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Obama Challenges Media to Elevate Discussions of Racial Tensions; Market Meltdown
Aired March 23, 2008 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HOWARD KURTZ, HOST (voice over): Wild over race. Barack Obama challenges the media to elevate the discussion of racial tension as he tries to distance himself from his incendiary pastor.
Did journalists rise to the occasion or reduce his speech to sound bites and shout fests?
Market meltdown. Were journalists too slow to recognize the magnitude of the housing crisis, the credit crunch, and the stock market swoon? "
Mad Money" man Jim Cramer joins our discussion.
Plus, affairs of state. As David Paterson replaces the prostitute-patronizing Eliot Spitzer, New York's tabloids report the new governor owning up to a series of extramarital flames. And Detroit's mayor, Kwame Kilpatrick, fighting for his job after "The Detroit Free Press" revealed he lied about an affair with a former chief of staff.
Have these sexual investigations gone too far?
KURTZ: It was a blunt speech, an uplifting speech, a difficult speech, a speech that some critics said was simply designed to get Barack Obama off the hook for his close association with a pastor seen on videotape spouting some pretty vile anti-American rhetoric. But what really struck me about the senator's address on race relations this week was his challenge to those of us in the news business.
Are we capable of joining in an honest dialogue about the feelings and grievances and blacks and whites? And are we capable of treating the nuances of a 37-minute speech on this sensitive subject without reducing it to the usual sound bite warfare?
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: We can tackle race only a spectacle as we did in the O.J. trial. Or in the wake of tragedy, as we did in the aftermath of Katrina. Or as fodder for the nightly news. We can play Reverend Wright's sermons on every channel every day and talk about them from now until the election, and make the only question in this campaign whether or not the American people believe that I somehow believe or sympathize with his most offensive words.
(END VIDEO CLIP)
KURTZ: Some anchors, correspondents and pundits grappled seriously with Obama's address, others boiled it down to politics or tried to score partisan points.
(BEGIN VIDEO CLIP)
GEORGE STEPHANOPOULOS, ABC NEWS: This speech today, by refusing to renounce Reverend Wright, that was in many ways an act of honor for Senator Obama.
DAVID GREGORY, MSNBC: It was gutsy, right? I mean, this was not the safe speech to give.
CHRIS MATTHEWS, MSNBC: We'll have much more on this momentous day, and what I personally view as the best speech ever given on race in this country.
GLENN BECK, CNN HEADLINE NEWS: The liberal media held a pity party. Oh, poor Barack, he has just got a crazy grandpa, and don't we all have a crazy grandpa? No.
(END VIDEO CLIP)
KURTZ: Joining us now to talk about race, the media and the campaign, in New York, Byron Pitt, national correspondent for CBS News. In Tampa, Eric Deggans, media critic for "The St. Petersburg Times." And in Seattle, Michael Medved, host of "The Michael Medved Show" on the Salem Radio Network.
Byron Pitts, as a black journalist who just came from church this Easter morning, do you look at this furor over Jeremiah Wright's remarks differently than white journalists? Are you less offended, perhaps?
BYRON PITTS, CBS NEWS: Oh, I think so. I mean, I've been black for 47 years, I was baptized in the Baptist Church when I was 12 years old. And so Reverend Wright said why -- much of why it was offensive, those are comments I've heard in church before, and I'm mindful of the context, that I think many of my colleagues who are white, they don't have that context.
Like, I was just looking at the clip you showed. All those commentators, all those reporters, were white. They have a different life experience. They have a different context. And I think this story speaks to the lack of diversity in major news organizations, that you have people speaking from a position of ignorance, because they don't understand the black church, that can't bring the context that we as journalists are supposed to bring to a news event.
KURTZ: A good point about diversity, but in one of your reports this week, you said that critics have called Reverend Wright's sermons anti-American. That critics have called them. I mean, this is a guy who said...
KURTZ: ... "The government lied about inventing the HIV virus as a means of genociding (ph) his people of color," who said, "God damn America," who said, "U.S. of KKKA."
Why push it off on critics?
PITTS: Well, I think there's some people -- I mean, I think there's some people who have the position that they disagree with much of what Reverend Wright said, but for some people, there is some basis of truth. I mean, I'm mindful of, you know, during Hurricane Katrina, there were people initially in that community who thought maybe the government had blown up the levee there, because, in fact, in New Orleans history, that in fact had happened.
For many people in black America, they remember how there's a time when our government injected black men with syphilis, I believe, that those kinds of thing occur. So, one of the things I thought that Barack -- a point that he made in his speech is how you have in the church, in the black church, there's this wealth of love, compassion, and truth, and some ignorance. And it's a world that if you're a pastor, that you have to navigate that world.
KURTZ: All right.
Let me turn to Michael Medved.
Put aside for a moment liberal and conservative reaction. A lot of mainstream journalists gave this speech very positive reviews.
What did you make of it?
MICHAEL MEDVED, RADIO TALK SHOW HOST: Well, basically the -- all the response, whether it was from black people or white people, to this speech was either, "It is the greatest speech I've ever heard, it's phenomenal," or people didn't deal with the content at all and just talked about it in horse race terms -- does this help Barack or does it harm Barack?
