Economist Ben Stein

The author of the forthcoming text, How to Really Ruin Your Financial Life and Portfolio, weighs in on abortion, the defense budget, the economy, poverty and how voters choose their candidate.

Ben Stein's résumé includes economist, lawyer, professor, speech writer, screenwriter, actor, humorist, novelist and TV show host. He worked at the White House for both Presidents Nixon and Ford, as well as in personal and corporate finance. In entertainment, he's not only a film and TV actor, but also hosted the long-running comedy quiz show, Win Ben Stein's Money, which won seven Emmys. He writes regularly on topics ranging from his Hollywood experiences to complex economic issues and has won awards for his financial journalism. Stein's upcoming text is How to Really Ruin Your Financial Life and Portfolio.


Tavis: Always pleased to welcome Ben Stein to this program. The noted economist, actor and author out in October with his latest text. It’s called “How to Really Ruin Your Financial Life and Portfolio.” Ben, good to have you back on this program.

Ben Stein: Nice to be here, sir (unintelligible).

Tavis: How you been?

Stein: Very busy.

Tavis: Yeah? That’s a good thing. That’s a good thing.

Stein: Yeah, better to be overwhelmed than unemployed. (Laughter)

Tavis: Speaking of unemployed, how about that first segue? This economy seems to be front and center in the campaign and certainly front and center in Tampa this week. Every poll, study, survey I’ve seen suggests that while Mr. Romney has been hammering this issue of the economy, how much better on the economy he will be than Mr. Obama, it hasn’t pulled him close enough to President Obama in the battleground states.

Stein: No, he’s not close enough at all, no, and not even close.

Tavis: So how can he, if the economy is the most important issue, it seems counterintuitive to me ideologically and intellectually that he’d be hammering this issue if it’s the most important issue but it’s not drawing him any closer.

Stein: Well it’s not counterintuitive at all, because that’s what losing candidates do, and he has all around him the look of a losing candidate. He’s still got plenty of time to turn himself around and be a winning candidate, but at this point he is a losing candidate, and I think the reason for this is this.

One, as you say, the economy is a giant issue. There are still way too many unemployed, too many who fear being unemployed, too many have lost their houses, too many in fear of losing their houses, too many of terrified about retirement.

But Mr. Romney does not have a plan to turn things around. All he’s saying, and correctly so, is that Mr. Obama said he had a plan that would work, and it didn’t. Mr. Obama said he was going to get us out of this. He didn’t. That’s absolutely clear-cut. But does Mr. Romney have a better plan? If he does, we have not seen it.

Tavis: So when asked about the Ryan budget, when he chose Paul Ryan, the Romney campaign’s response was we’re delighted that we chose Mr. Ryan, we made the right choice, but Governor Romney will have his own economic plan. So I hear your point. When might they get around to putting that out?

Stein: Well, they’d better put it out fairly soon, but I’ll tell you what worries me. I think Mr. Ryan is a brilliant guy, a hard-working guy, a family man, a solid citizen, but he has bought into what I think is a bit of nonsense about supply-side economics. He has bought into the idea that by cutting taxes you automatically spur the economy.

That would be wonderful if true, and it may be true, but there’s no data that it’s true. It certainly isn’t true that by cutting taxes you spur the economy enough so you make up the lost tax revenue. Instead what seems to happen is you might have some spur to the economy, but the deficit just keeps getting bigger and bigger and bigger.

We have an economic plan for Mr. Romney and for Mr. Ryan, at least suggested by Romney, not yet put in concrete, that just is based on a premise that is unproven. It’s a delightful premise. Supply side is delightful. It basically says something for nothing.

It would be a wonderful, wonderful thing if it were true, but to me there’s just no data that it is true. It would be great if it were true. There’s no data that it’s true. So where’s the plan? Where is the plan?

Tavis: Didn’t we try supply-side during the Reagan years? That whole trickle-down notion?

Stein: Well, supply-side and trickle-down are not the same. Supply-side says if you cut tax on everyone, which Reagan did in 1981, dramatically, people will work much harder, there’ll be more creativity, more productivity, and the economy will grow.

