What You Know And Who You Know

From Between Thee And The Bedpost by Cernig:

It simply doesn’t compare, though, with the likes of Andrea Mitchell reporting on the bank bailout plan - and blaming Obama for its failure - while married to Alan Greenspan and not making full disclosure of that fact before every report.

I was having a similar thought this morning while watching Mrs. Greenspan on the Today Show. Perhaps the assumption is that everyone knows who she is married to, although that certainly is no excuse for not making full disclosure.

Who is Henry Paulson married to? George W. Bush and Goldman Sachs and his investment banking buddies, that’s who. Are we really to believe that he cares more about the average American than he does about his current work buddies and his former work buddies?

The same thing holds true for Jim Cramer giving advice and opinions on the bail out on the Today Show. Does he really care more about my financial future than he does about his own or his investment buddies financial future?

I’m not saying that these people don’t know anything and shouldn’t be listened to. All I’m saying is we should consider who they have been associated with and who they represent. A little balance from less self-interested parties would also be nice. Plus more informative and pointed questions from the likes of Matt Lauer would help. Instead we get things like Jim Cramer scoffing at economic academics (who opposed the bail out) for not being part of the real world. (As if college buildings are less tangible than financial derivatives.) There is no analysis of content, just an attitude of superiority. “I used to trade these things, so I know better.” (I’m relying on my memory here, but I think that’s close to what he said.) And Matt Lauer just lets that go. He doesn’t ask Cramer if he helped contribute to the problem because he used to trade these things. He doesn’t ask Cramer about the uptick rule and whether he ever benefited from the elimination of it. Chances are that Cramer never did (He even called for its reinstatement), but the point is that Lauer doesn’t ask these questions. I don't know who is right here, I'm just saying that we heard Cramer's point of view, and nothing else.

Steny Hoyer and Roy Blunt were also talking to Ann Curry on the Today Show this morning. Their talk disturbed me greatly. From what they said one could infer that short term stock market moves on Wall Street are what is driving how they will decide what policies to put into place. This is scary. Short term gambling on Wall Street, rather than long term investing on Wall Street is part of the problem. To have legislation that is driven by the former, rather than the latter will only make things worse.

We seem to think that the very same “experts” that have been part of the cause of the problems we now face are going to come up with a solution. The President and Congress allowed for way too much deregulation and too little oversight. The investment bankers (like Henry Paulson), and other financial speculators “played” the market with greed as their guide while things were good, and fear as their guide when things were bad. They weren’t investing, they were gambling. And to make matters worse, they were gambling with things they didn’t understand. Now we turn to them to not only explain what they were doing, but to come up with a solution. How insane are we? Instead of reporting on the dangers of the deregulation and lack of oversight, the media focused on the ups and downs of the market on a daily basis. The roller coaster ride of greed and fear probably got better ratings than the text of the newest bill passed by Congress and the President. Yet, who is now supposed to be fixing everything, and who is telling us about it all? The very same people once again. Why should we trust any of them? Do we have any alternatives?

Let’s look at another marriage. Mr. and Mrs. General Electric. General Electric owns NBC. NBC produces the Today Show. General Electric is also largely a financial company, and as a financial company they are heavily involved with loans.

From General Electric:

Since over half of GE's revenue is derived from financial services, it is arguably a financial company with a manufacturing arm. It is also one of the largest lenders in countries other than the United States, such as Japan.

The conflict of interest of Andrea Mitchell, while important, kind of pales in comparison.

Update:
This Modern World