It seems to me that it is appropriate to actually look at the real substance of the speech, because it changes Barack Obama's campaign in a fundamental way. Up until now, he has been running an enormously successful campaign, because he has offered, in the terms of Shelby Steele, who wrote a book about this, a bargain to white America.
It's basically, you can show that you are post-racial, that you are beyond racism, if you vote for me, I'll be sworn in as president, and then we can put this whole guilty, horrible past of racism behind us. Now he's taking the opposite point of view, saying let's talk more about race.
I happen to believe that most white people, and maybe a very large segment of black people as well, do not welcome the idea of talking endlessly about race and picking the scab. And that is what Barack is now offering. He's changed the terms of the deal, and I think that's the substance that most of the media were missing.
KURTZ: All right.
Let me bring in Eric Deggans.
Did you feel like -- a lot of stories in the papers this morning that we're having now, a somewhat intelligence conversation about racial difficulties. Or is this the usual, did it help him, did it hurt him, the usual sound bite stuff?
ERIC DEGGANS, "ST. PETERSBURG TIMES": Well, I think the biggest problem that we have here is that people haven't actually looked at what Reverend Wright said. On my blog, the feed for "The St. Petersburg Times," I've actually put up longer clips of the two controversial speeches, the 9/11 speech, and the speech in which he said, you know, an expletive, "America."
And when you see the actual sermons, you see that he's trying to make some very explosive points about America, but he's leading up to them in a way where those statements make a little more sense. And in fact, the "chickens coming home to roost" comments he made about 9/11, he was quoting someone else. And the ABC News report that initially revealed this made it seem as if those were his words.
And you know, as much as I like Byron, you know, the reference to black men being injected with syphilis, what actually happened is that they had syphilis and they weren't treated for it by a government program. And I think one of the problems we have in this debate is that journalists are not getting to the heart of what's actually going on here, taking a step back and really explaining these issues to the American people.
KURTZ: All right.
DEGGANS: What we're doing is taking the emotional part of it and constantly putting it before people in order to gin up a conversation that may be based on false assumptions.
KURTZ: Let me broaden the discussion a little bit, Byron Pitts.
When Senator Obama talks about media coverage of race often being reduced to O.J. spectacles and the Katrina fallout, and you made the point just a couple of moments ago about it is still a white-dominated business, does he have a point? Have we fallen short? You know, this speech aside, have we fallen short in dealing with this important subject in American life?
PITTS: Oh, I think so. I mean, I think it's -- because it's such a difficult subject to talk about. I mean, I think we in the mainstream media, we don't talk much about race, we don't talk much about religion. And so those are two topics that have come up in the last few weeks because of this controversy with Reverend Wright. They're difficult topics to talk about. So I think he was right. I think the -- at least the major networks this week I think made a legitimate effort to cover the issue. When Obama gave his speech, I know ABC, NBC, CBS all devoted about four minutes in their lead piece. And as you know, Howard, four minutes is a lot of time in a half-hour broadcast.
KURTZ: Yes. Sure.
PITTS: And all the networks did a second piece. ABC did a piece about the black church. CBS, we had a roundtable discussion with three experts to talk about the issue. So I would agree, I think that most often the mainstream news media falls short, but I think this week an effort was made to address the issues raised in this controversy between -- with Reverend Wright and Obama.
KURTZ: And some reporters questioned Barack Obama. Let's take a look at Terry Moran interviewing the senator on "Nightline."
(BEGIN VIDEO CLIP)
TERRY MORAN, ABC NEWS: If I went to a church where white supremacy was preached, what would you think of me?
OBAMA: Well, see, I disagree with you, Terry. That's not what's preached at Trinity.
(END VIDEO CLIP)
KURTZ: Michael Medved, the investigative reporting required to do this story basically involved going to the church gift shop and purchasing some of these sermons on DVD for, you know, $9.95, or whatever. Why in this whole more than a year of Obama's presidential candidacy did journalists not seek to do that until FOX News and ABC broke the story last week?
MEDVED: Well, I think that's a complicated question. And it also goes to basically the strategy here that it seems to me that Obama decided to follow with his speech.
Yes, I think it was a courageous speech in some ways, and yes -- but it was also an attempt to change the subject. Because the truth is that people responded indignantly to Reverend Wright not because he's black. It's not about race, it's not because of the racial outlook of the church, which very specifically defines itself as an afrocentric church and emphasizes blackness, blackness, blackness.
They didn't respond to it that way. If a white pastor had made the comments that Jeremiah Wright had made, people would have been equally indignant.
So there was a decision that was made here to cover this as a racial issue, and it seems to me that this goes to the bigger point, which is that from the time he's announced his campaign, Barack Obama has had kid gloves treatment. I think people are so eager in this country to welcome a credible, strong, articulate, enormously talented black presidential candidate, that he has gotten much lighter treatment than either McCain or Clinton.
KURTZ: Pick up that point, Eric Deggans.
