Meghan McArdle thinks that a lot of the recent criticism of CNBC’s Jim Cramer is misdirected. Of course, the guy isn’t some deep seeing economic theorist who should have foreseen our financial catastrophe. He’s just a trader who wants to find the bull market, which he’s convinced is always out there somewhere.
More importantly, a lot of the people criticising CNBC and Cramer overestimate the influence of the network. In fact, they probably overestimate the ability of “influencers” to influence much at all. The market is far more powerful than that, except perhaps in the extremely short-term.
Jim Cramer had no influence over the twin manias that afflicted America in the last 10 years: the madness of homebuyers for ever more expensive houses, and the madness of bankers for buying bonds based on those homes. Jim Cramer did not persuade the Asian savers to pour moronic amounts of capital into oversaturated American markets. He did not talk up MBS or CDOs to any level that could be vaguely said to have meaningfully increased the amount of leverage in the system. If you want a television host, or network, to blame all of our troubles on, you’d do better to cast your ire on Home and Garden Television, and Flip This House. They’re the ones who told Americans, over and over and over and over, that it was possible to get rich by installing granite countertops.
Jim Cramer ran a show on trading. You can say it might have been nice if he’d run a show on financial regulatory theory, but there’s no reason to think that he would be any good it it–the guy’s a trader, not a regulator, not a crack investigator. The skills that make someone a good trader, like a short attention span and an appetite for risk, are not what makes someone good at economic theory or managing regulation. We lost precisely nothing, as a society, when he decided to tout stocks instead of take a dive into public policy.
Actually, we’ll go further. His policy advice–urging the Fed to cut rates when the crisis started, calling on the SEC to revive the uptick rule–has been confused at best and usually counterproductive. We’d prefer less of Cramer as a world saver, and more of Cramer as a stock analyst and trader.