Ben Stein: What, him worry?

Not about a recession anyway. But he is plenty concerned about the fallout from the impending retirement of his 'undisciplined' generation.

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Interview by Eric Schurenberg, Money Magazine managing editor

Does this guy look nervous to you?

(Money Magazine) -- It's safe to say, without even fact checking, that Ben Stein is the only New York Times weekly economics columnist who has won seven Emmys as the host of a TV game show ("Win Ben Stein's Money"). He's the only personal-finance author (latest book: "Yes, You Can Supercharge Your Portfolio!") who is stopped in public by ordinary people and praised for his movie acting (most memorably, as the comically boring teacher in "Ferris Bueller's Day Off").

Among the legions paid to opine on money, Stein's persona, not surprisingly, is unique - part pundit, part consumer crusader, part court jester. His take on financial matters is dependably unconventional (even when it's over the top, like his assertion that Wall Street traders engineered the downturn). When he sat down recently with managing editor Eric Schurenberg, he focused on two ideas: that you shouldn't worry about recession and that you should about retirement.

Question: Was there a moment when you realized one career wouldn't do?

Answer: I was living in Washington, writing speeches for Richard Nixon and teaching night classes at American University. My girlfriend talked me into buying a house I couldn't afford. I was in a state of constant fear about being able to pay for it. I had to keep thinking of new ways to earn a buck. And you know what? I found I liked being busy. And I found I'm a born ham and that I like being in the public eye.

Q. So your career was launched by a housing crisis. Just like this recession.

A. A recession implies at least two quarters of negative economic activity. So we can't know whether we're really in one until July at the earliest.

Q. Do you really think we'll escape one?

A. Maybe not. Lenders' losses have been worse than I expected. The Federal Reserve has been unbelievably incompetent at righting the financial ship. It needs to assure lenders it has their back and will not let them fail. Eventually, I think, the Fed will get off its ass. And if it does, whatever slowdown we have will be brief.

Q. That makes you an optimist.

A. Things aren't that bad. Short-sellers and the press are pumping fear into the national bloodstream. The unemployment rate is 5%. Only 3% of the labor force is unemployed for more than 5 weeks - 3%! Of all mortgages extant, more than 94% are current. The number of people in college is at a record. The number of millionaires is at a record. We're a long way from poverty row. Let me put it this way: Do you see Buffett selling?

Q. The worry isn't that the numbers are bad now. It's that they will be soon.

A. I'm worried that my wife smokes and that I eat too much. I'm worried about al Qaeda and unethical behavior on Wall Street but not about the economy. If there's a recession, I'd buy stocks. That's when you make money: when markets are spooked. In fact, I'm buying now.

Q. What are you buying?

A. Index funds. Exchange-traded funds, all based on broad domestic and foreign indexes. Trying to pick individual stocks is a trap. I can't do it. Warren Buffett can, but hardly anyone else can beat the indexes over a long period of time.

Q. If you really believe Wall Street manipulates the market, why invest?

A. Traders can cause short-term volatility. In the long run, the market must revert to a sensible price/earnings multiple.

Q. Are you totally sanguine about the outlook for the economy?

A. No. There's a real economic crisis highballing down the track. And that's the baby boom's retirement. There are going to be 20 million or 30 million people coming up quite short of the money they'll need to live on. I'm terribly worried about that.

Q. What's the problem with boomers?

A. A shortage of intelligent behavior. We're a lazy, undisciplined generation. I don't exempt myself: I spend way too much, even though I make a good income.

Q. What do you spend on?

A. As my wife says, if we didn't have eight houses, we'd be better off.

Q. You have eight houses?

A. Some are condos. Plus a buildable lot in Malibu. I'm a little obsessed. To top of page

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