DEGGANS: I would have to -- again, I would have to disagree with Michael on that point. One thing that struck me about this situation, for example, is that there were -- that the initial reports on this cherry picked very controversial lines out of sermons that were 20 minutes long and 30 minutes long. And again, these initial reports did not present the full context of what the preacher was saying.
Secondly, I think this is very much a racial issue, because Reverend Wright has said what he said in a very explosive and aggressive way. But you go to black churches throughout the country and ask them if they believe that the government is mostly controlled by a culture that is oriented more towards white culture than black culture, and minimizes black people and harms black people as it minimizes them, and I think you'll find a lot of agreement. I think the problem here is that people need to have this discussion in a way that is calmer, and I think that's what Obama was talking about.
KURTZ: A little short on time.
DEGGANS: We need to talk about these issues in a way that's respectful of both sides. But to deny that race is at the heart of this makes no sense at all.
KURTZ: I 'm a little short on time.
MEDVED: I would just argue that any pastor who says from the pulpit -- who uses the "S" word, who makes a Sunday morning sermon sort of a parental advisory period, who says "G. D. America" repeatedly, I don't care what race you are, that is outrageous to people, and if you don't describe someone who cruses America repeatedly from the pulpit as anti-American, than what is?
KURTZ: Byron, final comment?
DEGGANS: A, I would say you have to look at the actual sermon to see what's going on.
KURTZ: Eric, I've got to -- I've got to...
DEGGANS: And B, I would also say there are many white pastors who do the same thing in reference to abortion, for example.
KURTZ: Can I get Byron in here for a brief comment?
PITTS: Sure. Listening to what Michael said, he listed Obama's traits. And while I would agree that race is on the table, one of his -- the attributes which he listed for Obama is that he's articulate.
Now, I've been a journalist for about 25 years. I don't ever recall anyone describing a white politician as one of their attributes the fact that they are articulate. This is a guy who was editor of "The Harvard Review," who taught constitutional law. And one of his attributes that people parade as one of his great strengths is the fact he's articulate. When President Bush ran for president...
PITTS: ... and George W. Bush ran for president, no one said, well, he's a rich white guy, and so, therefore, a rich white guy is going to vote for him.
KURTZ: I've got to break in here because I'm short on time.
KURTZ: I just want to play a piece of tape from Friday morning's "Fox & Friends." They've been talking about Obama's comment about his grandmother being a typical white person and having some concern about black strangers. Chris Wallace, the host of "Fox News Sunday," came on, and here's what he said.
(BEGIN VIDEO CLIP)
CHRIS WALLACE, FOX NEWS: I have been watching the show since 6:00 this morning when I got up, and it seems to me that two hours of Obama bashing on this typical white person remark is somewhat excessive, and frankly I think you're somewhat distorting what Obama had to say.
(END VIDEO CLIP)
KURTZ: Eric Deggans, they denied doing any distortion of Obama's remarks, but what do you make of the host of "Fox News Sunday" criticizing the show for essentially not being fair and balanced?
DEGGANS: I have to say bravo to Chris for taking a stand. I actually included a clip of that on my blog as well, blogs.tampabay.com/media, by the way, and I thought he made some good points. I mean, again, to have a simple slip of the tongue sort of converted into some Rorschach test for how Obama feels about white people just isn't fair.
KURTZ: All right.
DEGGANS: And one of the things we're supposed to do as journalists is be fair.
KURTZ: Got to wrap it up.
Eric Deggans, Byron Pitts, and Michael Medved, thanks very much for a lively discussion this morning.
When we come back, it began with a "New York Daily News" story about the new governor, David Paterson, having had an affair. Now there are so many affairs, that the city's tabloids are having trouble keeping track.
KURTZ: New York breathes a sigh of relief this week when Eliot Spitzer relinquished the governorship after saturation coverage of his hiring of high-priced call girls. His lieutenant governor, David Paterson, took the oath of office Monday, and at a news conference the next day, the state's first black chief executive got himself talking about extramarital sex.
(BEGIN VIDEO CLIP)
GOV. DAVID PATERSON (D), NEW YORK: I saw this as a private matter, but both of us committed acts of infidelity. This is something I think, you know, in regular marriage we would have been wishing to go to our graves with, but after talking it over the other day, we decided to come forward. We decided to tell the truth.
(END VIDEO CLIP)
KURTZ: Now "The New York Post" is calling him "The Stud Gov."
To talk about the new governor's sex scandal, which supercedes the old governor's sex scandal, I sat down with Andrea Peyser, columnist for "The New York Post," and "New York" magazine contributor Lloyd Grove.
KURTZ: Andrea Peyser, Eliot Spitzer disgraces himself, and he's gone in 48 hours. Along comes David Paterson, legally blind, everyone things he's a nice guy. And now the papers are full of stories about affairs involving the man that "The New York Post" is calling "Randy (ph) Dave."
Why are reporters going after him this way?
ANDREA PEYSER, COLUMNIST, "NEW YORK POST": Well, I think that the issue with David Paterson is that he had girlfriends who are on the state payroll. He's a -- he was of course a state senator at the time. And he's taken them up to the Days Inn. And then in return, they're getting promoted, they're getting protection if they have a medical problem.