Unfortunately, what happened was that revenues fell dramatically in that first year – not dramatically, but significantly – and so every year after that Reagan raised taxes. This is something that my wonderful party, the Republicans, and I – and I must say I’ve never voted for a Democrat and I don’t ever plan to – but they have forgotten that Reagan, who is the guiding light of the Republican Party even to this day, raised taxes, and sometimes very, very significantly raised taxes, for almost all the years of his presidency.

So I’m not sure whether this idea that Reagan is a great tax-cutter came in, but certainly supply-side as a way to spur the economy so much that revenue for the government increases has not worked. It just has not worked.

Will it spur the economy? I don’t know. We have very, very low income tax rates in this country already compared with most of the countries in the world, most of the developed countries in the world. We have very low income tax rates. It doesn’t seem to be working.

We had incredibly high income tax rates in the ’50s and ’60s, when we had really amazing prosperity. We had breathtakingly high tax rates in the war years, World War II years, and we had just unimaginable prosperity. So will we have high prosperity if we cut taxes? It would be nice to think so, but the data is lacking.

Tavis: So you said a moment ago in this conversation, a few minutes ago, that Mitt Romney is running a losing campaign.

Stein: Well, so far.

Tavis: So far. Then you said, though, that you would never vote for a Democrat. You haven’t heard what Mr. Obama’s going to say at his convention. Maybe you’ll change your mind, Ben.

Stein: Well, I tell you why I don’t think I will ever vote for a Democrat, if I may say so. Because for me, the number one issue is right to life, and I don’t think the Democrats are very good on the right-to-life issue.

If the Democrats would change even to a position like Mr. Clinton’s, which was abortions to be safe and rare, I would give them more of a thought. But people who think of abortion as a reasonable method of birth control just are never going to get my vote.

My other big issue is defense, and I think Mr. Romney has said he was for a much bigger defense budget than Mr. Obama is. I have to say – let me back up a little –

Tavis: Wait, hold it. You want to increase the defense budget?

Stein: Yeah, I think that –

Tavis: Oh, come on, Ben, you can’t be serious.

Stein: I do. I’m very serious.

Tavis: But it’s already outsized at the moment, and you want it even larger?

Stein: Well, it’s outsized compared with what other countries spend. But look, we were able to fight two very small wars in Iraq and Afghanistan simultaneously. What would we do if we had to fight a big war?

Iran has a big, big army. What if Iran invaded Saudi Arabia? I don’t know how they would do it, just because the geography would make it difficult, but what if they did? What would we do about that?

We seem to have a big army, but an amazing amount of our military expenditure goes for pensions and for civilian desk jobs. The actual cutting edge of our military, those who actually fight, is not that large at all. It’s very large compared with the armies of Western Europe or Japan – very, very large compared with those armies – but not compared with the army of China or the army of Iran or the army of North Korea.

If Iran and North Korea, by some horrible, devilish, nightmarish scenario, got together and went to war at the same time, one against Saudi Arabia and one against South Korea, I don’t know what we would do about that. I don’t know that we could stop them short of using nuclear weapons.

Tavis: But there’s one thing missing, one big hole in your theory here, and I’m not a militarist, by admission. But the one big hole is that one of those wars that you referenced a moment ago between Iraq and Afghanistan was unnecessary. One was fraudulent. We shouldn’t have been there in the first place.

So it’s not that our budget was too small, it’s that we lied to the – somebody lied to the American people in the very beginning, got us into a war where we spent a trillion dollars that should not have been spent in the first place.

Stein: The Iraq war was unequivocally a mistake.

Tavis: Right.

Stein: There’s no doubt about it. But that’s over with. That’s done with now. We’re out of there. Except for a very small number of troops, we’re out of there now. So the question is what would we do now if we had two wars break out at the same time?

The North Koreans are armed to the teeth and so are the Iranians. What if they both launched attacks on our allies at the same time? What would we do? We would have a very hard time stopping them without using nuclear weapons, and I don’t think we want to use nuclear weapons.

