Stewart versus Cramer telling of media failings

by Dawson Smith, 2L
Law Weekly
March 24, 2009

I am not an economic expert by any means. At an Oklahoma “Odyssey of the Mind” competition over ten years ago, I came in third place in the state in the economics category, but I have no idea how I did it. I don't understand complex financial instruments, barely even understand mortgages, and if someone tries to explain a concept as simple as short-selling to me, my brain looks for an escape hatch.

I do know media, however, so while discussing the best ways to deal with our crumbling economy is above my pay-grade, masturbatory nonsense such as writing an editorial about the newsmedia's reaction to a newsmedia watchdog comedian taking on a financial news infotainment network is right up my alley.

If this story has slipped beneath your radar, here's a quick summary: Feb. 18 on CNBC, stockbroker Rick Santelli staged a live “spontaneous” rant about the bailout package, with the money quote, “The government is promoting bad behavior! Do we really want to subsidize the losers’ mortgages?!?!?! This is America! We're thinking of having a Chicago tea party in July, all you capitalists who want to come down to Lake Michigan, I'm gonna start organizing."

This was subsequently revealed to have been a planned stunt, as the “grassroots” website chicagoteaparty.com which sprung up in the wake of the segment had been registered by the Koch family, right-wing billionaire founders of the John Birch Society and funders of the Cato Institute.

Santelli was scheduled to appear on The Daily Show on Mar. 4 but flaked, and so instead TDS ran a nine-minute segment eviscerating CNBC for failing to report on the shady practices at the investment houses and for encouraging irresponsible spending and investments. Much of this segment featured clips of Mad Money host Jim Cramer, by far the most recognizable face on the network, touting the strength of the specific firms, juxtaposed against how long it took for those firms to fold (in the case of Bear Sterns, six days.)

Cramer responded by talking on the morning shows about how Jon Stewart was bullying him, and then on Mar. 12, appeared on TDS in person. Cramer showed up looking like a puppy dog called into the principal's office at Mixed Metaphor Elementary School, and Stewart, in the alleviated language of the internet, totally pwned him.

Jon opens the interview amiably, possibly extending an olive branch, even. “How the hell did we end up here?” he asks.

There are two possible interpretations of this question. The first is, “How did you and I get into this public feud to the point where we have to be on the show together to clear it up?” The second is, “How did the country screw itself and the rest of the world so badly financially?”

Cramer chose the first interpretation, and the rest of the interview consisted of Stewart doggedly trying to convince Cramer that he meant the second.

Stewart's problem wasn't with Cramer personally, though he certainly took issue with the effects of treating financial news as entertainment. No, Stewart's real problem was with CNBC pretending to be objective in its reporting while taking all of its information from the mouths of CEOs, and then airing Santelli's rant calling those who acted upon CNBC's advice “losers.”

Now, to be perfectly fair, Cramer has actually been better about telling truth to the CNBC power than most others there, most notably in Aug. 2007 when he had his infamous “meltdown” with Erin Burnett, shouting that the Wall Street firms would go bankrupt, and that he's “too old” and knows “too many people” to toe the party line and tell people that investments are safe when he knows they aren't. But as soon as the meltdown became a story, and his credibility was under attack, he stepped back in line, just as he capitulated with Stewart.

Matt Taibbi of Rolling Stone has suggested that the best way to understand the crisis is not in terms of money, but of power. The firms treated the economy like their own personal poker chip, lost it all, and then got the government to give them exclusive power to win it back.

Stewart's money quote of the night came after showing previously unaired footage of Cramer instructing a colleague on how to create rumors around stocks that play into the stories the companies want to tell. “Now, I understand you want to make finance entertaining,” Stewart replied, “but it's not a f----ing game, and I can't tell you how angry that makes me, because it says to me: you all know.”

That's the problem. They all know, and we don't, and “they” want to maintain the fiction of the perfect information system so that the rest of us are to blame for the mistakes they made with our money.

CNBC may not be entirely to blame for the financial collapse, but they are the foremost channel of information between Wall Street and the investor, and they chose to get in bed with those parties interested in keeping the investor in the dark. Cramer might not have deserved all of this on his shoulders, but I think he can handle it and he played his part for sure, so my sympathy is limited.