I think there's allegations that he may or may not -- but he may have used some state money, some campaign money, to pay for these liaisons. I mean, I don't know where it ends, but I don't think that's a very good way to go about your business. And he's married at the time.
That's never an issue anymore, we're not allowed to say that, but he had numerous women. He can't even count any women he had. And like I said, he's sleeping with them on the public dime...
PEYSER: ... and giving them promotions. And I think that's a real serious public issue.
KURTZ: Lloyd Grove, we only knew about the first affair, which was broken by your old paper, "The New York Daily News." This is a woman who was not on the state payroll. Paterson's wife Michelle came out. She supports him. She said she had an affair around the same time.
Do you have any sense that the New York press here is piling on?
LLOYD GROVE, PORTFOLIO.COM: Well, they gave that interview, and then they gave that interview, and then they held a whole press conference. I mean, what are you going to do?
I mean, it's not like back in 1987, when "The Miami Herald" was hiding in the bushes for Gary Hart. I mean...
KURTZ: You're saying Paterson is contributing to the story by be willing to talk about it.
GROVE: But he's not only contributing to the story, he's orchestrating the story.
KURTZ: But if he wasn't answering these kinds of questions from reporters, then you all would accuse him of stonewalling.
GROVE: Well, I think there's probably a happy medium, but I think it's probably absent, you know, financial shenanigans. And Andrea's quite right, everybody's poring over campaign records and looking at state financial records to see whether he used the public dime or the campaign dime to conduct these affairs. But, look, I mean, New Yorkers in recent polls give him a 70 percent approval rating even after all this has happened, so I don't think it's going to be a big issue and won't have legs.
KURTZ: Maybe some of them are impressed by his energy.
Andrea Peyser, you write earlier this week, "Paterson's greatest sin is not that he was horny; rather, he's cheap."
PEYSER: Well, Paterson's taking his women to the Days Inn. I mean, I'm sure it's a very nice Days Inn, but it's not exactly the Mayflower in Washington.
GROVE: I live four blocks from that hotel. Who knew?
PEYSER: Yes. He's taken them to the Days Inn, and, you know, he can't even count any women he's had affairs with.
I think he started out with one. That's what he told "The Daily News," "I had an affair with one woman." Then he's up to two. And now he's up to numerous. And on top of that, first it was one state worker, one woman who worked for New York State. Then it was two women who worked for New York State. I'm not sure he's even sure. And on top of that, he's doing favors for these women.
Now, at some point legislation has to be written. People have to be governed. But David Paterson was so busy with other issues that I don't see where he found the time to do any of those things.
KURTZ: Of course, reporters didn't care about this at all when he was lieutenant governor. Now that he became the accidental governor -- but let me follow up with some details, Andrea Peyser, because some of our viewers may not be following this that closely.
One affair that Governor Paterson has with a state employee, Lila Kirton. Paterson now says he may have improperly billed his campaign $103 for the big fee at the Days Inn for the overnight stay. And then on Friday, your newspaper, "The New York Post," reported that Paterson made a $1,000 payment from campaign funds to another woman who was on the campaign staff who says she barely knows him.
So, you know, I think the country kind of got a laugh at this the first couple of days. Is this now taking a more serious journalistic turn?
PEYSER: Well, it keeps going on and on. And every time Paterson, like, checks his notes, or checks his tapes of what he did, he finds more and more and more that he did.
And now first it's $100. Then it's $1,000. What's it going to be next?
I don't think he even knows. I think he's telling the truth -- I don't think he's quite aware of how bad he was. And now we're left holding the bill.
And, you know, I think another reason why he's polling so high, if we have to replace a second governor in the space of two weeks -- well, first of all, it's going to be a Republican, Joseph Bruno.
PEYSER: And New York is an overwhelmingly Democratic state, and I don't think people -- I think people really, really want to see Paterson succeed.
KURTZ: Right. Let me go...
PEYSER: But as the days go by, it's just getting worse and worse for him.
KURTZ: Let me go to Lloyd.
On the other hand, should "The New York Post" have run pictures of Lila Kirton's husband -- this is one of the women who had an affair with the governor -- and a story about how angry he is? I mean, what did this guy do other than possibly get cheated on?
GROVE: Well, that's where we get into the New York tabloid culture. You know, I wouldn't have. I probably wouldn't have had the stomach for it, but is "The New York Post" and "The New York Daily News" hard at it, at each other. And so of course you expect that kind of thing.
And I have to say, there's also a culture up in Albany, so I'm reading with great interest, of sexual libertinism in which not only lobbyists and legislatures and interns, but also reporters participate. What else are you going to do in Albany late at night?
KURTZ: Well, it's funny, because what was once fodder for you, Lloyd, when you were a gossip columnist, now seems like it's front page news.
Andrea Peyser, in Eliot Spitzer's news conference before he resigned, when it was over you shouted a question at his wife Silda about whether she was going to leave the guy.
KURTZ: You later wrote that she was a doormat.
No sympathy for the woman who was cheated on so publicly and humiliating a fashion here?
