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Ben Steinís America
ANNOUNCER: Funding for THINK TANK is provided by the Bernard and Irene Schwartz Foundation; the Smith Richardson Foundation; the lynde and Harry Bradley Foundation; and, by Marilyn Ware.
BEN WATTENBERG: Hello, Iím Ben Wattenberg. Ben Stein is an author, actor, speech writer and columnist. He has unique views which we shall explore. The topic before the house: Ben Steinís America, this week on Think Tank.
Ben Stein, old friend, former guest on our various television enterprises, welcome to Think Tank.
BEN STEIN: My great pleasure, sir.
BEN WATTENBERG: Give us a little word about your background and then I want to -- I got -- I got something I want to talk to you about.
BEN STEIN: Iím from Washington. I was born in Washington in 1944, went to Montgomery Blair high school with Goldie Hawn, Connie Chung, Carl Bernstein and Sylvester Stallone. I went to Columbia, studied political science and many other things, but mostly economics. I was an economist briefly at the Commerce Department. I was -- I went to Yale law school and studied at the Yale Graduate School of Economics as well, graduated in 1970.
Was a trial lawyer, lawyer for poor people in the Office of Legal Services. I was a teacher at America U., teacher at USC/Santa Cruz, trial lawyer at the Federal Trade Commission, a speech writer for Mr. Nixon and Mr. Ford, a columnist for the Wall Street Journal for two years. Screen writer in Hollywood, novelist, actor, star of several TV shows. Iíve been in many many movies.
I now write a column for the New York Times and I write a column for Yahoo and I write for the America Spectator, my favorite. And I do commentary for CNN, Fox primarily. I used to do it for CNBC, but I was fired for being too much in favor of balancing the budget.
And letís see, what else do I do. Oh, I do a commentary on Sunday mornings for CBS and I travel around the country giving speeches all to pay for my mammoth extravagance.
BEN WATTENBERG: And you come from a very underprivileged, under cultured household. Your father was a saint.
BEN STEIN: My father was a saint.
BEN WATTENBERG: Herb Stein who was a chairman of the council of economic advisers and was one of the most decent people I have ever met in my life. He was a colleague of mine --
BEN STEIN: He loved you too, Ben.
BEN WATTENBERG: Yeah, he was -- and he once said -- we were told to share a secretary -- and he said sharing a secretary with Ben Wattenberg is like sharing a canoe with an elephant.
BEN WATTENBERG: Give me your short take --
BEN STEIN: That was awfully good.
BEN WATTENBERG: He had a great -- you know, there were only two economists who could write in America and one made sense, which was your father, and the other was Ken Galbraith, who was a very decent human being, but I donít quite agree with his --
BEN STEIN: Whacky.
BEN WATTENBERG: Well, your word --
BEN STEIN: Not totally wrong. Not totally wrong.
BEN WATTENBERG: You have written some very gloomy things about the America economy right now.
BEN STEIN: Actually Iím quite optimistic compared to the New York Times. They think weíre heading into a great depression. I donít think that at all.
BEN WATTENBERG: You think weíre heading into a recession, though.
BEN STEIN: We have not been in one yet, letís just say. A recession is by classical definition six months of negative economic activity. We havenít even had one month yet that we know of it may well be that February was the first one or maybe possibly January after revisions.
But it takes six months, so we canít possibly know until late in the summer.
BEN WATTENBERG: But you have written some stuff thatís fairly gloomy in the short term.
BEN STEIN: I think We have a very serious problem. One, the deficit should not be anywhere near as large as it is. We shouldnít have had those huge tax cuts --
BEN WATTENBERG: Excuse me, the deficit by historical standards is very low. You know that, right.
[speaking over each other]
BEN WATTENBERG: As a function of the gross domestic product.
BEN STEIN: No, I donít know that. It was for two years. We had two year of a low GDP. Now, itís bouncing back up very very fast.
BEN WATTENBERG: Itís about two and a half percent.
