Jon Stewart Destroys Jim Cramer, With Video!

By Justin Gardner | Related entries in Comedy, Economy, History, Media, Money, Video

If you didn’t see it last night, well, here ya go…

Part One

Part Two

Part Three

That very last part about Stewart’s mother…wow. I think we all know somebody like that and it’s why we’re so furious when we consider how jokers like Cramer were asleep at the wheel at best or, at worst, were complicit in all of this.

As I predicted, that surprisingly frank but remarkably dumb interview Cramer gave in 2006 (where he basically admitted that the whole market was a big scam) was a centerpiece of Stewart’s assault. And Stewart could have shown A LOT more of that interview too, but he hit the high points and made Mr. Mad Money look like an absolute fool. Because Cramer would try to explain that he was fighting against a practice like “fomenting”, but then Stewart would play another clip where he said he recommended it because the SEC doesn’t know how to stop it. And then Cramer would sit there with a smile/grimace on his face, shrug his shoulders and wait for Stewart to begin talking again.

It was pitiful.

Deliciously so.

But yes, Stewart didn’t let Cramer off the hook. He kept pounding him with his own BS and backing him into a corner until there really wasn’t anything left for Cramer to do expect say that he’ll try not acting like a maniac on his show and actually tell people how the market really works. And after the schlacking Cramer received last night it’s hard to imagine him actually going back to his “Mad Money” ways without inflicting some serious psychic damage on himself. Still, I’m not holding my breath.

To his credit, Cramer did actually go on the show and take his lumps. Good for him. It’s more than you can say for Rick Santelli. But is anybody going to trust what Cramer says anymore? Is his show at CNBC done?

Remember, Stewart went on Crossfire, ripped everybody a new one and 6 months later it was cancelled.

I’m just saying…


This entry was posted on Friday, March 13th, 2009 and is filed under Comedy, Economy, History, Media, Money, Video. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

49 Responses to “Jon Stewart Destroys Jim Cramer, With Video!”

  1. gerryf Says:

    I was surprised it was as brutal as it was….I thought Stewart would score some points, but it was a full scale evisceration, but done with a sincerity and honesty that was painful to watch.

    You bring up the whole Crossfire history and that really is the key–when Crossfire invited him on, they expected a “fake news” guy on for some laughs, but Stewart revealed then what he showed again last night….he BELIEVES in the obligation of those who purport to deliver news to take their job seriously and he has zero respect for those who don’t live up to that obligation.

    When Paul Begala and Tucker Carlson invited him on Crossfire, Stewart played it pretty straight and eventually Begala had the intelligence to at least be embarrassed. Carlson shamed himself.

    Last night, Cramer I think, tried to play the middle ground, but he had a lot more to live down.

  2. Mike A. Says:

    It was truly a great interview(?). Stewart showed his genius – attacking Cramer’s answers, what little he gave, with Cramer’s own words and videos. Stewart remained aggressive while being civil. It was as good as his interview with Douglas Feith, May 12 ’08, questioning the premise for the Iraq war. This is an example of the type of reporting you don’t see enough of on TV…and from a comedian.

  3. Brian Krenz Says:

    It was a real lashing, but it was fair. This is what journalists are supposed to do.

    It wasn’t that Stewart was unleashing a populist rage on Cramer and CNBC (though he was) – it’s that he was dogged in his questioning and his criticism of the state of business (and in effect all) journalism.

    Cramer looked helpless, which he should have. I appreciate that Cramer didn’t hoot and holler and try to make up stupid excuses for himself or his network. He seemed at least close the genuinely sorry.

  4. shane Says:

    Good interview. Props to Stewart for the hard questions, props to Cramer for showing up. They could battled back and forth on their respective shows for weeks. Did anyone else catch Jon’s assumption that the average investor turns to CNBC for advice? I watch it every morning at market open, but I’ve never bought any equity because some hack analyst told us it was the next big thing. Stewart’s argument is that the network should have protected its viewers, but I always had the belief that the shows on the network were for the insider. I’m really curious to know who is watching CNBC now?

  5. Doug Mataconis Says:

    First, of all ,it’s worth noting that Stewart isn’t a journalist, he’s an entertainer.

    Second, there’s something fundamentally wrong with putting all the blame for what happened to Stewart’s mother and other investors on Cramer or CNBC in general. If you’re going to invest in the market you have the responsibility to educate yourself and relying on one person, or even one network, is anything put responsible. I’d also note that anyone who was spending the last decade buying individual stocks with money that they couldn’t afford to lose was a fool by definition.

  6. Rich Horton Says:

    Hmmm. I thought of the Crossfire appearance as well. Only, its Stewart’s show that most resembles Crossfire these days.

  7. Justin Gardner Says:

    Doug,

    Duly noted. Your point?

    Sure, while it’s true that Stewart is an entertainer, he’s done a lot more to piece together how everything went wrong than many people who call themselves journalists. Cramer was stupid enough to pick a fight with him, dismiss him as a comedian and say he has a “variety show.” Well, Cramer will never make that mistake again.

    Also, Stewart isn’t saying that CNBC is entirely to blame for what happened. What he did say, very clearly, was that some folks in the media, including CNBC, were “disingenous at best and criminal at worst.” Yes, the media should play a role in revealing what’s really going on. I know people think that’s anti-business, but since business is only concerned with making profits, corners are often cut and then we have things like banks being overleveraged 30 to 1.

    One last note, I agree that somebody who was buying individual stocks with money they couldn’t afford to lose is a fool. But both you and I know that people like Stewart’s mom most likely had bought mutual fund stocks and had a ton of money in their 401(k) (thus, acting responsibly and having a “long term” outlook, which is what Stewart said…you did watch the interview, right?) and have seen their entire life savings drop 40% in the span of a year.

