Laughing All The Way To The Bank

One of the standard ways for media to draw attention to itself is to pick a fight with other, perhaps rival, parts of the media.  Readers of New York tabloids know this strategy well.  Last year we witnessed an MSNBC news "anchor" constantly flame a Fox News commentator.  Ratings, apparently went up all around.

It's not surprising then, that this past few days Jon Stewart of Comedy Central has taken on financial media types like Jim Cramer of CNBC, accusing them of fueling the economic bubble from the past 8 or so years and failing to take responsibility.  Stewart's Exhibit A is Cramer's endorsement of Bear Stearns stock days before the company went belly-up.  

NBC, the owner of CNBC, loved the attention, just as Fox did when their commentator was attacked by MSNBC.  In this game, the idea that attention, good or bad, is good for ratings, holds true.  Jon Stewart invited Cramer on his show, and NBC milked it.

While Stewart apparently was not a comedian with Cramer, and engaged in some fairly serious accusations about media types failing to investigate the extent of the financial institutions failures and hyping the "bubble," it's still odd, in some conventional sense, to think of a comedy show doing the work of journalists and opinion "leaders."

In reality, Stewart makes his living off of current issues.  And the economy is front and center.  Picking on Cramer (who is way too hyperbolic for my taste) was like shooting fish in a barrel.  Easy pickings for Stewart, especially since he probably couldn't get John Thain or any other Lord of Wall Street on the show.  It was a win-win for Stewart as well as Cramer.

However, the economy is a real problem impacting everyone.  It's global reach is devastating.  And there are serious details in the reconstruction work that needs to be done, which require attention of everyone, pushing leaders to do the right thing, not short change us as they have in the past.  One of those issues is quite technical but extremely urgent if we want to have a long term sustainable economy built on (to use the current vernacular which I think has lost meaning) transparency.  Mark-to -market is an accounting rule that requires financial institutions to value assets on what they could get on the market, not what they paid for the asset.  In other words, what it is worth.  It is like saying the 10 year old Ford you own is still worth what you paid for it, rather than what you could get if you listed it on Craigslist.  

Financial institutions, now scrambling to demonstrate to Treasury and the Federal Reserve that they are solvent (to avoid federal take-overs and loss of that oh-so sweet corporate jet and huge salaries), want to mark the assets value at something closer to what they paid, rather than what the market will bear.  In other words, fluff up their assets.  Then they can claim they have the reserves to function and voila, the financial problems go away.

The problem is, some Members of Congress are actually listening to them (remember I have discussed the lobbying advantage these banks have over us?)!

So while Jon Stewart and Jim Cramer can "fluff" up their ratings railing at each other about who is responsible for the economic debacle, we all need to keep our eyes on the ball, follow what our leaders are doing, to make sure it doesn't happen again.  This is serious stuff.  And only we can make sure the right policies are set into place so we are not here, again, or our children are not left picking up the pieces.