04/16/2009 05:12 am ET | Updated May 25, 2011

CNBC's Shoutfests: Not Show Business but Serious Business

"Like a prosecutor bearing down on a decidedly uncomfortable witness, Stewart argued that the cable TV financial network--and by extension much of the business press--had given the public a false sense of financial security."

That was how CBS' Jeff Greenfield reviewed Thursday night's face-off (here, here and here) of the feuding cable personalities: Jon Stewart of Comedy Central's The Daily Show against Jim Cramer of CNBC's Mad Money.

"Business Press" is the giveaway phrase in Greenfield's description. For years now, business journalism has been a misnomer. What makes news first and foremost about national economic activity is finance. The sole certain economic tidbit to be reported each night on the nightly newscasts is the status of the Dow Jones Industrial Average.

People have jobs. Businesses engage in commerce. Importers and exporters conduct trade. Labor unions organize. Governments tax. Consumers spend. The poor are always with us. Yet the "business press" sees the entire economy through the prism of finance. Even the nightly newscasts have a bias in favor of finance. So far this year, for example, even in the depths of a recession, of the 376 stories the three networks have filed on general economic topics, almost a third (120 or 32%) have had a financial angle. CNBC, a "financial" news network, is the pinnacle of this distorted view of the economy.

The raison d'etre of a "financial" news network is to persuade its audience that the best measure of prosperity is the value of financial assets. To that end, the financial markets are assumed to be a rational, efficient and civic-minded method of assigning capital. With finance occupying the commanding heights, the real economy--labor, wages, commerce, business, trade, poverty, infrastructure--is covered by the financial networks as a secondary sideshow.

In that context, CNBC's fulsome cheerleading for a bull market--and its consternation in the face of the bear--has not been an error of judgment. It is a fact of its identity. CNBC is by nature unable to report a bubble in financial assets as bad news, even if it is fueled by lax monetary policy and reckless leverage. It is unable to report the bursting of that bubble as good news, even if that represents a return to sane levels of valuation and a productive allocation of capital.

If CNBC practiced objective journalism, with no rooting interest in the direction of stock prices, it would be an economics news network not a financial news network.

That was why Jon Stewart paraphrased Carly Simon in his Daily Show interview with Cramer: "It is not all about you." Even though the face-off was pitched as the Stewart vs Cramer Feud of the Century, Stewart's critique was against the entire CNBC enterprise.

Not that Cramer's Mad Money was let off the hook. David Muir used the following, bleeped, critique in his coverage of the confrontation on ABC next night. "I understand that you want to make finance entertaining but it is not a fucking game." Cramer justified his colleagues' Fast Money style: "There is a market for it and we give it to them." Stewart's response: "There is a market for cocaine and hookers." NBC's nightly newscast, by the way, unlike CBS and ABC did not find the Stewart-Cramer showdown newsworthy enough to cover.

Take your pick. Mad Money's mixture of bells & whistles and inside tips and carnival barker intensity is either entertaining. Or it vindicates Stewart's criticism that CNBC favors casino-style speculation at the expense of long-term investments. "How is that different from an infomercial?" the comedian inquired.

Yet we should not confuse Cramer's Mad Money antics with so much of the shouting that takes place at other dayparts on CNBC's schedule from the likes of Rick Santelli or Larry Kudlow or Dennis Kneale. Michael Calderone at Politico (in an article that quotes me) attributes the CNBC shoutfests to a house style at NBC News: "The increasingly opinionated dispatches from CNBC's stars parallels MSNBC's shift during the 2008 campaign to more aggressively opinionated commentary."

A close viewing of CNBC's market coverage reveals that the shouting stands for something more serious. As persuasive as Stewart may have seemed on Comedy Central that the recently collapsed bull market consisted of "giant piles of money going in and out and people trading them. It is transactional and it is fast but it is dangerous. It is ethically dubious" or "a Sherman's March through their companies financed by our 401(k)s and all the incentives were for short term profit and they burned the fucking house down with our money and walked away rich as hell," those insights are still vigorously challenged inside CNBC itself.

There are plenty of holdouts at CNBC who adamantly believe that high finance does--and should--occupy the commanding heights of the economy and that therefore financial journalism has the appropriate perspective on the economy at large. Growth in the real economy depends on inexpensive access to capital, subject to lower taxes and less regulation. The shouting Ludlow and the shouting Kneale are joined by the softer spoken Melissa Francis and Michelle Caruso-Cabrera, for example, in insisting that the system of financial capitalism that CNBC was founded to validate is not broken.

The CNBC shouting represents a genuine intellectual and ideological crisis at the network. The received wisdom of the last 30 years--Chicago School, supply side, laissez faire--is being challenged by the current facts on the tape. Much of the shouting is targeted at pundits, experts, analysts and correspondents, led by in-house economist Steve Liesman, who take the other side--the Keynesian, demand side, supporters of government intervention in the economy at the expense of unregulated finance.

The reason voices are raised is because the disagreement is stark and crucial. The entire neo-liberal economic orthodoxy is at risk of being discredited. If that goes, CNBC's foundational identity goes with it.

As ABC's Muir said of Stewart's questions: the "comedy show was anything but funny." Or as CBS' Greenfield concluded, it was a "very serious question the late-night comedian was raising."