Glenn Greenwald makes the main point I wanted to make about the last episode of Stewart v. Cramer. There is nothing special about Cramer and there is nothing special about CNBC. The point Greenwald doesn’t make, but which I will, is that Cramer, like thousands of others, gives investment advice, and like thousands of others failed to call the collapse and therefore gave a ton of terrible advice. Greenwald’s point is that CNBC, like basically every other news outlet, has been captured to some extent or other by the high-placed sources that it has so fastidiously cultivated. Greenwald rightly points out that this is exactly how the New York Times and other elite media outlets talked the country into the war in Iraq.
The point that can’t be emphasized enough is that this isn’t a matter of past history. Unlike Cramer — who at least admitted fault last night and said he was “chastized” — most establishment journalists won’t acknowledge that there was anything wrong with the behavior of the press corps during the Bush years. The most they’ll acknowledge is that it was confined to a couple of bad apples — The Judy Miller Defense. But the Cramer-like journalistic behavior during that period that was so widespread and did so much damage is behavior that our press corps, to this day, believes is proper and justified.
And here’s something I’d like Jon Stewart to grasp. In some important sense, Timothy Geithner faces the same assymetrical information quandry Cramer did. The government is so incredibly dependent on Wall Street for much of the information it needs that it is almost inconceivable that the government (and thus the taxpayer) is not being gamed. Somehow I’d never thought much before about the similarity between regulatory capture and a journalist’s becoming a tool of her sources, but it’s a pretty striking similarity.
Why are so few people able to spell Jon Stewart's name? I feel like half of the commentary on the Cramer stuff I've read by bloggers who I assumed were pretty familiar with him keep calling him John. Weird.
@jme I only know it because my brother is a Jon. It's too common to worry about.
Will, my intuition was that Stewart got your point about journalists' becoming tools of their sources. He wasn't as explicit about the parallels between Iraq Media Coverage and CNBC as you are here (and you are right about them) but it seems to me that he got the fundamental idea you're getting at when he talked about the basic starting point of not taking a source at face value.
Sure, but government and it's appointees operate under a vastly different incentive structure. Cramer suffers from assymetrical information and ironically profits more the more assymetrical it is whether its correct or not. While Geithner has an incentive to actually receive the right information so he can fix the problem. Cramer has no such incentive. If Cramer had figured out in 2006 that the market was going to collapse at the end of 2008, he would have been a fool to start doomsday proclamations as his show would have probably been canceled due to nobody watching and now a couple people would be saying, “Hey remember that crazy Jim Cramer said this collapse was coming, whatever happened to him?”
So yes assymetrical info is a problem in government as well, but at least there is an incentive to get it right, especially for Geithner at this point in time. That was clearly not the case in the financial industry the past few years. Getting it right would just lose you tons of money.
Valid point regarding CNBC and Wall Street. One thing has gotten me quite irritated though, and that is the assumption that advice is somehow tantamount to coercion – ipso facto CNBC's giving of bad financial advice amounts to the mass fleecing of Americans. I must have missed the civics lesson where we were taught that risky behavior is offset by the mitigating presence of professional daredevils who assure us to “come on in, the water's fine” and that the burden of risk is shifted to those that massage our less noble instincts. Moreover, it disgusts me that a huckster of a different kind is now vaunted as some kind of latter day Murrow (host of “living rooms of the stars”) for scolding a guy whose crimes any rational human rightly conflates with those of Billy Mays.
We can all admit that this network, whose purpose it is to give investment advice and financial news, was wrong, and gave lousy advice. We can admit that many of the people who appear on the network are predatory douchebags. So are the owners of OTB franchises by the same logic. But to suggest that CNBC, in giving bad, predatory financial advice, is solely responsible for the bubble we've found ourselves in, and the subsequent losses many Americans have endured is hysterical and ridiculous. I personally, just as a matter of common sense, have never trusted the notion of rapid trading, and those who engage in it do so at their own risk. In laying the bulk of the blame on a Cable TV station for God's sake, that doesn't even command a competitive market share, we completely disavow individuals of their own responsibility for an inherently risky financial endeavor. We will always have the irresponsible, the gullible, the gamblers, the eager to make a fast buck. And we will always have the purveyors of snake oil, and the Jim Cramers.
I've been writing and re-writing this comment, maybe this is the best nutshell:
Most people should not be actively trading their retirement funds, but these networks are structured on there being a mainstream audience ready to do just that.
It isn't bad info that is the worst thing here, it is that cable took a trading culture and made it an all day, every day, infomercial.
I mostly agree, but (as I suggest below) look at the ads. CNBC isn't in the business of giving financial advice. Their business is ad revenue. During the trading hours what are those ads? I don't watch often but most seem to be from brokers ready to take your order.
CNBC wants to generate buzz, to make those ad placements more valuable. They want you to trade. What you trade is less important.
