Remember that old ad slogan? "When E.F. Hutton talks, people listen."
Wall Street uber-ranter Jim Cramer wants America to keep listening to what Wall Street says, but no one is in the mood right now.
Cramer took a stab at reasserting the stock market's importance in setting the agenda yesterday morning in an appearance on the Today show. Discussing the market's plunge this week, the CNBC commentator said: "We have an agenda in this country right now that I would regard as being a radical agenda. We had a budget come out that I think put a level of fear in this country that I have not seen in my life and I think that changed everything."
Asked by Today host Matt Lauer if President Obama's policies are "shareholder-friendly," Cramer responded: "Shareholder friendly? This is the greatest wealth destruction I've seen by a president." Then, responding to a comment by CNBC colleague Erin Burnett that President Obama's policies might be good for the country overall, Cramer said:
The stock market is the country right now. This is where people's wealth is. This is their pension plans, their 401(ks)s, their IRAs.
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I'm sure Cramer and the people who run CNBC wish that were true. But Wall Street's credibility is so badly shot that few people give credence to the "market verdict" on the president's recovery plans or anything else. What's more, from a retirement security perspective, Cramer's comment that "this is where people's wealth is" was never true in the past -- and it sure isn't the case today.
The average American has a retirement savings balance of about $60,000, according to the Center for Retirement Research at Boston College -- hardly enough to be central in a household's retirement security planning. Only 63 percent of eligible employees even participate in their employers' defined contribution plan, according to Fidelity Investments. More broadly, only 47 percent of American households owned equities or bonds in 2008, according to the Investment Company Institute.
Obama Press Secretary Robert Gibbs framed it just that way when he was asked yesterday about Cramer's comments. "If you turn on a certain program, it's geared to a very small audience," he said. "No offense to my good friends, or friend at CNBC. But the president has to look out for the broader economy and the broader population." It was reminiscent of the smack down Gibbs delivered to CNBC correspondent Rick Santelli after his ridiculous rant last month from the floor of the Chicago Mercantile Exchange about the importance of market winners and losers.
Here's the other interesting thing: Obama's policies aren't provoking the "fear" Cramer claims is rampant in the country. According to the latest NBC News/Wall Street Journal poll:
--68 percent of Americans have a favorable view of the president, including 47 percent whose opinion is "very positive."
--67 percent feel hopeful about his leadership.
--54 percent say Obama has the right goals and policies for the country, and 57 percent "tend to support" the stimulus package.
--41 percent say the country is headed in the right direction, up from 26 percent in January.
I'm not claiming that Americans aren't scared, of course. Those of us who do have retirement portfolios are down 40 percent or more, so there's no shortage of fear to go around. But the system of retirement saving based on investor-managed accounts has failed to encompass all of America in the way Cramer claims. It wasn't working well before the market meltdown -- and now it looks less relevant than ever.
Instead, the talk in Washington focuses on finding new ways to insure retirement security. Retirement experts are calling for safer, more automatic savings options, ranging from a so-called Automatic IRA that converts to an annuity upon retirement to a federally-run pension program that would sit alongside Social Security.
Cramer and all the other market pundits are still talking. But is anyone listening?
UPDATE: Jon Stewart took apart Kramer and Santelli limb by limb last night in a brilliant send-up of CNBC: