Ben Stein's entitled to his own opinion, but not his own facts

This article was written by Ben Stein and appeared on the Yahoo Finance site today. My comments are in italics.

1) Have a fiscal policy that creates immense deficits in good times and bad, burdening America's posterity with staggering burdens of repaying the debt.

America's deficit is small relative to GDP, which is the measure that counts. Even at this year's projected shortfall of $430 billion, it is less as a percent of GDP than during Reagan's years and even smaller than much of the Clinton Presidency. Moreover, our national debt is smaller than Germany, France, Canada, Italy and Japan's. Ben totally distorts the picture on this one.

2) Eliminate regulation of Wall Street and/or fail to enforce the regulations that already exist, instead trusting Wall Street and other money managers and speculators to manage other people's money with few or no regulations and little oversight.

I agree.

3) Have an energy policy that disallows producing our own energy and instead requires that we buy energy from abroad, thus making our oil prices highly volatile and creating large balance of payments deficits, lowering the value of the dollar and thus making the problem get progressively worse.

America holds 3-percent of the world's oil reserves. Drilling will not get us out of this problem. It is naive to think so. Furthermore, OPEC has a 30 year history that shows each time non-OPEC nations have increased output, the Cartel has cut back, offsetting what the non-OPEC producers add, to a large degree. If we get those 2 million barrels per day in the next few years, it would be quite easy for OPEC to reduce their output by that much, keeping global oil prices exactly where they are. Bottom line: we'd still be paying the same.

4) Have Congress mandate that banks and other financial entities lend money to persons they know in advance to have poor credit ratings or none at all.

Congress did not mandate the following:

-no income verification
-no verification of credit scores,income and assets
-120% loan-to-value ratios
-Zero percent down
-inflated and fraudulent appraisals
-AAA ratings given by ratings agencies, like Moody's, S&P and Fitch on worthless junk paper

Ben, you're entitled to your own opinion, but not your own facts.


5) Allow investment banks, insurers, and banks to bet their entire net worth and then some on the premise that borrowers known to be improvident will in fact repay those loans.

Again, ratings agencies told them that these bets were low risk.

6) Allow the creation of large betting pools called "hedge funds" that can move markets and control the outcome of trading, thus taking a forum for savings and retirement for families and making it into a rigged casino game that exists primarily to fleece suckers like ordinary working men and women.

Yes! Especially in their impact on oil and gasoline prices and other commodities. And in the bear raids they conducted on solvent institutions, forcing them to go out of business. Shut this down, I agree with you, Ben!!

7) Have laws that protect corporate officers from being sued for misconduct but at the same time punish lawyers in the private sector who ferret out such misconduct and try to make accountable the people responsible for shareholder and investor losses. If one of those lawyers gets particularly aggressive in protecting stockholders, put him in prison.

Sounds like Ben is on some "conspiracy" bent here.

8) Appoint as head of the United States Treasury Department a man whose whole life was spent on Wall Street, who became fantastically rich through his peddling of junk bonds at his firm while the firm later sold short those same sorts of bonds.

Or whose firm was instrumental in pushing up crude, heating oil and gasoline prices, and who said that "speculation is not causing gas prices to go up."

9) Scare Americans into putting up $750 billion of their hard earned money to bail out the billionaires and their friends who created the market for loans to poor credit risks (The "subprime" market) and the unbelievably large side bets on those loans, promising that such a bailout would save the retirement savings of Americans, then allow the immense hedge funds to make the market crater immediately afterwards.

"Putting up?" Americans have not "put up" one dime. The government will finance the by selling Treasuries to investors around the world who will voluntarily agree to exchange some of their cash for a safe, secure, investment that pays interest. There has been no, "putting up." Could those proceeds have been used more effectively than buying questionable assets? You bet. A giant infrastructure project, investment in education, R&D, alternative energy, the electric grid, extension of unemployment benefits, loans to real businesses, etc. All of these would have created jobs immediately and stopped the decline in the real economy.

10) Propose to save the situation by surtaxing the oil industry, which is owned by our fellow Americans, mostly in their retirement plans, thus penalizing Americans for investing in companies that efficiently and legally produce an indispensable product.

This tax is probably a bad idea, unless the proceeds are reinvested in alternative energy. Oil has got to go.

11) Insist that the free market requires that banks and insurers with friends of the Secretary of the Treasury be saved but allow other entities not so fortunate to fail, thus creating total uncertainty and terror among financial institutions, and demolishing all of the confidence built up in financial circles since the days of FDR.

Lehman was not saved; Bear Stearns was not saved. But you're right to an extent, the financial sector is probably more trouble than it's worth. Save the real economoy, not financial intermediaries.

12) Then have the Republican candidate say he would keep on the job the Treasury Secretary who facilitated the crisis, failed to protect the nation from the crisis, got the taxpayers to pony up to save his Wall Street buddies, and have the Democratic candidate, as noted, say he would save the day by taxing the stockholders of energy companies.

It's a stretch, Ben, to say Paulson facilitated this. And, again, nobody is "ponying up."

There, that should do it.