Just for some brief background (that you can also access through the links above), Jon Stewart initially aired a piece which was critical of CNBC and a wide variety of their hosts who advised viewers to make bad decisions in regard to the stock market. Stewart was also critical of the lack of journalism that was displayed by the network and showed video clips of CNBC hosts lobbing softball questions to CEOs of these corporations. One of these hosts, Jim Cramer, took exception to Stewart's piece and voiced his discontent, claiming that Stewart took the pieces out of context. Stewart returned the next night with a piece that focused solely on Cramer and showed more video clips of Cramer advising viewers to buy and hold onto stock that ended up crashing in value only weeks later.
By this point, Cramer not only inserted himself into a situation that was not initially about him, but was clearly doing all he could to keep his head above water. This is when Cramer went on The Today Show and MSNBC's "Morning Joe" to attempt to defend himself. He called Jon Stewart a "comedian" with a "variety show" to attempt to discredit Stewart, but his response only ended up adding fuel to the fire. Stewart ran another piece the same day as Cramer appeared on these programs and expanded his range of criticism from Cramer to the NBC network for "protecting" one of their own.
All of this built up to last night when Jim Cramer was scheduled to be Jon Stewart's guest on The Daily Show. The interview had to be considerably edited down for the program, but Comedy Central posted the full length version of the interview on their website today. Below is the interview in three parts. Part 2 is the longest and if you only have time to view one, view part 2:
It is quite obvious that Jim Cramer looked absolutely defenseless while fielding Stewart's questions and responding to the criticisms. Cramer was confronted with tough questions and his own words, both damning evidence that supported Stewart's case.
I think it is important to take a look at why Jon Stewart had such beef with the network in the first place while also recognizing that this problem is not unique to CNBC. Stewart's initial critique is that the network acted irresponsibly by telling people to hang onto shares of stock when that strategy may not have been the brightest idea. He also articulates that it has become evident that two markets exist, the first is the market that is presented to the public by the journalists and anchors on CNBC. The second market, is the one behind the scenes where these same figures know the system, have powerful connections on Wall Street, and end up manipulating the system by selling the public a different perspective on the market.
Part of the evidence that Stewart confronts Cramer with, is an interview which Cramer did on TheStreet.com in 2007 where he admits spreading rumors about certain stocks, gaming the system, and doing things because the SEC isn't smart enough to catch on. After the first clip, Cramer initially tries to defend himself by saying that he wasn't saying that he himself took part in practices like this, but Stewart quickly rolled another clip which rendered Cramer's defense moot. Stewart rightly points out that it looks like he knows the game and is deliberately feeding the public a different perception.
Cramer then makes the claim that he is trying his best to hold people to account and that the regulators can go after these people if they want to. Stewart jumps in and asks Cramer why the financial networks don't act as a "powerful tool of illumination" instead of making noise about how wrong they are after the fact. The following exchange really sums up the heart of Stewart's argument:
STEWART: This thing was 10 years in the making . . . . The idea that you could have on the guys from Bear Stearns and Merrill Lynch and guys that had leveraged 35-1 and then blame mortgage holders, that's insane. . . .
CRAMER: I always wish that people would come in and swear themselves in before they come on the show. I had a lot of CEOs lie to me on the show. It's very painful. I don't have subpoena power. . .
STEWART: You knew what the banks were doing and were touting it for months and months. The entire network was.
CRAMER: But Dick Fuld, who ran Lehman Brothers, called me in - he called me in when the stock was at 40 -- because I was saying: "look, I thought the stock was wrong, thought it was in the wrong place" - he brings me in and lies to me, lies to me, lies to me.
STEWART [feigning shock]: The CEO of a company lied to you?
STEWART: But isn't that financial reporting? What do you think is the role of CNBC? . . . .
CRAMER: I didn't think that Bear Stearns would evaporate overnight. I knew the people who ran it. I 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 before? Maybe, to some degree. . . . 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.
STEWART: But what is the responsibility of the people who cover Wall Street? . . . . 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 at face value. That you actually then go around and try to figure it out (applause).
After I heard this exchange, I couldn't help but think of the coverage in the lead-up to the Iraq War. This morning I was pleased to see Glenn Greenwald draw this same parallel. In both of these cases it is the failure of journalists to critically examine the information that they are told. Then, when the information turns out to be false, they feign surprise that they were not told the truth. There is no greater evidence that the corporate media mainly acts as stenographers to power as opposed to an independent check on the power structure. Too often is it an accepted view that the media simply report what they are told with little examination of the validity of the information. It is interesting to see Jon Stewart, the host of a satirical comedy show, fulfilling the role of a critical journalist by simply holding people to account when they try to feed the public lies. This type of behavior should be the norm, not the exception.
I am in agreement that Stewart's interview should be praised and that it was correct and appropriate to go after CNBC and Jim Cramer, but this will only prove useful if society learns from this encounter. Jim Cramer is shocked that he has been lied to by powerful people that have an interest in feeding the media misleading information. When items like this come as a shock to journalists, it should underscore that the media in this country are in trouble. Critical journalism should not be confined to Comedy Central, but should percolate into every major media network. We have seen uncritical reporting assist in making the case for war and now shielding us from some of the truths about the financial crisis. A critical and independent media is fundamental to a healthy democracy. We can only hope that instances like this can awaken us into demanding a better and more critical media.