Friday, March 13, 2009

Cramer Contrition on Daily Show

I feel I owe readers of "Reflecting Obama" an explanation as to why I have spent time writing about CNBC and their pundits. After all, what do they have to do with Obama, the theme of this blog?

In my extremely humble opinion, CNBC and pundits like Jim Cramer and Erin Burnett have been unfairly attacking President Obama regarding the downward trend in the stock market. They've blamed him for not exuding confidence (therefore the dow dropped) and for not focusing only on the economy (as if health care, budget and housing were not connected to our economic crisis).

One of the things I like about Obama is his ability to work in an organic, nonlinear, fashion. Unfortunately, the pundits are often unable to do that. Indeed, some of their approach is what got us into this crisis.

Yesterday, I discussed the questionable journalistic abilities of CNBC pundits Erin Burnett and Jim Cramer. At the end of my article I wondered out loud how the Jim Cramer visit to The Daily Show would actually play out. The "war of words" between Cramer, CNBC and Jon Stewart and been ongoing for eight days, so the direct confrontation was something to really look forward to.

I was somewhat surprised to find, hours in advance, reviews online in Huffington Post and USA Today. Neither article gave a lot of details, but they did say that Stewart had gotten the better of Cramer. This is exactly what I was waiting for.

Frankly, I was a bit disappointed that the articles were published ahead of the event, since the anticipation was sort of destroyed - kind of like hearing the outcome of a ball game before it's actually played (although the show was taped yesterday afternoon). Nonetheless, I was still eager to watch the show, especially to see all the "plays" and the nuances and reactions of the "players."

So, how did it really play out, watching it live?

If you are interested in watching, check out this Daily Kos article by Jed Lewison that contains the links to the entire show. Basically, Stewart took Cramer "to school." Indeed, as Lewison states:

"Sometimes listening to Jon Stewart is like what you'd imagine it would be like to listen to a great journalism professor...except you're laughing so hard you've fallen out of your chair. In tonight's interview, Stewart makes the case for what CNBC should have been doing over the past few years: actual business reporting, instead of acting like they were an entertainment channel for the stock market."

This is exactly the point that I made yesterday: CNBC and its pundits have not been reporting about Wall Street, but rather they've been playing Wall Street cheerleaders. And, along the way, they watched the house of cards tumbled down around everyone.

The problem is that CNBC has tried to exonerate themselves from any responsibility for contributing to the mess we're in. My article -- and to a much greater extent The Daily Show -- has tried to criticize their brand of reporting and bring their irresponsible actions into the light.

My take on the interview has several angles: what was said, the psychological exchange, and the impact.

After the humorous and gracious start to the show, Stewart explained how the whole thing began with his criticism of CNBC's Rick Santelli for calling foreclosed home owners "losers." To Cramer's credit he criticized Santelli and called those folks "fighters."

Jim Cramer's approach was one of denial, justification and contrition. His message was to offer a mea culpa along with a justification of the way CNBC operates. He tried to hide behind a wall of innocence: "I would think you'd want people like me to reveal what is going on." Stewart answered that Cramer and CNBC had known all along what had been going on and remained silent.

Stewart fumed, "I know you want to make finance entertaining, but it's not a fucking game. When I watch that it makes me so angry because it tells me you all know... You can draw a straight line from these kinds of shenanigans to what went on at Bear [and] AIG..."

Once Stewart showed a 2006 clip of Cramer explaining off air how he manipulated his clients, it was all over. That clip was the "smoking gun" that destroyed any credibility Cramer may have been able to portray. The interview was, for all intents and purposes, over.

Each time that Cramer tried to explain what he does on his show, Stewart made a point of letting Cramer know, "It's not just about you." Early in the interview he said, "CNBC sells itself as financial experts... It's about the way your company does business."

Other memorable lines from Stewart were:
  • "At least we advertise our show as selling snake oil."
  • "You knew this was happening."
  • "The banking institutions were playing these games with our 401K's."
  • "You were promising something that couldn't be delivered."
  • "Who are you responsible to?"
Throughout, he returned to the issue of the question of responsibility - that CNBC needs to become more responsible in reporting information to the public.


In the end, Stewart told Cramer and CNBC not to live on the "commentator" laurel and become real reporters. And, with one last verbal swipe, Stewart asked CNBC to get rid of the show's promotional line: "In Cramer We Trust."

If my audio had gone out during the show, I still would have clearly picked up content of the interview. As a teacher, I've seen it a hundred times. A student shoves another to the ground in anger. I see the whole thing out my window and run out to confront the culprit. First, he denies having done it. When I say I saw the event, he says the other kid deserved it.

Then, after my prodding, he says he didn't mean to hurt the kid. Once he knows all's lost, he apologizes for his actions hoping the teacher will just drop it. But, it's not over, because there are still explanation of motive and personal change that must be dealt with. Once the student sees that I haven't just let go of the issue, he is forced to take these last steps.

All of these steps were evident last night, with Stewart playing the role of teacher dealing with Cramer, the culprit. Cramer was contrite, but like a good teacher, Stewart did not want to accept anything at face value. He delved deeper and deeper, until Cramer was wrung dry of excuses and had to move into the realm of personal change.

We'll see if the promised change actually comes about. For me, it will only be valid if Cramer and CNBC understand why it's important that they change.

First, they were involved in convincing the public to stay in the stock market game, even while it was tanking.

Second, all the emotion and hype of shows like Cramer's "Mad Money" actually coerce people into going further into the market, even though their rational mind says they should not.

Recently, Richard Peterson - a psychologist and economist - explained on "Radio Times" (on Philadelphia's public radio station, WHYY) - that it is not uncommon for the levels of dopamine to increase dramatically during multiple stock transactions. There is a physiological reaction to make people want to continue trading.

That's why, like with gambling, people must be extremely careful in the stock market. As Jon Stewart so brilliantly stated, "Its not a fucking game." Yet, for years it's been treated as a game, millions of people were getting high off it, and CNBC and its pundits simply added fuel to the fire - and made a bundle in the process.

Like Stewart, I implore CNBC to make the changes to bring honesty and professionalism to their financial programming, for their sake and ours. I also implore Americans to use this crisis to reconsider their own behavior, both with the stock market and televison shows that prod them along. As my wife - the wisest person I know - often says, "Just turn it off."

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