What business reporters, and the so-called "experts" don't get is WHY the public is pissed at them. Cramer's certainly not the only one. As I noted previously, Erin Burnett was on "Real Time" Friday night, and actually suggested that taxes shouldn't be increased for the very rich, because the markets have penalized the rich enough. They are just completely out of touch, and they have forgotten their role in this marketplace of ideas. In the end, they are supposed to be JOURNALISTS!
The purpose of the press — and the reason their rights are placed so prominently in the Bill of Rights — is to keep politicians honest. In a perfect world, the market really should regulate itself, but it's not a perfect world, so the government is supposed to oversee the market and regulate it where necessary. The job of the press in all of this is two-fold; they're supposed keep both government and the market honest. The "experts" in the business press STOPPED DOING THAT, and became cheerleaders for a market that was obviously seriously corrupted. I know, because I was writing on this five years ago, and I claim absolutely ZERO expertise in this. I wrote articles on the looming mortgage meltdown back in 2005, and I was warning about the market back in 2006. Now, if I can see this stuff coming, why are these so-called "experts" so blind?
During a period that was inarguably the greatest economic boom in world history, the United States economy went from also-ran to superpower in a quarter century. At the end of World War II, the Dow was sitting at about 180, and stayed there, with an occasional run-up to 200 through the rest of the 1940s. During the 1950s, the greatest economic expansion in history, the Dow went from 195 to 679, which is where it stood on December 31, 1959. In other words, during a decade in which we became a manufacturing superpower, and we were as close to full employment as we would ever be; during a decade in which more people could read and more people had college educations than ever before, the Dow went from 200 to 700 points. The 1960s, which were also prosperous, and even featured the first post-war balanced budget, in 1968, saw the Dow move from 670 at the beginning to the decade to a PEAK of 995 in 1966 and back down to 800 by the end of the decade. It would peak again at 1000 in December1972 and January 1973, but wouldn't hit 1000 again for almost annother decade.
In other words, during the most prosperous period in our history, the stock market was a good place to out your money for the long haul. It was a reliable source of steady income, because stocks were sold in companies that built and sold goods and services. We were investing in infrastructure, and the good of the country.
Contrast that with what's happened in recent years. From 1983 to 1993, the Dow went from 1000 to 3300. At a time when the economy was being dismantled, with jobs being shipped overseas, and the manufacturing dominance starting to give way, the market was tripling? Look closely; the largest econominc expansion in world history, and the market barely triples. In the 1970s, with the worst inflationary cycle in US history, the market stays pretty much flat. In the 1980s, with the economy contracting, and increasing numbers of people trading jobs at GM for jobs at McDonald's, the market's soaring that much in value?
Then came the tech bubble. From 1993 to 1999, the Dow went from 3300 to 11,000. During that time, the experts were crowing about the tech boom, and explaining to us that investments in browser companies that gave away their only product was a smart move. They screamed at us that a stock purchase in a company that sold pet supplies online was a brilliant investment, even though they could buy the stuff cheaper at their local grocery store, and didn't have to pay enormous shipping costs. Folks, these people were no longer touting stocks based on their company's long-term profit outlook, but rather, for their potential for a quick turnaround for a get-rich-quick profit.
That is not the business reporter's job. Where were the business reporters warning us of the coming dive in tech stocks, which was inevitable? Didn't any of the experts see something wrong when a company that actually produced nothing of value and generated very little actual revenue, bought a storied revenue machine called Time Warner a decade ago?
Where were business reporters warning us of the precarious nature of the last stock run-up, when the Dow went from 7900 in late 2003, to its record, 14,164, on October 9, 2007? Someone in the "expert" community had to see a problem with such a steep run up. What was it being based on? Why didn't anyone warn people away from derivatives? Why wasn't anyone on CNBC or Bloomberg, or any of the myriad financial programs doing exposes on the bullshit mortgages that were being written at the time? Are you telling me NO ONE in the financial community saw that mortgage backed securities were a bad investment, and destined to bring the market crashing down? I know I'm not the only one who saw this coming, because I used to talk about this with friends years ago.
The REASON Jon Stewart and I (and many others) are pissed off at these people is simple; they forgot their job as journalists, and they became cheerleaders for a securities that was unregulated, unsupervised, and wherein no one gave a rat's ass what was happening, as long as everyone was making money.
THAT is why Jon Stewart ripped into Jim Cramer, and why the rest of us are cheering. The CNBC reporters need to go back to being reporters, and stop being cheerleaders and stock touts. The stock market is supposed to be a tool for investment, and not a Las Vegas-style betting pool, and journalists are the ones who are supposed to keep an eye on it.
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