    So please, a little compassion Doug.

  8. Mike A. Says:

    Doug

    First – Agree Stewart’s an entertainer…he would be the first to acknowledge this. Is your point that entertainer’s can and should only entertain?

    Second – Stewart by no means pins the blame for what happened entirely on Cramer et al. He targets their roles and responsibilities in this crisis. Specifically “the gap between what CNBC advertises itself as, and what it is…and the help that people need to discern this”. If I missed a statement to the contrary, let me know.

  9. Doug Mataconis Says:

    Justin,

    It’s compassionate to let people get away with not accepting responsibility for their own foolishness ?

    Even if your money is in 401(k)-based mutual funds, there’s still a little thing called diversification. If you’re in your 60s or 70s and still have all or most of the money you’re going to need for retirement in stock-based mutual funds, you’re taking the risk that the market could have one or two bad years, thus wiping out money you need right now. That’s why you move it out of stocks and into bonds, treasury bills, and cash. Yes, the return on your investment is lower, but that’s the price you pay for the safety that these investments offer.

    These are basic principles of investment that can be found in any book on the subject that you can pick up at Borders, Barnes & Noble, or Amazon.

    When your in your 20s and 30s, a year like we had last year doesn’t amount to much because you’re investing money that you’re not going to use for 40 years. When your ten years or less away from retirement and still making the same risky investments, well then you need educate yourself and stop blaming others.

    The best thing that could come out of this is that people finally learn how to take responsibility for their investments and actually, you know, plan for the future.

  10. michael reynolds Says:

    Doug:

    You’re blaming the victims of a massive con.

    All sources of financial information — CNBC, the WSJ, the other networks, the financial magazines — were part of the same con. They traded in access not reporting. They did none of their due diligence.

    So some 75 year old grandma in Boca Raton is supposed to pierce the veil of bullshit thrown up by every financial reporter in the country? Nonsense.

    These people managed to fool Congress, managed to fool the regulators, managed fool each other and managed in the end to fool themselves, but granny should have seen through it all? It’s her fault?

    Stop trying to blame the victims. Stop making excuses for toadying financial “reporters” and for criminal bankers and short-sighted bonus-chasing businessmen.

  11. kranky kritter Says:

    I agree with Doug that folks near retirement who had their money primarily in stocks don’t deserve sympathy.

    I agree with all the folks giving Stewart plaudits on this one. I also thought he was dogged but fair. And as has been pointed out, he’s done a better job than many so-called journalists. [As an aside, what is it about Lou Dobbs that makes him sso ingularly dislikable? I'll freely stipulate that such @$$-holery spans the spectrum to include the equally deplorable likes of Hannity and O-Reilly and so and so forth. Yet I can't tolerate more than 3 seconds of Dobbs. Anyway, I digress.]

    Let’s all notice though that Kramer is both an easy target and a common type. A smart guy IMO, but ultimately a bullshit salesman. We’re all familiar with such folk, right?

    Don’t we need to go both upstream and under the covers to get at quiet conscienceless villains in this saga? Like, for example:

    • Who OK’d the practice of rubberstamping AAA ratings on CDOs (investment composed of packages of loans) that included dangerous numbers of risky sub-prime loans?

    • Who was it that decided “sure, it’s fine to make our rankings based on models that presume that 8% growth in RE prices was indefinitely sustainable?”

    •Who at each big wall st firm decided, “hey, as long as we can offload these crappy loans we making on other investors, who cares how risky they are?”

    THESE are the people that need to be hunted down and put in the stocks. We won’t fix much of anything just by going after the dimestore fortunetellers. They’re a symptom of the rotten system, not the cause.

  12. Chris Stout » Blog Archive Jim Cramer Jon Stewart Daily Show Says:

    [...] Donklephant » Blog Archive » Jon Stewart Destroys Jim Cramer, With … [...]

  13. Doug Mataconis Says:

    Michael,

    All sources of financial information — CNBC, the WSJ, the other networks, the financial magazines — were part of the same con. They traded in access not reporting. They did none of their due diligence.

    Nonsense.

    There are nationally syndicated radio shows that concentrate on financial advice that teach the very lessons about diversification that I was talking about in the comment above — Ric Edelman and Bob Brinker are two that come to mind. Every for-the-public book on investment — including the “For Dummies” books — talk about the importance of investing for the long term, diversification, and choosing a mix of assets that’s appropriate for your time horizon.

    The information is out there and if someone is going to do something as important as investing for their future, it’s their responsibility — to themselves and their family — to find it, and act on it.

    So some 75 year old grandma in Boca Raton is supposed to pierce the veil of bullshit thrown up by every financial reporter in the country?

    If she’s 75 years old and has even a single penny of the money she needs right now in risky investments, then, yes, she is to blame.

    These are very simple concepts to understand, and even simpler to implement. The problem is that most people don’t want to take the safe route, they want the 30% returns they kept reading about in the newspaper and they didn’t bother to think about the risky position they were putting themselves in.

    As the saying goes, a fool and his money are soon parted.

  14. JMG Says:

    Doug,

    Your personal responsibility canard is tired as it is partisan. You’re completely ignoring the importance information in markets, specifically how asymmetrical it was (and still is) in finance. You’re trying to make a responsibility equivalence in a scenario where one or few market actors has all of the information, and other actors have little to none. You can’t ignore features of the market just because it doesn’t fit your politics.

    Furthermore, your point that people should’ve been ‘aware to diversify’ has no bearing, in a moral or practical sense, on the causes, and who bear responsibility for causing, our current crisis. The argument is similar to saying that the passengers of a bus that crashed simply should’ve known to drive instead. Both assume that the victims must be victims of their own decisions, by virtue of the fact that they are victims.

