PBS' "Wall $treet Week with Louis Rukeyser," hosted by one of America's best-known and ir reverent economic commentators and visited each week by the financial world's superstars, celebrates its 20th anniversary this month.
The milestone is being marked this week on PBS by "Twenty Years of Wall $treet with Louis Rukeyser," a retrospective of highlights from the past two decades.
Besides hosting the series, Rukeyser is the author of several best-selling books on economics and investing, including "What's Ahead for the Economy: The Challenge and the Chance." He also writes a weekly syndicated newspaper column and lectures across the country.
Rukeyser talked about his 20 years on "Wall $treet Week" with Susan King.
Do you remember any amazingly bad predictions economists have made over the last 20 years?
Interestingly enough, the people who have been the most off-base most consistently are the extreme pessimists.
If you have a moment, that fits into another theory of mine about life: If you know any young person in this country who has no conspicuous IQ or talent, but wants to live very well in America, I can solve that person's career problem for you right now. Tell them to become a professional economic pessimist. They need not know economics and they need never be right. Because I have discovered over the 20 years of doing this program that if you make one wrong optimistic prediction, no one will ever forgive you or forget you. But you can make 15 wrong pessimistic predictions and everyone will forgive you.
People who routinely predict catastrophe not only survive but flourish. I think the reason for that is that most people are scared to death about money. First, we think we will never get any and if somehow it comes our way, we think we will lose it tomorrow.
Therefore, when someone comes along and says, "Things are worse than you think," the tendency is to say "Oh, my gosh, I always thought so." And these guys have been predicting the end of American civilization since I have been around and are always at the top of the best-seller lists.
Do you think we are in a recession?
Let's say it's not a golden hour for American statesmanship.
What amuses me is the effort of people to make a partisan issue out of it. I think both sides should be hanging their heads in shame at the way we have behaved. And I don't think the economy is in great shape. The big argument right now is: Are we already in a recession.
By the most technical definition, which is 2 consecutive quarters in which the gross national product declines after adjusting for inflation, it's not yet possible to say we are in a recession, but that is like (asking), "How many angels can dance on the head of a pin?"
I don't know anybody who thinks we are in a boom. The economy is punk. It is anemic. It is weak and it appears to be getting weaker. That is the reality. I don't have the impression it is falling over a cliff, which would suggest to me that the next few months are not going to be very happy ones.
We have had for several years now a rolling recession in which it rolls from region to region and industry to industry. The oil belt had it, the arm Belt, and the Northeast is clearly in recession. In terms of industry, the auto industry is in recession, the housing industry is in recession and many manufacturing industries are in recession.
Are there any sound tips for the small investor?
I think that people ought to get back to basics in terms of their finances and that means being a little more careful about going into debt. I think that people are going to discover that it is not necessarily un-American not to spend 120% of your income every week, and that it might be sensible to pull in your horns a little bit. I think that means getting back to some rules that make sense in tougher times.
One set rule is not to borrow unless the thing for which you are borrowing will last as long as the loan. That is a very practical rule. It is all right to borrow to buy a house, it is all right to borrow to buy a car, as long as you don't take one of these new 30-year loans they are pushing.
But it means you probably shouldn't borrow to go on vacation or to buy some expensive present. It may make more sense to save and then enjoy as opposed to the manic desire for instant gratification followed by, "Someday I will pay this off."
In terms of people who maybe can think into the longer term, I still think that people who are small investors, who steadily accumulate quality stocks, are going to look smart over the next five or 10 years.
In terms of our outlook, I think that some of the demographic changes that are occurring in America may turn out to be positive. Everybody knows that we are getting older. We usually only hear about the negatives of that--like pension costs problems--but there is a positive side to this as well, which I think is a reason for long-term hope.