I don’t think there’s really such a thing as being too prepared to defend the interests of the United States. We got –

Tavis: Hold up, hold up. I think there is a point, there is a notion of being too prepared. How many nukes do you need? How many times over do you want to blow up the world, Ben? There is a line at which enough is enough, particularly when you’re talking about nukes.

Stein: Well, the nuclear part of the budget is a very, very small part of the budget. During the ’50s, we spent roughly 10 percent of GDP on defense. Now we spend roughly 3 percent. So we could easily afford to spend more. I just don’t think there’s any reason to take a chance on anything involving war, and the more we spend, the safer we are.

Also, I think people in the military should be paid more. I think it’s criminal how little people in the military are paid. These are people out risking their lives, taken away from their families for long periods of time. I think they should be paid dramatically more than they’re paid.

Tavis: But Ben, if the more we spent equated to the better off we would be, we wouldn’t have been hit the way we were hit in New York and in Pennsylvania in the first place. So clearly, it’s not just a matter of spending more money.

Stein: It’s not just a matter of that. I agree, it’s not just a matter of that. But it’s partly a matter of that. Partly, it’s a matter of incredibly shoddy and incompetent work at airport security checkpoints, but part of it is also a good, strong military defense.

But your point is extremely well taken. We should not have been in Iraq. It’s very questionable whether we should have been as much in Afghanistan as we were. But we do have several very dangerous adversaries out there, and we should be able to protect ourselves and our interests.

Tavis: The only point I would make about that is, again, that we have more nuclear weapons now than we need. We ought to be disarming the ones that we do have.

Stein: Well, why should we disarming the ones we do have?

Tavis: I believe that it is the height of hypocrisy for us to try to tell other nations whether they should or should not have nuclear weapons and we do, and we tell them that they cannot. So we’re smarter, we’re better, we’re more righteous than they are?

Stein: Well, we are telling countries – the only country I think that we’re telling not to have nuclear weapons is Iran, and we know that they’re a country that has said that if they have them they’ll have a holocaust in an afternoon and wipe Israel off the map.

So as a Jew, not to mention a person who reveres life, I don’t like the idea of them wiping Israel off the map, and I think it’s very, very right for us to tell Iran not to have weapons.

If Iran said look, we’re developing this nuclear power because we know we’re going to run out of gas and oil someday and we need power, that would make sense. But they’ve already had their mullahs and their ayatollahs saying we’re going to use these weapons against Israel. Absolutely we should stop them from having nuclear weapons.

Tavis: But here again – I’m switching gears, but it’s not that disconnected – here again, my issue with your notion of a stronger, more financially emboldened military – so you’re okay with us telling Iran what they should or should not do.

Stein: Absolutely.

Tavis: Okay, but –

Stein: Because they’re aggressive thugs and we’re not.

Tavis: We went into a country called Pakistan under the cover of darkness, unbeknownst to them, and took out Osama bin Laden. Now, the debate is not about whether you agree or disagree that we should have taken out bin Laden –

Stein: If you disagree –

Tavis: – but how do you – no, that’s not the point. That’s not the point. The point is what gives us the right to invade another – if another country came into here under the cover of darkness to do anything, we’d raise holy hell about that.

Stein: Well, I think it would be –

Tavis: But it’s okay for us to go into another country without their permission?

Stein: I think if we had a person that we were sheltering here next to West Point or the Naval Academy who had done a terrorist mission in Pakistan that killed 3,000 innocent civilians, I don’t think we’d be surprised or angry if the Pakistanis sent in someone to kill him.

Tavis: Ben, I disagree. I can’t imagine any condition or circumstance under which the United States would allow any foreign government under the cover of darkness to invade our country to do anything.

Stein: Well, we wouldn’t like it, but I think people would understand. And we presumably would not shelter such a horrible person. This guy is the worst person in the – was the worst person in the world, and they were sheltering him, and they’re our allies.

Tavis: But that’s my point, though. While they were allegedly sheltering him – they’ve denied that – but while they were sheltering him, to use your phrase, we had normalized relationships with that country.

Stein: Well –

Tavis: So again, it’s another level of hypocrisy. You’re sheltering this guy, we’ve got normalized relations, but we’re still going to come into your country under the cover of darkness without your knowledge and do what we need to do.

