55pm.

MCC has relatives that know all about the joys of the Second World: she's a child of Cuban immigrants. (This according to her own "I am CNBC" spot some years ago that unfortunately I can't pin down on youtube in short order.) This does not surprise me in the least. Frequent viewers of CNBC can - I hope - detect that MCC is not all that keen on governments coming to the rescue all the time, and of governments babying people.

"CONSUMED DEMOCRACY RETURNS A SOCIALIST REGIME" - Slayer, "Fictional Reality", from Divine Intervention (1994)

Holy cow,

Submitted by Boudin on Mon, 09/05/2011 - 9:15pm.

A flicker of sanity in the made up media. Someone missed their lines

Seek Truth, Defend Liberty

Sadly, she can't

Submitted by hbnolikeee on Mon, 09/05/2011 - 9:47pm.

be long for this job after those observations. No good deed shall go unpunished.

hbnolikeee

"Europe's central banks

Submitted by NC Boy on Mon, 09/05/2011 - 9:51pm.

"Europe's central banks stepped in and said we will help you, Italy, we will help you keep your interest rates low, but you've got to promise to make changes like balancing your budget, reducing the size of your government, which is very bloated, passing a balanced budget amendment."

Let's have the European Central Banks give Obama a few pointers!

Better get that drug-addled

Submitted by killa37 on Tue, 09/06/2011 - 12:25am.

Better get that drug-addled little gerbil Krudman on CNBC tomorrow to refute what this gal just said...........she can't be 'talking truth' like this!!!!

CNBC's Michelle Caruso-Cabrera is a

Submitted by Rush Fan on Tue, 09/06/2011 - 1:43am.

fiscal conservative.

In reading your link I saw

Submitted by Scuba Dude on Tue, 09/06/2011 - 8:22am.

In reading your link I saw that her two favorite Presidents were Reagan and Clinton. Reagan I can understand, but with Clinton she forgot one thing Clinton had that helped him a lot, a Republican Congress.

Because of them he had a balanced budget.

"The trouble with our liberal friends is not that they are ignorant; it's just that they know so much that isn't so." President Ronald Reagan

Scuba Dude,,,,,,,Gingrich and the Republican Congress certainly

Submitted by Rush Fan on Tue, 09/06/2011 - 3:52pm.

helped Bill Clinton make important positive fiscal changes to our economy that were contrary to Democrat principles. Clinton's move away from Democrat ideals is often described as "Clintonian triangulation". I'm not a fan of Bill Clinton, but when it came to economic policies, he did have the flexibility to work with Republicans.

Art Laffer, known for the Laffer Curve, and a member of Reagan's Economic Policy Advisory Board, said this about Bill Clinton's economic policies:

One income tax hike cut that almost cost him almost everything. Then he became more Reagan than Reagan the day afterwards. He lost the House, he lost the Senate, he lost the governorships, he lost the state legislatures. And then he became more Reagan than Reagan: He got Nafta through Congress, against the unions, against his own party. He reappointed Reagan's Fed chairman twice. He signed welfare reform, that you actually have to look for a job to get welfare. He cut government spending as a share of GDP by 3.5 percentage points. No president ever has come anywhere near him on that. He had the biggest capital gains tax cut in our nation's history in '97. He got rid of the retirement test on Social Security. This guy was a great president and I voted for him twice.

Here is Art Laffer on Fox and Friends discussing Obama's economic 'policies'. Laffer's praise for Bill Clinton begins at the 3:00 mark.

As you know, the Democrat Party has moved so far to the Left since Clinton was elected, that today Bill Clinton would be considered, like John McCain, a 'moderate' Republican, often called a RINO.

The following are a few other sources that describe Bill Clinton's economic agenda:

Heritage Foundation: Bill Clinton was Right.

OnTheIssues: Bill Clinton on Budget & Economy

Much Prefer

Submitted by Caringwhiteguy on Tue, 09/06/2011 - 7:44am.

Much prefer MCC to Becky Quick, whose head for the last 5 years has been in the same place anatomically with Warren Buffett that Richard Wolff's is with Barack Obama.

The hot Becky Quick

Submitted by Unsane on Tue, 09/06/2011 - 7:52pm.

To be fair to the hot Becky Quick, I have always wondered why it is only SHE who interviews Warren Buffett?

Since she is on maternity leave, don't expect to see Buffett interviewed for awhile...

"CONSUMED DEMOCRACY RETURNS A SOCIALIST REGIME" - Slayer, "Fictional Reality", from Divine Intervention (1994)

It is setting in

Submitted by octavioj on Tue, 09/06/2011 - 10:48am.

The newfound respect for the Tea Party in ABC and the final declaration that governments do not solve the problems but rather cause many of them. Refreshing.

As Bruce Willis said, "welcome to the party".

Submitted by UpNorth on Tue, 09/06/2011 - 11:54am.

I'm glad to see that people are finally finding the truth,that liberals attempts to buy their way into people's hearts and minds comes with a price that we can't afford.

To re-elect Obama would be like the Titanic backing up and hitting the iceberg again.

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