  15. Doug Mataconis Says:

    JMG,

    What is it about the Age Of Obama that compels people to absolve individuals of the need to take responsibility for their own well-being ? I ask, because that’s exactly the impression I get from what you and Michael are saying.

    You’re completely ignoring the importance information in markets, specifically how asymmetrical it was (and still is) in finance. You’re trying to make a responsibility equivalence in a scenario where one or few market actors has all of the information, and other actors have little to none. You can’t ignore features of the market just because it doesn’t fit your politics.

    This has nothing to do with politics, and everything to do with exercising prudence. If you’re going to invest for your future livelihood, then you have a responsibility to know what you’re doing and not just rely on some guy on a television show shouting at you about this stock pick or that margin call. By diversifying rather than, say, putting all your money in Enron, you are doing what’s necessary to ensure that your nest egg isn’t destroyed if one company goes bad. By investing in a variety of assets — stocks, bonds, Treasuries, and cash for example — you are offsetting the risk inherent in stock investments with the much-lower risk provided by the other three. Again, the rule is that low-risk also means lower return.

    These are time-tested investment strategies that actually work. Why not consider them rather than looking at them through the prism of your own apparent ideology ?

    your point that people should’ve been ‘aware to diversify’ has no bearing, in a moral or practical sense, on the causes, and who bear responsibility for causing, our current crisis.

    My point is that someone who doesn’t take at least the elementary steps required to protect themselves from the inevitable “down” that will follow the “up” doesn’t belong in the stock market.

    And someone who puts money they need in less than 5 years in a high-risk investment is just begging to see it disappear.

    Whose responsible for the economic crisis isn’t the point. Each one of us is responsible for our own financial well-being.

  16. Doug Mataconis Says:

    JMG,

    One other thought — personal responsibility isn’t a “canard,” it’s reality.

    It means not buying a house you can’t afford, not using plastic to buy a television you can’t afford, and not putting your life savings into the market without educating yourself.

    It’s easy to blame the Jim Cramers of the world for the people who’ve seen their retirement funds dwindle away, but, that’s only part of the equation. Someone who based their retirement planning solely on what they heard on CNBC, or what they read in a magazine, wasn’t taking responsibility for themselves. And, yea, they do deserve some of the blame for what’s happened to them.

  17. JMG Says:

    Doug, at no point did I say what personal responsibility is to be absolved. You simply can’t just create one overreaching idiom; that those that have been victimized deserved it, in hindsight, and expect that to encapsulate the entirety of the scenario. At no point in your response did you approach the aspect of asymmetric information, which is the crux of why your (and many other) personal responsibility arguments are highly oversimplified. Another issue you choose to ignore is the role incentives play in markets, and individual financial decisions.

    You were kind enough to bring up Enron, which, is a perfect example of why a pure personal responsibility approach to any problem lacks nuance to adequately leave abstract theory and actually help people. Enron, as we all know, was highly dishonest in it’s financial reports. Investors who put there money in Enron, did so under the assumption that the company was being honest, and that they would not be defrauded. The asymmetrical aspect of information led to massive financial collapse of numerous stockholders. In a moral and practical sense, these people bear no responsibility for their loss of income.

    We are in the midst of a similar event, where numerous financial actors were less than truthful about aspects of mortgage-backed securities, among other things. No amount of ‘time-tested’ investment practices are going to protect from national market failure.

  18. gerryf Says:

    Doug,

    We are kind of strolling off the mark here–the premise that set this whole thing off is that CNBC and its ilk are part of the education process and they were part of the con job being perpetrated. Sure, a smart investor doesn’t watch Mad Money and race out and throw his life savings into Cramer’s latest hunch.

    But, and this is key, when the preponderance of noise coming out of the “financial news” networks is that you should buy, buy, buy and invest, invest, invest when those people know damn well it is a con job, their lame mea culpa after the fact just doesn’t cut it.

    That is the initial issue–a media source that purports to be one thing, but is instead a PR arm for the lie. At best, they were duped, but at worst; they are at least partially culpable for perpetuating the lie.

    Do you believe that Cramer didn’t know this whole thing was a disaster waiting to blow up? C’mon. I barely have a grasp of finance but I have been warning people for years things were getting ugly.

    Now for the second issue that you brought up–personal responsibility.
    Well, everyone else is reluctant to say it, but I will. It’s easy for someone who has had the education and opportunities you have had, or just the plain Go-given smarts to sit there and play that card.

    I am here to tell you that there are a lot of people–in fact, probably more people than I am ready to admit who don’t know any better. They took their queues from the Cramer’s of the world (not just CNBC, but every personal finance guy who is more interested in a commission than his client).

    These people trusted these financial people to be honest and they trusted that the government was doing its job. Well, the financial folks were only out to enrich themselves and for the past 30 years the government was doing all it could to help them.

    These are basically simple folk working 9-5 and they do what the experts tell them because they don’t know any better. These are people with high school educations working in factories and cleaning the offices of the people ripping them off.

    Nobody, including the CNBC’s of the world or even the freaking Wall Street Journal was warning them that everything was built on a house of cards that could all come tumbling down. Even the honest financial watchdogs were overwhelmed and either under qualified or under-funded to do anything but sound a weak “caveat emptor” that was quickly drowned out by the Cramers of the world.

    Justin implored you to show a little compassion, and maybe you are just arguing for argument’s sake—goodness knows sometimes I do that—but IF your only response really to that scenario is, “Hey, you’re a retard for getting caught up in the maze of lies,” then I can only echo Jon Stewart:

    “F” you.

    Hopefully, you are not the guy you are appearing to be in this thread. There are some people who comment here who have demonstrated a callous lack of regard for their fellow man, but I would not have put you in that category.

