History repeats itself as criticism of Cramer, finance journalists quashed

It's no secret that Wall Street has long been in willful denial George Santayana's aphorism, "Those who cannot remember the past are condemned to repeat it." Repeat the past they must, forever buying stocks when they're at their peaks and selling when they're crashing. There's another aphorism that, perhaps, might come from the much-ballyhooed criticism face off between John Stewart and Jim Cramer, says Thomas Frank in today's Wall Street Journal: the stock market is not the friend of the small investor.

Cramer and CNBC, the network on which his energetic show appeared, are just a few of the hundreds of "thought leaders" who have gone on depicting the stock market as a place in which anyone, not just the moneyed elite, can make a buck, and have fun doing so; despite every evidence to the contrary. Remember the great crash of 1929? For the most part, the extremely wealthy survived that fine. Not so the small investor, caught up in the fervor. As Frank says, if the "world of financial infotainment can itself be described as a "market," it is a market where accountability does not seem to exist, where the heaviest of incentives seems to carry no weight, and where consumers, to judge by what they get, seem constantly to choose the lousy over the good."

In the story of the current market meltdown, it's clear who were the victors to which the spoils were delivered. The bankers, first, who may have lost their jobs and, in many cases, their life's work, but made plenty of money off the climb to the top of Mount Dow -- and then continued to make money as the market fell, still collecting bonuses and mind-blowing paychecks while their institutions fell to pieces around them. The hedge fund managers and executives at the top of huge corporations whose stock went high, higher, highest; they were being compensated based on their company's stock price, so eagerly participated in the sham of the endlessly-growing nature of revenues and profits.

The government agencies who were supposed to regulate the markets, and the market regulating bodies themselves, were in on the rush. In most cases, those who worked for government agencies were ex-investment bankers; those who weren't, were in awe of them (or had portfolios managed by them, most likely, in "blind trusts"). The market regulating bodies had a vested interest in the protection of the market's populist aura (and got paid in vast sums befitting the brawn behind the enormous mysterious Wall Street).

And here's the rub, as Frank points out: there is no true punishment for being wrong. As Bernie Madoff has proven, there is a real cost to stealing money. But if you're just the one who encourages millions to invest their money in a stock market run-up that behaves and looks like any number of mob-fueled bubble markets of the past millennium? Well, you're likely patted on the back, with a shake of the head. How could you have known? Here's a government job until things blow over.

Frank writes, "In the marketplace to describe the marketplace itself, there is precious little competition. There is a single, standard product that comes in packaging that is alternately sultry, energetic or fun -- bitter, brainy or Cramer "crazy" -- but which rarely strays beyond certain ideological boundaries. Adversarial voices are few. Criticism is sacrificed for access. Advice sometimes shades over into simple propaganda. Even the worst prognosticators sometimes go on to jobs with presidential campaigns or prominent think tanks." Or private equity firms. Or jobs at CNBC.

Will you be doomed to repeat the past? I suppose your viewing habits over the next decade will be answer enough to that question.


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