BEN STEIN: No, now itís more like three and a half to four percent. But look at it this way, Ben, if I may call you that, when Mr. Reagan took office -- Reagan, not Bush -- it was 900 hundred billion. It was the total national debt, federal debt.
It is now approaching rapidly ten trillion. Most of that was run up by Reagan and the two Bushes. Mr. Bush, our present President, whom I voted for twice and would probably vote for again if I had the chance, he inherited a budget deficit of something like roughly five -- four and a half to five trillion -- itís not as I say, close to ten trillion.
BEN WATTENBERG: Our gross domestic product now is about 12 and a half trillion dollars.
BEN STEIN: Well, we can look at it that way.
BEN WATTENBERG: Okay, just give me a chance, all right. By 2025 itís going to be about double, 25 trillion dollars.
BEN STEIN: Well, we donít know that, we hope it will be.
BEN WATTENBERG: Well, at a moderate rate of growth, which we have -- I mean less than weíve experienced thatís what weíre going to get.
BEN STEIN: Well, with all due respect, Ben, that is not quite true. Because if you assume GDP rises at three percent a year, it takes it 24 years to double. So, by 2025, we wouldnít quite get there.
BEN WATTENBERG: Well, thatís what my data -- I have economists who have said it would double. In any event, weíre in for a huge amount of additional monies, which can and will be taxed.
BEN STEIN: Right but itís not going to be enough, because the entitlements are rising much faster than the tax revenues.
BEN WATTENBERG: But look, in 1982, with Alan Greenspan and Pat Moynihan on the -- we adjusted Social Security. Everyone said itís the third rail of America politics. You canít do it, absolutely terrible. They did it, it was a fix that worked for about 15 or 20 years. Nobody even noticed it.
They took it down six months -- by six months over a long period of time. That can be done again.
BEN STEIN: It can be fixed. I donít question that it can be fixed, itís just that weíve got to fix it for it to be fixed.
BEN WATTENBERG: Why do you think we wonít.
BEN STEIN: I donít think we wonít. I think we will. We have to. If we donít, weíre heading for national insolvency. Theyíre going to have to raise the age for which you get Social Security.
Theyíre going to have to means test it so that very rich people donít get Social Security. Itís outrageous that people who have incomes of a million dollars a year from interest and dividends get Social Security.
BEN WATTENBERG: They put the money in. Itís capped.
BEN STEIN: Itís not an insurance plan, itís a tax plan and tax to redistribute such that the wealthy pay and the poor get the money. Thatís just the way it work in a society like ours.
BEN WATTENBERG: What weíre saying is people are living longer, healthier lives. Isnít that terrible.
BEN STEIN: I agree.
[speaking over each other]
BEN WATTENBERG: Itís not terrible, weíll figure out a way to pay for it. These people are not going to starve in the street. And we have -- look, Iím a -- I donít know -- seven - eight years after I can get Social Security. I keep working. I love my work.
BEN STEIN: Are you getting Social Security?
BEN WATTENBERG: Iím getting Social Security, but Iím paying more into the system by far than Iím getting and Iím paying -- Iím doing as you are better than I ever expected.
BEN STEIN: Well, youíre going to be paying a hell of a lot more if Mr. Obama wins, because what I heard is that he is going to abolish the cap on Social Security taxation so that it only goes up to a certain --
BEN WATTENBERG: As they did in Medicare.
BEN STEIN: That has been eliminated?
BEN WATTENBERG: Look somebody like Michael Jordan, who gets ten million dollars a year --
BEN STEIN: Way more.
BEN WATTENBERG: Whatever it is -- paying 100 thousand dollars or whatever it is in Medicare. I mean -- and --
BEN STEIN: Oh great.
BEN WATTENBERG: And eliminating the cap on Social Security would tend to do what you want to do, which is tax the rich.
BEN STEIN: I do want to tax the rich, but I --
BEN WATTENBERG: I have no problem with that.
BEN STEIN: But I just would like the rich part to start right after me.
BEN WATTENBERG: Thatís exactly -- [Laughs] Let me ask you something else. People, I think including yourself, have indicated that this housing situation, the sub prime situation is something terrible and the housing market is going to be catastrophic for a while.
BEN STEIN: Well, actually, you have got the wrong cowboy, Ben. Because I have been writing -- and being mocked and ridiculed -- for saying it isnít that bad. The -- if you have -- if weíre going to have losses of 250 billion in sub prime and roughly 50 percent of that will be recovered upon default, seizure and liquidation of a property, a 125 billion dollar loss is not even one day on the stock market..
So, Iím not that worried about that. What I am worried about is the endless selling and peddling and of fear into the economic system by the New York Times, my employer, and by the Wall Street Journal which has become just -- well, is the leading fear monger.
And the fear that has that has thrown Wall Street into a panic and tizzy has made the modeling of prices of debt insurance a joke and has led to extreme convulsions. This is a real situation where we have nothing to fear but fear itself.
BEN WATTENBERG: Can we stipulate that Wall Street ďam a fool.Ē
BEN STEIN: [Laughs] Well, Wall Street is a nervous maniac. Wall Street is a bunch of very very greedy people. They wouldnít go there if they werenít really greedy and theyíre very nervous people.
BEN WATTENBERG: Let me tell you something, you know I write about demographics.
BEN STEIN: Yes, I know youíre a great expert at demographics.
BEN WATTENBERG: Thank you very much. There were three hundred million Americans in the year two thousand. By the year 2050 there are going to be 400 million Americans.
BEN STEIN: Scary.
BEN WATTENBERG: Why?
BEN STEIN: I wonít be alive. Thatís why itís scary.
BEN WATTENBERG: Oh, well, you may be, you can never tell. Now, so there are two possibilities about the housing market. Either youíre going to have 100 million people out on the street or youíre going to have a housing boom.
BEN STEIN: I donít question the --
BEN WATTENBERG: Is that correct.
BEN STEIN: -- that the housing will recover. Ben, youíre talking to the wrong cowboy. I think itís a cyclical correction and it will recover.
BEN WATTENBERG: Weíre allowed to agree on this program.
BEN STEIN: I think it will recover.
BEN WATTENBERG: This is not CROSSFIRE.
BEN STEIN: Right. I think they will recover.
BEN WATTENBERG: Now, there are people saying that the malefactors who went into this sub prime are not being penalized. Yet, Bear Sterns, whose shares were selling at about 107 dollars a share --
BEN STEIN: 170 when I bought it.
BEN WATTENBERG: When you bought it and they have to liquidate at two dollars. Right.
BEN STEIN: Right.
BEN WATTENBERG: So that is not exactly -- so those guys who made the stupid loans havenít even been punished.
BEN STEIN: Well, Ben, Iím not quite -- the top brass of Bear Sterns last year, 2007, the top guy got about 40 million. The two under him each got about 30 million. Several under them got about 15 and 20 million.
And thatís for running the company into the ground, thatís where absolutely destroying the hopes and dreams of about ten thousand or fourteen thousand employees of the company in terms of their retirement and job security.
BEN WATTENBERG: But the shares they own have diminished from very high to almost nothing.
BEN STEIN: Thatís not enough punishment.
BEN WATTENBERG: Did they commit felonies, should they go to jail.
BEN STEIN: Oh theyíre clearly going to --
BEN WATTENBERG: Well, I assume theyíre going to be prosecuted.
BEN STEIN: I donít think so. I havenít seen one big player in the sub prime meltdown, as they call it in the media, whoís been prosecuted criminally. Are you going to tell me one.
BEN WATTENBERG: Of course not. Youíre the expert. Iím just a guy off the pumpkin truck. I just ask the questions.
BEN WATTENBERG: People are also saying -- the foreign minister of France mostly recently -- but the candidates right here in America in the primaries -- Americaís in for trouble, our power is gone, our influence is gone and, so on and so forth.