Stein: I think because we knew that they knew they were sheltering him, and if we warned them to say extradite him to the U.S., they would just warn him and he would go away, and then he would be hidden again.

Tavis: How has Obama done, to your mind, in the Middle East, namely Israel and Palestine?

Stein: Well, he has not brought about a solution, which he said he was going to do.

Tavis: Everybody says that.

Stein: I know. (Laughter) That’s right, everybody –

Tavis: If that’s your reason for not voting Democrat, you can’t vote for Democrat or Republican if that’s the issue.

Stein: No, he has not done that. Israel is our strongest, most reliable ally in the Middle East. Of course, we’re their most reliable ally too. But he humiliated Netanyahu at the White House, kept him cooling his heels as if he were a door-to-door salesman. That was outrageous, so I wasn’t happy about that. How is he doing in the rest of the world?

Tavis: Who got – let me just jump in – who feels sorry for Bibi? Bibi Netanyahu is the most aggressive, tenacious –

Stein: I feel sorry. He’s the head –

Tavis: Who feels sorry for Bibi? Israelis don’t feel sorry for Bibi?

Stein: Well, I think it’s humiliating for Mr. Obama to keep the head of one of our closest allies – maybe our closest ally – waiting, and then tell him he’s too busy to see him. That’s outrageous. That’s just outrageous. It’s inexcusable.

Tavis: The reason why I’m pushing back on this, and you and I are friends and I love doing this –

Stein: No, go ahead.

Tavis: The reason why I’m pushing back on you about this defense thing –

Stein: It’s your show.

Tavis: – is because (laughter) – but you’re the guest, though. That’s more important than it being my show.

Stein: No, no.

Tavis: But the reason why I’m pushing back on this is because the thing I’ve always respected about you is how your career got started, and the fact that I’ve seen you, more than most, more than most, talk about poverty and talk about poor people. I’m just trying to juxtapose your wanting to spend more money on defense while poverty is threatening our very democracy.

Stein: Well, we have plenty of money to spend on both. The government has – well first of all, let me back up several steps. One, we have more than enough money to spend on defense and also on programs to keep the poor from being hungry and in want. Plenty of money, if we would just have taxes at a proper level.

I hate to say this, I know I’m going to be waylaid on the way home by some of my Republican friends. We just spend way too little – sorry, we tax too little. The tax on middle class, upper middle class and wealthy people in this country are just too low.

So we do need to raise those taxes. I’d like to see that money go to military pay, first of all, but also to have really comprehensive training of poor people so they could get out of poverty. I don’t think we can just pay people to be out of poverty, but I think with enough education the poor people in this country can lift themselves out.

There’s a huge problem in this country – the problem in this country, the problems are all over the place, but the biggest single problem is we have an underclass of poor people, Black and white and Hispanic, who just are living on a different planet from people like you and me.

Tavis: True enough.

Stein: People like you and me go to the grocery store; we just throw whatever we want in the grocery cart and go to the checkout counter. For millions, tens of millions of Americans, they have to think very carefully about every item they buy. That’s really scary.

We have our children, we send them to private schools and they go out and we buy them cars when they’re 16. For many, many children in this country, they don’t even know who their parents are. This is children across all the ethnic spectrum. There’s a terrible problem of poverty and of the way poor people live in this country, and it seems to me that has to be addressed.

I don’t see either candidate talking about that. There is a moral issue here. The moral issue is are we as a country of many, many, many rich people going to allow our poor people to live in such terrible conditions as they live. As I say, I don’t think we can just write a check to all of them to go live in Beverly Hills, but I think we can make it possible for them to have an education so they can change their lives.

Tavis: Earlier this week on this program we had Newt Gingrich as a guest, and I got a chance to get his take on this. Let me get your take on it now. We’re just days away from the U.S. Census Bureau, as you know, releasing its official poverty numbers. We expect those numbers, I believe, in early September, after both conventions are done.

The numbers are really going to come out, and I suspect when the Census Bureau puts these numbers out, which the Associated Press has already given us some sense of what the numbers are going to be, the worst ever, Romney’s going to take those numbers, clobber Obama over the head with them.

