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Ben Stein's Diary

Searching for a Way Out

By from the December 2011 - January 2012 issue

Don’t miss Ben’s favorite poem “about working and love and Wagner and Cadillacs.”

Tuesday
It was a dreary, drizzly day in Los Angeles. My wife and I and all of our dogs decided to go down to Rancho Mirage. Before we left, I had a nice morning reading sad stories about the economy, especially one about how banks had so much cash, so much more cash than they had good uses for, that they were discouraging people from saving. Interest rates on deposits are trivial, as we all know. Now, the New York Times reports that some banks are actually charging customers to allow those people to deposit money with them.

That means interest rates are negative. As far as I am aware, the last time this happened was in the worst days of the Great Depression. We are in a classic Keynesian “liquidity trap.” That means when the Fed pumps more money into the system, it doesn’t get used for new plants or expansion, but just stays in the most liquid form, like the shortest term Treasury instruments.

Again, this is exactly what Keynes said would happen when an economy reached stasis at a level well below full employment.

Kids, I hate to break this to you, but it sure looks as if Keynes had this part of the present-day situation nailed down. The part about what you do about it—well, that part is still a bit of a sticky wicket.

I doubt if most Americans, even very learned Americans like Wlady, know that the Great Depression only ended with Pearl Harbor. Not until we got full national mobilization and unlimited war production did the Great Depression end. Unemployment was well into double digits as of late 1941. That was after every kind of New Deal program. Only stupendous national government spending got us going.

No chance of that now, right? No, wrong. It’s worse than that. We are already having massive deficit spending and it’s truly massive. We spend about $40 billion each day more than we take in at the federal level. We still have 9 percent unemployment and a prostrate housing sector.

Either Keynes was wrong about that deficit spending or we have to do it at a full mobilization level, where we quadruple federal spending deficits or something like that.

That’s not going to happen.

What do we do? Monetary policy just will not work when there is zero enthusiasm in the business world. Neither will deficit spending.

A friend suggested that we make it illegal to be unemployed. If you are still unemployed, while in good health, after six months, you will be assigned a job as sorter of books at a postal facility or a trash picker-upper at Zuma Beach or a schoolteacher in Brentwood Park. You won’t get any more unemployment comp. unless you take the job.

This sounds like a good idea to me, but probably most people would consider it too severe.

I go back to what I keep saying: for some of the unemployed, the fault genuinely is theirs. They are just not looking to work. For others, obviously not. They really are suffering. Their pain is in no way their own fault. But compulsory work? Is that a bad idea? I guess sometimes, yes, sometimes, no.

What about housing? Here, it’s just a catastrophe. What on earth will we do? Surely, the solution is not to take away the tax deduction for mortgage interest. That makes no sense at all.

Before my wife and I set out, Phil DeMuth and I had lunch at Nonna, a great Italian café. We had unbelievably good pizza. Most of the time we talked about my favorite novel, The Great Gatsby.

Topics: Was Gatsby Jewish? I think he must have originally been in Fitzgerald’s mind. “Gatsby” or “Catesby” is often a cover name for Katz. Gatsby had the very Jewish combination of superficial toughness and extreme sentimentality we Jews often have. Plus, he was great pals with the notorious fictitious mobster Meyer Wolfsheim, and I wonder if Wolfsheim would have trusted a Gentile with his highly secretive business.

Page: 1 2 3  

About the Author

Ben Stein is a writer, actor, economist, and lawyer living in Beverly Hills and Malibu. He writes “Ben Stein’s Diary” for every issue of The American Spectator.

Letter to the Editor View all comments (37) |

Appleby| 1.25.12 @ 7:11AM

I have been unemployed since November, and am working at a temporary job right now that is beyond my abilities. I am nearly 64 and ought to be retiring, but I don't have the resources, having lost them all in various stock market crashes along the way. I have no solution in view. I would gladly do any work of which I am capable, but I am afraid I am not capable of doing the work I have done all my life anymore.

You are a wealthy and fortunate man who can sit comfortably on your couch and lecture the millions like me who are living in quiet desperation with no solution in sight. I hope you never have to sit where I am and listen to people like you tell me what I already know: that I am part of the useless surplus population and people like you are disappointed in me.

In an hour I will be off to my temporary job which I will do to the best of my ability. Meanwhile I will pray that somehow a solution to my quiet, lonely desperation will emerge from the shadowy dark around me. And when you pray, be careful to remember the Pharisee and the Publican and don't stand there pointing out to God how much better you are than the rest of us.

Occam's Tool| 1.25.12 @ 11:54AM

Appleby: May G-d smile upon you soon, dear. You deserve it.

Ben: One solution: don't raise taxes on investors in the middle of a recession, and demonize them. You seem too stupid to realize that. However, raising taxes to 99% on actors and lawyers seems like a great answer to me. ;)

Jack in Wi.| 1.25.12 @ 7:03PM

I work in food pantries and soup kitchens a couple days a week. The the soup kitchen is full every night and the food flys off the shelves when they put on them. Newt Gingrich thinks there are too many people on food stamps. But dear Newt thinks we are supposed to carry Israel on our backs forever. The president has just dumped another 3 billion into Israeli loan guarentees. Newt should start calling for cuts in that program.Oh that's right those are the people shoveling millions into his bank account and campaign.

Dave Williams| 1.25.12 @ 11:01PM

Alvays dose ver-dammt Choos, eh, wacky-Jackie?
You are a pus-filled Nazi troglodyte (look it up)...oh, and your boy Paul has ZERO chance of winning ANYTHING.

Jack in Wi.| 1.25.12 @ 11:17PM

He has more chance of winning then Gingrich, especially if Nutt is the Republican nominee and he goes 3rd party. Nutt isn't even on the ballot in many states it is almost impossible for him to get enough delegates to win. Only Ron Paul and Willard Romney are on the ballot in all the states. After Florida 95% of the delegates still have to be picked.

janvones| 1.26.12 @ 12:39AM

Wow. We are being schooled on the horse race aspects of elections by outright antisemite cultists? Thanks, Dave, for pointing out that this guy is a Paulbot. To think I had ever thought I might reluctantly vote for that lunatic. It's like Weimar all over again.

Bob K.| 1.26.12 @ 2:36AM

When is the Beer Hall Putsch scheduled?

Occam's Tool| 1.30.12 @ 1:17PM

Here's an interesting thing: I have a subscription to the Print version---Feb 2012, Ben has just come out talking about our legal system's easy lawsuit ways because he might become a defendant.

Well, good luck making it "memorable," Ben. In fact, might I suggest you shut up about the case right now? You are the one who has supported this approach to easy lawsuits on TV frequently. I hope you win a 12 year, multi-million dollar in legal fees case, Ben. Your views on economics and the law are idotic as usual.

The solution, Ben, is not "caps" on injuries. It is simply "loser pays"---you sue and lose you pay the court costs for the defendant. As it is now, unless the case is unbelievably ridiculous, you will never see a dime back of your defense money. And Ben, it couldn't happen to a nicer guy.

But take my free advice, and talk with your lawyer before you say or write another word. That's personal, not professional, advice.

Occam's Tool| 1.30.12 @ 1:21PM

Sorry, Ben---mispelled" idiotic." Lawyers make me get on a roll, incidentally.

And, yes, it will be sunny again, Ben. But perhaps not for you. (I won a malpractice lawsuit---did not settle, did not lose, did not appear in court---dismissed with prejudice---on April 9, 1998, that started on June 29th, 1995. It gave me irritable bowel syndrome and hypertension. I have them both today. Pleasant dreams, Ben.)

Occam's Tool| 1.30.12 @ 1:24PM

Those would be loan guarantees, right? Has Israel defaulted on payments or something?

beebop2| 1.26.12 @ 5:54AM

The fact that people like you are attracted to the candidacy of Dr. Ron Paul is all I needed. Your diatribes are an onging reminder that I was correct in my initial assessment. While I don't need to be reminded on a daily basis .... there, nontheless, you are.

Vern Crisler| 1.25.12 @ 1:57PM

I've criticized Ben before on his denial of this Great Recession. It's not that most people aren't looking for work; it's that under this Obama economy the jobs just aren't in great supply, and there are too many people chasing after the few that come open.

I'm afraid if Obama is reelected, it's just going to be four more years not of quiet desperation, but of loud, angry desperation.

beebop2| 1.26.12 @ 5:51AM

When I closed my eyes last night, I could not shake off the impact your comment made. I am going to be 60 in the late spring. I too lost a substantial amount of paper gains in the housing bubble induced crash. My current job -- which I spent nearly 14 months searching for as I held down three part time jobs -- has always been a younger person's game. But more and more there are grey haired folks like me (and perhaps you?) competing with considerably younger people for the few positions available.

Among the worst consequences of the Toys R Us occupant in the white house (picture four year old insisting that denial of something is just not FAIR) is that he who ran on the platform of hope has dashed ours. His platitudes and politically motivated pablum makes the days of plenty recede further into the rear view mirror. But his followers are young, they believe the government will provide and they are too unfamiliar with the concept of "consequences."

