Martin Wolf lays the smack down on Jim Cramer

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Last week, Passport (and just about everyone else on the Internet) noted Jim Cramer's outburst about the subprime mortgage meltdown, in which the MSNBC financial pundit slammed U.S. Federal Reserve Chairman Ben Bernanke, called for a cut in interest rates, and screamed:

My people have been in this game for 25 years. And they are losing their jobs and these firms are going to go out of business, and he's nuts! They're nuts! They know nothing! . . .  The Fed is asleep."

FP contributor Martin Wolf noticed Cramer's rant, too, and his response in today's Financial Times drips with acid condescension:

So capitalism is for poor people and socialism is for capitalists. This view is not just offensive. It is catastrophic.

Wolf worries that folks who took foolish risks might get bailed out and thus fail to learn their lesson. Pressure might mount on the Fed to do more than simply ensuring that the markets remain liquid. But a rate cut or some other form of bailout would only encourage bad behavior, in Wolf's view:

There has been too much imprudent finance worldwide, with central bankers and ministries of finance providing rescue at virtually every stage.

Wolf needn't worry about Bernanke, however. He's the perfect man for this situation, having studied economic crises in great depth while at Princeton. As the Fed chairman wrote for FP before he became the second-most powerful man in the world, "History proves ... that a smart central bank can protect the economy and the financial sector from the nastier side effects of a stock market collapse." So far, the evidence suggests that Bernanke is a pretty smart central banker himself. Only time will tell, of course, if that assessment still holds six months from now.