I’m sorry, but Ben Stein is an idiot when it comes to economics. His solution for problems created by too easy credit? Give out more easy credit!
There is only one place it can come from now: the federal government, which has to guarantee loans made by lenders, completely restock the banks’ coffers, flood the society with liquidity and create so much of it that it will have to be lent out. Of course, this will have the makings of the next credit bubble. But that cannot be helped.
I’m not sure where to start with such nitwittery. He is saying that, in order to solve the world’s greatest credit bubble, we should make an even greater bubble!?! You probably need to go back to the drawing boards, Ben!
Just to demonstrate how much he knows, here is a column from a year ago in which he claims that everything is just hunky dory and we should all quit worrying. Wow, glad you saw this coming, Ben! He writes:
Newspapers (which often sell on fear, not on fact) talk frequently about a mortgage freeze. However, for all but the least qualified buyers, mortgage money is plentiful, and in fact the potential borrower is bombarded with offers.
Just so, Ben. The problem was that banks were handing out free money to whoever wanted it, too bad you missed that.
The large banks and investment banks are committed to lend hundreds of billions of dollars for deals that looked sweet when deal guys were playing musical chairs but look dicey now that the music has stopped. Some people think that the game won’t start again for a while (although I happen to think it will restart very, very soon — the fees are just too good for this game to stop).
Ooo, nice prediction there, Ben. The “game” as you call it, has yet to restart by the end of 2008 and will most likely not restart in our lifetime. You sure know what you’re talking about.
NOW, let me go back to my role as Little Benjy Sunshine. None of this will sink our glorious economy. The losses are nothing compared with the losses in the tech debacle. They will be nothing like the numbers bandied about in the fear-mongering media. If there is a questionable $200 billion pool of loans, that means a small percent will be lost, not all of it. This big, strong economy will sail on through.
Hahahahahaha, let’s see, we’re at the Fed pouring in 2 trillion dollars and counting in order to stop a few billion dollars of losses. Glad to see your “big, strong economy will sail through” [into the dumpster.] Where did you learn economics, Benjy Sunshine?