The president’s going to argue that it could have been worse had I not been in office to do X, Y and Z. I don’t know what the moderators are going to do in terms of these debates. I’ve been upset and been saying for four years that four years ago when McCain and Obama were running, in three presidential debates the words “poor” or “poverty” didn’t come up one time. Obama didn’t raise it, McCain didn’t raise it.

Stein: That’s terrible.

Tavis: The moderators didn’t ask about it.

Stein: Yeah, terrible.

Tavis: Here’s the question. What’s going to happen in this campaign between Labor Day and Election Day to push poverty higher up on the agenda, since neither of them are really talking about it right now?

Stein: I don’t think there’s going to be anything that’s going to happen about it. The Republicans know they’re not going to get the votes of the non-white poor. The Republicans know they will get the votes of the white poor. So there’s no point in them bringing it up.

Same with the Democrats – they know they’ll get the votes of the non-white poor and they will not get the votes of the white poor. So what’s the point of them bringing it up? But again, it’s a moral issue.

Tavis: Sure.

Stein: It’s a moral issue –

Tavis: That’s the reason for bringing it up.

Stein: – that there are so many children in this country who don’t know their fathers, it’s a moral issue that there’s so many people in this country who are in prison. This country has more prisoners than the entire rest of the world. We have two million, roughly, prisoners.

That is more than all the prisoners in the entire rest of the world. Something’s wrong here that we have that many prisoners in the United States of America. By the way, another issue which is never, ever brought up is the way people are treated in prison. It’s a horrible thing to be in prison in the United States of America, and I would like to see some effort made to improve the lives of prisoners.

A civilized society is based on how it treats its prisoners – that’s my view, and I would like to see some issue made of that. I don’t think it’s going to happen. Everybody’s vying for the middle class, for their votes, and everyone’s vying for the upper middle class and upper class for their money. But it is a moral issue that there are children living in such desperate straits in the United States of America.

It’s a moral issue that we’re going to have a retirement crisis in which we’re going to have millions upon millions of Americans who are not going to be able to afford the basic decencies of life.

Tavis: Well, where the children are concerned, it’s more than just a moral issue, it’s a moral disgrace.

Stein: It is. It is.

Tavis: There are a lot of issues, that’s a disgrace.

Stein: It is a moral disgrace.

Tavis: This election is starting to turn on class and race. Does that trouble you?

Stein: I think all elections are about class and race, whether it’s admitted or not. America is a country that is divided very, very much along racial grounds. People will pretend that it isn’t, but it is. America’s a country that’s divided very, very much along class lines. We’ll pretend that it isn’t, but it is.

The Republican Party is the party of white, middle class, some working class, and upper class people. The Democrat Party is a party of African American people, largely, not entirely, Jewish people, some union people, but it’s a whole different America.

If you saw a convention, if you look at the Democratic convention and then look at the Republican convention, look at the people out in the audience, it’s a whole different America. It’s a completely different America.

Tavis: Since you raised the issue of your being Jewish, as we all know anyway, but since you raised it and we talked about Israel earlier, the Romney campaign, Romney-Ryan making a hard, hard push for the Jewish vote and very friendly with Mr. Edelson, Mr. Obama has not been universally embraced by the Jewish community, no matter what he said when he ran four years ago. So with regard to the Jewish folk, what’s going to happen this time around?

Stein: I don’t know. I’m only one vote. (Laughter)

Tavis: I know you all the Jews, though. You know all the Jews.

Stein: No, I don’t. (Laughter)

Tavis: I know all the Blacks, you know all the Jews. I’m just asking.

Stein: All gentiles think that every Jew knows every other Jew, but I don’t know.

Tavis: Is it going to be contested this time?

Stein: I think it’ll be contested more.

Tavis: That’s the question.

Stein: But I don’t think it’ll – I think the great majority of it will still go to Mr. Obama. I expect that unless something dramatic is done on the Republican side, unless they pull themselves together and show some charisma, pretty much everything’s going to go on the Democratic side.

Tavis: Hold it – did you just say Romney’s going to lose? Did I hear you say Romney’s going to lose?