Ben Stein is a tiresome fellow. He apparently thinks that peppering his point (when there is one) with anecdotes of his limited (albeit comfortable) life view somehow makes him more human (or something). We know there are always going to be folks with more than us and yet we come from an age that believes that after a certain point it is bragging and not in good taste. At least, that is how it usually appears to me.

The occupant of the people's house has figured that if he can make "rich people" obvious enough, divides us by the haves and used to haves/have nots, he can undo the wonderful possibilities of what it is to be America. Don't buy in.

I know that it is tremendously difficult to face an uncertain future with hope, but please don't torture yourself. I wish you nothing but the best.

Stammon| 1.25.12 @ 9:50AM

Wow, I didn't get that at all Appleby. Ben seems to be trying to relate to the rest of us, not hold it over our heads how lucky he has been. But then I am lucky too. I have 4 wonderful children who read Fitzgerald on their own, (and O'Brian, Asimov, Shakespeare, Le Quin, Hemingway, Proulx et all), a farm I was lucky enough to buy, a wife who puts up with me. There is a certain wistfulness to the Jewish male mind, my stepdad was Jewish and I feel in Ben what I felt in him. It does not exist in my blood family, we are Aryans, blue eyed ice people. Mechanically intelligent, but cold. Many times I have wished that I was my stepbrother.

Ta| 1.25.12 @ 10:07AM

"blue eyed ice people . . . mechanically intelligent, but cold . . ."

Mercy, how you do stereotype. Have you been reading too much Afrocentric "literature"? Sure sounds like it.

And about your children's taste in reading. Sounds a little fishy to moi. Oh well, back to my Proust . . .

Bill| 1.25.12 @ 11:58AM

They read Proulx? Yech! Well, their other choices are good, so I guess they can be forgiven one lapse.

Messenger| 1.25.12 @ 9:52AM

Have you considered writing for AmSpec? You're every bit as good as Ben.

Aquanomics| 1.25.12 @ 10:21AM

Mr. Stein,

There are many items you write about that I enjoy reading. Economics is not one of them. Please stop. You sound like an econ undergraduate (you are) that hasn't read a textbook or journal article since 1975. I am forced to say your economic comments are almost always idiotic.

Vern Crisler| 1.25.12 @ 2:01PM

He's basically a pre-Reagan Revolution Republican in his view of economics. They all wanted to raise taxes back then.

Anthony| 1.25.12 @ 10:24AM

After 8 years of the great FDR, the unemployment rate on 12/7/41 was 17.5%.
Don't tell me a president who would intern 150,000 America citizens in camps, wouldn't allow a Japanese attack on American soil to get America into the war.
And speaking of wars Ben, how goes things with Gloria Allred? Don't forget my previous advice. Also, wasn't Gatsby's real last name Gatz?

beebop2| 1.26.12 @ 5:57AM

I suggest there may have been a settlement ... but who knows?

Bill| 1.25.12 @ 11:56AM

I respectfully submit that the Great Depression continued through World War II and only ended with the post-war economic boom in housing as the veterans came home.

The reason why people think the Depression ended with Pearl Harbor is that they don't consider that the government took all the unemployed people, made them governmental employees, put them into the armed forces, built a huge war machine whose productions were destroyed or used up almost immediately, thus putting the remaining unemployed to work in subsidized war industries, and provided the free market with a huge customer, the United States government.

Vern Crisler| 1.25.12 @ 1:45PM

Right, about 15,000,000 Americans either joined or were drafted into the military services or into the war industry. That pretty much ended unemployment in America. None of FDR's economic programs had worked up to that point.

During the war, Americans suffered many economic hardships, though it wasn't as severe as in Europe.

The real boom didn't start until after the war. Our own modern troubles started with LBJ's Great Society programs, where he started the whole process of moving away from equality of opportunity to equality of results.

Bill| 1.25.12 @ 2:57PM

We know that the Great Depression continued into World War II because of the rationing that made it difficult for people to get certain grocery items, automobiles, and so on. There was still a supply-demand problem during the war.

Bob K.| 1.26.12 @ 2:38AM

You are right, Bill. Appalachia never got out of it.

Occam's Tool| 1.25.12 @ 11:59AM

As good as Fitzgerald? Hmm....Jane Austen. Best Novelist ever, according to Rex Stout.

Back to sleep. (Lawyer buttmunch.)

Bill| 1.25.12 @ 12:04PM

Making unemployment beyond a certain allowed period of time is a mistake; first, if the unemployed are required to pick up trash or landscape the public parks if they don't get a job, their jobs will be paid for by the taxpayers; second, more government jobs means greater dependence on government as a problem-solver of free-market problems, and greater government control over markets and employment.

Bill| 1.25.12 @ 12:05PM

Making unemployment beyond a certain allowed period of time ILLEGAL, that is...

beebop2| 1.26.12 @ 5:59AM

But at least if they are picking up trash, reading to kids in school, etc. they are contributing. And that is all we can reasonably expect.

Appleby| 1.26.12 @ 6:39AM

Many of us would be glad to "contribute" and in fact we do, when we can; I am going to get 39 weeks of unemployment and then I don't know what I'll do. I am not loafing about on the taxpayers' dime. I am desperately hanging on while trying to cover my obligations and praying constantly for a solution to my situation that will come soon. I am doing everything I can...and making unemployment illegal when I cannot find an alternative is as stupid as solving the health care crisis by making illness illegal.

beebop2| 1.26.12 @ 7:12AM

One of the statisics not captured at all is those of us who do not qualify for unemployment benefits at all. I moved back to Ohio from another state where I was gainfully employed for more than 25 years. I came here initially to provide the housing for and cover the day to day needs of my mother. Housing and other needs were LESS EXPENSIVE by housing mother with me than in an institution. When she passed away, I had no claim for unemployment benefits. Whether I qualified for other assistance, I do not know because I took up those three part time jobs (and a boarder) that I referred to in an earlier post.

I am not suggesting that classifying unemployment illegal is a good idea. But? At a certain point the states will be driven into insolvency between the needs of their public unions and other demands. Again, I (as a contemporary) wish you only the best. Losing your faith in yourself is a deep hole from which it is truly difficult to escape.

Bill| 1.26.12 @ 9:31AM

I'm willing to volunteer my talents to community projects. I volunteer; that means that I work for no compensation. I would probably accept compensation, but would probably regret it and quit prematurely out of shame. I also will not volunteer if it is mandated by the community or the state. That's not volunteering; that's a levy or a corvee.

Frank| 1.26.12 @ 6:15AM

Ben, thank you for your words. It's amazing and sad how mob mentality destroys lives (RN).

Your advice regarding paying down mortgage debt is solid. Usury remains the only way to consistently turn a profit, but the logical extension of unlimited usury is the concentration of wealth in a few hands. After the depression, it took a major social upheaval (be it Pearl Harbor, WWII, whenever) to kickstart the economy once more. I fear that once again, it will take a complete overhaul of the existing paradigms for growth to return. But maybe the process will be made less painful if we deleverage first.

GF Founder| 1.26.12 @ 5:35PM

Dear Ben, I truly get how there are no finite answers to our country's financial troubles even by the most accomplished Economists. You validated that fact for me through your teaching and editorializing quite some time ago (at no charge, thank you!) Here's a (my) case in point about our current financial CATCH 22 ..

I have a proven product, a certain market, I even have several customers (orders) in hand. However, I cannot find ONE bank to loan me enough money to hire, produce, and distribute the product.

... and they did not live happily ever after.

Tim Shevlin| 2.21.12 @ 6:42PM

Ben, this video was just sent to me and if you've never seen it (about Tibor Rubin, Korean War hero) take a few minutes and watch it. Kind of parallels a recurring theme in most of your Spectator articles.
www.greatamericans.com/video/P.....ibor-Rubin
Tim Shevlin, 20+ year Spectator reader
Anaheim, CA
p.s. we have something in common: I, too, have 8 cats... but no wifey. Am I crazy? Yeah, probably, but in the winter I usually share my twin size bed with 3 or more and yes, there is a sense of inner peace and serenity when your trusting pet is purring/snoring softly at your elbow.
Sure hope this idyllic state is not rudely interrupted by yet another shooting war. World situation not looking good.

Wendy| 2.23.12 @ 8:32PM

No offense, Ben, but you sound like you are on vacation. These column musings are not what I expect from your brightly lit brain. Thank you, though, for the tidbit on Keynes. Without any economic education, we need all the help we can get out here in flyover country, especially now that it seems to matter so much. I agree that the enthousiastic energy of even a portion of our population would do a lot to turn our doldrums around, but how do you get 100 million people off the couch, out of breadlines, away from their own problems, and focused on a bigger goal? We need Kennedy's charisma, Reagan's optimism and vision, and Eisenhower's leadership all at once to light the fire. See that anywhere?

colleen| 3.19.12 @ 9:49PM

I loved this column. I love Ben Stein. thank you for writing it Ben.

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http://spectator.org/archives/2012/01/25/searching-for-a-way-out

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