A few weeks ago I said here I wasn’t going to read econo-talkshow host Ben Stein’s NY Times columns any more. They are anecdotal arguments from pseudo-authority rife with pandering and half-cooked conspiracy theories. In other words, they are just plain silly.
And then, much to my dismay, I stumbled into reading his weekend NY Times on how hedge fund traders run the world. Don’t even get me started on his nutty anecdote that Dealbreaker dissects here, or the unsupported claim that corporate earnings drive the market on a 1:1 basis. but the rest of the piece was no better.
Particularly egregious, at least to me, was the implicit claim that the capital markets are there in large part to help people save for old age. No they’re not, and if regulators or governments ever decided to enforce that particular view we would likely have a market crash. The market are there to provide liquidity. Period. And if by doing that people are able buy stock and bonds in companies whose value appreciate, that’s great. But markets whose core notion is wealth accumulation for individual savers, and markets whose main object is liquidity creation, are very, very different things, as even a lapsed economist Mr. Stein should know.
Why does the NY Times continue to run this drivel? Fine, people are talking about it, but it’s embarrassingly bad stuff. Couldn’t the Times run, you know, random stuff pecked out by cockatoos or something?