CT Blue

I must admit that Ben Stein is one of those Republicans who really gets under my skin. Perhaps it’s because he’s put himself forward as a poylmath, and operates on an idiot level on so many fronts. He writes on economics for the New York Times, though his credentials for doing so are something of a mystery. In his spare time, he unsuccessfully debunks evolution and blames Darwin for the holocaust.

Last year, as the mortgage crisis started to gather steam, he sought to calm all us Nervous Nellies by telling us:

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.”

Being incapable of evolving, he is back again today telling us that he was right back then, and that a few bank failures, along with the collapse of Bear Stearns, along with the de facto bankruptcy of Fannie Mae and Freddie Mac along with the advent of a probable recession along with a decline in employment are no big deal and everything is still fine.

Like Stein, I’m no economist (unlike Stein, I don’t claim to be), so I’ll leave the details to Dean Baker (who is an economist) at his invaluable blog, Beat the Press:

[Stein’s column] includes a number of wondrous “no big deal” comments. For example, the Fed had to step in and rescue Fannie and Freddie from bankruptcy — no big deal. We’ve had only one major bank (IndyMac) fail — no big deal. One of the major investment banks, Bear Stearns, collapsed — no big deal. Of course those minimizing the economy’s problems last summer expected such commonplace events.

We also have the great line “employment in June was considerably less than 1 percent below its all-time peak in November 2007.” You’ve got to really really love that one. Does Stein not know that economies add jobs through time. In other words, we generally expect that in any given month we have more jobs that we ever did before. To be 1 percent below our all-time peak, 7 months after that peak is really quite bad.

In addition, Stein misrepresents the meaning of the employment data. Contrary to what he claims, the numbers do not show “that 94.5 percent of the people who wished to be employed and were capable of work were employed.”

The employment rate (EPOP), the percentage of the non-institutional population that is actually employed, is more than 2 full percentage points below its peak in 2000. This corresponds to more than 5 million fewer people employed compared with a situation in which the EPOP had stayed the same. We can either believe that these people just developed a distaste for working in the last eight years, or alternatively that they are not working because the labor market does not present as many good job opportunities today as it did in 2000. The latter seems more plausible to me, but readers can make up their own minds.

In singing the praises of the economy, Stein also neglects to mention the loss of $5 trillion in real housing wealth over the last two years (almost $70,000 per homeowner), but that’s probably a small point.

Okay, I admit it. I’m jealous of Stein. Here I am laboring away in anonymity and Stein gets to write for the New York Times. I’m at least as unqualified as he to write a column on economics. Of course, I’m also just as unqualified as David Brooks to be a social critic. I didn’t know that Applebee’s doesn’t have a salad bar either. My point is that given the proper motivation I could be just as wrong as Stein, indeed just as wrong as Brooks (I’m overlooking Maureen Dowd here. Since she never says anything, technically, she’s never wrong), just as often as either of them, if only the Times would give me a chance.