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Few Humble Thoughts about the Economy By Ben Stein
Larry King Live Blog ^ | 11/17/2008 | Ben Stein

Posted on 11/17/2008 3:24:47 PM PST by Responsibility2nd

We are clearly in a serious slowdown. A slowdown this serious, fed by a credit shutdown, will not stop automatically or at least might not.

This is way beyond a normal recession. At this point it might become self reinforcing and become like a Depression in which we reach what economists call a state of equilibrium far below full employment.

This is what happened in the great depression and could happen this time. The main contributor to this unusual situation is a serious credit shortage, generated by fears fed by the collapse of Lehman and the problems at other lenders such as Wachovia and Washington Mutual and financial firms such as Merrill Lynch and Bear Stearns.

There is no other entity besides the government that can restore this situation to a full employment equilibrium position. State governments are suffering and so are municipalities. Corporations are obviously suffering. Only the federal government can literally print money to restore the situation.

Any stimulus will have to be large and fast. The analogy would be to falling off a cliff. It takes a certain care to keep from falling off a cliff but it is a lot easier than retrieving you after you have fallen. The history is that only a large amount of stimulus at this point when the private economy is in shock will help. This means a lot of stimulus applied on a continuous basis.

(Excerpt) Read more at larrykinglive.blogs.cnn.com ...


TOPICS: Business/Economy; News/Current Events
KEYWORDS: benstein
Oftentimes we should hang on every word that Ben Stein utters regarding economic concerns.

This is not one of those times.

1 posted on 11/17/2008 3:24:48 PM PST by Responsibility2nd
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To: Responsibility2nd

Gads, you are right!


2 posted on 11/17/2008 3:26:41 PM PST by ConservativeMind (Obama is bringing in every crook and bumbler he can to assure consistency in his message.)
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To: Responsibility2nd
Franken won some of Ben Stein's money for this race. How about this ticket in 8 years?

Franken/Stein 2016!

3 posted on 11/17/2008 3:27:03 PM PST by Paleo Conservative (Drill Here. Drill Now. Pay Less.)
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To: Responsibility2nd

Ben Stein has been consistently more often wrong than right since early 2007.
There are embarassing playlists of TV panel discussion clips going around from 2007 that focus in on Stein’s lack of understanding as to what was going on.


4 posted on 11/17/2008 3:28:04 PM PST by JerseyHighlander
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To: Responsibility2nd
More Stien wisdom in the middle of this one...
5 posted on 11/17/2008 3:28:44 PM PST by Vince Ferrer
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To: Responsibility2nd

Stein was an Obama supporter.
Enough said.


6 posted on 11/17/2008 3:30:06 PM PST by silverleaf (Fasten your seat belts- it's going to be a BUMPY ride.)
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To: Responsibility2nd
After being so wrong in his predictions on the run-up to this economic disaster Ben should just fade away, and take Jim Cramer with him. - Tom
7 posted on 11/17/2008 3:30:11 PM PST by Capt. Tom
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To: Responsibility2nd

Has EVERYONE been drinking the Obama Kool-Aid?

Printing “money” does not cause prosperity.

Huge cuts in marginal tax rates are ALWAYS a good idea.

Repeal of the 16th Amendment has been a good idea ever since the day is was “ratified.” (If it ever was.)

How do people who are normally sane—like Ben Stein—go insane so suddenly?


8 posted on 11/17/2008 3:35:04 PM PST by Arthur McGowan
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To: Responsibility2nd

I do believe that Ben has become a senile citizen. Too bad, he always seemed to be a smart man.


9 posted on 11/17/2008 3:37:18 PM PST by ssaftler (Imagine January 20, 2013)
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To: Responsibility2nd

"In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the... Anyone? Anyone? ...the Great Depression, passed the... Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act? Which, anyone? Raised or lowered? ...raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression. Today we have a similar debate over this. Anyone know what this is? Class? Anyone? Anyone? Anyone seen this before? The Laffer Curve. Anyone know what this says? It says that at this point on the revenue curve, you will get exactly the same amount of revenue as at this point. This is very controversial. Does anyone know what Vice President Bush called this in 1980? Anyone? Something-d-o-o economics. "Voodoo" economics."

10 posted on 11/17/2008 3:37:36 PM PST by dfwgator (I hate Illinois Marxists)
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To: dfwgator

Buehler?

Buehler?

Buehler?


11 posted on 11/17/2008 3:41:30 PM PST by Responsibility2nd
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To: Responsibility2nd
There is no macro economic reason not to save the auto companies. They must be reformed, of course, but they need to be saved to keep a massive fall in employment and confidence from occurring.

