Every once in a while TV doesn't just report the news but becomes the news. TV coverage of the Kennedy-Nixon presidential debates may have altered the outcome of that election by helping to draw a stark visual contrast between a young, energetic Kennedy and a tired-looking Nixon. CNN's coverage of the first Gulf War made war transparent and immediate to viewers all over the world in a way that had not been done before.
While Jon Stewart's evisceration of CNBC money prophet Jim Cramer won't be remembered in the same pantheon of unforgettable TV moments, it undoubtedly struck a chord in a nation battered by Wall Street excess and duplicity.
Jim Cramer may become the face of recent Wall Street excesses in a way that Michael Douglas's character in the movie Wall Street -- Gordon Gekko -- became the face of greed in the late 1980s. Obviously, Gekko was a fictional depiction of what was wrong on Wall Street at the time. He did not exist in real life and therefore could not have been actually responsible for what went on in the Board rooms and trading floors at the time. While Jim Cramer is a character of flesh and blood, he is only a minor figure in Wall Street's backroom game. The bigger figures appear to be certain hedge fund characters who grace Fortune's list of the richest Americans yet whose portraits are harder to come by than those of undercover CIA operatives.
Even for folks such as ourselves who are engaged in the Wall Street game but try to play it in a way that has some reference to the real economy, the Wall Street "side bet," as Jon Stewart has called the unregulated -- or lightly regulated -- trading in exotic instruments, is suspect.
Wall Street was invented to channel capital to productive uses, thereby making the economy more efficient. That was the way Wall Street was supposed to earn its just reward: By providing companies with capital and then letting those companies earn satisfactory returns on that capital, Wall Street was supposed to aid in the growth of profitable industries while starving industries that would destroy wealth over time.
Not only has this not happened in many instances -- witness airlines and auto makers -- but, perhaps more importantly, by being at the nexus of savings and investment, Wall Street decided long ago to hoard a large portion of capital it was supposed to help direct to productive uses. The result was a mushrooming of the financial sector the world had never before witnessed. Instead of becoming an efficient, lean allocator of capital, Wall Street turned into a humungous industry in its own right, with "side bets" that could only be properly understood and exploited by insiders. The latter got rich while savers footed the bill.
It's high time that Wall Street got called on this -- and it's a shame no one could do it except the anchor of what's billed as a comedy show. Not funny.
If you missed Stewart's face-to-face evisceration of Cramer, here it is: