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I see it even in the very tony neighborhoods where I hang out, like Beverly Hills and Rancho Mirage and Malibu. Older people and even younger people are scared.
However, as the economist I am, I try to not only watch and wring my hands, but to draw lessons and rules from the experience. Here are a few of them:
1. People who bought guaranteed income in the form of annuities from insurance companies have been saved. As far as I am aware, no insurers have failed to make the guaranteed payments they were contracted to make. People who bought variable annuities with value floors and guaranteed incomes and inflation riders have been able to laugh at the economic tornadoes. There are many people who hate insurers, but for those who put their trust in insurance companies to guarantee their old age comfort, there has been security.
2. The people who have been laid off and cannot find work are generally people with poor work habits and poor personalities. I say “generally” because there are exceptions. But in general, as I survey the ranks of those who are unemployed, I see people who have overbearing and unpleasant personalities and/or who do not know how to do a day’s work. They are people who create either little utility or negative utility on the job. Again, there are powerful exceptions and I know some, but when employers are looking to lay off, they lay off the least productive or the most negative. To assure that a worker is not one of them, he should learn how to work and how to get along -- not always easy.
Productive workers with real skills and real ability to get along are also sometimes unemployed, but they will be the last fired and the first hired.
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When men and women do not do this, their lives become horrible in bad times. In a recession like this, with unemployment high, home prices devilishly low, and stock prices falling, rising, then falling, lives can be turned upside down in a hurry if they have not been lived with at least a modicum of prudence.
I see this around me constantly. People in desperation (that word again!), women selling their bodies, men turning to drugs, families torn apart -- all because they allowed themselves to be ruled by magical thinking that things would be all right because the wisher happened to wish that they be all right. I get letters and e-mails from friends of decades standing asking for money every single day. Their common denominator is that they lacked prudence and lived in a dream world. I pray that I am not as much like them as I often think I am.
This has been a recession that has hit wishful thinking very hard, and has rewarded prudence lavishly.
More Here..
How would he know who is unemployed? I guess college graduates and laid off professionals are all lazy and overbearing huh.
ReplyDeleteStein is a tool. This guy was out to lunch several years before the housing bubble burst! Sure, $700K for Fontana, Ca in 2004-5 is normal!
ReplyDeleteSecondly, where are his stats about lazy workers. Heck, I could say the opposite, that hard-working people are unemployed. But, how would I know that?
I love how he broad brushes the entire re(de)pression and then prays he isn't like so many others.
What a condescending twit!
No wonder this guys gets little attention.
Although I dislike Stein as he is a Keynesian-leaning Supply-Sider, I have taken his approach at reassessing "why" I got laid off. The point he makes (indirectly) is that 'what you know' and 'what you do' are FAR LESS IMPORTANT than 'who you know' and 'how much you are liked' in the corporate world.
ReplyDeleteBen,
Marginal utility has little to do with it in the corporate world. Your coworkers and managers receive SALARIES so they ultimately care little about your productivity.
Corporate worlds are just High School for adults. They are cliquish. They reward politicking. They promote those who tow the company line even if it is a lie.
So the lesson is, either a) become a suckup or b) get out of the corporate world.
Best,
TJG
Bubble up desparity?
ReplyDeleteI have said all along, he is a pompus jackass. What does he know of peoples work ethics?
ReplyDeleteI am an operations Manager for a relatively midium sized construction company, to date, all of us have taken a drastic weekly paycut to try to keep our company going during these hard and difficult times. I think this says a lot about the character of our employees. They have families to feed and clothe, but they also know that if we do not take these measures, we All will not survive.
When was the last time the president (lower case intentional) offered to take a wage and benefit concession? When was the last time ANY of our elected officials have heve thought about taking concessions? I am sure, not one rep. has a district that is not suffering.
So. mr. stein, do not talk to me about work ethics of the unemployeed. Do you honestly believe the vast majority of the unemployeed would rather have a $400.00 unemployment check over a job that pays well and offers a living benefit? If you believe this that you really are out of touch.
Troy, truer words were never spoken. That about sums up my experience in Corporate World. It's amazing what people will do.......after my experience in Corporate World, I now realize how Nazi Germany was possible.