Yes there is, to break the power of the UAW. Let them get protection in Chapter 11, break the union, and private capital may well be willing to invest after the union is broken.

12 posted on 11/17/2008 3:42:26 PM PST by SirJohnBarleycorn
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To: dfwgator

Did you thank me for that tagline? ;)


13 posted on 11/17/2008 3:42:31 PM PST by ExpatGator (Extending logic since 1961.)
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To: Responsibility2nd
Buehler? Buehler? Buehler?

"Um, he's sick. My best friend's sister's boyfriend's brother's girlfriend heard from this guy who knows this kid who's going with the girl who saw Ferris pass out at 31 Flavors last night. I guess it's pretty serious."

Hey I just needed an excuse to post a pic of Kristy Swanson.

14 posted on 11/17/2008 3:45:21 PM PST by dfwgator (I hate Illinois Marxists)
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To: Responsibility2nd

I think Stein has a brain tumor.

He hasn’t been right in the head for a while now.


15 posted on 11/17/2008 3:46:56 PM PST by y6162 (uot)
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To: Responsibility2nd

AP: Stein, an actor, writer and economist, has contributed $2,000 to Franken’s Minnesota Senate campaign. The two men have known each other for about 30 years.

“I’m struck by what an incredibly capable, hard-working guy he is,” Stein told The Associated Press in a telephone interview Thursday. “He’s a very smart liberal, he’s a thoroughgoing patriot, and I would feel better with him in the Senate.”

Franken is one of several Democratic candidates vying to take on Sen. Norm Coleman, R-Minn. As a former “Saturday Night Live” star, Franken has received scores of contributions from people in the entertainment industry, but the donation from Stein doesn’t fit into the GOP’s talking points about liberal Hollywood elites bankrolling Franken’s campaign.


16 posted on 11/17/2008 3:47:24 PM PST by ansel12 ( When a conservative pundit mocks Wasilla, he's mocking conservatism as it's actually lived.)
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To: Responsibility2nd

I have said before and I say again, we are still in the Great Depression. The primary industry on earth is the finance industry. It began about the instant Smith’s Wealth rolled off the printing presses making that book instantly obsolete. The finance industry can loan out ten or twenty times what it is worth, based on anticipated return, and if the return doesn’t, that loan won’t.


17 posted on 11/17/2008 3:49:02 PM PST by RightWhale (Exxon Suxx)
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To: silverleaf

You’re kidding? Where did you see that?


18 posted on 11/17/2008 3:50:41 PM PST by arrogantsob (Hero vs Zero)
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To: Arthur McGowan
Printing “money” does not cause prosperity.

It devalues debt. The idea is to get debt under control, while (hopefully) not screwing the lender. But since the lenders are holding devalued property that they would like to unload and return to positive cash flow...etc.

See, if done correctly, (please pay no attention to any possible unintended consequences,) everybody wins.

19 posted on 11/17/2008 3:52:15 PM PST by D Rider
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To: Responsibility2nd

Ben Stein and friends ridiculing Peter Schiff , President of Euro Pacific Capital who predicted the financial collapse of the USA

http://www.youtube.com/watch?v=2I0QN-FYkpw


20 posted on 11/17/2008 3:53:40 PM PST by Para-Ord.45
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To: ExpatGator
OK, I did a little Googling, I saw this quote from you on November 1:

Let me welcome you to FR and extend my agreement to your observations on the ominous nature of a Marxist regime here. I am a twelve year veteran of the Cold War, the son of a 20 year veteran of the same war. I lost friends in that war and know the philosophy for what it is: Tyranny. To paraphrase the Blues Brothers: I hate Illinois Commies.

I hope that the electoral map turns out in our favor, as a lot more is riding on it than many realize.

Meanwhile, yours truly had this in his tagline as of October 27th: 17 posted on Monday, October 27, 2008 11:44:54 AM by dfwgator (I hate Illinois Marxists)

So who should get credit? But then again, great Gator minds think alike. ;)

21 posted on 11/17/2008 3:53:45 PM PST by dfwgator (I hate Illinois Marxists)
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To: dfwgator

Is Kristy Swanson wearing an Annie Oakley medal with some kind of a cluster?


22 posted on 11/17/2008 3:57:41 PM PST by Paladin2 (No, pundits strongly believe that the proper solution is more dilution.)
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To: Responsibility2nd
Sorry, Ben, that "equilibrium below full employment" is nothing but warmed-over Keynesianism from the 1930s. It was wrong then, and it hasn't improved with age.

The idea that the economy could be in equilibrium with large numbers of people seeking work and not finding it could be true only if a minimum wage law kept entrepreneurs from hiring them at a wage that made their product affordable. Unfortunately we have such a situation, but it's not inevitable.