  19. Doug Mataconis Says:

    JMG,

    You simply can’t just create one overreaching idiom; that those that have been victimized deserved it, in hindsight, and expect that to encapsulate the entirety of the scenario.

    Nor can you blame Jim Cramer or CNBC for the fact that people have seen their 401(k) balances dwindle. Nobody forced these people to follow Jim Cramer’s advice, or anyone else’s, and, as I’ve said, there are plenty of other sources of financial advice out there who didn’t talk the same line that Cramer did — even a few who’ve shown up on CNBC over the years, like Suze Orman and Jean Chatzky.

    At some point, people need to take responsibility for their own lives.

    At no point in your response did you approach the aspect of asymmetric information, which is the crux of why your (and many other) personal responsibility arguments are highly oversimplified. Another issue you choose to ignore is the role incentives play in markets, and individual financial decisions.

    No, it’s that you’re refusing to recognize that diversification is designed precisely to overcome the fact that the average investor is never going to know as much about a specific stock or the general direction of the market as the professionals will. By not putting all your eggs in one basket, your significantly lessening the risk of buying something that you don’t know enough about.

    And, again, if you’re investing for the long-term, the day-to-day (or even year-to-year) fluctuations in the market don’t really mean anything. And if you’re not investing for the long term or using money that you can’t afford to lose, then you don’t belong in the stock market.

    The fact that some guy on at TV show may have been saying that some stock was a “sure thing” doesn’t mean that you’re forced to listen to him and go out and put your kid’s college fund in that stock.

    As for Enron, well, again, that just proves the point that smart investing is the only way to go unless you are a market professional who really understands what’s going on. Someone who invests in stock mutual funds would have been only minimally impacted by the Enron episode, in stark contrast who put all their money in a single stock. That said, I agree that the Enron executives bear some responsibility for enouraging their employees to keep buying the company stock when they knew it was about to collapse, but that’s another story.

  20. Justin Gardner Says:

    What is it about the Age Of Obama that compels people to absolve individuals of the need to take responsibility for their own well-being?

    Wow.

    BTW gerry, you know the rules of the site. Omitting a few letters doesn’t clean up the intent or make it any less offensive. Scrap it or take it somewhere else.

  21. Doug Mataconis Says:

    gerryf,

    I don’t think we’re strolling off the mark at all here, because I think that there are those out there, personified by Jon Stewart, who seem content to blame all of this on the CNBC’s of the world (I would not include the WSJ in this in any respect. If you’ve read the WSJ on a regular basis, you’d recognize that they really don’t belong in that camp) when, in reality, the stock market bubble and it’s ensuing collapse is as much the fault of the people who participated in it thinking they could make a quick and easy buck without worrying about what they were actually doing.

    I also think it’s relevant because it all goes back to the issue of personal fiscal responsibility, and it’s a lack of fiscal responsibility at all levels that has gotten us into the situation we are in today.

    I am here to tell you that there are a lot of people–in fact, probably more people than I am ready to admit who don’t know any better. They took their queues from the Cramer’s of the world (not just CNBC, but every personal finance guy who is more interested in a commission than his client).

    These people trusted these financial people to be honest and they trusted that the government was doing its job. Well, the financial folks were only out to enrich themselves and for the past 30 years the government was doing all it could to help them.

    Well, first of all, I think it’s both unfair and wrong of you to say that all of these “financial people” as you call them were doing the same thing Cramer was when it’s a provable fact that they weren’t. Again, I can name at least four nationally known financial planners who get significant media exposure whose practice and advise was markedly different from that which you criticize.

    Second, saying that people shouldn’t be held responsible for their decisions because they weren’t smart enough to know what I know is nonsense. This isn’t stuff you need to go to college to understand. Again, go to a bookstore or the library and pick up one of those “Investing for Dummies” books, and you’ll see the exact same things I’ve been talking about. You don’t have to have an MBA to know the basics of smart investing.

    I’m sorry that I’m coming across as harsh but, you know, if people lost their money because they failed to take the basic steps necessary to protect themselves, then I feel the same way about them that I do about the people who bought houses they couldn’t afford or the people who financed a lifestyle they couldn’t afford by paying with plastic.

    You can only avoid the consequences of your actions for so long.

  22. michael reynolds Says:

    Doug:

    No, they are NOT simple concepts to understand, and you seriously expect that pointing to some obscure radio show is ample evidence that Granny should have figured it all out when quite clearly the Fed, the SEC, Congress and the banks themselves didn’t?

    You’re putting ideology ahead of reason.

    Granny should have figured out that Moody’s and S&P were lying? She should have known that her mortgage broker was signing off on a fraudulently-premised mortgage? She should have known that CEO’s were looting their own companies?

    I don’t spend an hour a week worrying about bond ratings because, like many people, I have a life. I actually have to go out and earn the money. So no, I don’t scan the radio waves obsessively looking for the one outlier that you can point to who defied the crushing weight of accepted economic wisdom.

    Most people trust professionals to manage their money. We don’t typically run off an earn a degree in economics, just as we don’t get accounting degrees, or educations in dentistry, plumbing, car mechanics, electronics or a million other fields where we rely on professionals.

    You are playing blame the victim, and you’re doing only so that you can avoid confronting problems in your ideology.

  23. Doug Mataconis Says:

    Justin,

    Wow how ?

    I can honestly say I have not seem so many otherwise intelligent people avoiding placing the blame for bad decisions on the people who made them.

    Let me correct that — they’re fine with placing blame at the feet of the bad actors on Wall Street but when it comes to holding politicians and individuals responsible for their own irresponsibility over the past decade or more, the silence is so deafening you can hear the crickets chirp.

