I had the opportunity to spend the last few days at another professional conference in California. You get to see some great speakers at these events including politicians like Jeb Bush and ex-athletes to help you get inspired to reach your dreams, and at this particular conference Mr. Ben Stein himself. I had always imagined Ben Stein to be this tall lanky guy with his thinly framed spectacles lodged on his most recognizable nose. It turns out he can’t be more than 5′ 4″, looks like he hasn’t missed a meal lately, and treks around in black vans like sneakers. As a respected author, comedian, and economist, I was excited to hear his perspective on today’s economy. Here are four things I learned from Ben Stein today.
1.) Without Two Moves We Would Have Hit The Great Depression Part Deux – According to Ben (or Benji as his family affectionately calls him), Bank Of America’s bailout of Merrill Lynch which was reported to be on the edge of bankruptcy was one of the two moves that helped stop another Great Depression. Mr. Paulson didn’t bail out Lehman Brothers, but places like Merrill and Bear Stearns got a stay of execution. Second, the massive TARP money pumped into the system by the Federal Government to bail out the big banks. This TARP money allowed several of these banks to stay afloat and continue to run their businesses through the traumatic times in 2008. I think it’s kind of ironic now four years later the US Government has decided Bank Of America is the bad guy and filing a civil lawsuit against them—seems backwards doesn’t it?
2.) When It Comes To Unemployment We Are Short In Both Supply And Demand – Most people who are looking at our economy today are concerned about the overall lack of job growth. Between the lack of large companies hiring and the shortage of capital going to small businesses to expand, unemployment continues to hover at much higher than normal rates. However, Mr. Stein argued that the other problem is about the supply of younger people who are willing to take ‘blue collar’ or jobs that wouldn’t seem to fit within getting a college education. In fact, in a prior session with Jeb Bush, he shared that you could make upwards of $70,000 to $80,000 a year being a truck driver in North Dakota. The big question is do we all want what we want? Or, should younger people (and older) go out and hustle and take the jobs where they are right now?
3.) We Need To Tell People It Is Time To Stop Grieving – Ben spent a bunch of time in the lecture talking about the fact that we are giving too much flexibility to younger people to complain and grieve on just about anything that they want to these days. They don’t like their teacher . . .just complain about it! They don’t like their boss . . . just whine about it! They think that people are being mean to them . . . just tell somebody that it isn’t fair! He shared that we need to give all people (including the next generation) less outs by complaining and arguing that things should be easier. The fact is that many people who came here in the early 1900’s and successful people today can do anything they want in the great country with enough hard work, fortitude, and determination. It just doesn’t all happen overnight.
4.) We Can’t Keep Printing Money – I guess this seems like an obvious one, but Mr. Stein shared that when all of the money was lent out to banks/financial institutions, most of the money was invested in Treasury Bonds by the big banks. What should have happened as money supply went right through the roof is a stream of loaning money to small and medium sized businesses to allow them to expand their operations and hire more people. This is the fundamental idea behind doing something like quantitative easing which we have done twice now. Will a third time crush our economy into a credit card type debt that we cannot recover from in the future?
I guess when Ben Stein played the famous teacher in Ferris Bueller’s day off, he coined one of the phrases we know today called Voodoo Economics. Who knew 25 years later that his prophecy might fulfill itself and put Ben Stein lecturing in front of thousands of people many years later? Guess I won’t be late for one of his classes anytime soon!
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Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
Co-CEO and Founder of oXYGen Financial, Inc – The Leaders in Gen X & Y Financial Advice and Services
Ted Jenkin is one of the foremost knowledgeable professionals in giving financial advice to the X and Y Generation.
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