Jumping on the Jon Stewart bandwagon, Todd Gitlin, Eric Alterman, Chris Hayes, and sundry other lefty activists have started the website fixcnbc.com, a network, they argue, that has helped "get us into the economic crisis we face today." This is utter nonsense. And the website presumes that we already agree with this blame-a-cable-network argument, offering little evidence (save an embedded Daily Show video) to bolster its case. It does, though, offer a quote from everyone's favorite hate-figure, host of CNBC's Mad Money Jim Cramer, as proof of the network's unforgivable perfidy: "Housing bubble? What housing bubble? The signs are in place for a further run-up in real estate. Breathe easy, mortgage holders…There is no housing bubble." As fixcnbc.com notes, Cramer's assurance was made in 2003—hardly damning evidence of his complicity in "the economic crisis we face today." (In 2007, Cramer freaked out about the housing crisis on his CNBC show). Indeed there are many that are stepping up to defend Cramer's now-infamous advice on Bear Stearns, arguing that professional economists like Stewart misunderstand the difference between keeping stock in Bear Stearns and keeping a brokerage account with the company.
But rather than attacking just Cramer—who does seem to be an unreliable source of financial information—why not go after Barney Frank who, also in 2003, argued that "these two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis." As the Washington Post reported, Frank "said the [Bush] administration's position [on tighter regulation of Fannie and Freddy] is driven by concerns about the financial safety and soundness of the companies 'to the exclusion of concern about housing.'" To the exclusion of concern about housing. But here is a potential difference: Frank hasn't attacked Barack Obama's stimulus plan as "causing the greatest destruction of wealth I have ever seen by a president," as Cramer recently did.
But of course, you rubes, cable television is the real malevolent power behind the financial crisis. Mustache-twisting CEOs use financial news programs to manufacture consent!
There is much to say in CNBC's defense, though why bother when The Atlantic's Megan McArdle has done all the heavy-lifting for me? A lengthy excerpt from her terrific blog post on the Kramer-Stewart showdown:
Jim Cramer ran a show on trading. You can say it might have been nice if he'd run a show on financial regulatory theory, but there's no reason to think that he would be any good it it–the guy's a trader, not a regulator, not a crack investigator. The skills that make someone a good trader, like a short attention span and an appetite for risk, are not what makes someone good at economic theory or managing regulation. We lost precisely nothing, as a society, when he decided to tout stocks instead of take a dive into public policy.
Individuals, of course, did lose something by following his advice. I'm sure a number of his viewers stuck with Bear and regretted it. On the other hand, I'm sure a number of his viewers sold out of the stock market in October on his advice and saved themselves a bundle. Do you know whether he has cost viewers more than he made them? I tend to suspect he has, but I have no actual data on which to base that conclusion, only a general belief that ordinary investors can't beat the market and shouldn't try.
No, neither Jim Cramer nor CNBC created this mess. They focus mostly on stocks, and though people tend to think of the stock markets as synonomous with the financial system, they just haven't had much to do with the current problems. And thank God, really. I'd rather not hand over the responsibility for the US financial system, or even my retirement account, to a guy who goes on camera to bite the heads off of plastic bulls.
The problem with Jim Cramer is the problem with the Jonas Brothers: what he does simply isn't much good, for all that people seemingly have a large appetite to consume it. And he encourages people to pursue a destructive activity, trading their own portfolios, when most economic research shows they'd be better off in an index fund.
But this is a minor sideshow. Going after Jim Cramer is like trying to fix your marriage by getting new drapes.