CNBC's audience is not a demographic cross section of America. If it was a cross section, the network wouldn't make any money; CNBC attracts advertisers not with the size of its audience but with its maleness and its affluence. ... Still, the financial pundits flatter viewers into thinking, as Rick Santelli put it during his famous trading floor rant, that they are "a pretty good statistical cross-section of America." For these guys, investors are America. Jim Cramer asked at one point, of the Obama administration, "Who do they think owns stocks?" As if the obvious answer is, "Everybody!" Obama, Cramer complained, "seemed proud that he ignored the [market] averages, as if they're some sort of distraction, and not a precursor of the economy."
I'm not going to argue that the Dow Jones is irrelevant to the economy, but the fundamental problem of the bubble years was that the Dow Jones was growing and our actual assets were not. We weren't really getting richer. We were just pretending to get richer.
In mistaking themselves for the country at large, and the bouncing of the market for the health of the economy as a whole, Cramer, Kudlow and the whole talking-head crew give the lie to Rick Santelli's assertion about a "silent majority." CNBC feels like bizarro world because, in an important sense, it is.
'Economics' is a social science. I am a trained social scientist.
SOCIAL SCIENTISTS KNOW
N-O-T-H-I-N-G
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