One of my classmates (and best friends) in high school (mid-1940s) had a father who got wealthy during the Depression. He hired people to salvage bricks from old buildings, chip the mortar off them, and make them saleable. He paid his workers 25 cents per hour. At that wage, salvaged bricks could undersell new ones. At that time there was no minimum wage.

So long as there are no impediments to hiring workers at wages that allow the product to be sold at a price people are willing to pay, equilibrium has to occur at "full" employment. That is, allowing for people between jobs, people in school, etc., everyone who wants a job can have one. Most economists consider 5% "unemployment" to be the nearest we can come to "full employment" once these factors are taken into account

23 posted on 11/17/2008 4:03:14 PM PST by JoeFromSidney (My book is out. Read excerpts at http://www.thejusticecooperative.com)
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To: Responsibility2nd
There is no other entity besides the government that can restore this situation

Ben needs to take a few days off.

24 posted on 11/17/2008 4:04:22 PM PST by Delta 21 ( MKC USCG - ret)
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To: ssaftler

Yes, I don’t think he’s really had something significant to offer in the last five years, at least.


25 posted on 11/17/2008 4:06:44 PM PST by 9YearLurker
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To: 9YearLurker

I thought “Expelled” was brilliant. Can’t say I agree with his politics...


26 posted on 11/17/2008 4:14:07 PM PST by Ted (http://sinema7.net - the 7 deadly sins as reflected in movies, TV, and music)
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To: Responsibility2nd
Stein sounds like he took econ 101 that covers macro-economics from a Keynesian perspective.

But there is more to the depression than a shortfall of aggregate demand. For one, FDR did his best to keep prices from falling, even though that would have been an excellent tonic. The problem wasn't a lack of government activity but too much.

FDR's policies prolonged Depression by 7 years
http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx

Why Government Spending Does Not Stimulate Economic Growth
http://www.heritage.org/Research/Budget/bg2208.cfm

The best response is let the system work without government stimulus. Let the bankruptcies happen. Also, stop damaging the economy with over-regulation including unnecessary, misguided environmental regulation.

Notice how well the stock market and economy have turned out after passing the stimulus package? (sarcasm). Now Paulson doesn't even know how to spend the money that he had to have "right away."

27 posted on 11/17/2008 4:18:01 PM PST by ChessExpert (Carbon Dioxide is not a pollutant. It is a trace gas that is necessary for life on earth.)
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To: Ted

Haven’t seen it, and I know that the subject matter could be handled brilliantly.


28 posted on 11/17/2008 4:20:19 PM PST by 9YearLurker
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To: dfwgator

Wow Great Gator minds do think alike!

How ‘bout them gators huh?!?!?!?!?!?!?


29 posted on 11/17/2008 4:43:28 PM PST by ExpatGator (Extending logic since 1961.)
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To: arrogantsob
You’re kidding? Where did you see that?

Best I can tell, its OK to just make stuff up.

30 posted on 11/17/2008 4:53:52 PM PST by Doe Eyes
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To: silverleaf

“Stein was an Obama supporter. Enough said.”

The following quotes indicate the opposite:

Friday, February 15, 2008

They Said It!: Ben Stein On Barack Obama’s Economic Plan

Stein: “Mr. Obama could become president and derail everything because his understanding of economics is 100 percent wrong. ... I must say I’m so scared about Mr. Obama becoming president. I can hardly tell you.” (CNBC’s “Kudlow & Company,” 2/14/08)

Stein: “[Obama] understands nothing. He wants to shut down the oil companies, take away their profits. Kill every state teacher’s pension fund that’s invested in XOM [Exxon Mobil]. I am terrified of this guy. Either somebody has got to wise him up or he has to wise up himself or he will be real dangerous.” (CNBC’s “Kudlow & Company,” 2/14/08)

(A Product Of The RNC Research Department)

http://www.gop.com/news/NewsRead.aspx?GUID=09e1c679-7175-4a13-b71b-66066c429ba9


31 posted on 11/17/2008 4:55:26 PM PST by onthelookout777
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To: Ted

“I thought ‘Expelled’ was brilliant.”

Yes, Ben Stein did a superb job with that movie. It’s a must-see, in my opinion.


32 posted on 11/17/2008 5:00:00 PM PST by onthelookout777
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To: Responsibility2nd

Right - not one of those times. In any case, it is all moot. The Dims next year will “bailout” the auto companies in tune with the demands ofthe unions.


33 posted on 11/17/2008 7:02:41 PM PST by Malesherbes (Sauve Qui Peut)
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