It seems to me as you look ahead -- first of all America is the only large stable free country that has a growing population. Weíre going to go from 300 million to 400 million to 500 million by the end of this century.
The world speaks English or America, our movies dominate the world. Our -- we borrow money, because weíre the so-called reserve currency -- we send them these pieces of green paper that arenít even backed by gold and they donít even call them. They horde them because weíre the only -- itís a pretty good scam, actually.
BEN STEIN: Itís an incredible scam. Well, the deal is --
BEN WATTENBERG: But itís a good deal for America.
BEN STEIN: Itís a great deal. The problem for the people -- the problem with the Japanese and the petro states and the Chinese and the Taiwanese, and so forth, is that we have borrowed so much from them.
That is we have -- our trade deficit with them is so enormous and weíre such a big country -- weíre the only place available for them to invest all that money. But at some point -- we donít have to repay. We donít ever have to repay it all, but we have to service it. And just getting to the point of servicing the debt we owe to foreigners is quite a chunk.
We pay a billionaire and a half a day to import oil, just for oil, import -- just -- the borrowing for oil imports is a billionaire and a half a day.
Our total debt to foreigners involves payments of several billion a day.
BEN WATTENBERG: Do the math for me quickly.
BEN STEIN: A billion and a half a day, so itís 365 times a billion and a half, which is say, roughly, 600 -- very roughly 630 -- very very roughly -- 630 billionaire, thatís not a trivial amount at all.
BEN WATTENBERG: Itís a couple of percent. And itís the basic fuel.
BEN STEIN: Itís the basic fuel, but we are accumulating an enormous debt to foreigners. I agree the debt is not enough to ruin us.
BEN WATTENBERG: But they donít cash it in.
BEN STEIN: But we have to service it. The problem isnít that we have to pay it off. For the ordinary America you just have to work more and more hours and more weeks each year to service the debt to foreigners and we are little by little becoming a colony once again, very little, I agree, but little by little.
BEN WATTENBERG: Now, wait a minute, Ben, please, youíre too smart to use words like colony, who are we a colony of?
BEN STEIN: Well, we have a huge amount of debt owned by the Chinese, Japanese, far eastern states --
BEN WATTENBERG: Why does that make us a colony?
BEN STEIN: Because I think --
BEN WATTENBERG: We have the army, right. But I think --
[speaking over each other]
BEN WATTENBERG: -- we have the economic strength, we have the principal markets in the world. They donít cash in the money and the last thing in the world they would do is pull the investments out of here because then they would collapse. Right.
BEN STEIN: No, if they had another place to put them they would put them --
[speaking over each other]
BEN STEIN: -- another place to put them.
BEN WATTENBERG: Thatís right. Try to name one large --
[speaking over each other]
BEN STEIN: Thereís no place else to put it. But do you -- let me ask the question of you who just fell off the pumpkin truck, do you think that our freedom of movement and the activity vis-ŗ-vis the Chinese is not circumscribed by the fact that they own something like 30 percent of our federal treasury debt.
BEN WATTENBERG: No, I do not. Why should it?
[speaking over each other]
BEN WATTENBERG: What can they do to us.
BEN STEIN: They can say weíre going to sell a lot of very fast. They donít -- they canít sell it all, because nobody will buy --
[speaking over each other]
BEN STEIN: No.
[speaking over each other]
BEN STEIN: No, they can convert it to euros, not all of it, but some of it.
BEN WATTENBERG: If you were running a pension plan in China or India or Russia or whatever and you had to try to secure something -- theyíve got that one child family -- has this terrible imbalance in China.
BEN STEIN: Terrible.
BEN WATTENBERG: And youíre looking for a place thatís big, free Democratic with open markets.
BEN STEIN: I agree. Weíre the best place to invest in terms of stability, but bear in mind that every day theyíre losing some of the money they invested in because of currency translation.
But also bear in mind China has political goals, China has ambitions in terms of reuniting Taiwan with the mainland. I think itís possible -- Iím not going to say itís a certainty -- that our freedom of action in terms of defending Taiwan would be circumscribed by their huge holdings of American debt.
