I despise the chattering class -- the political pundits, mostly ex-politicos themselves, who think that they alone are entitled to comment on things politic. Their latest topic is the "effrontery" of Jon Stewart who, by interviewing Jim Cramer, invaded their territory. He actually made news; they had to report on him. God, that seemed to stick in their craws. I, on the other hand, think it was a helluva interview, and Stewart showed more guts than most financial reporters when he called to account not only Cramer but CNBC and the entire financial reporting establishment.
As an Emmy judge, I would like to suggest to my colleagues that we immediately award Jon Stewart the Emmy for "Outstanding Interview" for the year 2009. I can't imagine (though I'd like to be proved wrong) that anyone can be more effective in an interview than Stewart was last week.
Stewart asked Cramer why he, CNBC and financial reporters had failed to warn us about subprime loans, financial derivatives and the housing bubble. He suggested that "CNBC could be an incredibly powerful tool of illumination" about what Cramer called the "shenanigans" that go on, on Wall Street. He wanted to know why CNBC didn't protect us from the "dangerous," "ethically dubious" behavior of the Bear Stearns, the AIGs and the Merrill Lynches. CNBC calls the Cramer show In Cramer We Trust, but how can we trust Cramer now? His questioned the integrity of CNBC and financial journalism in general. Did CNBC flack for some of the worst scoundrels on Wall Street?
I come at this from a unique vantage point. At CNN I created Moneyline, the first cable financial news program. I hired Dan Dorfman, Myron Kandel and Lou Dobbs. I realized even then the potential conflict of interest inherent in a program like Moneyline. Since we were both reporting about and depending for advertising on the financial industry, would we dare to criticize it when it deserved criticism?
To make our stand clear, on June 1, 1980, the first edition of Moneyline consisted of a half hour investigation of retail price-fixing in Los Angeles by the world's major oil companies. Our source who had participated in the meetings went on camera with Dobbs and told how every Friday oil company representatives would meet at the Los Angeles Petroleum Club to set the next week's prices. According to him, he'd protested and been fired, and most importantly, he had his notes about what had happened at the meetings. We asked the dozen or so oil companies that had attended the meetings for comments, all of them declined. But I believed we had delivered our message -- if we discovered financial "shenanigans" we would report on them. Dobbs, Kandel and Dorfman called 'em as they saw them. Moneyline prospered.
I don't want to pat myself on the back too much; at CNN, our advertising risk was small -- Moneyline was on air for only two half-hours during our twenty-four hour day. (Although, we did financial cut-ins all day long.) Even if financial advertisers boycotted us, we would've survived. But Stewart raises a fundamental question, can a twenty-four hour financial news network, a network that depends almost entirely on financial advertising maintain its journalistic integrity and stay in business? What I most admire about Stewart's interview with Cramer is that Stewart wasn't particularly picking on Jim -- he was trying to define the role of financial reporting -- was CNBC giving Wall Street a hard look, or was it merely a cheerleader?
I don't want to single out Jim Cramer. As a matter of fact, I think I can make a pretty good case for his integrity. What Jim was saying at his most egregious in the clips Stewart's staff had discovered was simply that, questionable practices, if not illegal, could, should and would be taken advantage of by him and most other hedge fund managers because they owed a duty to their investors to make the most money they can for them. That sounds cynical, but it's the rule of the game, and Jim, to his credit, was one of the few who were trying to improve the rules.
Stewart's interview puts the spotlight on the realities of financial reporting, and for that alone he deserves an Emmy. Personally, I think CNBC has been too much of a cheerleader over the last ten years, and it has to take some blame for leading us down the path to our greatest financial crisis since 1931. They certainly should have taken a harder look at subprime mortgages and financial derivatives. Their reporters presumed to be experts in financial matters, they're supposed to inform viewers about the true conditions of the market place.
I don't think they've performed that function well. I'm convinced Jon Stewart did us all a great service when he used Cramer as the exemplar of what's wrong with financial reporting. It's unfortunate that he made Cramer the poster boy for financial "shenanigans", but somebody had to play the role, and Cramer is certainly not entirely blameless. In contrast to all the chatterers, Stewart taught many of us something we didn't know, and made abundantly clear, even to the most knowledgeable, that there's something rotten in television financial reporting. For that he deserves our thanks and an Emmy. That'll give the chatterers something chatter about.