By: Cliff Kincaid
Accuracy in Media
One of the best questions in the GOP debate was offered by Jim Cramer, the hyper CNBC host, near the end of the event. Interestingly, it came from a viewer. Unfortunately, the Republicans with a chance to answer it had no answer.
“I’m going to be quoting Joanne Kornbly (ph),” Cramer said. “She e-mails us. She says, ‘Our stock market has turned into a casino with high- frequency computerized trading comprising 70 percent of all transactions and hedge fund speculation resulting in market swings. Before privatizing Social Security, how would you make the stock market safer for individual investors?’”
This is a question that is on the minds of millions of Americans who want to see the American system of capitalism succeed and have investments in stocks. Last year, in the famous flash crash of May 6, the stock Accenture dropped from $44 dollars to one cent per share within 15 minutes, and recovered back to $41. Apple computer dropped 60 points in 15 minutes. It went from $258 down to $199 and then recovered to $248 within a 15-minute period.
Cramer introduced the question by saying that he was directing it to Herman Cain and that “This does not lend itself to 9-9-9 or any other number.” He asked the question and then said, “…how do we restore faith in the markets for the little guy?”
After Cain responded with another statement about improving the economy, Cramer followed up: “When the economy was going great, sir, there was no trust. When the economy was going great, people were getting ripped off and there was insider trading. When the economy was going great, people were getting hurt in the stock market. Forget the economy. Talk about the way the market is regulated.”
After Cain failed to respond, Maria Bartiromo followed up with Texas Governor Perry: “How do you restore faith in the public markets?” Perry replied, “Well, we have the regulations in place, and we had the regulations in place well before the meltdowns occurred.”
This may not be as funny as his gaffe in forgetting one of the federal departments he wants to abolish as president, but it is just as serious. Beginning under President George W. Bush, the Securities and Exchange Commission began dismantling the safeguard regulations, such as the uptick rule, circuit breakers and trading curbs, which prevent short selling and computerized high-speed trading.
Cramer, a director and co-founder of TheStreet.com, has been an advocate of reinstating the uptick rule, which would slow trading. He has also been extremely critical of Obama’s economic agenda, saying that he was “taking cues from Lenin.” Predictably, the Soros-funded Media Matters group has attacked him for these and other anti-Obama comments. It understands that its financial patron, who backs Obama, is the ultimate inside trader, having been convicted for that offense in France.
Cramer is not a liberal in the media and knows the money business. A former hedge fund manager and founder/owner and senior partner of Cramer Berkowitz, his bio notes that his compounded rate of return was 24% after all fees for 15 years at the firm.
“Not all regulation is bad,” he said, in reviewing the GOP debate performance. He makes the simple point that capitalism requires rules and regulations that protect invested capital. This was the point implied in the question he put to the Republicans.
In this debate, at least in the case of Jim Cramer, we saw a panelist and questioner who knew his business and tried to get real answers. Cramer did the Republicans a favor by feeding them a softball question from a viewer. Their failure to handle it effectively was a lot more significant and newsworthy than Rick Perry’s much-publicized gaffe.
The role of the hedge funds in market manipulation, which was alluded to in the question and was a subject of Cramer’s on his Tuesday show, one day before the debate, is something that won’t go away. Let’s hope that CNBC hosts another debate and Cramer is given another opportunity to grill the Republicans.
Cliff Kincaid is the Director of the AIM Center for Investigative Journalism, and can be contacted at firstname.lastname@example.org.
1 thought on “The Other Rick Perry Gaffe”
If asked who is a better presidential candidate between Perry or Cain, I would say Cain despite the sexual harassment accusations. Even if he keeps going back to his 999 Tax Plan, he rebuts better than Perry which means he is a better option.