In Stewart We Trust + A.I.G.
posted in Business |I’m sure everyone has seen all the attention about the great Stewart vs. Cramer showdown on the Daily Show this week. The most amazing thing to me is how wacky the press coverage has been, especially the people who should know better. The thing is, what Stewart is attacking is not just CNBC and the charlatans on the so-called cable “news” networks, but also the broader media itself that hasn’t had the guts to say or do anything about it.
The New York Times TV critic posts a snarky thing about the show that totally missed the point. Its not a boxing match, its not about two dueling personalities. Even the revelation during the show of the video clips of Cramer pretty much straight-out admitting to criminal market manipulation and encouraging others to do the same is not the most important bit (although it was also missing from most of the coverage). Its about the nature of media itself. Where has the NY Times been all along? I didn’t get a chance to listen to the whole “On the Media” radio show this week, but the web-site doesn’t give any indication that they paid any attention either.
The even deeper point is the extent to which the media has been falling down on their jobs of actually calling people on BS and lies. The “present both sides of the story” by printing quotes from a couple of people but in general have been amazingly lax about bothering to investigate, dig up any real facts, or make it clear when the quote from that CEO is just a lie.
A great example is today’s New York Times article about the outrageous bonuses that prints the quote from the A.I.G. CEO Liddy “We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses — which are now being operated principally on behalf of American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury.”
That quote is presented unchallenged in the New York Times, but let me just pick at it for a second. To quote one of my favorite Saturday Night Live bits lately, Really? REALLLY?!? These are the “best and the brightest”? Really?!?!? These are exactly the same guys that just incurred > $200 BILLION in losses directly for your company (we still don’t know the full extent because these guys are still hiding it in their accounting), these are the guys that already incurred a $170 BILLION tax-payer bailout directly, these are the guys that precipitated the worst crisis in decades, costing the US taxpayers over $1 TRILLION so far, costing the economy many times that. These are your “best and brightest”? These guys should be indicted for fraud and/or reckless negligence.
Beyond my indignation, the reporter could have done some basic fact checking. Are $3 million bonuses really necessary to retain Wall Street guys in the current economy right now? If these guys were fired, would anyone even hire them? (”lets see, on your resume, it says you worked for A.I.G. Let me call your references… You say you lost $100 billion in your last position?”) Frankly, from folks I know in the financial industry, most that still have jobs are just pretty happy to have them. And I’ve heard the quality of the resumes that show up at any company that is hiring at all are through the roof. Trust me, if these guys are the sort that are just out for a quick buck and will quit if they don’t get their big payday right now, A.I.G. and their shareholders, the US taxpayer (80% ownership) are much better off without them.
Everyone is also taking at face value the notion that these guys have contracts that require the payments. I’m pretty confident that their contracts have clauses that if they are fired “for cause”, they aren’t owed bonuses. If the contracts don’t have that clause that would be pretty direct evidence that the contracts themselves were part of a fraudulent scheme to lock in a payday in anticipation of a government bailout, which again would void the contract. And let me just say that I’m pretty confident that losing $200+ billion would count as a valid reason to get fired. I can just picture these guys trying to contest it as a improper termination in front of a jury (watch last week’s Law and Order if you want an example of what that looks like).
The bottom line is that the mainstream press, all of them, just doesn’t dig in on this stuff anymore and they accept the truthiness as a normal form of communication. We find ourselves in this strange position where Jon Stewart, the guy with the talk show on Comedy Central appears to be the only one we can rely on anymore.