ReplyDeleteOf course, I knew all this before I started in Corporate World from my Organizational Behavior course in Graduate School. It was framed in the positive, but the message was suck up and manage perceptions to get ahead and be considered valuable....truth, knowledge and hard work be damned.
Hey Bone-heads. He said there were exceptions, but to a great degree he is correct. Most of the people I know who are on the bricks are the sad-sacks of the world.
ReplyDeleteIn the world of keeping up with the Jones, it's mostly white collar who try and end up losing everything when it goes south. Appearances are everything to many of them. Making money is hard and keeping it is really a SKILL. Thats why you make two people - one who is poor and one who is self made rich- switch their fortunes and they will become what they were before in a few years.
ReplyDelete11:08, that's bullshit. The ones who still have jobs, to a large extent, are the invertebrate sycophants who allow themselves to be anally raped day in and day out just to keep up appearances. Every day that Red Hot Poker that gets shoved up their ass keeps getting larger, sharper and hotter, but they keep smiling as though it's not there. What's worse is they then arrange for the preparation of their offsprings' rectums....a process that takes approximately 22 years....and then they're ready for the Red Hot Poker. Fraternities and Sororities create perfect Stepford Little Eichmans who beg for the Red Hot Poker. That's what their initiations are all about.
ReplyDeleteBen Stein doesn't know work. Whatever he's done thus far in his life, it's not work, and as such, he shouldn't have a dime to his name. Just goes to show you how screwed up this Capitalist system is. Something as worthless as this flesh sack, Ben Stein, can somehow be rewarded for farting.
This fruit cake is a total ass. I believe absolutely nothing he says or writes. He once accused Ron Paul of Antisemitism, Ron Paul did not bite, he ignored the comment.
ReplyDeleteGo to hell Stein...
Ben Stein, It was so nice for you to stoop down to our level and address us with your wisdom. In reality I would like to tell you to go jump in a lake any of your choosing. Where does he get off and think he can tell people how they are. He has no idea what we are like. He makes it sound like the business world is so noble and we worker people can never meet up to their standards. I have skills I learned on my own that your corporate world can never know. I say success is relative. If I was to look at things through the systems mindset of profit and corporate brown nosing then I guess our world looks inferior. But those tables are turning my friend..The days are coming where the world of trinkets is almost over, people will be throwing their stuff in the streets. The way I see it the system has turned its back on the people and is now attacking them to wreak their livelihoods through various calamities. High fuel prices, food prices, it is getting to the point where even having a job is not enough. But your so wise. People are starting to feel depressed because of the depression. Then we have people like you on their ivory towers telling us who will make it and who won't. I think you will be surprised who will make it and who won't. The rabbit and the hare go read it. Falling when your poor is easier than falling when your rich.
ReplyDeleteB ig
ReplyDeleteE ars and
N um nuts
Supply siders believe that economic growth is created by lowering taxes and reducing regulation. Keynesian economics believe higher taxes and government controls are a good thing and that the government can spend your money better then you can. The two philosophies are polar opposites.
ReplyDeleteBen was correct on about half of what he said which for an economist is actually a pretty good score.
He must have the impression that unemployed people will not be reading what he has to say, presuming they're too ignorant, since he was so willing to insult them. He's an elitist snob and some day, he will get his "reward." Justice will prevail in the end.
ReplyDelete5.40
ReplyDeleteGives us a modern free market economists propagandist idea, of Keynesian economics, in polar contrast with his abstract idea of a magical, imaginary, self reviving, non-concrete economy. ruled by the so called invisible hand ,in order to paint Keynes as some sort of Marxist .
My admittedly “50% understanding” is that Keynes put forward proposals on how to stimulate a dead capitalist industrial economy, as in the last great depression ,by giving handout loans to the productive industrial sector of an economy and by first squeezing the workers wages, in order to regain profitability for capital ,to save capitalism in trouble, by getting industrial growth going with a later sort of more humane trickle d own effect eventually creating jobs, thereby increasing money supply in the hands of the broad population to purchase the commodities produced by the growth of physical commodity production. Government spending on public infrastructure to stimulate the commodity markets and Growth and for the common good might create other jobs. For example FDR and the Hoover dam.