PEYSER: Well, I'm not saying I have no sympathy, but I think when a woman stands by a man who broke the law, who cheated on her -- and she has daughters, teenage daughters. What is she saying to them? What is she saying to all of us?
I thought, you know, he got into this himself, he should get out of it himself. I don't know why she's allowing her face and herself to be used in such a disgusting way.
KURTZ: Right. All right.
Lloyd, I see what you mean by New York's tabloid culture. It can be tough there in the city.
Lloyd Grove, Andrea Peyser, thanks very much for joining us.
KURTZ: David Paterson has now repaid the $103 charge for the Days Inn and some other expenses that were improperly financed by his campaign. And the New York tabloids reporting this morning that the investigation of Democrat Eliot Spitzer began several months ago when veteran Republican operative Roger Stone wrote a letter to the FBI saying the governor was using hookers.
Coming up in the second half of RELIABLE SOURCES, Detroit's mayor, Kwame Kilpatrick, who also had an affair, is fighting for his job. He's casting his battle against the press in pretty stark racial terms.
We'll talk to the city's most colorful TV reporter about that.
Bus first, a sinking economy and ailing housing market generating plenty of headlines. Were journalists too slow to recognize the crisis and too timid in reporting on it?
CNBC's Jim Cramer and CNN's Ali Velshi face off after the break.
KURTZ: For months now the headlines have been filled with bad economic news from Wall Street to Main Street, a process that seemed to grown only more intense this past week.
(BEGIN VIDEO CLIP)
CHARLES GIBSON, ABC NEWS: If there were any doubt about the precarious state of the nation's financial system, it was erased by events in the past 24 hours.
KATIE COURIC, CBS NEWS: Remember that huge rally on Wall Street yesterday? The Dow up more than 400 points? Well, most of it disappeared today with new worries about the credit crunch.
(END VIDEO CLIP)
KURTZ: But are news organizations exaggerating the negative signs, or were they until recently asleep at the switch?
We called in two of our favorite financial commentators in New York, Jim Cramer, the host of CNBC's "Mad Money," and author of "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich," and CNN's Ali Velshi, the host of "Your $$$$$" and the new program "ISSUE #1." His new book is called, "Get Rich, Sleep Well: Making Money in Good Times and Bad."
KURTZ: Jim Cramer, has the reporting on how bad things are, from the credit crunch, to the housing foreclosures, to this looming recession, been too negative or too timid?
JIM CRAMER, HOST, "MAD MONEY": Actually, the reporting has been spot on. And I would even go a step further and say too complacent. In part, because everyone wants to get what's known as the "get." People who watch your show know this. They want to be able to get a call from Treasury Secretary Paulson or the Federal Reserve, Chairman Bernanke, and both of those, until last weekend, thought the fundamentals are sound.
KURTZ: Ali Velshi, isn't there a natural caution, some would say an over-caution? You don't want to come on and say, "Good morning. The market is going to hell in a hand basket."
ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: You don't. And a number of people who tell me -- and they must tell Jim the same thing -- even though we talk about opportunity sometimes -- "Why do you guys have so much bad news out there?"
The fact is you do need to tell people -- and I wish the government were out here faster. I just had one very respected economist tell me a couple of hours ago it would have been fantastic if the Fed would have figured this out a long time ago.
I remember, Jim -- I remember you yelling, yelling at the Fed to cut rates and to make more money available because this could have been avoided.
Once you're tipping into a recession, Howard, unfortunately you've got to let that thing fall. It will come back, but that's where we are now.
KURTZ: Hard not to -- hard not to hear Cramer when he yells. Even Federal Reserve officials can hear him.
CRAMER: Well, I mean, I was so right it's scary. But of course when I was doing it, it was scary. And they -- look, the Federal Reserve has systematically dismissed me as a pop-off madman, of which I quite enjoy since they're a bunch of amateurish incompetents.
I didn't mean that. I'm a statesman.
They're over their heads.
KURTZ: All right. Speaking of yelling, we're going to play a little piece of tape. As you know, you became fodder for Jon Stewart at "The Daily Show" the other day for some comments you made about Bear Stearns. This was a few days before the Wall Street giant collapsed and was taken over at a fire sale price.
Let's play that.
(BEGIN VIDEO CLIP)
CRAMER: Peter writes, "Should I be worried about Bear Stearns in terms of liquidity and get my money out of there?"
No! No! No!
Bear Stearns is fine. Do not take your money -- if there's one takeaway other than (INAUDIBLE), Bear Stearns is not in trouble. I mean, if anything, they're more likely to be taken over.
Don't move your money from Bear! That's just being silly! Don't be silly!
(END VIDEO CLIP)
KURTZ: All right. How do you plead?
CRAMER: OK. First we have to understand that the question was -- the question was, "If I have my deposits at Bear Stearns and..." -- it was an e-mail -- "If I have money at Bear Stearns, is it safe, or is Bear Stearns in trouble and my money won't come back?"
OK. I was wrong about -- Bear Stearns was in trouble. But the idea was that you are going to be safe.
