Page 2 of 2 Justice on Comedy Central
By Julian Delasantellis
Comedy Central's Jon Stewart, the man trusted by America's Generation X to
deliver the news on his Daily Show as much as Walter Cronkite was by
their grandparents, took note of Santelli's use of the term "losers" and
decided to take a look at CNBC. After Santelli ducked out of a scheduled
interview, Stewart found a highly target-rich environment in the networks'
coverage of the last two years of the financial crisis.
First, there was a clip from March 2008, with Cramer vouchsafing Bear Stearns,
when the stock was selling just under US$70 - about 10 days later, the failing
bank was bought out by JP Morgan for $2. Then, through last summer, there were
clips of analysts and CNBC personnel all agreeing that it was impossible
that Bear's fate would soon be shared with other endangered financial
powerhouses such as Lehman Brothers, Merrill Lynch and AIG, all of whom, in one
way or another, soon would share Bear's fate.
There was a clip of Cramer predicting that Bank of America's share price would
hit $60, where last week it hit $2.50. There were clips of Cramer, Kudlow and
other network on-air personnel continually telling viewers last year that the
whole financial crisis was over, when, in truth, it had barely just begun.
Bundled up in a winter parka at the 2008 World Economic Forum in Davos,
Switzerland, cherry-cheeked Maria Bartiromo exclaimed with her doe eyes that
"It's amazing - we've had a lot executives on who say ... that their businesses
are OK. " Finally, Stewart showed CNBC reporter Carl Quintanilla absolutely
prostrating himself before now-disgraced financier Sir Allen Stanford, asking
how he avoided the worst of the subprime crisis; whatever Stanford said, the
real answer, of course, is that he resorted to crime.
Stanford, in response to a Quintanilla question, said that it's fun to be a
billionaire. There's hard-hitting, incisive, investigative journalism.
As the news of the Cramer/Stewart dustup failed to fade from the public's
consciousness, GE circled the wagons to protect the credibility of their
important asset. First came a generally softball-spewing interview on NBC's Today
show, then (after an appearance on The Martha Stewart Show that had
Cramer slamming a rolling pin down on a counter upon hearing Stewart's name) a
generally idolatrous interview on MSNBC's Morning Joe Scarborough show,
where the host said that Cramer, in contrast to Stewart, could predict where
the Dow Jones would be in five years - all current evidence to the contrary.
Stewart, in seeking to prove he had some big guns behind him as well, went to
one of Comedy Central-owner Viacom's big names, the cartoon character Dora the
Explorer, a star on its Nick Jr network.
Dora: "Doesn't Jim Cramer understand that it's not about individual
mistakes he's made; it's about him creating a false sense of urgency that
helped hyper-inflate the bubble?" Stewart: "That was kinda the point."
Dora's monkey friend Boots: "You want me to throw feces on him?"
Finally, as with Achilles and Hector, or Octavian and Mark Antony, it was
destined that these two giants would meet in a titanic clash. This they did, on
last Thursday's show. But what could have been just a few segments of basic
cable fun turned into something very different, in effect, the most
comprehensive and informed effort to put Wall Street in the dock for the
current calamity.
In the end, it was no contest. Cramer rolled over from virtually the first
punch
"I mean, we all should have seen it more. I mean, admittedly this is a terrible
one. Everyone got it wrong. I got a lot of things wrong because I think it was
kind of a one-in-a-million shot. But I don't think anyone should be spared in
this environment."
Wisely, Stewart shifted the focus away from the bad calls to the very
questionable underpinnings of CNBC-type financial journalism.
"CNBC could be an incredibly powerful tool of illumination for people that
believe that there are two markets: one that has been sold to us as long term.
Put your money in 401ks. Put your money in pensions and just leave it there.
Don't worry about it. It's all doing fine. Then, there's this other market;
this real market that is occurring in the back room. Where giant piles of money
are going in and out and people are trading them and it's transactional and
it's fast.
"But it's dangerous, it's ethically dubious and it hurts that long-term market.
So what it feels like to us - and I'm talking purely as a layman - it feels
like we are capitalizing your adventure by our pension and our hard-earned
money. And that it is a game that you know. That you know is going on. But that
you go on television as a financial network and pretend isn't happening."
