Tuesday, January 29, 2008

Ben Stein's "trader realism"

In The New York Times this Sunday, Ben Stein has explained market volatility in a conspiracy-theorist spirit.

Stein isn't the type of guy who stocks up on canned food and worries about the black helicopters of the UN. He's perhaps best known as an actor (having played Ferris Bueller's teacher, having hosted game shows on television etc.) but he seems to think of himself more as an economist in the line of his father, Herb Stein, who chaired the council of economic advisors under Presidents Nixon and Ford.

At any rate, Stein seems to have carved out a niche for himself somewhere in between the worlds of financial punditry and entertainment. The actor who can discourse eruditely about economics, the finance pundit who can play a role.

His column Sunday begins with a personal note -- he reminds us that he is Herb Stein's kid, and tells us that when he was a child monetarism was a subject for dinner table discussion, over the meatloaf.

From this we seque to his law school education, to his absorption of the ideas known as "legal realism," and from there at last to the point. He has decided that what economics/finance needs is the sort of veil-piercing that the realist scholars brought to the world of law.

I once wrote a book which was largely devoted to the defense of formalism against realism within jurisprudence, so I guess I'n not the audience Stein had in mind when he introduced his conspiracy theory in this roundabout way.

If you'd like to read the column itself, please do sohere. I'll describe the theory to which his effort at veil-piercing has led him tomorrow.

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