Later that week I said that Bear Stearns was worthless at $37. Why would I say that the stock is worthless if I was recommending it? What mattered is that, unbelievably, the Federal Reserve did guarantee your investment over the weekend.
So, there are two issues here. Was your money safe at Bear? And that was right. And anyone who thought they should pull it out was, no, no, no.
But I said the common stock was worthless. So, I don't know. I mean, a lot of professionals thought it was a good call. A lot of people shorted (ph) Bear off of my call.
KURTZ: As you know, Ali, you live by the sound bite, you die by the sound bite, though.
VELSHI: Yes, you do. And Bear came unraveled faster than most people would have suspected. In fact, it created a move by the Fed on Sunday night that is unprecedented. We haven't seen the Fed do something on a weekend in more than 20 years, though it might even be longer than that.
VELSHI: So, it did catch a lot of people off guard.
KURTZ: Cramer, let me read you a quote from Yvette Kantrow. She's the editor of "The Deal."
And she wrote a couple of months ago, "Really, how many financial journalists knew what the auction-rate market was-or that it even existed-until a few weeks ago? Or a SIV, for that matter? Or a conduit? Or a credit-default swap? Or even bond insurance? This is normally dense, difficult, unglamorous stuff."
So, my question is, with some exceptions in "The Wall Street Journal" and elsewhere, didn't the media consistently underestimate the magnitude of this credit crunch?
CRAMER: I think the media often takes its cue from people in responsible positions. And the responsible position people in this country, whether they be in the U.S. Treasury, or with the Federal Reserve, systematically denied that there was anything wrong. So they created an atmosphere where you were basically being an alarmist if you worried about the so-called model-line insurers.
They created an atmosphere which just said that you were chicken little if you went with the bear, so to speak. So -- and that made it very tough.
KURTZ: Was that -- did you find those complaints aimed at you? Were you labeled an alarmist and a chicken little? CRAMER: Oh, I was completely ostracized. Completely ostracized for a guy who was saying that they know nothing and that they have no idea -- hold on just a second...
(BEGIN AUDIO CLIP)
CRAMER: They no nothing!
(END AUDIO CLIP)
CRAMER: I mean, that was the rant. And they basically just said, well, listen, that guy who's worked it 27 years, who was a hedge fund manager, who was -- I was a salesman at Goldman Sachs, worked in the margin department -- they didn't know anything. That's what -- but they told me -- this guy was a Princeton professor. Do you think he knows the difference between a stock and a bond, frankly?
KURTZ: OK. But both of you talk about the experts. Now, it seems to me that journalists could be accused of relying on -- too heavily on these Wall Street types who have a vested interest in saying that everything is just fine.
Listen to this. Michael Moran, chief economist at Daiwa Securities, was quoted last November as saying, "Most of the reporting in the media is exaggerated and sensationalized. Less than 3 percent of the mortgage market will be affected, the economy will be absorb the shock" -- blah, blah, blah.
VELSHI: OK. You know what? Let's talk about exactly how limited the mortgage market is.
Talk to any American, they will tell you the biggest problems are what they pay for milk and cheese and bread and gasoline and airline tickets and to send a FedEx pouch. They'll tell you about the gas prices. They're worried about jobs. We've started to see those go under.
I agree with you. Is the mortgage mess the be all and end all of it? No. But average Americans no exactly what's going on with their investments and with what they pay.
That's the truth. The government denies that that's happening. We had Ben Bernanke saying, what, a month ago, don't worry too much about the dollar, and inflation's really only a concern if you buy imported goods.
Guess what? We all spend the dollar, we all buy imported goods.
KURTZ: All right.
KURTZ: Go ahead. CRAMER: Howie, I've got to tell you, I went on "The Today Show" in September, and I made a comment. I said the one thing -- Meredith Vieira said, "What do you think of the housing market?" I said, " I never make guarantees, but I guarantee you that your home will lose value. Do not buy a new home."
A national letter-writing campaign to get me fired. That was one of the most right calls I've ever made.
But you know what? You're not allowed to say a lot of negatives in a lot of places.
KURTZ: Why, Jim, have not more journalists written or said the following -- this is a colossal failure by federal regulators who failed to rein in -- over several years I'm talking about -- these exotic mortgage instruments that are so complicated that few people understand them, and all these no money down and risky loans?
CRAMER: Well, look, the two biggest proponents, the people who championed this, were Alan Greenspan and Ben Bernanke. How many times did they go to the Hill and say exotic mortgages were the answer?
Alan Greenspan is a revered figure in this country. So basically what you'd be saying is, that guy doesn't know what he's talking about. A lot of people are uncomfortable saying that.
KURTZ: And Ali, talking about things that people don't want to hear, I don't see journalists very often saying, you people who went out there and made bad investments, buying houses you couldn't afford with no-money-down loans, with adjustable rate mortgages that you knew you couldn't afford, is the press just afraid to blame them?
VELSHI: Yes, Howard. Actually, to some degree, that is true. There are people who are absolutely responsible.
I've signed a couple of mortgages in my life, and I didn't read all those papers. And, you know, I'm hoping that I was right about it. So far I have been.
