say anythingone in an ongoing series
Ben Stein in the New York Times, Sept. 9, 2007:
I get to the point of laughing when I read doom-saying articles in the business sections of newspapers or watch Jim Cramer on CNBC.Ben Stein in the New York Times, April 27, 2008:
Yes, there are real problems: housing, mortgage defaults, losses at financial firms, rot in hedge funds. But over all, things will be fine. Unless there is a genuine dollar crisis or a devastating recession (very unlikely), things will work out. This economy is very big and very solid. It cannot be derailed for long by anything we have seen lately.
If I were the editor of the business section for just one day, I would run one immense headline: “Everything Is Going to Be Fine. Go Back to Work.”
You may well be asking yourself, as I have asked myself, how on earth did the credit crisis on Wall Street become such a catastrophe?Note that in Stein's list of people who should have warned us or done something -- government watchdogs, credit rating agencies -- you will not find "columnists who write about finance for the nation's leading newspaper." If someone had tried to police the emerging financial crisis in its earlier stages, what would the Ben Stein of 2007 have said about them?
How did all of the mechanisms operated by the mind-bogglingly well-paid men and women of the Street go so wrong that we saw a major investment bank, Bear Stearns, essentially disappear? How did Wall Street firms of ancient lineage take such immense losses that they made banks clam up on lending — at great risk to the economy?
Weren’t fail-safe devices in place to guard against risk? Weren’t government watchdogs there to make sure that catastrophes could not happen? Weren’t ratings agencies on the job to police what was going on in the canyons of Lower Manhattan?
To paraphrase Dr. Evil in the “Austin Powers” movies: “How about ‘no,’ Scott?”
It looks to me as if the inmates are running the asylum. One truth, that deregulation is sometimes a good thing, has been followed down so long and winding a road that it has led to an immense lie: that deregulation carried to an extreme will not lead to calamity.
To think that people of this mind-set are in charge of the finances of the nation that is the cornerstone of world freedom is terrifying.