This really strikes me as analogous to criticizing the mainstream marketing of games of chance, because degenerate gamblers bet their family savings and more often than not, lose everything. As someone who has spent quite a lot of time around Atlantic City, I am intimately acquainted with the depths of human depravity that is the result of another form of mainstream asset gambling. The fact that people aren't aware of the inherent risk in what CNBC's “advisers” urge them to do is besides the point, so is the fact that a network has grown out of this practice. There's also a network that would have us believe, if we were to take them at their word, that “History” includes solely the events of WWII, UFO sightings, and possible encounters with real live monsters.
Sure this might be bad. It's always bad when people engage in stupid, reckless behavior as regards their finances. It's also bad when people take advantage of that tendency to profit. But when a guy bets his kid's college fund on a prize fight, and it turns out the fight was fixed and he bet on the guy that took the dive, why is it we always blame the fixers first?
“But to suggest that CNBC, in giving bad, predatory financial advice, is solely responsible for the bubble we've found ourselves in, and the subsequent losses many Americans have endured is hysterical and ridiculous.”
I'd agree but I've never heard anyone come remotely close to saying such a thing. Certainly you can't possibly be referring to the Stewart interview. Stewart's criticism that CNBC, instead of being a worthless bunch of cheerleaders telling everyone they're real journalists, they could be real financial journalists. Certainly, had the clowns at CNBC actually done what they say they do (e.g. In Cramer We Trust), then we'd be better off.
And Stewart makes a very compelling point and adds much evidence through that interview he kept going back to, that Cramer knew damn well that these finance guys were full of shit and couldn't be trusted. Yet, he just kept cheerleading as did the whole network.
This argument is far more complex than the strange strawmen you propose in your posts.
If the Krazy Kapitalists of Wall Street had really “captured” the press, wouldn't the Dow be at 35,000 now instead of limping slowly back to 13,000 or so under the steady hand of Obama and his stimulus?
No, the idea is if they hadn't captured the press, the Dow would have been limping a long time ago. We all found out the Iraq war was based on lies, too… eventually.
Sorry, it seems like straw men because I'm not exclusively referring to Stewart, but rather the dogpile that has accumulated on CNBC and Cramer in general. Andrew Sullivan has basically stated that these guys are responsible for what he's been calling the “depression” up until recently. I guess my judgment of Stewart making a point about this is clouded by the fact that I really place Stewart in the same category as every other huckster/pundit on cable or AM radio. I don't take him seriously, and even when one tries to distill a point from his comedy, glaring ignorance of crucial facts is evident. And while that certainly doesn't make your point about Cramer any less relevant, the whole spectacle seems more like two deceptive idiots arguing morals, and Stewart happens to be the home team. This is a man (Stewart) who kisses Evo Morales's ass when he's on the show, yet suddenly has an attack of virtue with a TV host who's Wall Street's Crazy Eddie.
Doesn't Wall Street own the press?
In the case of CNBC, it's owned by GE.
Can you “capture” something you already own?
“We all found out the Iraq war was based on lies, too… eventually.”
Um, a lot of us knew the Iraq war was based on lies before we invaded it, Will.
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CNBC is not like a normal journalistic channel like CNN its more like ESPN , that's a whole different level of regulatory capture. Regarding Treasury and Wall Street I imagine the next debate in political economy will be a comparison between the Treasury Wall Street complex and the Military Industrial complex.
There is a structural bias built into the press.
Because it is easier to reach and report what big organizations have to say, and dispersed information is hard to gather, press coverage will favor large centralized institutions.
Thus an anti-liberty bias is inevitable.
To some the inevitable bias in favor of large government, large labor unions, the UN prove a liberal bias to the media. To others the inevitable bias toward large corporations, Wall Street, and large flashing geopolitical actions demonstrate the media is conservatively biased.
Very true; and I think it probably matters a lot in war, when it's so much easier and less dangerous to find out what organizations say about war than to go see what it's like.
The bias in the press (and I think also in the blogging world) is towards spokespeople. Towards any organization that is dedicated to answering the question, “What should I think about this?” in a simple form. That means the administration's press secretaries and spokespeople; it also means corporate spokespeople, advocacy organizations, financial advice gurus, and so on.
Who's missing from the picture? Anyone who's not a professional at telling people what to think. Workers, independent business owners, soldiers, and civilians in war zones rarely get their say. Also, anyone who can't give simple, punchy soundbites. So scientists and economists are badly represented or misrepresented.
You're going to get a strongly pro-Washington bias, in both conservative and liberal administrations. You're usually going to get an anti-liberty, organizational bias. And more broadly, you're going to get a bias in favor of those who view the world as a clash of ideas, and see politics as central, as opposed to those who see the world as something else: a place to enjoy, or a place to examine, or a place to work, or simply a place to survive.
Bingo ! Stewart is a hypocritical jerk. And a lot of the people in his fawning studio audience are pseudo-sophisticated morons.
Scarborough nails it….http://www.youtube.com/watch?v=jeILW5T0E3M
“Andrew Sullivan has basically stated that these guys are responsible for what he's been calling the 'depression'.”
Bull. I read his blog regularly. He hasn't said anything like that. You made it up.
