Understanding Jim Cramer

Reading Newsbuster headlines about Jim Cramer “flip-flopping” on Obama shows a fundamental misunderstanding of Cramer’s show and how it works.

The show is not usually concerned with politics. Cramer opens each show by saying, “Some people want to make friends, I just want to make you money.” And Cramer isn’t from the “Church of buy and hold.” The show is geared towards people who are actively trading in the market

Thus, the show is about what companies you should buy, what companies you should sell, and what market trends mean to you as an investor. The comments on political figures are rare and come down to where politicians or regulators are harming the short-term stock market. Cramer rarely waxes eloquent about the far future of the long-term economy because it has little to do with why he’s on television.

There have been some subtle rhetorical shifts from the White House. The uptick rule is on the way back in, mark to market will most likely be revised. Obama has quietly put the kibosh on the bill limiting executive compensation which Cramer warned would allow Goldman Sachs to take over Wall Street by repaying its TARP money (thus taking it out from under the law’s auspices) and being able to lure an all-star team of financial talent from every firm out there. In addition, Geithner now has a plan for fixing the mortgage crisis. Yes, it’s an expensive boondoggle, but as a reader e-mailed Jim Geraghty, a plan even a bad one removes some uncertainty from Wall Street.

Cramer is also friends with Senate Budget Committee Chairman Kent Conrad (D-ND.) who has reportedly made some changes to the President’s budget budgeting $3.6 trillion budget which Cramer called the greatest wealth destruction in American history. If Conrad has cleaned up the budget, so that it’s not near as damaging to Industry as Obama’s three-Alarm fire special, Cramer will be far happier.

Cramer’s show is an entertainment show about the market. Cramer’s goal is to help people make money off stocks, not to score political points. Cramer will be critical of Obama, he’ll praise Obama, and most of the time, he’ll end up saying not much at all about Obama. Because his response is going to depend on how Obama’s policies are impacting the stock market in the immediate term. And Cramer’s attitude is going to be a lot different towards the Administration at Dow 7600 then it was at Dow 6300, particularly if he doesn’t see the Administration doing anything that is going to hurt stocks any time soon or cause an investor panic.

I love Cramer’s show. I love the fact that he uses his expertise to try and help people make money, and really he’s got the most fun to watch business TV show out there. However, anyone looking for a consistent voice of the opposition to the President should look on another show that’s focused on politics, not money, or shows focused on the long-term economy.