2009-01-02T08_16_38

In Defense of Jim Cramer

What does one make of Jon Stewart's skewering of CNBC's Jim Cramer and the ineffectiveness of financial journalists.

Jon Stewart of the Daily Show versus Jim Cramer of CNBC's Mad Money, the headline proclaimed. I absentmindedly clicked on the link, and what did I find? Simply that Viacom had requested that YouTube remove the copyrighted footage from the video site.

Naturally, I was then curious, and Googled further for the interview. The web obliged, and I duly watched the footage, complete with lengthy adverts, presumably providing much needed revenue for the Daily Show. From a comedic perspective, the interview was, however, a bust, as they say. Stewart was disappointed that Cramer was not, CNBC, a financial journalist or Rick Santelli, and Cramer seemed to be there to praise Jon Stewart and occasionally admit responsibility for defrauding the investing public.

Stewart seemed, to me at least, to miss the point of Santelli's famous rant, which did not blame the financial crisis on mortgage defaulters, but instead questioned the wisdom of the government appearing to condone or forgive risky financial behavior, by bailing out those who could not pay their mortgages with tax payer money. The details of the mortgage bail out are far less favorable to borrowers than either Santelli or Stewart apparently recognizes or at least reports, the lenders will extract the major payout, and borrowers and tax payers alike will be duped.

However, faced with a broad attack on his employer and financial journalism as a whole, Cramer winced and floundered. He variously admitted complete responsibility, praised Stewart, blamed CEOs, and attempted to turn the conversation toward Madoff. This pin wheel like defense was not particularly effective against an array of finely targeted and edited clips of Cramer opinions and admissions, and Stewart pressed home his attack with uncharacteristic gusto, like a television lawyer breaking a witness on the stand. Whilst watching this (between Viacom's adverts) one had the distinct impression that Cramer had been handed a different script prior to the interview, or a Rohypnol laced iced tea, and perhaps, in turn, Stewart's autocue was particularly carefully and steadily fed on this occasion.

There was an implication in Stewart's line of attack that CNBC should have been more insightfully pressing in their pursuit of the truth behind investment banker greed. Yet, in reality Cramer and Stewart share a common need for ratings. Ratings attract advertisers and pay salaries and dividends. Stewart's show is owned by Viacom, a company with billions of dollars in revenue, derived from selling advertising slots targeted to teenagers. CNBC is owned by GE by way of NBC, a larger company, with an older audience, but with no lesser need for ratings.

Nirvana for both Viacom and CNBC is an enormous audience of docile viewers, passively watching footage about their hero's cribs, amid a thicket of lucrative advertising messages. As the audience is bled dry of its discretionary spending power, the status quo is maintained, the poor are taxed, and the hosts and networks extract as their due their percentage. At some point, as Stewart noted in the interview, value is work, and truth be told neither network nor show contains much value or work.

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