If you donít think so, more power to you. Generally speaking, when a person owns a lot of debt of another person, eh has some control over the other person. If you donít agree with that, Iím hoping it never becomes --
[speaking over each other]
BEN WATTENBERG: If we owe them money and they donít spend it and they canít spend it, they canít pull it because it would harm them --
BEN STEIN: Well, they could pull some of it.
BEN WATTENBERG: So, why does that hurt us.
BEN STEIN: They can pull some of it. If they sold a lot --
BEN WATTENBERG: And invest it where?
BEN STEIN: Thereís not enough for them -- not enough liquidity in the world market for them to invest all of it in Germany and France and England and Brazil. But thereís enough to sell some bonds in the US and some of it overseas.
Well, it would cause a fall in the value of the bonds and that would be -- and that would raise interest rates. At present I think your points are very well taken. At present our interest rates are so low we would hardly notice it.
But it is a concern that at some point when the interest rate situation is not so favorable to borrowers, there might be an issue. But I think youíre making very good points. Iím impressed with your points.
BEN WATTENBERG: Thank you, youíre a very sensible man. I think I am also. The Bush tax cut is supposed to expire in 2010?
BEN STEIN: I think thatís right.
BEN WATTENBERG: Do you favor going back to the old rate or keeping the new rate?
BEN STEIN: I favor keeping the new rates for everyone but the very rich. And by very rich I mean people with incomes of five million a year or more.
And those people I would like to tax very heavily, because we need the money. Theyíve got the money and they should be paying it to solve some of our deficit problems.
BEN WATTENBERG: But one of your heroes, Ronald Reagan, used to tell a story. I heard him tell it when he was a movie actor, the marginal rate was 90 percent. And with all the taxes it was close to 100 percent, something like that.
And he said, so we stopped working. Whatís the sense of working for free?
BEN STEIN: I think thatís not quite true. I think he stopped work as an actor, because nobody wanted to hire him, but he was a very well-loved guy.
I agree itís great to cut taxes. Itís great. I hate paying high taxes, but we need the money. Where is it going to come from.
BEN WATTENBERG: Listen, I used to and I still do in many ways -- I mean if the tax plan were a little more rational, I would be happier. It is an honor to pay taxes to this country.
BEN STEIN: It is a great honor.
BEN WATTENBERG: And the libertarians who say taxation is theft are crazy.
BEN STEIN: I agree. This country is great and itís wonderful. The only thing --
BEN WATTENBERG: And because we pay taxes, weíre not speaking Russian.
BEN STEIN: Well, for you and me, weíre not ashes, I would say, is the answer. But we are -- we are so blessed to live in this country itís beyond all reason.
Itís just beyond reason. Thereís nothing in the whole history of mankind like this country. This country is the greatest thing thatís ever been.
And the men and women who go off from small towns in Kentucky and Idaho and put up their lives so that old geezers like you and me can sit around and jabber in comfort and peace, they are the real saints.
You know people say to me all the time --
BEN WATTENBERG: What do you think of the war in Iraq?
BEN STEIN: I think it was a mistake, but I think weíre making great progress resolving in favor of --
BEN WATTENBERG: And I like to point out that thereís something very different. People say itís just another Vietnam. Every military person, man or woman in Iraq is a volunteer.
BEN STEIN: Yes.
BEN WATTENBERG: Thereís no conscription.
BEN STEIN: Right.
BEN WATTENBERG: And many of them re-up time and again. I mean I served in the Air Force. I was supposed to be a pilot, bombardier, navigator, it turns out I edited sports for the base newspaper. We were going to throw our typewriters at the Russians when they came in through Mexico.
But these are all volunteers. It may or may not have been a mistake. There were many reasons for it. It wasnít just weapons of mass destruction. And this country has transformed -- I mean I think perhaps our greatest legacy is in the last 30 - 40 years -- the numbers of people governed under some form of Democratic rule has gone from ten percent to 60 percent. If the Chinese ever get sensible it will be 90 percent.
