I just watched the Jim Cramer vs Jon Stewart showdown on The Daily Show and I’m just not as impressed as some others. Stewart’s real problem with Cramer seems to be that he should have known that the meltdown was coming and told his viewers. By advising them to buy stock that he should have known was bad he is jointly responsible for the fomentation that led to the stockmarket crash. There are two reasons why I’m not convinced:
- As Megan McArdle says, Stewart is being hypocritical. He is “… doing exactly what Cramer is–making powerful statements, and then when he gets called on him, retreating into the claim that well, you can’t really expect him to act as if he were being taken seriously.” I don’t know how much to trust reporting that Stewart himself is careful to point out is comedy, not journalism.
- Stewart’s central claim is that Cramer should have known better. I say that Cramer’s viewers should have known better. So perhaps Cramer should realise that the CEO of Lehman Bros had an incentive to say they were doing well. But Mad Money makes money by being entertaining and getting people to watch, not by doing hard-hitting journalism. If Cramer were an uncompromisingly hard interviewer he’d never get any of the CEO interviews that people tune in to see. Viewers should realise that his show doesn’t succeed by picking stocks well, as the numbers show. If they don’t then they’re going to be relieved of their savings by someone else if Cramer doesn’t lose it for them first.
Ultimately, I was a bit disappointed that Stewart’s entire attack asked Cramer to adhere to journalistic standards that he has little incentive to aspire to. He doesn’t hold himself to such standards (although I understand why), and he doesn’t hold investors to those standards either.