This statement, the one I am about to quote, is hysterical and ridiculous: “”But to suggest that CNBC, in giving bad, predatory financial advice, is solely responsible for the bubble we've found ourselves in, and the subsequent losses many Americans have endured is hysterical and ridiculous.”
Stewart's point is Chomsky's point. The media is in the business of manufacturing social consent by endlessly repeating tribal myths. The Market Is Good. Celebrities Are Important. Be Afraid Of Strangers. Money Uber Alles.
In each of these myths you can see the shadow of some more primitive property of our individual lizard brain. Social Connections Good. Not My Genes Bad. Famine Coming! Can I Have Sex That?
Look at Cramer's show. I especially appreciated how Stewart lampooned Cramer's use of props and sound effects. As a rule of thumb, the louder and more strident the conversation, the less light (knowledge) and the more heat (emotional provocation intended to make you more succeptable to advertising) is involved.
See alphie was good buddies with Hussein and knew exactly what weapons he had and didn't have. US intel, French intel, the UN, they were all wrong, but alphie had all the answers.
It is ironic that Jon Stewart and a comedy show instead of the regulators or news media had to bring all of this public. Also in Cramers defense he is far less guilty than most of the other financial media for their efforts together with Wall Street, the politicians & incompetent regulators for what has happened.
While I enjoy watching Cramer every night, one must remember the show is primarily entertainment. The financial networks exist to promote their advertisers financial and investment products. Who would expect them to warn about the credit bubble or coming Washington national debt collapse which will destroy much of the remaining private wealth in America today or what this will do to the dollar, the stock market, bonds, gold or the real estate market?
China is now worried about their dangerous over investment in US Treasury obligations. Washington ’s long-term choice is either repudiation or monetization. For monetization to be effective, the depreciation in the dollar would have to be substantial and this in turn would dramatically raise prices of imports for American consumers which would mean a tremendous drop in foreign imports. Debt monetization would cause more disruption to exporting nations than selective repudiation of Treasury debt.
The Campaign to Cancel the Washington National Debt By 12/22/2013 Constitutional Amendment is starting now in the U.S. See: http://www.facebook.com/group.php?gid=675946904…
Thanks,
Ron with 30 plus years in the investment business and banking industry.
ehhh, Jon Stewart's prognostication record is what, exactly? He likes to pretend he's news when he wants to pretend he's news, and entertainment when that's more convenient, but — bow tie or not — he's mostly just a dick with an opinion and a forum. I think the sooner the public wises up to the fact that some news — perhaps all news? — cannot be summarized with clever one-liners, the better off we'll be.
Funny that you mention the UN, because if I remember correctly the main UN weapons inspector, Hans Blix, was very unhappy about the US invasion as he said he needed more time. I'm saying this as someone who isn't wild about the UN, but rather to refute your obviously regurgitated point.
And if you were paying attention at the time, you would have picked up on the administration's obvious outright lies, like Dick Cheney saying Iraq was connected to 9/11, and known that shenanigans were afoot.
More importantly, if you were an informed citizen you would have understood at the time what all the talk about “WMD” was about. Confused people like yourself hear WMD and think nukes. Iraq didn't have anything remotely close to bomb building capability, especially fissile material (see Iran's difficulty in openly trying to obtain a bomb, enrichment and/or reprocessing is tough!). The Intel community, rather, knew that Iraq likely had some chemical weapons capability (which turned out to be marginal at best). The distinction between chemical weapons and nuclear bombs is pretty drastic, and destroys the security/preemptive argument. Was Saddam going to shoot mustard shells at the US with his 300 km range Scuds?
Sorry to get on a soapbox, but you know nothing dip-shits (to use your posted name) piss me off, because you were the one's who cheerleader our disastrous invasion. And you're still cheerleading. Have a nice life, and try getting outside your bubble while you're at it.
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You are one clueless moron.
You should have been aborted by your clueless mom.
Go back and read my comment again, illiterate one.
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Sure, but government and it's appointees operate under a vastly different incentive structure. Cramer suffers from assymetrical information and ironically profits more the more assymetrical it is whether its correct or not. While Geithner has an incentive to actually receive the right information so he can fix the problem. Cramer has no such incentive. If Cramer had figured out in 2006 that the market was going to collapse at the end of 2008, he would have been a fool to start doomsday proclamations as his show would have probably been canceled due to nobody watching and now a couple people would be saying, “Hey remember that crazy Jim Cramer said this collapse was coming, whatever happened to him?”
Sure this might be bad. It's always bad when people engage in stupid, reckless behavior as regards their finances. It's also bad when people take advantage of that tendency to profit. But when a guy bets his kid's college fund on a prize fight, and it turns out the fight was fixed and he bet on the guy that took the dive, why is it we always blame the fixers first?
Sure this might be bad. It's always bad when people engage in stupid, reckless behavior as regards their finances. It's also bad when people take advantage of that tendency to profit. But when a guy bets his kid's college fund on a prize fight, and it turns out the fight was fixed and he bet on the guy that took the dive, why is it we always blame the fixers first?
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