Why would you call him an economist?

Comedian/speech writer or comedian/law professor are both reasonable, but there's no basis to call him an economist. Comedian/shill is of course the most accurate.

Usually the reaction to a mistake is worst than the mistake. The essence of what Stein is saying and what Leonard is missing is - don't go overboard in accessing risk. The tendency is to take whatever is currently happening and extrapolate too far into the future. Subprimes are a problem but doesn't need to be huge problem for the world economy. But if people over react and overstate the risks, then that's when things go awry. The tendency is to over react and Stein is suggesting to guard against that tendancy.

To the poster(s) that are saying that we do need to be chicken little, I agree, mainly because there isn't much we can do. That doesn't mean that I think that it should be business as usual and I'm concerned.

Most people I know have been doing pretty good, but most have spent every penny of their equity. What they really have is debt. Large debt. Because their home values went up, they cashed out, bought larger homes, those values went up, they spent the equity on "improvements", large pools, $5000 bbq's, incredible kitchens and baths (improves the value of their home even more!!!), new cars, etc. I know tons of people that "feel" rich, feel like they are doing great, not seeming to notice that while they have a decent job, make around $150 grand a year, they now OWE close to a million on their refinanced home, whose value is now stagnant, if not dropping. How is this not a problem? How is that sustainable? Who gives a damn that they get a tax deduction on the interest paid?

That's not my situation, but it will effect me. Every foreclosure hurts the value of the homes around them. It hurts my city, it eventually hurts business.

Bush, the Dems, etc. wouldn't feel the need to pander to all these people about home loans and ARM's unless it was becoming a serious problem. Why do you think the market is so volatile now? Because SERIOUS investors are becoming frightened...not middle America who has been lulled into thinking the only "safe" investment is real estate and aren't the big money investors in the first place.

Why is there a "credit crunch" even with relatively low interest rates and liquidity dumps occuring? Because banks (not your Aunt Emily) are all of a sudden getting very cautious about lending money, even to each other in the commercial paper market, are keeping it themselves in case margins are called.

Talk about pronoun trouble!

Ben Stein is not one of us. This sounds just like more wisdom from someone who doesn't have to choose. He'll never be stuck being one of the crowd and trying to get out or in with a horde of people. His assets and income and what passes for income risk in his circle is unknown to us. He'll never be stuck in his career because of the bath that he'd take selling his house, his one house, at exactly the wrong time.

I'd like Ben Stein be more like us. Quit his job, lose his Rolodex, and try to be one of those noble working stiffs he and his kind exalt. If hippie Barbara Ehrenreich can do it, someone of Ben's intellect should be able to breeze right through.

Andrew Leonard is just another "The sky is falling"..wannabe. There are so many negative people these days that you just can't begin to look at the facts.

Get over it!

Ben Stein is right and you are totally wrong.

I guess I'm in the crowd that believes recession aren't always a such bad things as long the economy recuperates in time. As much as any of would like a smooth economic ride, the nature of the beast (and the beast is collective human nature) is that we are always going to have ups and downs. I don't think these are such bad things. Recessions give individuals and companies opportunties to reevaluate risk and reallaocte captial. A wise individuals stores away nuts during the boom, and deploys thems during the dip.

While he may be wrong in predicting what will happen in the macro economy, which will obviously affect all of us in ways that are difficult to predict, Stein's "stay the course" mantra is always excellent advice for individual investors saving for retirement, etc. The caveat is that this assumes people actually have a strategy for asset allocation and diversification, as opposed to simply investing in whatever Money magazine tells them to each month.

What are we all supposed to do in the face of troubling numbers, Mr. Leonard? What course would you advise? Should we all start running from the falling sky?

The ability to keep one's head in volatile markets is what separates investors who make money from those who lose it. If the U.S. economy melts down, we're all going to be hurting, whether or not we're invested. Unless a person is a genius, or has insider information (which would be illegal to act on anyway), the only sensible choice is to adhere to one's pre-existing strategy. If you're saving for the long term, just keep on keeping on. You definitely won't make any money if you become Chicken Little.

What Ben fails to recognize is that there are two more years of ARM resets. He's obviously looking out for his own investments.

a couple of years ago i was trying to force myself to watch the fox "financial" shows on saterday morning.it is a waste of time as they are not financial shows but political propaganda.gold was in the 470's,and someone said gold would soon go over $500.Stein had a meltdown,screamed "gold will NEVER go over $500!!!".....well,the next week it went over $500,and where is it now?over $700....smart man that Ben,he really knows reality of the markets.anyone who ever cracked a history book about the markets would know the set up for a higher gold price was here.he is a fool..