Tuesday, March 17, 2009

Stewart v. Cramer



I guess I am glad that John Stewart has climbed on the bash Cramer bandwagon. I criticizing that TARP-touting Obama supporter half a year ago.

I have a two or three problems with Cramer's public barbecueing, though.

First, a major beef of Stewart's seems to be that Cramer failed to predict the crash. True enough, but on those grounds Stewart should be skewering all the Keynesean economist who are now advising BHO to spend us rich. As far as I know, the only people who saw it coming, and (more importantly) explained in advance exactly why it would happen were free marketeers like Peter Schiff and theory-free contrarians like Gerald Celente. (For a very recent comment on these matters by Schiff, see this.)

Second, there is Stewart's notion that Cramer's employer, CNBC, doesn't emphasize the down side of the stocks they cover because they are "in bed with" those giant corporations. To this I say, "Close, but no cigar." CNBC is owned by NBC, which is a giant corporation. To be more exact, CNBC is a business, and its business is serving people who invest, mainly in the stock market. This means they have a vested interest in making the stock market sound good. That is, they have a vested interest in enabling speculative booms. This effect is reinforced by the fact that, like other "news" outlets, they are basically storytellers, like the bards of old -- weaving tales to hold their audience spellbound. In their case, the stories are about investments -- ie., about the audience -- so they have to make the stories sound up-beat and optimistic, if they can.

Note that even in hard times CNBC systematically tends to play down investments that are basically downbeat and gloomy, such as gold. As as for short-sellers -- well, no one likes a party-pooper, right?

In somewhat the same way, those reports on individual stocks that you get from your broker are systematically inflated. Like CNBC, your broker is trying to sell the stock market to you and I say: buyer beware! Investors should view all these sources very critically.

The best gloss I can put on Stewart's deliberate destruction of Cramer is this: To get people to view such sources more critically, he took the most ridiculous one, the one who keeps yelling "Booya!" and making funny noises, the one moreover who was stupid enough to come on his show, and publicly humiliate him.

Did the end justify the means in this case? My head says "maybe so." The ratings of Cramer's show, the appropriately named "Mad Money," have gone down about 20% since The Smackdown, and that ain't a bad thing. And yet I couldn't help feeling sorry for Cramer. (But then I also felt sorry for that other clown when he stabbed his wife to death.)

On the other hand, many have pointed out that there is a much darker interpretation of the Cramer auto da fe. It happened soon after Cramer began loudly criticizing The Greatest President Since G. W. Bush. A coincidence? I also would point out that it also happened soon after Rick Santelli canceled an appearance on Stewart's show at the last minute (no doubt on advice from friends -- the sort of friends that Cramer apparently doesn't have). What was the crime for which Santelli deserved to, so to speak, get the Cramer? In case you have been in hiding for a month, here it is:










__________________________________________________
Here is an interesting article on the Cramer evisceration. The article was published, I notice, by the organ of the John Birch Society, but it seems pretty solid to me.

4 comments:

Jeremy said...

Seriously, I just watched the Peter Schiff video and i could not be more impressed with him and less with the others. All of these other experts are just skewering him, i would love to see guys like laffer and ben stein come back on and watch those videos and then respond. Did you notice that his prescription for remedying the situation was spending cuts not increases. Why can't we get a guy like this to be the treasury secretary?

Anonymous said...

Contra the herd, Richard Cohen has an interesting take on Cramer's culpability.

pappy d said...

I gather Cramer was a last-minute substitute. Santelli would have made a better victim. Maybe he'd have got up on his hind legs & criticised the bailouts too, but it's doubtful.

CNBC is actually owned by GE. They also own NBC, but they both pale next to GE Capital which counted for about half of GE's 2008 earnings.

Lester Hunt said...

Pappy,

According to Wikipedia, CNBC is owned by NBC Universal, which in turn is jointly owned by GE and a French company called Vivendi (though GE owns 80%). So I guess we are both right.