Cramer: Depression Comparisons are ‘Scare Tactics’
Do as I say, not as I do.
That appears to be Jim Cramer's philosophy. The CNBC "Mad Monday" host told NBC "Today" show viewers Dec. 2 that comparisons between the current economy and the Great Depression were inappropriate.
"[T]hat's got to be taken off the table," Cramer told "Today" host Meredith Vieira. "There 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 ‘Today' show even to compare it. Things are very different. We do need help from Europe; we need help from China. But take the Great Depression talk off the table. That is scare tactics."
"I'm reluctant to start talking like that," Cramer said of describing the current recession as "the longest since World War II," as Vieira did. "I've adopted a ‘just the facts, ma'am,' 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."
He was right. Comparisons to the Great Depression are way off the mark - Cramer makes them enough, he ought to know.
"Remember, we have had declines of unemployment 33 percent in this country in the '30s," Cramer noted. "We're trying to just - we're flirting with 7-8 percent. That's why it's important to keep a little calmer head."
Recent contractions in gross domestic product are also far from the huge drops seen during the Great Depression. And current stock market volatility doesn't compare to the 90 percent decline during the Depression.
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 industry on the "Today" show Oct. 1, Cramer warned the country was "on the precipice of Great Depression II."
He made a similar claim about the financial bailout in September, arguing that if Treasury Secretary Henry Paulson didn't find a way to get a rescue package passed, "we are going to have The Great Depression II on our hands."
On Nov. 11, Cramer supported another proposed bailout - this time for the U.S. auto industry by saying it would prevent another depression. "It's like look - we got to bail them out," Cramer told CNBC "Street Signs" host Erin Burnett. "We have to. We have to keep the Great Depression off the table."