But the fact is, yes, some people didn't take responsibility. Other people were absolutely duped. And remember, the goal of homeownership has so been held up as something so American and so fantastic, that that pushed to get more people to own homes.
You know, in that push we got blinded to the reality that some of those people shouldn't have been given mortgages, and some of those mortgages were just unsound investments. So, yes, there is actually -- I think it is one of those things that's hard to go out there and criticizing people for making those mistakes. But in truth, just like making an investment, you do have to take some degree of responsibility. We also have to make sure you're not duped by your bankers and your mortgage brokers.
KURTZ: Cramer, you seem to be saying that many financial commentators and journalists are just timid because if they say anything that's too negative -- for example, what you said on "The Today Show" -- they get kicked around and smacked around and denounced and pressured.
CRAMER: Well, you get it from both sides. The National Association of Realtors is very powerful. I don't want to lose my job. I like my job.
So, it would have been easier to just say, listen, all real estate is local, blah, blah, blah. And that's what they always say. When you -- obviously, I lost a lot of sources when I went nuts about the Fed, but I'm not trying to book anyone that's important on "Mad Money," on my show.
Now, look, your show is uniquely about the media. You know, Howard, better than any that a lot of times if you criticize people that you're trying to get as your sources, or have on your show, you're hurting your own career. It's very rare that you have a situation where you don't need those people.
KURTZ: All right. Before we go, Jim Cramer, this week a second time you were on "Celebrity Apprentice." How does a man of your reputation allow himself to become Donald Trump's toadie?
CRAMER: I am proud of the work I've done with Donald Trump. He's one of the great investors. And by the way, just so you know, he is the only guy -- you need these guys -- oh, no, hold it. I was going to say he's the only guy -- Spitzer, too. These are the only guys that get worse press than I do.
KURTZ: All right.
Jim Cramer, Ali Velshi, thanks very much for joining us.
CRAMER: Thank you.
KURTZ: And Ali Velshi will have more on the economy all next week on "ISSUE #1." That's at noon Eastern.
Up next, move over Eliot Spitzer and David Paterson. Detroit mayor Kwame Kilpatrick, under fire for lying about an affair with his top aide, says the local media are trying to lynch him. Does he have a point? We'll talk to a reporter who keeps ambushing the mayor.
KURTZ: When "The Detroit Free Press" published a series of steamy text messages between Mayor Kwame Kilpatrick and his chief of staff, it was, to say the least, embarrassing. "I'm madly in love with you," the married mayor wrote to Christine Beatty. She wrote, "Did you miss me sexually?" Hell yeah," Kilpatrick replied. "You couldn't tell? I want some more."
But more than mere embarrassment is involved. The mayor and his top aide had denied under oath in a lawsuit that they were having an affair.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Were you and Mayor Kilpatrick either romantically or intimately involved with each other?
CHRISTINE BEATTY, CHIEF OF STAFF TO KILPATRICK: No.
(END VIDEO CLIP)
KURTZ: Kilpatrick is now fighting for his job. The city council demanding his resignation this week. And not long ago, he lashed out at the press.
(BEGIN VIDEO CLIP)
MAYOR KWAME KILPATRICK (D), DETROIT: This unethical, illegal, lynch mob mentality has to stop. We've never been in a situation like this before, where you can say anything, do anything, have no facts, no research, no nothing, and you can launch a hate-driven, bigoted assault on a family.
(END VIDEO CLIP)
KURTZ: Strong words.
I spoke earlier with Steve Wilson, chief investigative reporter for Detroit's WXYZ-TV, who we caught up with in Jacksonville.
KURTZ: Steve Wilson, are you part of the lynch mob that is supposed to be harassing the mayor to boost your Nielsen ratings?
STEVE WILSON, CHIEF INVESTIGATIVE REPORTER, WXYZ-TV, DETROIT: Well, apparently the mayor thinks I'm part of it, if not the leader of it. We have done a number of stories about this mayor. This is not just some isolated incident.
This has gone on through much of his two terms now. He tried to put it all behind him after his first term as mayor and said he had understood he had problems. He was going to reach out to people, he was going to have regular news conferences, and he was a new man. But unfortunately that hasn't been the case.
But with two majority white newspapers, "The Detroit News" and "The Detroit Free Press," and television reporters like you hammering Kilpatrick day after day, can you see how it might look racial to Mayor Kilpatrick and his supporters?
WILSON: Well, I can understand that this is a mayor who has not told the truth. I can understand that the facts that he's given us have turned out to be false. And so often happens, people grasp at whatever they can to try and get themselves out from a fix. And, you know, racism, unfortunately, is alive and well in Detroit on both sides, I'm ashamed to say, but not in this news coverage.
That has not been the case here. This has had absolutely nothing to do with it. These are facts that we've laid out. And as I've said to the mayor's press people, "You all stop me when I'm lying."
I don't make this up. This is the facts.
KURTZ: All right.
Let's roll some tape from a report that aired this week on your station. This was right after a news conference with the mayor was breaking up. You followed him to his car.
Let's take a look.
(BEGIN VIDEO CLIP)
WILSON: Mayor Kilpatrick and the first family are getting big personal benefits and refusing to disclose who's really paying the bill.
