We´ve stayed out of the predominantly useless buzz over the recent battle between the financial news network CNBC and The Daily Show host Jon Stewart, but now it´s time to weigh in. Our verdict: Regulators should watch and learn.

Stewart attacked CNBC´s content and personalities continually over the period of about a week. He contrasted commentator Rick Santelli´s rant about the supposed moral hazard of the Obama administration´s foreclosure prevention plan with evidence of CNBC´s general failure to uncover the true ugly nature of some big Wall Street bankers´ activities. "To all you dumbass homeowners out there who let your optimism and bad judgment blind you into accepting money that was offered to you from banks, educate yourselves," Stewart said, before running a collage of clips showing jovial CNBC anchors and guests exchanging upbeat platitudes about the state of the financial markets.

Stewart was criticized for taking some of the clips out of context, and it is generally easier to satirize a past event than to thoughtfully analyze a present situation. But his confrontation last night with CNBC´s Mad Money host Jim Cramer warrants serious attention.

In his interview with Cramer, Stewart continued to press his main criticism of CNBC: that its superficial coverage of the financial industry perpetuated the state of contented ignorance in which many viewers were ensconced when the crisis hit. But this time he went further.

Stewart played clips from a conversation Cramer had with a reporter from TheStreet.com in late 2006. The footage shows Cramer describing how to successfully short a stock by spreading rumors to drive down the price. He waves off concerns over retribution from the Securities and Exchange Commission, claiming that its agents don´t understand enough to recognize illegal manipulation.

"You can´t create, yourself, an impression that a stock´s down," Cramer said, "But you do it anyway because the SEC doesn´t understand it."

At another point, he concluded: "It´s a fun game, and it´s a lucrative game...By the way, no one else in the world would ever admit that, but I could care. And I´m not going to say it on TV."

The video wasn´t buried; it was posted on TheStreet.com and circulated around the Web. But it had little effect, at least when it comes to supervision of Wall Street (we're not sure how many viewers, if any, followed Cramer's advice). And that is shameful.

Any new regulatory structures that are erected in the coming months and years will have to be effective on many levels, and one is psychological. Enforcement needs to combat the jaded self-assurance Cramer displayed-an attitude that is rarely so publicly voiced but apparently common in the industry. Ideas for a new regulatory regime are flying high and fast but they haven´t addressed this point.

Arrogance of the kind Cramer displayed isn´t something that can be combated with longer-term incentives and other new "carrot" concepts. It needs to be worn away by a regulator that does what it says it will do and nothing less. We here at BankThink aren´t offering any apologies for sounding naïve; we don´t know exactly how to fix this problem. What we do know is that if it isn´t fixed, once the crisis passes things will snap right back to the way they used to be. This doesn´t just go for hedge fund managers, but for underregulated lenders and other financial firms that have been caught (or gotten away with) engaging in predatory or unfair practices. Whatever the solution, the first step is recognizing the problem. That is why, despite all of the hype surrounding the standoff, it´s time to concede that The Daily Show got this one right.