BEN STEIN: I agree. And this country is godís gift. Ben, nobody sitting in this chair is disagreeing with you. This country is godís gift.
BEN WATTENBERG: You are a many of many talents and facets --
BEN STEIN: Some
BEN WATTENBERG: You have become a cult figure in the comedy world.
BEN STEIN: No doubt about it.
BEN WATTENBERG: How do you like acting?
BEN STEIN: Iím never acting. I canít act one bit. I can only play myself. But my own self has many facets.
BEN WATTENBERG: Ferris Bueller, tell me about that.
BEN STEIN: Well, I was writing screenplays for many years in Hollywood and I became friends with a fellow who was the producer of Ferris Buellerís Day Off.
He asked me to do a part. I improvised. It was wildly successful, beyond belief successful. I got paid all of $384 for it. But it made me into a cult figure. And, so, I liked it.
Then I did many other things in Hollywood that helped keep me a cult figure. The main thing that seems to have made me a cult figure is that Iíve been doing commercials for an eye drop called Clear Eyes for about 15 years and everywhere I go, every person I see knows me for Clear Eyes.
BEN WATTENBERG: You played in Ferris Bueller, as I recall, the role of a nerd.
BEN STEIN: A boring economics teacher.
BEN WATTENBERG: A man with your background and what youíve done is a long way from a nerd. I hate to compliment people on this program.
BEN STEIN: Well, youíreí very kind.
[speaking over each other]
BEN STEIN: Iím not a nerd. I played -- I seem like a nerd. Inside Iím a rap star. To you I am an economist or whatever you think I am, but I am really representing for the gangsta all across the world, hitting corners and them loloís girl. Taking my time to perfect the beat. And I still got love for the street.
BEN WATTENBERG: How often do you travel?
BEN STEIN: Oh, three or four times a week.
BEN WATTENBERG: Iím allowed to ask you what do you get for a speech, roughly?
BEN STEIN: You canít ask, but itís --
BEN WATTENBERG: I can ask.
BEN STEIN: Compared --
BEN WATTENBERG: Compared to Bill Clinton.
BEN STEIN: Compared to Bill Clinton, itís very small.
BEN WATTENBERG: Thank you very much.
BEN STEIN: But itís a lot with what I ever thought I would get. I am very very blessed to get it and I especially blessed to get, because I love doing it. Just between us Iíd rather do it than do anything else in the world except lie in bed with my dogs.
Lying in bed with my dogs is my absolute number one wish. And actually the very best is to lie in bed with my wife and the dogs and listen to Mozart. That is the best thing in the whole world. As we get old, we appreciate things like music.
BEN WATTENBERG: How old are you now?
BEN STEIN: Sixty-three.
BEN WATTENBERG: Youíre ten years younger than I am.
BEN STEIN: Yes. I hope I am as smart as you when I am 73.
BEN WATTENBERG: Well, Ben, I would confess that in many areas, you are much smarter than I am.
BEN STEIN: Well, Iím not, but you are very kind to say so.
BEN WATTENBERG: Weíre running out of time, I know you have a plane to catch, to go make a million dollars in a speech.
BEN STEIN: I donít make even close to that, you have wildly exaggerated --
BEN WATTENBERG: Is there anything I should have asked you. Is there anything youíd like to say.
BEN STEIN: Iíd like to say god bless America. We are so lucky to wake up every morning in the United States of America. Everything that else that happens to us in the course of the day is trivial by comparison with waking up in the United States of America.
BEN WATTENBERG: Iíll buy that.
BEN STEIN: Good.
BEN WATTENBERG: Thank you so much for joining us.
BEN STEIN: Thank you.
BEN WATTENBERG: Youíre welcome back any time.
BEN STEIN: I am honored. Thank you
WATTENBERG: And thank you all. Please remember to send us your comments via email. We think it makes Think Tank a better program. For THINK TANK Iím Ben Wattenberg.
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