Ben Stein's mea culpa
Ben Stein is such a juicy target to beat up when he's wrong. Which is frequently. I'm shocked I've done it only once before. Beating him up is like beating up Kudlow, Cavuto, — heck, all of the Team Bush apologists who wouldn't recognize genuine free-market capitalism if it bit them in the ass — all at once.
So along comes Stein with a mea culpa for missing the recent stock market crash. OK, so a lot of genuinely smart people didn't think it was going to be as horrific as it turned out to be. But Stein chalks it up to just one little misstep of the otherwise brilliant Paulson-Bernanke-Geithner team. "I did not foresee the catastrophic mistake, as I view it, by Treasury Secretary Henry M. Paulson Jr. to allow Lehman Brothers to fail," Stein writes. "That failure left a gaping hole in the financial services industry, and blew away confidence that the Feds knew what they were doing."
Actually, Stein is sort of onto something here. At the time Lehman blew up, Paulson & Co. had already engineered the demise of Bear Stearns and the full government takeover of Fannie and Freddie. Nothing appears to have happened to alter my hypothesis at the time of Lehman's demise about why it was allowed to happen. But looked at from the Paulson interventionist standpoint, it was a blunder of the first order. Lehman's downfall pretty well doomed AIG and put a host of money-market funds in grave danger.
At this stage, it was obvious to all that Paulson & Co. were pretty much making it up as they went along. Stein writes, "After Lehman, I felt sure that the government would realize its mistake and issue blanket solvency guarantees to banks. But that didn’t happen, the stock market fell apart, credit went icy cold and the wheels started to come off the economy. This also took me by surprise."
This smacks of disingenuousness, an after-the-fact conceit that, "If I'd been in charge, I've have known which levers and pulleys to manipulate to make everything just so." So what does Ben think ought to be done now? Well, it has nothing to do with the free market he allegedly reveres. "The need for the government to take action seemed so clear — and still seems so clear that I cannot believe a day passes without its happening. But the days pass, nothing happens, and I am proved wrong again. And I lose some of my life savings and it hurts."
Yes, the government is now going to own a piece of insurance companies, just as they've moved to own a piece of banks — but government is "doing nothing" in Stein's view. It's enough to leave you speechless.
But no, Stein has one more whopper to lay on us before bringing this column to its merciful end.
And, closer to home, a talented makeup artist who works with me almost daily in my TV appearances asked what happened to people in a recession. (She is young.) I said that fear and insomnia happened to most people but that a few million would actually lose their jobs and millions more would lose income.
“What do they do?” she asked, looking worried.
“They find other work or live off their savings,” I said. “They certainly cut back on their spending.”
“What if they don’t have any savings?” she asked. “I don’t have any savings,” she said. “No one I know except you has any savings.” She looked extremely worried.
This is perhaps the main lesson of this whole experience. It is basic but still unlearned: human beings must have savings. This is not just a good idea. It’s the difference between life and death, terror and calm. So start saving right now, and don’t stop until you die.
Ben, where the hell were you all these years when Alan Greenspan was — by his own admission to Jon Stewart — discouraging people from saving by slashing interest rates, thus encouraging them to speculate wildly, first on tech stocks, then on real estate?
The only redeeming thing about Stein's column is a postscript in which he says a windfall profits tax on oil companies is a dumb idea. Yes, it is, Ben. But you and Kudlow and Cavuto and the rest of you shrieking jackasses don't help make the case when you've been so stunningly, breathtakingly wrong about everything else when Greenspan and Bernanke and Bush were running this country off a freaking cliff. So do us all a favor: Just shut up. SHUT UP! Go away for a while. Your "free market" patina is going to make it damn near impossible for genuine free-marketeers to state their case for the next couple of years, at least. We're left to cry, not unlike pathetic hardened communists confronted with the demise of the Soviet bloc, "But what's been happening isn't really a free market!"
Oh well. If you can't change any minds, at least you can take a step to recover from whatever whacking the market has recently dealt you.