Tuesday, October 07, 2008

More lefty, populist fiddle-faddle from Ben Stein

Not content with his legacy as a TV and Film character actor, former speechwriter for President Nixon, and beloved game show host, Ben Stein has been working furiously in print and Internet as an economic pundit, and sometimes not doing it all that well.

Most of his 12 points are sensible, in the way that Glaucon would have replied to Plato "Well, a reasonable man would agree!"

I was on-board until Ben got to number six.

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.

Seriously, I have to ask what kind of fairy tale world Mr. Stein thinks he inhabits? Does he really think that the equity markets should be a magical kingdom where his hypothetical "working men and women" can invest their wages with zero risk and all return?

How is his point any less naive than the rioting investors in Karachi who demanded that the Pakistani government should pass laws to ensure "that stocks only ever go up"? What a great idea!

Newsflash: risk and reward are not correlated at 1:1. And, um, markets move. Sometimes a lot. Without any volatility, there wouldn't be any losses, but neither would there be any gains. Anybody who's uncomfortable with that should put their cash in a coffee can and bury it in the back yard.

Sadly, invective like his plays well to the crowd that wants to blame "the Man" for their problems, but doesn't do much to further their grasp of the real issues at play.

Sphere: Related Content

No comments: