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Farewell To Ben Stein

Its time to bid a not-so-fond adieu to the New York Times columns of Ben Stein.

No, he is not leaving the paper. Rather, we've reached the point where Stein's commentary has become detached from reality, so ridiculously fabricated, that it can no longer be read. Indeed, its become so absurd that not only have I decided to skip reading him, I am immediately making the public commitment to stop commenting on his Tom Foolery.

Quite a bit of electrons and pixels have been spilled needlessly over the past few days in response to his most recent exercise in inane rhetoric, illogic, and fallacious reasoning. (No, I am not referring to this WSJ article). Across the blogosphere, smart insightful people have wasted far too much time and effort dispelling the absurdities that take residence in Stein's columns.

Its time to put a stop to this.

I frequently mention that I loathe ad hominem attacks. They are a lazy way to avoid responding to a challenging argument. However, there comes a certain point in a pundit's career arc where their credibility, intellectual honesty, and quite bluntly, their entire world view comes into question. Mr. Stein is at that point; he has jumped the shark, and its time for the rest of us to move on.

Stein, a former Nixon speechwriter, has made his opposition to Darwinian Evolution public. He is idealogically committed to creationism and intelligent design, and is the star of the upcoming documentary Expelled: No Intelligence Allowed. Once a commentator eschews logic and reason, once they deny science, then their readers are forced to question their entire analytical approach to ANYTHING -- be it economics, markets, stocks, whatever. Ideology trumps facts, theory trumps data. For better or worse, this is the turf Stein has staked out as his own.

But its more than mere creationism. Stein's entire view is a denial of reality. He seems to be committed to throwing up smoke screens, obscuring what is really going on. This is unforgivable.

We see this ideological absurdity carried to an extreme in his recent Sub-prime real estate and finance  columns.

I first noticed this inanity int he August 12 2007, column, Chicken Little’s Brethren, on the Trading Floor. Stein made the foolish argument that because sub-prime was so tiny relative to the US Economy, it was meaningless. Imagine an oncologist saying to a patient:  "Well, Mr. Jones, relative to your body mass, its only a 15 gram tumor, so I wouldn't worry too much about it."

If Stein actually believed this gross oversimplification, I would dismiss him as just another clueless bobblehead. However, I believe he is marginally more intelligent than that. That makes me wonder if this column is purposefully misstating facts. Remember, Stein does not manage assets for a living, and was a political speech writer for Nixon. Everything he writes has a subtle political connotation -- even if it ends up costing people a lot of money. Thus, the better explanation of his errors is that he is not merely clueless, but willfully misstating the US Economic situation for political purposes.

Perfect example: On October 21, Stein top-ticked the market with this pollyannish column: The Gloomsayers Should Look Up. Then came a dishonest criticism of Goldman Sach's Economist, Jan Hatzius -- who may I point out was correct in raising red flags that sub-prime was an increasing economic problem. Stein criticized Hatzius, writing:

"That worthy scholar recently wrote a detailed paper about how he thought the subprime mess would get worse and worse. It would get so bad, he hypothesized, that it would affect aggregate lending extremely adversely and slow down growth . . . Is it possible that Dr. Hatzius’s paper was a device to help along the goal of success at bearish trades in this sector and in the market generally? His firm says his paper, like all of its economists’ work, was not written to support any larger short-trading strategy. But economists, like accountants, are artists. They have a tendency to paint what their patrons, who pay them, want to see."

Of course, we actually found out later that Goldman had made their bets many, many months before, and that Hatzius, if anything, understated the degree of the problem.

The final straw, as far as I am concerned, came this past weekend.

Rather than admit his error, Stein went a completely different way: He blamed the sell off on traders. (Can Their Wish Be the Market’s Command?) It was the last bit of idiocy from him anyone should tolerate. Forget the fact that Stein missed the importance of the sub-prime debacle, that the economy has continued to decelerate, that the job market continues to soften, that the situation had become dire enough that it forced the Fed to make the biggest single one day emergency cut in its history. Stein chose to ignore all of that -- and blames the sell off on traders.

Compare Stein's work with that of another NYT business columnist, Mark Hulbert: Its always data driven, thought provoking intelligent analysis. Hulbert seems to have no political agenda, no bull or bear bias -- he merely takes a run of interesting data, and reaches supportable conclusions. He is the Anti-Stein.

Other about the blogosphere have similarly identified  Stein's foibles:

• Dealbreaker called "bullshit on this uncheckable story Stein uses to illustrate an unsupportable theory."

• Doug Kass has repeatedly taken apart the dissemblings, poor reasoning, and unsubstantiated theories.

• Paul Kedrosky asks "Why does the NY Times continue to run this drivel?"

• Roger Ehrenberg says that Lying with Statistics" is Ben Stein's Modus Operandi   

• Henry Blodget says "Ben Stein Is An Idiot"

• Science Blogs agrees, noting: "Ben Stein must be on a campaign to make himself look stupid."

• Yves Smith: Ben Stein Tells Us It's All the Traders' Fault   

•  Marek Fuchs finally exclaims Ben Stein Must Be Stopped!

This is quite a waste of intellectual firepower.

I'm finished with his misleading political hackery, his absurd wingnuttery. To be blunt, its time for intelligent people to stop wasting time arguing with him, and apply their energies more productively than on his economic Tom Foolery.

There's an idea: I propose the phrase "Ben Steinery" be substituted where ever you would have used the phrase "Tom Foolery" in an economic context.

But read his absurdities, or respond to his inane commentary? I'm done.

Tuesday, January 29, 2008 | 11:00 AM | Permalink | Comments (121) | TrackBack (1)
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Comments

Since giving idiots their own tv shows seems to be the norm these days, I suppose we should expect to see him on CNBC soon. Perhaps right before or after Kudlow.

Posted by: Bob A | Jan 29, 2008 11:39:12 AM

Now I need to send a copy of this to the producers of CBS' otherwise-excellent show Sunday Morning, which periodically allows the twit out of the Loony Bin (Loony Ben?) to rant about whatever the tinfoil hat picks up and transmits to his brain. The faster CBS dumps him, the better. Barry, would you be interested in his position? Please? Pretty please?

Posted by: Uncle Jeffy | Jan 29, 2008 11:40:26 AM

BRAVO!

Posted by: Mike Nomad | Jan 29, 2008 11:42:10 AM

We need a new blog called "The Cucking Stool."

Ben could be the first Charter Member. But why stop with Ben?

I have never really minded a person talking his book as long as he opens his book. But Stein, Kneale, Kudlow, et al do the investing public a serious dis-service. Kudos my boy.

Posted by: Ross | Jan 29, 2008 11:51:19 AM

Ben's prose style is reminiscent of Alan Abelson. Similar pretensions as well.

Posted by: cathompson | Jan 29, 2008 11:52:23 AM

I wholeheartedly agree.

I've also stopped reading --

David Brooks
Maureen Dowd

and I never plan on reading Bill Kristol. I'm a liberal, but I rarely find anything of value in Frank Rich either.

Krugman is really the only op-ed columnist worth reading. He's great.

Posted by: Jmay | Jan 29, 2008 11:53:16 AM

there are far too many right-wing market flaks in operation today, across all media. they're going to get a lot of people hurt

Posted by: scorpio | Jan 29, 2008 11:59:39 AM

Let us not forget that Ben Stein thinks that Nixon could have won the Vietnam War, and defeated the Kamar Rouge, but not for the dastardly deeds of Woodward, Bernstein and Mark Felt aka "Deepthroat".

Posted by: Trainwreck | Jan 29, 2008 12:01:01 PM

Ben is entertaining but his integrity is a suspect.I was really upset when he brought up Ivy league shtick and law school credentials and basically - an entire war-chest of self-promotional tools.Now wait, we all know who the biggest self-promotors are in thie business: Me, Cramer, and the American Hedge Fund dude with ego bigger then Everest. Ben shows up and things he could join our league with Writing 101 attempt? However, excuse me but his last article must have been fabricated after consuming a large dose of Canadian grass. So far off. "He knew traders." O yes.
Rob,

Posted by: Rob | Jan 29, 2008 12:02:31 PM

I've never read Ben Stein but I must say that I am impressed, although not surprised, that you appear to be returning to a "philosophy before finance" position.

Barry, you are a philosopher. Logic and reason are unfortunately a rare quality in the financial world (or any other part of the world, for that matter).

Thanks for the post...

Posted by: The Financial Philosopher | Jan 29, 2008 12:09:03 PM

I know you are, but what am I?

Posted by: bstein | Jan 29, 2008 12:09:15 PM

I thought I'd share a funny anecdote about Ben Stein. Around 1990-1995, XXXXXXXX was a bartender at The Hard Rock Cafe in Los Angeles. This Hard Rock was just a step above TGI Friday's. It was NOT a celeb hangout-strictly touristas.

But Ben Stein used to come in all the time-a regular. He would sit with a friend at the bar (no alcohol though) and order lunch. Let me also say that the food was probably at the same level as Denny's or TGI Fridays. Funnily enough, I heard from some other waiter friends that he also used to hang out at the TGI Fridays in the Marina also.

XXXXXXXX moved to Barney Greengrass (yes there's one in Bev Hills also) and that was strictly A-Listers-Arnold, Bruce (big tipper) Sharon Stone etc...

Posted by: XXXXXXXX | Jan 29, 2008 12:10:15 PM

Awesome Barry, welcome to club!

Posted by: JM | Jan 29, 2008 12:11:22 PM

Mr. Stein is certainly a combination huckster, stern disciplinarian and faux intellectual. My first encounter with him was when he hosted that wacky quiz show on cable. The perfect progeny of a mass media celebrity culture, he attempted to substitute charm and wit for knowledge and facts. The true indicator of a fop. Just another facet of the charming velvet glove fascism that has insinuated itself into the heart of the culture through mass exploitation of the electronic and printed media. Talking heads spouting endless cliches in a dribble of mindless chatter.

Posted by: Ace Armstrong | Jan 29, 2008 12:13:06 PM

Nice post Barry. His connections to ID are new to me. What a tool.

An editing comment: the correct author for the "Science Blogs" article you link to is Pharyngula; scienceblogs.org is just a domain for a lot of science-related blogs.

Posted by: Frank Rizzo | Jan 29, 2008 12:14:20 PM

BUELLER...BUELLER...BUELLER...

Posted by: alex norman | Jan 29, 2008 12:15:53 PM

Best "Don't Feed The Troll" speech I've read in a long time. He is smart enough that he can't simply be missing these things.

Kudlow eats it up but I think he actually believes Stein's arguments. Stein doesn't even believe his own arguments. Bob Pisani was on the other day arguing that "Capitalism is a religion" that runs on hope and positive thinking. Sounds like he's not the only one. Stein is sort of like a priest giving false hope to the masses while asking for tithings ("invest in financials").

I'm not a religious guy but you probably pissed off a lot of your readers by stating that faith is detrimental to sound investing. Not saying you're wrong just don't run for office!

Posted by: KirkH | Jan 29, 2008 12:21:32 PM

I don't read the NYT and am not familar with Ben's written word. Ben is a regular on Cavuto's saturday morning business show. Here's my summary from watching: I believe he has insisted that higher taxes are needed. He was wrong about the housing bubble; he didn't see one coming. He's generally long-term bullish on the US economy and doesn't seem to worried about day-to-day fluctuations. For stock picks, he seems to recommend diversified funds and ETFs over individual stocks.

I still believe it's okay in this country to have religious beliefs. Evolution isn't quite the scientific slam dunk as many make it out to be; but it certainly represents the best guess of the scientific community at this point. We should never be against what science is telling us, but we should expect that science itself evolves over time as more information and research is available.

So if Ben is out there saying that we shouldn't teach evolution, then I think he's out of line. We should teach whatever we believe to be the correct science at the time. If it changes, the education curriculum will change.

Posted by: muckdog | Jan 29, 2008 12:21:44 PM

I'm trying to find his column from March, when we were seeing the first hints of these credit issues, where he first proposed that evil traders were trying to take Main Street's money.

His recommendation, as I recall, was to go long IYR into the downdraft.