The point is that Keynes was dealing with the INDUSTRIAL manufacturing societies of his day. Not an unproductive service based Ponzi marketing of debts economy, seen to be in some sort of a “normal” economic cycle difficulty.
Keynes in no way proposed “stimulus” by handouts to a failed Ponzi financial sector, socialising their losses as “stimulus” to get the economy functioning again as a way of smoothly continuation of the cycles. Keynes put forward ideas for getting jobs and industrial productivity and profitability for capital in crisis going, not handouts at all. The handout big spending solutions of Keynesian spending and waste are mainly A free marketeers myth that are also circulated by fake Keynesian “leftists” like Krugman based on their leftist assumption that high waged American workers are really productive for capital and only need jobs for a Great Ponzi “recovery” to fly.
But the real problem of creating recovery is the banksters that have money refuse to loan it as capital as they know there are no real profits to be got in a dead Ponzi free market services economy they created but blame its collapse on “Keynesian government spending.
Especially as the bailout kitty is now depleted by their subsidies already. Capitalism in de-industrialised America is now non- profitable, and stimulating a dead horse with printed-paper has nothing to do with Keynesian economics for an industrial society except for the of the word “stimulus”.
Stimulus by printing money and inflation is what has been occurring in modern America for years already, even before the current crisis. Stimulus for the economy in the “good times” with inflationary low interest rate money provided to the finance sector at the expense of savers.
Creating a serial bubble economy fed by inflows of value from the Third World and investments from oil puppets. With huge government deficit spending on militarism and wars, printing money was another means used to stimulate the American economy. This artificial stimulus has been called by some” Military Keynesian” but is really Corporate State subsidy for capital profits
The Keynesian “stimulus” gun to stimulate and save capitalism in trouble has already been used up and bankrupted America. After the last bailouts stimulus only an empty bag of debts exists in a Treasury that has promised its future revenues to bondholders and banksters.
There is little left over to bail out the working people and small businesses and for handouts to the unemployed and food stamps “charity”.
Apparently you are in favour of the low interest stimulus and money printing for capital government handout “profits” continuing , but not any handouts for working people as “Keynesian” and implied “Marxism” not suited to your ideal dreams of an impossible recovery” of profitability in a dead great Ponzi economy ?
Ben sure does get people going. That is the purpose of writing is penning something worthy of discussion. To that end he seems to have done a fine job. I read all your responses, no I will go read what you are all so worked up about.
ReplyDeleteCome on people!
ReplyDeleteWhatever he says means "NOTHING."
Just look at his track record getting his ass handed to him by Peter Shiff MULTIPLE times during the 2005-2007 years...That and him admitting he had lost so much money in the last 2 years...So in retrospect he's a bad economist.
If it wasn't for his moderate fame he would be a sad broke white guy who would pay a prostitute to call him dirty names as he soiled his adult diapers.
I didn't realize how biased this blog was until right now. This article is a great read, but no one would know because it's cut, condensed, & renamed to smear the author. What's the point of that? I'll decide if the author is an idiot or not. I don't need a fringe blog author to tell me what or how to think. This blog has almost zero credibility. I'll look for a more reliable source of news outside the mainstream elsewhere.
ReplyDelete@6:22am-So he can have an opinion and we can't?
ReplyDeleteHe can make bold, overstereotyping, generalizing statements and we can't call him on it?
Lets play "Devil's Advocate." Lets aknowledge that some of what he says is true...Which it is mind you but at lower percentages...I notice he uses a lot of "But there are powerful exceptions" clause.
What I dislike about his lil rant was his high horseness, on a soap box, pius method he uses, as he wrings his hands in humble fear of what might be...I say look him up online and listen to what he SAID/WROTE not only on FOX but in his columns from 2004-2008...He seemed just like any of the douchebag gamblers they had on FOX Business/Cavuto, a very bullish guy...Buy Buy Buy!!!...Till NOW...Now it's all about save and have reserves.
Hence why he admitted to being wrong and losing a good portion of his money...Although at present it seems he recouped some but lets make this clear...Only reason he recouped it was because the "Invisible Hand of the Fed" is propping the market and flooding it with taxpayer guaranteed money/IOUs...So in retrospect he's full of BS...So if you think we're biased?...Then goodbye and have a good day.