Cramer continued to throw himself on the mercy of the court:
"Okay. First, my first reaction is absolutely we could do better. Absolutely.
There's shenanigans and we should call them out. Everyone should. I should do a
better job at it."
Stewart pressed home his opening.
"Listen, you knew what the banks were doing, yet were touting it for months and
months. The entire network was. For now to pretend that this was some sort of
crazy, once-in-a-lifetime tsunami that nobody could have seen coming is
disingenuous at best and criminal at worst."
Cramer admits that he now knows that former Lehman Brothers CEO Richard Fuld
lied to him.
"I always thought they were honest. That was my mistake. I really did. I
thought they were honest. Did I get taken in because I knew them from before?
Maybe to some degree."
At that, Stewart pounced again.
"It's very easy to get on this after the fact. The measure of the network, and
the measure of mess. CNBC could act as - no one is asking them to be a
regulatory agency, but can't - but whose side are they on? It feels like they
have to reconcile as their audience the Wall Street traders that are doing this
for constant profit on a day-to-day for short term. These guys' companies were
on a Sherman's March through their companies financed by our 401ks and all the
incentives of their companies were for short-term profit. And they burned the
f***ing house down with our money and walked away rich as hell and you guys
knew that that was going on."
Cramer again pleads for mercy.
"I'm not (former CBS News commentator) Eric Sevareid. I'm not Edward R Morrow.
I'm a guy trying to do an entertainment show about business for people to
watch. But it's difficult to have a reporter to say I just came from an
interview with [now former Treasury secretary] Hank Paulson and he lied his
darn fool head off. It's difficult. I think it challenges the boundaries ... I
wish I had done a better job trying to figure out the 30-to-1 (major Wall
Street financial institution leverage ratios) and whether it was going to blow
up. It did. Once it did, I was late it saying it was bad."
Prosecutor Stewart summed up his case.
"I'm under the assumption, and maybe this is purely ridiculous, but I'm under
the assumption that you don't just take their word for it at face value. That
you actually then go around and try and figure it out. So, again, you now have
become the face of this and that is incredibly unfortunate."
Cramer's confessions weren't quite up to those of the Outer Party members in
George Orwell's 1984, claiming that they had targeted Eurasian nuclear
missiles on Airstrip One, but it was close. The opinion was nearly unanimous
that Stewart won the contest.
But this was just so much more than a TV smackdown liberated from the Federal
Communications Commission's Seven Deadly Words commandments.
Here in the winter of the old lion's life, former US Federal Reserve Board
chairman Alan Greenspan continues to deny any and all responsibility for the
calamities that commenced upon his departure. One of his core defenses is that
there was no way to conclusively interpret what was going on during the last
years of his term, say from 2003-06, as a classic speculative bubble.
The only way you could accept his defense that there was a shortage of evidence
of the hubris of excess and dangerous speculation is by agreeing that the
evidence actually was nowhere - it was everywhere.
It's not that the evidence of what in 1996 Greenspan called "irrational
exuberance" was thin - it was so overwhelming, so right in front of society's
face, that the experience of it was like a blur being seen close up by someone
with farsightedness. Specifically, in media outlets such as CNBC, even before
the shift to the right in the wake of Murdoch, the surfeit of fawning,
reverend, even idolatrous coverage of the bubble and those inflating it should
have, independent of any other factor, been indicative that this was not one of
the human species' rare dalliances with rationalism, but another case where
society had been consumed by mankind's overwhelming tendency to fall victim to
its innate "animal spirits" (as Robert Shiller and George Akerlof put it in a
new book [1]) of unlimited greed and avarice, and that appropriate
counterbalancing policy initiatives should be administered.
The late outlaw comic Lenny Bruce used to say that, "in the halls of justice,
the only justice is in the halls." What a tragedy it is that, as of now, the
only justice in the halls of finance is on Comedy Central.
Note
1. Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters
for Global Capitalism, by George A Akerlof and Robert J Shiller,
Princeton University Press, 2009.
Julian Delasantellis is a management consultant, private investor and
educator in international business in the US state of Washington. He can be
reached at juliandelasantellis@yahoo.com.
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