I watch cable TV business, political and news networks. It’s our job to know what’s going on. And I’ll be the first to admit there’s a lot of value in hearing congressional hearings, presidential news conferences beginning to end, or observations from the more intelligent members of the business and financial communities.

On the other hand, there is a nearly constant drone caused by the newsreaders and commentators in their furious quest to entertain, shock, out-shout each other and their guests, and sound intelligent. Many of these folks are very smart, talented, and have extensive education and credentials. You wouldn’t know it, however, because their primary job is to stir the pot and fill the airwaves. Content takes a back seat to action and hype.

Maybe that’s understandable and a necessary evil. After all, if they conducted reasonable discussions backed by sound research and reporting, and minimized the doomsday speculations and scenarios…they’d be a PBS show with 25 viewers and no advertisers. I understand they have their marching orders. The problem is that a lot of people take them seriously.

Now this reminds me an awful lot of the days when sell-side analysts were the oracles. They had the buzz. They set the tone. And their models and recommendations got people to fork over billions. They were smart, had credentials, and ostensibly had training in financial modeling. What they lacked was integrity, because they worked for the man, and the man said “here’s how you play the game.”

Regardless of supposed Chinese walls or implied integrity, their job was to hype the companies their investment banking firms found financing for. They were loud, enthusiastic, and incessant. Unfortunately, they lied. They presented themselves as informed experts with integrity. In fact, they performed like hucksters. In the 1980s, a lot of stock got sold before people realized that despite what the analysts said, no management team in the world could run a company that made table lamps, sold fresh orange juice and manufactured bras (Beatrice Foods). Lot of people lost a lot of money on diversified conglomerates: the final solution to profitability and cyclicality! Oops.

The 1990s offered another opportunity for exuberance. Once again, supposedly intelligent analysts filled our heads with rosy rhetoric about how in ten years, nobody would need to go to a store. Everything would come to us on our doorsteps. Nobody ever did figure out how to cost-effectively ground-ship a 40 pound sack of cat litter, nor did they ever figure out how to turn a profit from a company where marketing costs exceeded revenue projections for more than a decade.

But a lot of people listened to the “experts,” bought a lot of stock, did a little day trading and lost a lot of money. “Real” long term investors, those who invested based on real financial models and long-term growth, were tearing their hair out. They knew they were right. They knew the analysts hype had dramatically influenced public perceptions. But they were seen as the dinosaurs, the clunkers, holdovers from a prior era. Nobody invested with them. Nobody listened to them when they blasted impossible valuation and stock pricing models.

Yes, a lot of people lost a lot of money and a lot of paper millionaires working for virtual companies saw their wealth evaporate as quickly as their employers.  But still we listened when the next iteration of expert analysts stood firmly behind their newly established Chinese walls and sang the praises of Enron, Tyco, and Worldcom. We know how that turned out. Finally, the Liars-In-Chiefs themselves, the Lehmans and Bear Stears and other sponsors of the hype finally succumbed to fumes of their own smoke screens.

All I’m saying is the investing public has been duped before. It’s reasonably safe to say the sell-side analyst will never again have the influence or credibility to shape market trends.

But that’s why the dependence on television and internet infotainers bothers me just a bit. They are far too uninformed to be as negative as they are. They are reactive, not proactive. They don’t make the news and they certainly don’t spend much time thoughtfully researching and developing stories.

If you don’t believe me, just consider that “Breaking News….this just in…” trumps everything else, and always will. Whether it’s unbridled optimism or doom and gloom, these infotainers read public sentiment and magnify it tenfold. In their case, they probably don’t much care whether they sell joy or misery, because they’re not promoting stocks or trying to help the politicians they cover look good or win elections.

I fear many Americans have a pathological need to go seek out the loudest spellbinders proclaiming themselves experts, and then sheepishly believe everything they hear. The sell side analysts of yore didn’t force people to go out and buy stocks and speculate in the market. The TV and Internet personalities don’t have the power to make people give up fighting to get out this economic mess we’re in.

Maybe Jon Stewart’s grilling of Jim Cramer (still hard to imagine a comedian now being one of the most respected news authorities in the country, but these are weird times, so why not?) scrapes a little gold paint off the leaden falcon. There’s nothing wrong with being entertained and occasionally even informed by personalities. I just hope Americans and investors remember that just because someone has air time, that doesn’t necessarily make them right. Even worse, the more pressure they have to fill air time, the more likely it is they’ll be filling it with the good, the bad, and the ugly. - Tad Gage