After Warning Sequester Would Damage Economy, NBC Says Nevermind
Talking to CNBC Mad Money host Jim Cramer on Wednesday's NBC Today about signs of improvement in the economy, co-host Matt Lauer wondered about past media fearmongering: "[What] we talked about over and over again over the last year was the sequester and whether it would pour a lot of cold water over our recovery here. Has that happened?" [Listen to the audio or watch the video after the jump]
Cramer replied: "No, it didn't. It didn't even hurt the defense stocks, those are the hottest stocks there is. So the stock market is terrific, housing's good, spending is going to increase. Things are going to get better."
Back on February 6, White House correspondent Peter Alexander appeared on Today to promote Obama administration spin that the sequester would be like "a butcher's knife loping off a big piece" of the federal budget.
On March 5, after the sequester went into effect, Today co-host Savannah Guthrie invited left-wing MSNBC host Rachel Maddow to decry the sequester "poison." Maddow declared: "Now we're heading into a big storm. Why are we gonna inflict that economic blow on ourselves?"
A day earlier, on March 4, Lauer voiced his shock that "there hasn't been more outrage on the part of the general public" over the sequester going into effect.
One exception to the media panic came when Cramer appeared on the April 7 Meet the Press. He lamented a hiring slowdown that occurred in the wake of the sequester, not because of the sequester itself, but because of exaggerated fearmongering by President Obama:
The President did make people feel everything's going to shut down in this country because of the sequester. A lot of CEO's were very scared. A lot of the small business people held back. The bankers would tell you that...It was fear that the sequester would cause massive layoffs. Go back in time a month ago. What was the rhetoric of the White House? It was, "Look, this is a really big deal. Everyone has to just stop and consider how bad this is going to be for the economy."
Here is a full transcript of Lauer's May 29 exchange with Cramer:
MATT LAUER: Meanwhile, what a difference a year makes. The stock market has hit record highs. The housing market, best it's been in years. A lot of positive signs, but is the recovery in this economy for real? Jim Cramer is the host of CNBC's Mad Money. Jim, good morning. Good to see you.
JIM CRAMER: Good morning, Matt.
[ON-SCREEN HEADLINE: Economic Upturn; Housing, Consumer Confidence Lead Wall Street Rally]
LAUER: Stock market closing in record territory, 20th consecutive Tuesday with gains. You've got the housing market, it's robust. New home construction, housing prices up almost 11% over the same time last year. And yet you're not doing cart wheels, why?
CRAMER: Well, housing is great. Automobiles are pretty good. But there's not a lot of new jobs, not a lot of new small businesses being created. Not a lot of commercial real estate. Those are the next leg that we have to see go higher.
LAUER: What about consumer confidence? It recently came in, it surged to a high for five years. If people are out there saying, "Wait a second, I feel good about this economy, I feel good about my prospects within this economy," won't that in some ways drive the economy?
CRAMER: Yes. It's the second half phenomenon. You get this first where the confidence is up. Confidence is up because stock prices are up. Confidence is up because your house is worth more.
LAUER: But if my confidence is up, I'm going to go buy things.
CRAMER: Eventually, yes. I mean just the last few months have not been that great on that score. I think the summer's going to be good, if gasoline stays low, I think the fall will be good, but we need to see some new jobs. That has to start, it hasn't happened yet.
LAUER: You talked about the jobs. You talked about commercial construction. You talked about small business lending. I went back and looked at some of the things we've talked about over the last year. One subject we hit over and over again was Europe and their economic troubles and would those spill into the United States. You don't hear much about that anymore. Is that subject over?
CRAMER: Yes, it's over because they're doing what Ben Bernanke, our Fed chief did, they lowered interest rates, they're pumping money in. Europe is bottoming, it's no longer the problem that is was, which is one of the reasons why things are better in our country.
LAUER: And the other thing we talked about over and over again over the last year was the sequester and whether it would pour a lot of cold water over our recovery here. Has that happened?
CRAMER: No, it didn't. It didn't even hurt the defense stocks, those are the hottest stocks there is. So the stock market is terrific, housing's good, spending is going to increase. Things are going to get better. It's why the market's been good, and it's why you should have hope and stay with the stock market, even during a couple of down days.
LAUER: Jim Cramer of CNBC. Jim, thanks very much.