Ben Stein's optimism isn't contagious
Submitted by John on Mon, 2007-12-24 13:59.
Simply put, the media and the short-sellers on Wall Street are trying to scare us into having a recession. Since the nice people who read this have some interest in facts and figures, here are a few reasons why things aren't so bad.
My impression is that the media and Wall Street are perennially optimistic. The spin is generally positive, so what fear-mongers are Mr. Stein talking about? Peter Schiff? He's just one guy, and the media have been beating him over the head with a stick for years. Am I now to believe that the media are aligned with Peter Schiff?
Mr. Stein goes on to say how housing, credit, and weak dollar aren't so bad and we shouldn't worry about them. I don't buy it.
The road may be bumpy for a year or two, but we'll come up roses in a short time and will be ready to smile -- sadder but wiser.
I agree with Mr. Stein's final statement that the road may be bumpy and we will be sadder. But, if Mr. Stein believes the credit crisis, etc aren't a problem, then why will we be sadder in a couple of years?
The housing/credit/weak dollar problem will likely turn out to be a much bumpier ride that Mr. Stein is expecting. But, one thing is for sure, we will eventually reach smooth pavement again. In the meantime, prepare for the worst and hope for the best.
As Benjamin Anderson writes in "Economics and the Public Welfare", the end of a real estate boom and crash is, partly for this reason [lack of short selling in the market], a prolonged period of stagnation, while the end of the stock market boom and crash is simply lower prices with activity still going on.
I think we will find the late Mr. Anderson to be more accurate in his forecast than Mr. Stein.