The Financial Media and Its Responsibilities: Does Cramer Owe Us More than "Mad Money?"

Last week, I returned to reality and to the nonstop news about the Great Recession, after escaping into the world of the late Stieg Larsson, author of  the crime thriller/mystery The Girl with the Dragon Tattoo.

It so happens that Larsson was a  journalist in the 1990s during the Swedish banking crisis and the later dot-com bubble. Because many news reports and online commentary during the current  economic crisis have described the Swedish response to their own meltdown, it was just a small, but noteworthy coincidence to me that part of this intriguing story focused on the financial press's role in the run-up to the Swedish economic debacle. And the central character in the story, a financial journalist who gets into libel trouble,  was  unsparing in his critique about the Swedish financial media's close ties to the Swedish business tycoons and their conflicts of interest with the corporations they were supposed to be objectively and independently covering.  Given its current relevance, it is worth quoting one of its passages, in this case, about Swedish financial journalism's failure to do what professionalism in any field requires: 

    "In the last twenty years, Swedish financial journalists had developed into a group of incompetent lackeys who were puffed up with self-importance and who had no record of thinking critically...time after time, without the least objection, so many financial reporters seemed content to regurgitate the statements issued by C.E.Os and stock-market speculators--even when this information was plainly  misleading or wrong...[compare this to] crime reporters... [and] the outcry that would result if a legal correspondent began uncritically reproducing the prosecutor's case as gospel in a murder trial, without consulting the defence arguments or interviewing the victim's family before forming an opinion of what was likely or unlikely...the same rules had to apply to financial journalists."   (From Stieg Larsson, The Girl with the Dragon Tattoo, London: Maclehose Press, page 91.)

And then the Jon Stewart-Jim Cramer debate hit the traditional and new media talkosphere.

Some have said there is nothing more to say about the debate itself. This is possible. I don't know. But there is quite alot more to talk about regarding the coverage of the financial media over the last several years. Whatever way you want to tranche it (a word I never thought I would have to learn to go along with all those other words, now perhaps obscenities in some people's minds, among them, credit default swaps, collateralized debt obligations), the fake news anchor, The Daily Show host Jon Stewart's questions require real answers from the real financial journalists. 

So, what is Stewart asking the media in a democratic society to do anyway?

Like most other people in the country, he is banking on the specialized financial media to act as the peoples' ears and eyes about the news, people, transactions and relationships that define and characterize a capitalist economy in this global era. Further, as a citizen, he concedes power and privileges to the media in exchange for truthful, honest, independent and accurate accounts of the vast financial world. In other words, he assumes that the financial media (just as all other media) serve the traditional function of the media in a democratic society: to act faithfully and honestly as the peoples' watchdog on the economy and financial affairs.

Stewart's questions to Jim Cramer, the "Mad Money" stockpicker at CNBC, were worthy of a truthful, honest, independent and accurate discussion of the role of the financial media in fulfilling this peoples' watchdog obligation. Whether this discussion actually occurred on the show or in the talkosphere afterwards. 

To be sure, if some people get the idea that Stewart was blaming the financial media for causing the financial crisis,  they would be wrong. What he was asking for, in my opinion, is a frank accounting and transparent investigation of what the financial media's news-gathering approaches and professional ethos have been over the past several years, with an eye toward getting them to step back and weigh in on the consequences of what they do. Here are some of the ideas he was trying to talk about:   

1. What should the moral responsibility be of journalists and others working for the  financial media in the runup to the housing, bond, securities and all the other bubbles that have since popped?

2. What should the overall role of financial media  be in a democratic, capitalist society? And how does the financial media distinguish the stockpickers, the sales and the marketing people for certain financial products and services from the journalists who are supposed to be offering independent and objective information, education and analysis to people who follow these media? 

Unlike Stewart's  previous public questioning of shows that consisted of vituperative spitting showers between political opponents, among them Tucker Carlson's "Crossfire," which led to its cancellation, I do not think Stewart's important exchange with Jim Cramer, will have the same effect. 

What the exchange does do, however, is to put Cramer into stock positions he never could have anticipated, and even perhaps gives him a different understanding of debts and obligations.