Economy & Policy

Me on CNBC: Really, it’s okay not to spend more than you earn

By Justin Fox | March 10, 2009 | +

I can’t get CNBC’s video site to work on my office computer, but I’m pretty sure this is a video of me talking to Erin Burnett and Mark Haines this morning about my “Call Me Mr. Sunshine” column. The best moment was near the end when Haines, sounding exasperated, said something along the lines of, “We can’t have the sort of booming economy we’ve had if consumers only spend what they earn!”

Haines is a pretty smart guy, so I think that was tongue in cheek. One never knows, though.

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  • bryanfromhouston

    Justin,
    -
    CNBC is the equivalent of crack for financial junkies. And I mean that in all seriousness.
    -
    Stewart pegs their shenanigans here:
    .
    http://www.thedailyshow.com/video/index.jhtml?videoId=220288&title=in-cramer-we-trust
    .
    and here:
    .
    http://www.thedailyshow.com/video/index.jhtml?videoId=220252&title=cnbc-gives-financial-advice
    .
    My .02. CNBC, bad. Bloomberg, good.

  • curmudgeon57

    I wonder if Haines considers leverage an essential component of a booming economy. I suppose it’s defensible, with the appropriate caveats, but we tend to forget those caveats.

  • plukasiak

    Haines is a pretty smart guy, so I think that was tongue in cheek. One never knows, though.
    _
    I detected not the slightest bit of irony from Haines… I got the impression that he never actually read your piece (especially “reason #5), and actually thought you would be as optimistic as your headline.
    _
    perhaps the next time you go on the show, you could explain to the jokers at MSNBC that an economic recovery can (and should) occur without a corresponding boom on wall street — that the concerns of the average american are separate and distinct from those of the investor class… the 10% of Americans that own 85-90% of all stock market based wealth. (and maybe give as an example how much better it would be for the economy if business “profits” were reinvested in the wages of the average worker or lower prices, rather than being used to drive up stock prices.)

  • bryanfromhouston

    Pluk,
    -
    Now, we all know as Erin Burnett would tell us that 50% of Americans own stocks. :-)
    -
    (Insert snark here.)

  • Joshua M Brown
  • http://phd9.blogspot.com Paul Dirks

    the 10% of Americans that own 85-90% of all stock market based wealth.
    .
    So if 90 percent of Americans own 15% of stock market wealth, what percentage of their own total wealth does that 15% represent. And how much of that represents the difference between being able to retire or remaining in the workforce?

  • plukasiak

    So if 90 percent of Americans own 15% of stock market wealth, what percentage of their own total wealth does that 15% represent. And how much of that represents the difference between being able to retire or remaining in the workforce?
    _
    I don’t have the exact numbers in front of me, but I do know that stocks comprise a significantly lower percentage of overall asset for the bottom 90% than for the top 10% — with “homes” and “(life) insurance” making up a far higher percentage of the assets of the “not wealthy”.

  • mbirchmeier

    “Life insurance” being a larger asset than stocks? woof…
    .
    I’m not against life insurance, but if you invest enough in stocks *and* life insurance, hopefully you’d no longer need the life insurance.
    .
    -MBirchmeier

  • mbirchmeier

    bleh… commenting again to get followup e-mails

  • bryanfromhouston

    mbirch,
    -
    You’ll get no argument from this group. We are all rational thinkers who appreciate facts and well-reasoned argument.

  • plukasiak

    “Life insurance” being a larger asset than stocks? woof…
    .
    I’m not against life insurance, but if you invest enough in stocks *and* life insurance, hopefully you’d no longer need the life insurance.
    _
    as a percentage of total assets, the wealthy need far less life insurance than does the average person.
    _
    moreover, the less money you have to invest, the more important life insurance becomes relative to stocks.

  • mbirchmeier

    I think we agree, I just think I made the flaw of assuming you meant income instead of wealth. It would be interested to see a plot of life insurance asset weight as it changes between income and wealth.
    .
    -MBirchmeier

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