  24. Mike A. Says:

    “Because I think that there are those out there, personified by Jon Stewart, who seem content to blame all of this on the CNBC’s of the world”

    Again,
    Stewart by no means pins the blame for what happened entirely on Cramer et al. He targets their roles and responsibilities in this crisis. Specifically “the gap between what CNBC advertises itself as, and what it is…and the help that people need to discern this”. If I missed a statement to the contrary, let me know.

    Doug, you continue to come back to this point as a basis for your arguments. Where in the videos did Stewart make these claims? Where was it inferred?

  25. Doug Mataconis Says:

    Michael,

    No, you’re the one putting an anti-market ideology ahead of reason.

    To say that concepts so simple that they can be summarized as “don’t put all your eggs in one basket” and “unless you aren’t going to need your money for a long time, don’t invest it in stocks” is something that the average person shouldn’t be able to understand is either disingenuous, or reveals a rather contemptuous assessment on your part of the intelligence of your fellow human beings.

    All that Granny needed to know is that she shouldn’t have been in the stock market to begin with because at the age of 75 she can’t afford to expose her assets to the high-risk of loss that is inherent in stock market investing. She belongs in bond mutual funds, Treasury Bills, and money markets, where her money will be much safer than it would be in stocks. And, if she wants viritually 100% security she can keep it in the bank and/or money market mutual funds, one of which is guaranteed by the Feds and the other of which has never defaulted in its history.

    Once again, you are also smearing the entire financial planning industry as giving the same type of buy-buy-buy advice that Jim Cramer did. That’s just a bald-faced lie.

    You are playing blame the victim, and you’re doing only so that you can avoid confronting problems in your ideology.

    No, I’m saying that it’s time people took responsibility for their own lives and the own actions and stopped looking for someone else to blame for problems that are due to their own, often willful, ignorance.

  26. Doug Mataconis Says:

    Mike A.,

    Let me put it this way, when Stewart invites Barney Frank on his show and grills him about his role in loosening credit standards in the 90′s and when he invites Franklin Raines on and grills him about his mismangement of Fannie Mae in the 90s, then I’ll take him seriously.

    Stewart is an entertainer, not a newsman. There’s no more reason for me to take his word as gospel than Jim Cramers.

  27. Mike A. Says:

    Doug,

    Don’t disagree with you on the fairness and left-lean. But he is clear in why he’s grilling Cramer. He’s not placing blame on him for causing the crisis. He is questioning whose interests he represents. And I think that is a fair question.

    I would also paraphrase others on this post. Yes Stewart is an entertainer, but, in this instance he is a better newsman than most I’ve seen in recent history.

  28. gerryf Says:

    The difference is The Daily Show is a fake news show; that is a distinction you have to make. If Cramer had not responded to the original piece on the show last week, it would have died away.

    For what it is worth, though, I’d love to see Barney Frank, Franklin Raines, John Murtha, and a host of others get a serious grilling by anyone. I don’t care if they are Dems or Repubs. I’m an equal opportunity disgusted at everyone.

    I do share Stewarts enmity toward supposed real news people not doin their job, however. That said, the fact that they were not grilled does not lessen Stewart’s message, does it? Where was Stewert wrong?

  29. Doug Mataconis Says:

    Mike and Gerry,

    It’s not so much Stewart I have the problem with, but those who have taken his comedic crusade, and make no mistake this is all comedy for him, and turned it into a crusade against financial advisers or pundits in genera and CNBC specifically.

    As I’ve said, there’s a certain lack of personal responsibility on the part of individual investors that contributed to this that’s being ignored.

  30. gerryf Says:

    I don’t think this is all comedy to him.

    That said, I concede your points and get what you are saying, but it is a lot easier to go along with the problem being a lack of personal responsibility provided everything else was working properly.

    The regulatory agencies charged with overseeing the financial system were inept or castrated, the journalistic community was largely asleep, and while I absolutely agree that a basic understanding of diversity is essential to protecting oneself against risk, when the system is rigged so that the risk is invisible or intentionally distorted, that means something–and it counts for more than personal responsibility.

    People who were investing were denied the necessary information needed to make good decisions–intentionally. That is why I am sympathetic to thier plight.

    I think you underestimate how much one needs to know to navigate the financial morass we find ourselves in. An investment for dummies book will only take you so far. You’re a smart guy, it shows, so you can cut through the swath of nonsense, but it is not nonsense to see how others cannot.

    I barely got scratched in this nonsense, but I some people who did and even though we discussed these things, there were always 10 or 12 learned financial geniuses contradicting everything I said.

    That is my ultimate point–the financial noise drowned out the common sense. Sure, you had a handful of guys warning this was all built on a house of cards, but there were more guys saying, “What, why worry?”

    Without going back to Cramer, he was telling everyone Bear Stearns was solid 6 days before the collapse–and he was not the only one saying it. Smart people who knew better were pushing the lie. I wonder how many of them were dumping shares at the same time?

  31. TerenceC Says:

    I’m torn on this one. I have little to no compassion for anyone stupid enough to trust stock tips given by a corporate VP (that’s their grade an GE) working for one of the largest defense contractors in the world. On the other hand, where does the obfuscation stop – somehow people in a position of trust on the television need to adhere to a set of ethical standards – honesty, integrity, and accountability being a few that come to mind immediately.

    I hate to suggest a cop-out but it could be that everyone is wrong? The individuals for being too gullible and careless with their money? The network and their personnel for treating investing like it was a spectator sport with time limits and measured quarters. I just don’t have compassion for idiots though – that’s what Darwin is for. Maybe Darwinism will see the financial networks get transformed into something else (Rukeyser on PBS never had these issues though), and of course the individuals have already been transformed into the working poor. There are two constants in the universe death, and stupidity.