Intersting that Ben seems to put all his faith in insurance annuities and other types of investments. I wonder what he would say, if oh, maybe those insurance companies went bankrupt (too many claims against too little revenue...) or say, the stock market got hammered down to < 4000, or say, runaway inflation kills all of his monetary investments?... Hmmm... Let's see if his skills as "lawyer, actor, and commentator" prove to be "productive" skills....
ReplyDeleteBen Stein must have touched a nerve with some of you. He is right to a certain degree. I got out of school during the Jimmy Carter mess.(no jobs high inflation) Unemployment around 11 1/2 % I always found a job
ReplyDeleteI have been working since 12 yrs old (paper routes ect) I have never collected unemployment I am 49 now. My only bill is a modest mortgage and my house is not "underwater" because I did not buy a McMansion. (saving up for a 20% downpayment before buying) I have no problems doing jobs that require getting your hands dirty. Most people today find this is beneath them
10:20 give it time, you'll be underwater, unemployed, starving and stupid like the rest of the people who can't get a job. Real Estate will go down 90%, you'll be underwater.. Take that to the bank. MARK MY WORDS.
ReplyDeleteI think the problem is we have two extremes...People who think it'll be a Mad Max World and people who think everything is kinda bad but not too bad based on their experience...SO FAR.
ReplyDeleteCase in point I used to date a hot blonde who made more money than me and was the epitome of an alpha female...BUT she was like #2 in her region for sales so she never took my ideas of "Prepping" seriously.
Well being #2 didn't help when CitiGroup laid off 70k-90k in I believe in 2007...Since then she has worked as a bartender, an assistant manager at a Curves and a maid at a motel.
Her experience with falling made her see that her degree from Penn, or her resume meant nothing if no one will hire you.
How many 50 year olds with good work ethic and skills are unemployed all of a sudden? Too many sadly...So what will happen is experience will make people believers BUT for the people who are believers...STOP with the anger.
Raging and ranting makes everyone ignore your arguements and honestly makes you look like a douchebag...Take care of your self and those you love and let shit go the way it's going to go because honestly?...We have almost ZERO control at this point over government/business/war decisions...Why because it's the same people who control all three.
Get ready but stay up.
Hmm. Anonymous 5:40 declares Keynsianism and Supply Side to be polar opposites. I disagree.
ReplyDeleteKeynesianism argues for government to finance public work schemes that will jumpstart the "circular flow" economy.
Supply Siders argue for government to finance corporate subsidies that will jumpstart the "circular flow" economy.
They are essentially the same economics. One embraced by Social democrats, the other embraced by neoconservatives.
The problem is there entire premise is wrong. Income does not come from consumption as they aregue in the circular flow. In reality, income comes from CAPITAL which itself comes from savings which is DEFERRED CONSUMPTION.
Ben Stein, Keynes and Laffer never read Bastiat.
to anon 8:51
ReplyDeleteKeynes was a Marxist Socialist pure and simple. Take a look at http://www.keynesatharvard.org/
for an explanation of what he did and why. It isn't just that Keynes didn't agree with the popular economic theories of the day and offered alternative ideas!! He intended to muddy the waters and introduce a philosophy that would cause capitalism to fail so that a socialist/communist model could take it's place. In the 30's Keynesian economics kept us in depression for 11 years and showed no signs of ever bringing us out of depression. WW II brought us out of depression and thankfully FDR died before he could destroy the U.S. completely
Troy: You need to look up straw man arguement. You were forced to lie about what supply side is so that you could denigrate it. Supply side is not about "subsidies" in fact quite the opposite supply side is about ending regulations only intended to harm the economy and reducing tax levels on everyone. Every consumer pays the taxes levied on business. All businesses pass on 100% of taxes to the consumer. What businesses want from government is to be left alone.
ReplyDeleteAs for Keynesian economics "jump starting" the economy you need to understand they are taking the money FROM the economy and then spending it in a way that rewards their supporters and hurts you. By their own statistics (which are clearly overstated) the government must spend $300,000 to create one job. You don't have to be an economist to understand that is stupid.