Ben Stein has a lot of money invested in the stock market, and tends to think of the stock market as a proxy for financial markets as a whole. So last summer, when the credit crunch first hit, he was sanguine about it because stocks didn’t fall. Now, when it’s clear that financial markets generally are in a lot of trouble, he still thinks it’s all about stocks.
"The markets are in a genuine credit crisis, on a scale rarely seen," says Stein in this week’s column – and then goes straight on to say that one of the reasons for this credit crisis is "the ending of the uptick rule in short sales." Er, no, Ben. A credit crisis affects credit. The uptick rule in short sales affected only stocks, insofar as it affected anything at all.
Joe Wiesenthal is quite right when he writes that "grousing about shorts is truly the last refuge of a scoundrel". The fact is that the uptick rule, or the lack thereof, didn’t even harm the stock market, let alone the credit markets. But Ben loves pointing fingers, and his second-favorite target is short sellers.
His favorite target, of course, is investment bankers. Our current Treasury secretary happens to be an investment banker by trade, and so Stein loves to attack him. Of course, being attacked by Ben Stein is a bit like being harangued no discernible reason by a demented vagrant: an impartial observer might feel sorry for the attacker, but none of the blows ever land. Stein accuses Paulson of "diverting attention" from the credit crisis by announcing long-term plans for revamping the regulatory structure overseeing US financial institutions. Has your attention been diverted? Mine hasn’t, or not by Paulson, in any event, and I’ve seen no indication in the financial press that coverage of the credit crisis has diminished since Paulson unveiled his plan.
But Paulson has mooted merging the CFTC with the SEC, and Ben’s not happy about that, calling it "an attack on basic legal protections of investors". Which isn’t true in any case, but also shows up Stein’s utter inability to consider "investors" to be anything other than just "stock market investors".
Stein also can’t conceive of a world in which some people suffer losses without other people (invariably investment bankers) finding themselves with enormous gains. "The false god of deregulation allows unscrupulous people to loot the system," he says, convinced that a cabal of cackling capitalists is somewhere cheering the present crisis, making billions of dollars every time another bank implodes.
The really funny bit is where Stein contrasts the winners and the losers. On the winning side you have "Wall Street", while on the losing side you have "the people who were wiped out in Bear Stearns stock", as though such people were widows in Omaha rather than the very investment bankers who Stein thinks are gaming the system so that they always win.
Still, Stein’s come a long way from his don’t-worry-be-happy days of a few months ago: he’s now putting out a call for "brave Coast Guard heroes," and ends his column by saying that "I don’t feel so good about the future." Can one hope that he knows the NYT is finally going to get around to firing him?
Incidentally, does anybody have a clue what Stein might be talking about when he says that "Paulson’s proposals divert the nation from such urgently needed measures as real solvency guarantees for the banks"? Is a "real solvency guarantee" the acceptable way of saying "bank bailout" in much the same way as "intelligent design" is simply a confusing way of saying "creationism"?