    I’m reminded about the story (I’m always being reminded of things) of the scorpion and the frog. I’ll spare you the whole story but the moral is “because it’s in my nature”. Why, you ask do so many people get taken advantage of by Wall Street and the financial markets…..because it’s in Wall Streets nature.

  32. Below The Beltway » Blog Archive » Whatever Happened To Personal Responsibility ? Says:

    [...] I’m involved in a fairly interesting discussion over at Donklephant in the comment threat to Justin Gardner’s post about the Cramer vs. Stewart showdown last nigh… [...]

  33. Loviatar Says:

    Doug M. makes his argument on personal responsibility and blames peoples losses on their lack of such. However, what if you followed the rules; invested conservatively, diversified, stayed away from the CDS crap and did everything a long term investor should do, yet through no fault of your own the market has gone down by over half since 2007. Your retirement money has dissipated, your job is in jeopardy and your life has been turned upside down through the greed of others.

    .
    Stewart’s point was that it was Cramer/Media’s job to call out the misconduct within the market. To report and identify the entities who were abusing the system and if after that knowledge is made public you then decide to continue to do business with those entities, then yes Doug’s point (personal responsibility) would be valid. However if the crucial link in this decision making chain (reporting) is broken, no not broken, but has turned to cheerleading then how are informed decisions supposed to be made.

    .
    Doug M.

    No one I know has any sympathy for the greedy, but what we do have is empathy for the victims who through no fault of their own, now find themselves in precarious positions. I am so glad America has moved away from your point of view.

  34. Justin Gardner Says:

    Okay Doug, I hate to do this, but…

    I went back and watched all the videos again. And from your comments, I really don’t think you paid very close attention to them or you didn’t watch them. I’ll give you the benefit of the doubt and assume the former.

    First off, Stewart absolutely DOES NOT blame all of this on CNBC and to suggest as much is just factually incorrect. It simply didn’t happen. So that’s first and foremost.

    Second, Stewart time and time and time again said that the day traders and the banks were using the long term investors’ money to finance their game. He made it a point to talk about how those 401(k) folks were the ones who got shafted, not anybody who was doing silly day trading or over-investing in single stocks here and there. That’s what lead to his final comment about his mom having a responsible, long term outlook and that not working out for her.

    And of course there’s personal responsibility, but the fact that you don’t acknowledge this as the massive fraud that it is extremely disconcerting. Because if we lived in a world where you made the rules it sounds like corporations could get away with nearly anything since the only rule would be caveat emptor. Well, we tried that back in the day and it didn’t work here or anywhere else, and so regulatory system were formed. But then little by little, the deregulatory, free market ideology has stripped away these needed rules in favor of one that theorized that the market can regulate itself. And that’s precisely what led us to where we are now.

    So the question now, why aren’t you and all the folks who fight for less regulation claiming responsibility for a reality where banks were allowed to be leveraged 35 to 1? All I’m hearing are lame defenses about personal responsibility and how grannie should have been more diversified, when, by the way, A LOT of people who were plenty diversified lost A LOT of money too.

    Come on Doug, nobody I’ve seen at Donklephant is arguing that responsible market driven capitalism isn’t the way to go, but what we are saying is that the deregulatory ideology that you are pushing has been shown to be fundamentally flawed. But you don’t seem to hear any of that. All you seem to hear is “Market bad. Socialism good.” But that’s not what we’re saying AT ALL.

    Last, but certainly not least, people DO take responsibility for their own lives. In fact, they do it so much more than you’d ever give them credit for. But what these otherwise responsible people don’t account for is a reality in which the entire banking system was allowed to be so utterly and fraudulently irresponsible. And right here, on these videos, you have Mr Mad Money himself trying to convince us that NOBODY saw this coming. If that’s truly the case, you really think grandma would know? Of course not.

    And with that, I’m off to be somewhat irresponsible at a buddy’s rock show.

    Goodnight all.

  35. John Burke Says:

    I think Doug has the theoretical edge in this debate. In theory, if you are going to participate in the stock market, even through a single, broad-based mutual fund available through a 401(k) to which you contribute automatically with paycheck deductions, the responsibility is on you to know the risks, as well as the benefits of that investment. The information you need to know to make that assessment is available somewhere — in the fund prospectus, on your 401(k) plan’s website, in the Wall Street Journal, on CNBC — somewhere.

    But we all know that most people have neither the time nor the temperament — or in some cases the intelligence or necessary literacy — to make such an assessment. An older person — say, a 75 year old — may have grown a bit dim with age. Or just as likely, someone who was already 45 or 50 years old when mutual funds, IRAs and 401(k)s became easily available and began to be marketed extensively, may not have acquired the base of knowledge or sophistication to cope with anything more complicated than a bank account. We should remember that the giant mutual fund industry is basically a product of the 1980s and 1990s. Only one generation ago, no ordinary working person with a few bucks a week to invest had any means to do so except a bank account (they used to be called names like “golden passbook account” if they paid a bit more interest).

    While this does not relieve anyone of the personal responsibility to behave prudently, it does spotlight the many ways in which unsuspecting people could easily be misled into believing that what they were doing WAS responsible and prudent — that is, people who trusted big brand-name institutions like Citigroup or Merrill Lynch, trusted their own own employers who set up the 401(k)s, were affected by the judgments of their co-workers and everyone around them, and relied on the generally optimistic reportage in whatever media they read or watched.

    Much of this discussion is hypothetical because we don’t know the particulars of Stewart’s mother’s situation. We can assume that she was overly invested in equities for a woman of advanced age. And Doug correctly points out that mountains of financial industry and media advice has always emphasized simple “diversification of assets to suit an individual’s financial goals,” or words to that effect.

