Jon Stewart Won But Did The American People Lose? Did America Lose?



The verdict is unanimous. In his publicized face off against Jim Cramer, Jon Stewart won by a knockout. We were interested in this brawl because we expected a serious debate between two passionate people with opposing viewpoints. That debate never took place. That was a loss for the American people. 

So, in this article, we raise some of the points we hoped Cramer would raise. Jon Stewart has no obligation to respond but we hope he reads the points and thinks about them.


The American people have lost a tremendous amount of money in this recession. The aggregate loss in US Household Wealth is now roughly up to $20 trillion, a figure that defies adjectives. The American people are mad because they feel they did nothing wrong but they ended up paying for the sins of others who behaved badly. There is rage across America and a demand to find the villains who made us suffer this disaster and to punish them. Wall Street Firms and the Big Banks are the easiest and most rational target of this rage. The complaint is that they let us down with their irresponsible 35:1 leverage and with their single minded pursuit of short term profits.

This is the rage to which Jon Stewart lent his voice and his platform. If you watch him during the brawl, you will see that Jon Stewart believes in this viewpoint passionately and ardently. There is no doubt whatsoever in his mind or heart. 


When Jon Stewart destroyed Cramer, his entire audience and a large section of America felt vindicated. With his win, the American people must be more convinced than ever that his viewpoint is the correct one. There is no room for doubt anymore. This, we think, is the loss of the American people.

Pause to think why is the rest of the world in so much trouble? Germans are dour, strict people and their bankers are disciplined Bundesbankers that constantly harp on the threat of inflation.Then why is Germany in so much trouble? Why is Eastern Europe nearly bankrupt? Why is Japan on the verge of a collapse? Wall Street had nothing to do with it.

So is it possible that Wall Street may not be totally responsible for the mess in America?


Let us play a virtual game. Pick the most moral, the most conservative town in America of your choice, a town where people are straight and honest, a town where people work hard for their money. You could pick Urbana, IL, Rochester Hills, MI, Chamblee, GA, El Paso, TX or even our favorite little township of Manhattan, NYC. 

Throw a million dollars in $20 bills from a helicopter in the heart of your chosen town. We are willing to bet that most honest citizens of that moral town would run to pick up the $20 bills and put these bills in their pockets. They might even consider the money from the sky as the modern equivalent of manna from heaven. 


This is what happened to America between 2004-2006. There was a huge mountain of money that was in captivity until 2004 because of fear of the 1994 Greenspan. This money was freed from captivity in 2004 when Greenspan signaled his slow and steady policy of raising interest rates without disturbing global bond markets. (see our article “Did the lesson of 1994 lead to the Credit Bubble of 2004-2007 and the subsequent Credit Crunch?” – August 2, 2008 – www.cinemarasik.com/2008/08/01/did-events-in-1994-lead-to-the-credit-bubble-of-20042007-and-subsequent-credit-crunch.aspx  )

This money descended upon America and the world like a huge amount of manna from heaven. The money available was so large, the demands on that money initially were so modest, the loans made with this money were initially of such high quality, that every loan made money. With each wave of success, the free money kept building, the demand for loans kept rising and the profits from the loans kept going up. In this environment,


  • If you were a homebuyer and you did not buy the biggest house you could buy, you were a fool.
  • If you did not borrow against your house and live a lifestyle you could not afford, you were a chicken.
  • If you were a saver, you were a fool that fell behind your neighbors, your friends and your colleagues.
  • If you were a lender and you did not lend freely, you were fired.
  • If you were a trader and you did not buy as much credit product as you could buy, you were a chicken and you were fired.
This is how the average American home buyer, the average American banker and the average American trader got further and further swept into the vortex of money.  

For the first time, the opportunities for the American Dream were reaching further and further down into the poorer and minority sections of American society. You could buy a house even if you could not afford it. Then you could take a home equity loan and decorate that home. If you were a Congressman, if you were a Governor, if you were a Mayor, if you were a City Council member, you took credit for this prosperity and for enabling the American Dream to finally get within reach of every American regardless of income level. the If you were a banker and you expressed doubts about lending to the poorer segments, you were called an elitist or a racist and probably fired.

Then one day, demand for houses was satiated, demand for loans was saturated, demand for credit was met, the mountain of money got depleted and the music stopped.

Who did this?


  • If you bought a house, you did it.
  • If you got a home equity loan, you did it.
  • If you financed your new car, you did it.
  • If you borrowed on your credit card, you did it.
  • All of us did it, Main Street and Wall Street.
When the entire society does it, there are no innocents left. This crisis shows us that we are, after all, our brother’s keeper, our neighbor’s keeper, our colleague’s keeper and finally, as we learn painfully, we are our bank’s keeper.

In this context, Jon Stewart is Rick Santelli’s keeper. Hopefully, Jon Stewart’s thinks about it and stops the blame game. Jon Stewart is so big that if he stops it, President Obama will.

Everyone in America is on the deck of the modern Titanic. The iceberg has hit us. We may, however, have modern equipment and a modern rescue team, the Bernanke Fed, that can take us to safety if we work together. After we get to safety, we can play the blame game.


Jon Stewart and the American people might be stunned to hear that Wall Street and American Banks have been actually more conservative than their European counterparts. The amount of money from the sky was not a shower but a deluge and Europe, traditionally conservative, was swept up in it.

Most European countries allowed their banks to become much bigger than the capacity of the countries to support them. Look at the facts about the short-term bank liabilities:


  • Belgium’s liabilities are roughly 285% of its gross domestic product,
  • Switzerland’s liabilities are 260%,
  • England’s are 156%,
  • France and Germany’s are 60%, while
  • America’s are only 15%.
Austria, that beautiful country of the Van Trapp family & the Sound of Music, ended up lending 170% of its GDP to Eastern Europe. No one knows about Chinese Banks, because no one is allowed to. Given that China was the greatest bubble of this decade, we shudder to think about the condition of the Chinese Banks.
Yet, the rest of the world blames America for the economic mess regardless of these facts, this reality. The world tells us America created this crisis; that American Society allowed Wall Street to run amok and destroy the world’s economy.

Why shouldn’t they? America’s cult hero, Jon Stewart, has just told them it is so.


This is why we think that while Jon Stewart won his debate, America lost. 




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