Finally, an issue conservatives & liberals can agree on.
Every now and then an issue transcends the toxicity of the American political divide. Both conservatives and liberals are expressing outrage over AIG’s decision to pay out $165 million in retention bonuses to the insurer’s executives has developed into one such issue. In this case, outrage over AIG’s actions is heightened by an already existing populist atmosphere related to the worldwide financial crisis in general.
If AIG executives think that this issue is going to blow over, they are sorely mistaken. Perhaps they should consult the producers and on-air personalities of CNBC. After last week, they know better than most that the public is growing intolerant.
Of course, I’m referring to the cable financial news authority getting its pants pulled down on The Daily Show with Jon Stewart. It was fascinating to watch. It started March 4th when Stewart aired a segment highlighting CNBC’s journalistic ineptitude. Between then and last Thursday, Stewart’s criticism, and CNBC’s exception to it, came to dominate straight news coverage, building to a climax when the network’s personality, Jim Cramer, appeared on the Comedy Central “fake-news” program.
During the interview, Stewart articulated the behavior of the banks before the collapse and the reason behind the rise in populist sentiment among Americans. He claimed there were essentially two markets. The first is where Americans are encouraged to invest for the long term. Stewart, aptly, went on to conclude:
There’s this other market; this real market that is occurring in the back room where giant piles of money are going in and out and people are trading them and it’s transactional and it’s fast … What it feels like to us — and I’m talking purely as a layman — it feels like we are capitalizing your adventure by our pension and our hard earned money…
The Stewart v. Cramer/CNBC story was all over the mainstream media last week and over the weekend. That’s somewhat ironic in that Stewart’s message was an indictment of the media as a whole, as well as the banking industry. Jim Cramer was merely its poster boy. A March 15 post at the Oxdown Gazzete summed it up well:
The war against the big banks began Thursday night, when The DailyShow’s Jon Stewart nuked the ethical pretensions of the entire industry and its media shills…
Using CNBC’s Jim Cramer as both Exhibit A and an accessory, Stewart laid out a devastating indictment of the industry and CNBC’s facilitating, coverup role. As Cramer fumbled to defend himself and CNBC, Stewart showed clip after clip of Cramer describing stock price manipulation, insider scams, and how cool and easy it is to fool federal and state regulators.
And in the process, the “comedian” as Cramer tried to belittle Stewart with Joe Scarborough’s help, not only humiliated Cramer; he showed by contrasting example how shallow and inept most of the MSM has been in covering the financial scandal.
AIG should treat this as a warning. When news coverage goes viral like the Stewart/Cramer kerfuffle, it inevitably stirs up politicians and the news media. The media reacts twice: first for being called out publicly for its poor performance. Secondly, and almost certainly the more powerful of the two reactions, they feed off the public outrage regarding big bank bailouts. Bank on it, the AIG bonuses issue will lead every newscast for the next several days.
Politicians react similarly to the public outrage generated by The Daily Show bit. Of course, they share in the blame of the financial meltdown, having let their regulatory guard down over the past three decades. However, politicians relish in the opportunity to be the shouters, rather than the one’s being shouted at. They can’t resist an opportunity to be seen engaging in the populist charge while banks are in their constituents’ cross hairs.
Tell me what you think. As we’re discussing AIG’s “retention bonuses,” I’d love to hear from someone willing to rationalize the payment of incentives to individuals who failed so miserably in their work. Keep in mind, however, we can’t forget why they were bailed out by the government in the first place; the reason being, AIG was so intertwined with other financial institutions around the world that their failure would wreck the entire financial system. That fact has not changed.
For now, I must admit that I’m enjoying the show. The mere fact that many people, occupying opposite ends of the political spectrum — those whom ordinarily would foam at the mouth at the sight of one another — are now engaged in a common goal. AIG, and other bailout recipients, would be wise to heed the message of this convergence. Any scandal outrageous enough to distract from the culture wars, as Frank Rich noted over the weekend, is not going to end well for those associated with it.
AIG Image from Flickr User: The Truth About... by way of CreativeCommons.org