    But at the same time that the mutual fund industry and the media were sounding that caution, they were also pushing stock mutual funds. A little digging would show, I think, that most mutual fund companies were saying just last year that someone approaching retirement should be cutting back equities from as much as 80% of a portfolio to 60% or 50% or 40% but rarely lower — to be decided by you, the investor, to suit your own goals. It is clear that such routine advice was crazy. Even if there had not been a market crash, someone past 60 has no business putting more than 15% into stocks — enough to provide an inflation hedge. Someone actually retired should have gone lower and by age 75 should be at zero.

    Doug seems to agree with that advice. And it could have been found somewhere — but not easily for the average sap with a 401(k).

    The blame for this is actually hard to fix on anyone because with millions of people getting into the market, and the financial services industry expanding enormously to serve that mass market, and the media rooting for an ever-higher Dow, and your friends and neighbors going all in, there has been a kind of mass delusion of wealth to be had. How many people sold the stock funds in their 401(k) and IRAs when the Dow passed 13,000?

    People like Stewart’s mother should blame themselves first. At the same time, they are also right to blame the industry which had some responsibility to millions of people who really had no idea what they were doing and the government that did not look out for their interests well enough. These were not greedy people looking for a fast buck or a big killing. They were just saving — as once their parents saved at the corner S&L.

  36. Loviatar Says:

    “I think Doug has the theoretical edge in this debate. In theory, if you are going to participate in the stock market, even through a single, broad-based mutual fund available through a 401(k) to which you contribute automatically with paycheck deductions, the responsibility is on you to know the risks, as well as the benefits of that investment. The information you need to know to make that assessment is available somewhere — in the fund prospectus, on your 401(k) plan’s website, in the Wall Street Journal, on CNBC — somewhere.”

    .
    @John Burke,

    What an assinine comment. According to your theory; if I ever see you walking at the side of the road, I have the right to run you down and I shouldn’t be charged with any crime. Because theoretically, you should know that cars are larger and more powerful than a human and damm the laws put in place to protect humans from cars. In theory you should have read up on cars and knew the danger presented by them and taken all precaution to protect yourself and if that failed caveat emptor.

    This is fun, I wonder if this theoretical stuff would work for other crimes like robbery, rape or murder. I mean they all have laws against them, but I’m sure John and Doug could easily explain away the criminality of it based upon the victims lack of “personal responsibility”.

    .
    You ideologues are a joke. Your theory failed and now you’re blaming the victims.

  37. gerryf Says:

    Well, in defense of Doug and John BUrke, I think a better term would be hypothetical arguement that personal responsibility is the key in this debate, as in a normal world, where the rules people thought were in place, hypothetically people had a responsibility to protect themselves.

    I would agree with that.

    But, this was not a normal world. The financial industry had developed a set of expectations–intentionally through marketing and agressive sales–that did not match reality.

    The people running the system (wall street, banks) and the people watching the system (reporters, regulators) knew things were bad and that information was not shared.

    Doug’s books are not investment plans, but general investing principles/philosophies. They don’t account for the malfeasance and lies perpetuated by a system that everyone who was in it knew was in trouble.

    As Justin mentions, when banks and investment houses were leveraged 30-1 and securities and homes are grossly over-valued, loans are offered to people with no money down–something is wrong.

    We had too much money chasing money and the result was inevitable, but very few people were sounding the alarm. You just cannot expect the average Joe to understand it when the people they are listening to refuse to admit it.

  38. Doug Mataconis Says:

    Guys,

    I guess what I’m not accepting is your argument that the financial planning industry or networks like CNBC bears the sole, or even a substantial amount, of the blame for the economic crisis when, in reality, there’s plenty of blame to go around.

    Do they bear some responsibility ? Yes, but there were plenty of other bad actors out there that helped put in place the events that led us to where we are today.

    You can blame Washington and certain lobbyists for taking lending standards that, in the 90s, made it hard for people with bad credit to obtain loans, and, though the means of Congress’s control over Fannie Mae and Freddie Mac, forced them to lower those standards in the name of “fairness”

    You can also blame Washington for spending money we don’t have, a practice when the Obama Administration is inecxpliciably continuing.

    You can blame that segment of the legal profession that made an industry out of suing lenders for so-called red-lining when, in reality, what was going on is that people who couldn’t afford houses weren’t getting loans.

    You can blame politicians who turned the “dream” of buying a home into some kind of right to have a home, whether you could afford it or not.

    And, you can blame the public, for spending money they didn’t have, for buying houses they couldn’t afford, and for thinking that Wall Street was like a Las Vegas casino where they could get rich quick, rather than the long-term wealth builder that it was, and still is today

    To place all the blame and Wall Street, while ignoring what happened on Main Street and on Pennsylvania Avenue is, quite honestly, just without merit.

  39. shawn Says:

    Doug, you’re right in that all of those people deserve blame, but the fact that there’s plenty of people who screwed up doesn’t mean that the media shouldn’t be called to task for their mistakes as well.

    And for what it’s worth, Journalists and the like seem to enjoy reminding everyone of the special place that they have in our society, how they’re the front line of defense that the people have, that they’re the ones that keep the powerful honest and expose the corrupt.

    A senior citizen who didn’t diversify properly made a mistake, no doubt. But making a bad decision isn’t nearly as bad as going on TV, telling people that you’re looking out for them, and then purposely giving those people bad info.

    Many parts of the media, including Jim Cramer, are just as complicit in this mess as the bankers who destroyed their companies in exchange for their own short term benefit. They knew what they were doing, some of the video clips that Stewart showed is proof of that. Being dishonest is way worse than being stupid.

  40. Agnostick Says:

    Doug Mataconis… a straight question:

    Do you believe that people–from ditch diggers on up to our titans of finance and industry–bear some amount of personal responsibility for adhering to the law?