Stein: Unless he changes in a dramatic way. He’s got to really pull himself together.

Tavis: Romney may lose in the short run, I hear your point, but in the long run, don’t you really feel like you’re part of a losing party? If your party doesn’t broaden its base and broaden its appeal – the stuff you said tonight makes so much sense.

Stein: I agree.

Tavis: If they don’t get that, they’re done. They’re toast.

Stein: I think they –

Tavis: So who’s going to be in your party with you? You and the teavangelicals?

Stein: I think we’re going to have to broaden our base, get more non-white and more charismatic candidates, and I think we are on the wrong side of history unless we can make some pretty big changes in the party.

Tavis: But it’s not just charismatic candidates. It ain’t just about charisma, it’s about principle and where you stand on the issues that matter to those voters.

Stein: It’s partly that, but it’s partly –

Tavis: No it’s not just partly, Ben. That’s the majority of it. It’s not about your freaking charisma. The reason why you don’t have a broader base is because the people that you’re talking about are not – your principles, your issues, are not in line with their interests. That’s not charisma.

Stein: I’m not sure that’s true.

Tavis: They certainly don’t view it that way.

Stein: I’m not sure that’s true.

Tavis: Is that fair?

Stein: I think there’s a lot of data from surveys that the likability of the candidate is the key issue. There are these issue polls where they’ll ask people about this issue or that issue, but then when they do the in-depth, one-on-one polls, people vote for the same reason they vote for the head of the student council in 12th grade – do they like him the most, is he the coolest guy.

I think in many ways this election comes down to who’s the cooler guy, Obama or Romney. Well, there’s no question about that; Obama is 10 times as cool.

Tavis: But part of what leads to that, leading to thinking the guy is cool, part of what leads to empathy is that you think he gets you, and you think he gets you based on where he stands on your issues.

Stein: Okay, okay, okay, well, let me ask you –

Tavis: So you’re making my point. (Laughter)

Stein: Well, maybe I am and maybe I’m not. Mr. Obama overwhelming majority of the African American vote in the last election, overwhelming, just incredible.

Tavis: Sure, yeah.

Stein: What has he done for the African Americans? Not the ones in the Cabinet –

Tavis: Not enough.

Stein: Not a damn thing.

Tavis: I wouldn’t say not a thing.

Stein: Not much.

Tavis: Ben, come on, you can’t say a thing. That’s absolutist.

Stein: He’s named a few Blacks to high positions and some of them have done very, very fine jobs. They’re the same as other appointments to high jobs – some will be good and some will be bad. But in terms of the African American mothers, teenage mother who doesn’t know what the heck to do and she’s overwhelmed, what has he done?

Tavis: Not enough.

Stein: In terms of the Black man in prison –

Tavis: Nothing.

Stein: There are so many Black men in prison it’s just a disgrace to humanity. What’s he done for them?

Tavis: I don’t disagree with that at all. But the ultimate question for those Black folk you’ve just referenced is how is Romney going to make my life any better?

Stein: I agree.

Tavis: So we’re done. Good night. (Laughter)

Stein: I agree. I don’t think Romney, I don’t think either of them cares about making their life any better. It reminds me of a long time ago when somebody asked what Margaret Thatcher was going to do about the poor in England, and he said, “Ignore them.” (Laughter)

Tavis: The book coming in October from our friend Ben Stein is called “How to Really Ruin Your Financial Life and Portfolio.” Maybe in October you’ll come back and see us, in November.

Stein: I would be honored, sir. Thank you.

Tavis: We’ll talk some real stuff.

Stein: Good.

Tavis: All right. That’s our show for tonight. Until next time, thanks for watching and keep the faith.

“Wade Hunt:” There’s a saying that Dr. King had, and he said, “There’s always a right time to do the right thing.” I just try to live my life every day by doing the right thing. We know that we’re only about halfway to completely eliminate hunger, and we have a lot of work to do. And Walmart committed $2 billion to fighting hunger in the U.S. As we work together, we can stamp hunger out.

“Announcer:” And by contributions to your PBS station from viewers like you. Thank you.

Last modified: August 31, 2012 at 3:56 pm