Mr. Mayor, is my information wrong, sir? Mr. Mayor, do you want to get caught again with another one of these things? Can't you just tell me the truth? Mr. Mayor, one last opportunity to tell the truth, sir.
(END VIDEO CLIP)
KURTZ: Now, why were you shouting questions from outside his car? And when you say "one last opportunity to tell the truth," you are clearly implying that he's a liar.
WILSON: Well, the mayor has not been forthcoming in a number of instances. And in the case that you just bought up, which we aired just in this past week, we have learned that while the mayor says his whole life has changed, he and his family have been raking in tens of thousands of dollars worth of free trips on private jets in a city that, you know, can't afford it. There's no suggestion the city taxpayer has paid for it.
The issue here is congresspeople can't do this. There's a law in the city of Detroit, a city ordinance that says that anything that has the appearance of impropriety should be avoided.
Who's paying? And what are they getting in return? That was merely the question we were trying to ask.
KURTZ: OK. But when you -- when he brushes past you, and he clearly does not want to talk to you, to get to the car and he's going to drive away, you stand there with the cameras rolling and you shout those questions, I mean, that's clearly a little bit of a television stunt, isn't it?
WILSON: No, it's not a television stunt at all. It's an effort to get some answers from a mayor who consistently has tried to avoid them.
We can't get through to this guy. We can't set up an interview. He's carefully chosen to do interviews with an old friend in one case on the radio, and a newspaper in town. But the mainstream media, so-called mainstream media, has not been able to get answers despite his promises that he's open, he's transparent, he's going to have press availability. That just isn't the case. And our obligation, as you know, is to get answers even when he doesn't want to give them.
KURTZ: But he did answer a few questions from reporters right before we picked up the tape there. He just didn't seem to want to talk to you.
WILSON: The questions that he answered all dealt with his defenses in this latest scandal. They didn't have absolutely nothing to do with the issues that we were there about, which was, who's paying for your jet flights and your family's jet flights back and forth to Florida? Who's paying for your high-priced spin doctors that you claim to be paying for?
KURTZ: All right. Now, obviously, the crucial question in the steamy text messages that came out, and the question of whether -- there is very little question, I should say, that the mayor was having an affair with his chief of staff. The key question is, did Kilpatrick lie under oath about that affair in a lawsuit? But, as we saw with Bill Clinton in the Monica days, don't some people see this as the media going after a public figure, essentially, about sex?
WILSON: You know, he certainly tried to make it that way, and in the beginning there was a lot of criticism that we had focused or had reported some of the, as you call it, steamier parts of these text messages. But this is not what this is about. This isn't about text messages.
It's about lying about whether or not he had a role in firing policemen, who ended up getting millions of dollars from the city of Detroit, a city that just can't afford that. It isn't about sex. It's about his truthfulness, it's about what role he played, and it's about a secret deal that he made and kept from even the city council in order to settle this lawsuit quickly to try and cover himself so these things wouldn't come out.
KURTZ: Steve Wilson, thanks very much for joining us.
WILSON: Thanks for the invitation.
KURTZ: Still to come, my two cents on the media's love affair with affairs. Are journalists exposing hypocrisy in high places or just wallowing in the seamy stuff?
KURTZ: You might be getting the impression in the last couple of weeks that we in the media care merely about sex and scandal, but with all these philandering politicians out there, it's not entirely our fault. Really.
KURTZ (voice over): Eliot Spitzer under investigation for hiring hookers, of course that was a legitimate story for "The New York Times." After all, the New York governor who once prosecuted call girl rings resigned 48 hours later.
How about the revelation that one of Spitzer's rented women, Ashley Dupre, had starred in a "Girls Gone Wild" video when she was 18? Now, that's sheer titillation, an obvious effort to keep the tawdry tale alive.
What about the "Daily News" reporting that the new governor, David Paterson, had an affair years ago? Not so important in my view, but New York's legally blind governor and his wife wanted to talk about it to put the matter to rest. But then came Paterson's admission of more affairs, including one with a state employee, Lila Kirton, branded "The Other Woman" by the "Daily News." "Girls! Girls! Girls!" screamed "The New York Post."
In the post-Spitzer environment, the questions were probably inevitable. But did photographers really need to harass Kirton's surprised husband about the affair? Come on!
Should "The Detroit Free Press" have published steamy text messages between Detroit mayor Kwame Kilpatrick and his former chief of staff? That's a no-brainer. Kilpatrick had denied under oath that they were having an affair, and he was the woman's boss.
Did we really need to know that Jim McGreevey, the disgraced ex- governor of New Jersey, had threesomes with his estranged wife Dina and another man? No! Dina was making the television rounds during the Spitzer debacle saying she was shocked to discover that her husband was gay, and they're locked in a bitter divorce battle. But at this point, who really cares?
KURTZ: And there's David Vitter and Larry Craig, and on and on. All these stories about politicians gone wild raises a question that the media might want to investigate -- how on earth do these people have time to govern?
Well, that's it for this edition of RELIABLE SOURCES.
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