    Agnostick
    [email protected]

  41. Justin Gardner Says:

    First off, @Loviatar, that’s a pretty specious argument. And try improving your tone. It’s needlessly harsh. I understand your anger, but you can make your arguments without going overboard.

    Now then, to Doug…

    I guess what I’m not accepting is your argument that the financial planning industry or networks like CNBC bears the sole, or even a substantial amount, of the blame for the economic crisis when, in reality, there’s plenty of blame to go around.

    Who made this argument?

    Answer: nobody.

    What we are saying is that the largest financial news network should be roundly criticized for being asleep at the wheel while all this was happening, especially when you have a superstar like Jim Cramer bragging about how the markets can be easily manipulated and how the SEC is dumb. You don’t think every single person at CNBC saw that video when it aired? Of course they did. And Cramer was allowed to continue on and give stock advice like, “Don’t sell Bear Stearns!”

    That’s the point Doug. EVERYBODY KNEW and they didn’t say anything. So right now when they’re saying, “Well, who could know?” most of us think they’re lying. And that means they’re complicit.

    And yes, of course there’s blame to go around. Doug, who’s not agreeing with you on this? But to continue to suggest that we’re blaming this all or even substantially on CNBC is a false argument, so please stop making it.

    Here’s the problem. I think you realize that the deregulatory free market ideology is really at the root of all this. Sure, people abused the system once the system had its rules stripped away (people are greedy? really? shocker!), but those are merely symptoms of the disease. And so now you’re faced with a reality where there’s a big flaw exposed in your ideology. The intellectually honest thing to do is quit distracting us from the core problem and address it head on.

    Again, nobody is saying that market driven capitalism isn’t a great system. On this we agree wholeheartedly. Obviously we may disagree about which mechanisms are the most appropriate to stimulate the market during certain situations, but we don’t disagree on the core idea of capitalism.

    By the way, the rock show was great.

    Just in case anybody was wondering. :-)

  42. Smooth Jazz Says:

    One thing that I wanted to point out was that the version that aired on TV was a lot different than the whole interview. The interview on TV made it look like an unadulterated smack down on Cramer, while the unedited version was not as bad for Cramer. In the TV version it just kind of looked like Cramer was just asking to be hit.

    I doubt the premises of the debate. I felt that Stewart was basically pounding Cramer because Cramer said something unfair about Obama. My gut instinct is that this was the real reason behind the debate, and not about the actual collapse on Wall Street. With that being said, I do think that Cramer did show a lot of humility and even contrition. It was not really Cramer vs Stewart. It was Cramer taking off his shirt turning around and letting Stewart flog him.

  43. John Burke Says:

    Loviatar and gerryf appear to have read only the first paragraph of my comment. First I say that Doug wins the argument in theory, then I go on to point out that practice is different from theory and many people got screwed as a result of an onslaught of industry- and media- driven delusions and bad advice.

    In the future, guys, I’ll make a practice of reponding only to your initial paragraphs, so you might as well keep your comments short!

  44. Doug Mataconis Says:

    I think you realize that the deregulatory free market ideology is really at the root of all this. Sure, people abused the system once the system had its rules stripped away (people are greedy? really? shocker!), but those are merely symptoms of the disease. And so now you’re faced with a reality where there’s a big flaw exposed in your ideology. The intellectually honest thing to do is quit distracting us from the core problem and address it head on.

    No, what I’m saying is that if people had exercised the slightest degree of personal responsibility, they could have shielded themselves from the worst of it.

    There’s no rational reason that someone who is ten years or less away from retirement should have a significant portion of their retirement money in the stock market. This is an elementary concept that is easy for anyone to understand.

    And yet people didn’t listen.

    Why ?

    Because they think that the stock market is a casino, rather than a long term investment.

    Is CNBC responsible for that ? Personally, I doubt it. They put the programs on the air that people watched. They’re no more responsible for it than Entertainment Tonight is responsible for a teenage girl becoming anorexic because she wants to look like Lindsey Lohan.

    And I won’t even address your comments about the free market, because I’ve done that before and because nobody here bothers to address the role that government played in creating the playing field for the current economy.

  45. Mike A. Says:

    Smart jazz

    “The interview on TV made it look like an unadulterated smack down on Cramer, while the unedited version was not as bad for Cramer.”

    Agree – and it’s a good example of sensationalistic journalism. How ironic that, from a very general pov, this was what Stewart was reprimanding Cramer for.

  46. Justin Gardner Says:

    Doug,

    People, including me, have admitted that the government had a role in helping create this mess. After all, who agreed to strip away the regulations? But which economic philosophy led to that?

    Also, you can’t point to the symptoms of the disease and say those were the main problem instead of the “disease” that allowed banks to overleverage themselves 35 to 1.

    And, again, CNBC isn’t responsible for it, but they were complicit. There’s a difference.

  47. Concerned Says:

    Jon Stewart’s mom lost money in her 401k, and he’s mad? She could have lost, at most, a few hundred thousand dollars. He makes millions a year. Is he just upset that he’s going to have share some of his wealth with his mother? Welcome to the real world, Jonny. All of us younger, less wealthy people are. It’s called paying into Social Security.

  48. Smooth Jazz Says:

    [quote]
    Smart jazz

    “The interview on TV made it look like an unadulterated smack down on Cramer, while the unedited version was not as bad for Cramer.”

    Agree – and it’s a good example of sensationalistic journalism. How ironic that, from a very general pov, this was what Stewart was reprimanding Cramer for.[/quote]

    I’m going to see if using [quote] tags work here…. :)

    Well said and thank you for the compliment. :)

  49. Surfer Girl Says:

    If someone didn’t find this feud absolutely perfect they should be hit over the head. Stewart pointed at the exact problem of this country and that is how people are believing the BS these guys say all the time. You go Jon.

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