The Three (Clinton) Stooges and CNBC
I was a day trader in the early 2000s. I told myself it was a form of gambling for intelligent people. I was kidding myself. It’s just a form of gambling.
After the markets closed, I’d always watch CNBC. I stopped when I segued into trading bonds, and then, finally coming to my senses, holding munis.
The financial media have almost zero interest in the bond market, although it’s about double the size of the equity markets. On the rare occasions when anyone on CNBC mentioned bonds, you could be sure the comment would be perfectly asinine. Last I checked, there was only journalist covering munis, Joe Mysak.
So it was a real blast from the past to tune in to what turned out to be the pre-game show on CBNC Wednesday and see, over the next two and a half hours, at least some of the old familiar faces -- mostly looking much the worse for wear in HD.
There was Jim Cramer, hyperbolic dispenser of cold tips and bad advice for investors. And Larry Kudlow, pompous pontificator, who was insufferable even when he was right -- which, to give him credit, was at least half the time. And Rick Santelli, who actually had some experience in the pit, and famously sired the Tea Party with a magnificent rant. And Jane Wells, who, the last time I heard her, was assuring viewers that the bad debt held by Fannie and Freddie was the equivalent of just one teeny, tiny bathroom in a 28-bedroom house, or some such absurd analogy.
As for the three panelists, Carl Quintanilla may have been on during trading hours. I never saw him. John Harwood was not then with CNBC, but he had a column several times a week on page 3 of the Wall Street Journal, and I always wondered why the Journal displayed his imbecilities in such a prominent place. It was probably a case of the news editors getting back at their archenemies, the more conservative editorial board. Becky Quick was on the air, though, coyly asking snarky questions to hedge fund managers and CEOs.
The first thing to be said is that, with some exceptions of course (Bob Pisani), the CNBC reporters and anchors have no background in economics and are abysmally ignorant of that arcane subject, and of economic history.
Quintanella has a BA in political science. So does Quick. John Harwood says evasively that he studied economics and history as an undergraduate. At least half their colleagues have degrees in journalism. Almost none have had experience managing anyone else’s money.
So it came as no surprise when Becky Quick asked Ted Cruz what he was going to do about the fact that women earn 77% of what men make. This claim has been made for four decades; it’s almost as old as Becky. It has 999 lives. No matter how many times it’s refuted by economists, the mantra is repeated -- like the similarly discredited claim that intelligence tests are culturally biased. Women earn less than men because of the career choices they make, for some obvious and some not so obvious reasons. Women are not paid 77% of men with the same experience doing the same job. Apart from its being illegal, no company would pass on the opportunity to grow its bottom line by a 23% reduction in labor costs. Cruz had a chance to expose the lie, but passed on it.
It was also not a surprise that questioners were uninterested in the economic plans of the candidates. Ted Cruz had to interrupt to talk about his own. By my count, there were 30 questions asked of the candidates. Eight of these were on non-economic subjects, including gun control and climate change. Of the other 22, four were about personal finances or business decisions: Trump on his bankruptcies, Rubio on his liquidating a retirement fund, Fiorina on HP stock prices, and Carson on his relationship with Mannatech. Of the remaining 18 questions, 6 were asked by the three “guest” panelists, Jim Cramer, Rick Santelli, and Sharon Epperson. So on monetary and fiscal policy, the three primary questioners asked 12 questions, versus 8 on other subjects.
Reading over the transcript, I was again impressed by Ted Cruz’s intelligence. Not only did he brilliantly turn the tables on the stooges, but he understands what is lost on the obtuse Jeb and on John Kasich: if you want to win over someone else’s supporters (Paul’s and Huckabee’s, in Cruz’s case), you don’t attack their candidate, you praise him.
Reading the transcript also makes clear exactly how nasty and combative Quintanilla and Harwood were. If Hillary’s staff were writing the questions, they could hardly have done a better job.
In my CNBC-watching days, I knew I could always get more informed and intelligent opinions on the Yahoo Finance boards, every hour, every day. The next time we have a Presidential debate on economics, we should think about inviting three random Yahoo contributors to ask the questions, rather than relying on CNBC’s yahoos.