Posted by: ZackAttack | Jan 29, 2008 12:22:59 PM

I completely agree. I've also stopped arguing with other traders whose arguments I believe to believe completely specious and unsupported by any evidence other than their own opinions.

What I find most frustrating about much of the current commentary about the market and the economy is that so many people assume that either the market is efficient or that there is some kind of objective fundamental reality that governs the market. What none of these people seem to realize is that the market is neither rational nor objective because the people who participate in it or both subjective and irrational. Chalk it up to the human condition.

I'm not a value guy, so I really can't comment on whether the markets, in the longer term, move based on some sort of statistical valuation or fundamental criteria. I'm a technician, which means that I believe that markets move on human emotion, on patterns which have repeated themselves for hundreds of years, and which will continue to repeat themselves long after I'm in the ground. As Richard Dennis once said: "Market change. People don't."

I've found that friends and colleagues who are fundamentalists, for the most part, don't seem to realize that markets routinely overshoot. Additionally, there seems to be a decisively bullish bias amongst this group. This is especially true in the media, although I wouldn't exactly label CNBC (ex-Santelli) as "credible".

Many of the value guys' arguments that we can't possibly be in a long-term bear market center around the idea that values would have to dip so low that such a fall would be inconceivable. Yet, during the bubbles, I've not heard many of these same people argue that values are, in any way, too high. The pendulum swings both ways.

This is not meant to be a criticism of fundamentalists; certainly, many have done extremely well. Nor is this meant to be an advocacy of technical analysis. Rather, I believe that anyone participating in the markets should understand that it is perception that moves markets and this perception is almost always over-stretched. Thus, we have both bubbles and busts.

If markets do, in fact, move in conjunction with some sort of statistical valuation over the longer term, I would posit that they do so because, over this longer period of time, the perception of the market aligns with this valuation. Yet, historically, this perception has also almost always overshot, at which point both bulls and bears come up with a myriad of reasons as to why the market will either never go down or crash and burn in hell.

It is at these turning points where I believe most market participants - both traders/investors and pundits - find new and wonderful ways to talk themselves into hardline positions. Whatever your methodology, it is important to recognize that history has shown again and again, that markets stretch themselves past what most would consider "reasonable". Yet because this is the very personification of the human condition, I would consider any such view to be, quite simply, unreasonable.

Posted by: Peter Davis | Jan 29, 2008 12:26:24 PM

Never read BS, but that he's a regular on Cavuto's show is not surprising. Cavuto is a complete boob.

And as previous posters have mentioned, Barry, your blog is much more interesting with lots of opinion--that's what makes it *your* blog. So this was a good post. Seeking Alpha can take care of the links.

Posted by: dukeb | Jan 29, 2008 12:27:33 PM

Stein 'jumped the shark' YEARS ago starting with his adamant support of this administration's failed, disastrous, tax cuts for the Rich & Corporate, and he's been jumping and jumping and jumping ever since.
.

Posted by: VJ | Jan 29, 2008 12:38:14 PM

Here in Chicago,I got the NYT (on Sundays only) for 20 years but stopped in 1994 when they couldn't admit the Republican landside. Yeah sure, their subscription base is dropping because of the internet. So I know Ben Stein from his old TV show, his Visine eye commercials, and his appearances on Kudlow. Of the three, I think his Visine commercials were viable, as they had some scienific basis.

Posted by: Street Creds | Jan 29, 2008 12:41:17 PM

Let's talk about commercial property loan defaults! Centro Properties defaulting on $1.1 billion, or the default to Deutsche Bank by the developers of Cosmopolitan Resort in Las Vegas. Oh, and the other big one I'm aware of, Macklowe in NYC. Is he selling the GM building?

Anyone know of a website keeping track of all this?

Posted by: Karen | Jan 29, 2008 12:46:05 PM

Nice, Barry. A good ole' fashion boycott.

Stein et al have become such a joke that a few weeks ago I had to expose the monster for what it is:

KugSiegStein: The Bagholder Bulls.

I think this crowd will enjoy one last laugh:

http://smartguystocks.com/?p=208

Posted by: D.H. | Jan 29, 2008 12:50:11 PM

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