So did Stewart get Cramer? Did he get him good? Did he stick it to him? As I posted yesterday, there’s a big temptation to frame last night’s head-to-head between Jon Stewart and Jim Cramer as a battle between two guys. But as Stewart told Cramer, to his credit, “This song isn’t about you.” (Indeed, Cramer’s thin-skinned personal reaction to an initial Daily Show segment that was about CNBC generally did more to make it about him than anything Stewart did.)
So, be my guest—talk among yourselves about who “won” the interview. (By the way, The Daily Show also has the full unedited exchange online.) Dance in the streets with Cramer’s trophy head held aloft if you like. (As I type, The Huffington Post’s headline is JON STEWART EVISCERATES JIM CRAMER AND CNBC, in VICTORY DECLARED IN EUROPE-sized type. Drudge is rather more coy on the subject.) It was a beatdown, to be sure. (After airing a promo for Cramer’s Mad Money which could have itself been a Daily Show parody: “I understand you want to make finance entertaining, but it’s not a f__ing game.) But in the long run, it was most fascinating as a discussion about how business journalism in particular and journalism in general are done in America.
About CNBC generally, Stewart kept returning to the question not only of why the network didn’t report on financial disaster coming, but who CNBC is for at all: “Who are you responsible to? The people in the 401ks and the pensions and the general public, or the Wall Street traders?” Stewart asked (adding that most traders are “bright guys” who are “f__ed in all this too”).
The answer seems pretty plain if you watch the channel: it’s for the traders. Period. It’s not just that CNBC doesn’t serve average, buy-and-hold investors. It’s that its very existence—at least, as it is presently aimed and structured—goes against their interests. CNBC is by and large about market timing and trading the market in the short term—exactly the sort of thing that average investors should not be doing. (It’s not that CNBC should have sounded some “sell” signal so that 401k investors could have bailed out of the market at the top; trying to do that kind of timing is bad advice for average folks generally. The question is how complicit it was in the market getting to unsustainable heights in an unsustainable manner, thus cleaning those average folks out.)
But being aimed at traders doesn’t mean being in service of CEOs, who were often seeking to spin at best on the network’s air, and at worst were out-and-out lying. The question, as Stewart came at over and over, was: What did CNBC know and when did it know it? Or, rather: if people like Cramer knew there were shenanigans going on on Wall Street—as shown by clips from his excruciating online video cynically describing manipulations that he said he’d never talk about on TV—then why not call them out?
A few of Cramer’s responses are especially eye-opening, not just as they relate to business news but to problems that journalism has generally:
* “These people were my friends.” Cramer said that, or something like it, repeatedly: that longtime friends flat-out lied to him. So problem one: coziness with sources is death for the information business. Now, Cramer is a commentator, not a reporter, and I don’t begrudge him friends per se. But it is a problem when reporters either become too close to their subjects to treat them skeptically, or become so obsessed with access that they are leery of being too skeptical: i.e., “If I do that, they’ll never talk to me again.”
Journalists prize getting people to talk to them, with good reason, but they shouldn’t be hostage to it. Part of the problem is a culture in which interviewing is privileged over research: “reporting” is defined as getting a person to talk to you, preferably a famous person. But as the original Daily Show CNBC clip showed, research can be pretty powerful—then it created a situation where Cramer pretty much had to talk.
* “We have reporters who try really hard who were not always told the truth. But most importantly, the market was going up for a long time, and our real sin I think was to believe that it could continue to go up a lot in the face of what you describe.” Again, leave aside the particulars of CNBC here, and there’s another lesson about journalism: it’s always safer to say the thing the last guy said (the market’s going up!) than to be the first one to say the next thing (the market’s going to go down!). Whether it’s CDS’s or WMD’s, the process is the same and the result is a huge loss of credibility and trust. In the long run. In the short run, unfortunately, it’s what gets rewarded. And if there’s one thing the financial crisis has taught us, it’s how often people consider the short run first.
* “It’s difficult to have a reporter say, ‘I just came from an interview with Hank Paulson, and he lied his darn-fool head off.’ It’s difficult. I think it challenges the boundaries.” OK, this is an easy quote to attack—why not just say he’s lying, damn you!—but in fairness it’s not as simple than that. The real story—and not at all a more flattering story—is that lies like these are not obvious and cut-and-dried: refuting them takes a lot of work and a lot of time and often involves sticking your neck out and going against the crowd (see previous point). Much easier to quote your subject, adding a caveat if necessary, and move on.
Much easier, too, to make this story about a feud between two cable-TV stars, declare a winner, and move on. Because then we don’t have to recognize that this song is about us.