Return to Transcripts main page

CNN Live Today

Interview With Ben Stein

Aired November 28, 2003 - 19:18   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


HEIDI COLLINS, CNN ANCHOR: So how much of an impact will your dollars and cents make this holiday season? A special guy joins me now. Actor and economist Ben Stein is with us from Los Angeles tonight.
Thanks so much for spending some of your Thanksgiving weekend with us, Ben. Glad you're here.

BEN STEIN, ACTOR AND ECONOMIST: It's better than being at home eating.

COLLINS: Better than that, huh? Let me ask you this, now holiday shopping, we've heard a little bit about the numbers. Is this really going to help the country spend its way into economic recovery?

STEIN: Well, the country is already in a very, very strong recovery. Astonishingly strong recovery. The GDP numbers are breathtakingly high, up over eight percent in the last quarter.

But retail spending is 70 percent -- consumer spending, rather, is 70 percent of the economy. Big numbers in the Christmas period which accounts for a very disproportionately large amount of all retail sales will be very, very helpful. And as your last commentator said, especially if they're not too heavily discounted, the profits will be great.

I spoke to some people at Wal-Mart. They're expecting a very big Christmas, and they ought to know. They're the most well run retail company in the world. I think we can expect a giant shot in the arm to an economy that's already reviving rapidly.

COLLINS: Well, let's talk about the consumer spending then for a minute. Every time we see consumer spending and consumer confidence and all of those numbers, is it always a good thing?

STEIN: It's a good thing. There is one caveat, though. People are not saving enough. We do need to have a lot of people spending, but we also need to have people saving.

We've got 77 million Americans in the baby boom generation racing towards retirement. They cannot spend their way into a secure retirement. They've got to be saving lots and lots of different and diversified financial assets.

So we need to have good spending, but we also need good saving. They have got to go hand in hand, especially for people my age. COLLINS: Your age. You're just a young pup.

STEIN: Yes. I'm 59. No, I'm 59. And there are lots and lots of people like me who need to prepare for retirement.

COLLINS: Absolutely.

STEIN: We've got to spend, but we've also got to save.

COLLINS: Well, let's talk about that then, saving. You know, a lot of people obviously putting their money in the stock market, or at least in the past. Now people little bit more afraid to do that. Where should they be putting their savings?

STEIN: Lots and lots of diversified things. Stocks, broadly diversified. I like index funds. Broadly diversified mutual funds are basically the same thing.

Medium to very short-term bonds. No long-term bonds. Real estate investment, trusts.

If they're smart and can be their own plumbers and roofers, their own little apartment houses. Some amount of cash, annuities, variable annuities. These are all very good things to have.

Diversification is the number one most blessed word in the investors' lexicon. That means dictionary.

COLLINS: Absolutely. You know, but these economic indicators are -- there are still a lot of people without jobs, even though they are sitting at home...

STEIN: Well, may I disagree with you for a minute? There are a lot of people without jobs. And any involuntary employment is too much.

But by standards of the whole post-war era, the amount of unemployment we have now is not very large. And considering how many of those people are the breadwinners and how many are unemployed for more than three months at a time, the number is not large at all. It's not going to have a big impact on retail sales. It really isn't.

An awful lot of people that are unemployed are teenagers or people between jobs who will very soon get jobs. The effect on families is not huge. Any is too much, but it's not huge by historical standards at all.

This is going to be a gangbusters holiday season. I think the real danger is the economy may be heating up too fast and we may be looking at some inflation.

One of your previous commentators said the price of luxury goods is going up. As a man whose wife wants him to get her a seven-carat diamond, I can vouch for the fact that that's true. And I can tell you that the cost of lots and lots of goods is going to go up. Anything not made in China I suspect is going to be going up. COLLINS: So you think pretty much anybody who wants to be working could be working right now? Is that what you're saying?

STEIN: No, not everywhere, and certainly not at the jobs that they want. But the amount of unemployment of breadwinners who are unemployed involuntarily for a prolonged period is quite small, and it's dropping rapidly. It's not going to have a big impact on the sales over this holiday season.

But I hasten to add that for anyone who is involuntarily unemployed, it's a horrifying experience, I've been there. It's a terrible, place to be, and I sympathize with them. But for the nation as a whole, it's not going to have a big impact.

COLLINS: All right. Ben Stein, thanks so much for being with us tonight. We sure do appreciate your time.

STEIN: Thank you. I'm honored.

COLLINS: And happy -- what are we calling it today -- turkey sandwich day, I guess, huh?

STEIN: All right. Turkey sandwich and left over stuffing.

COLLINS: Love it.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com







Aired November 28, 2003 - 19:18   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: So how much of an impact will your dollars and cents make this holiday season? A special guy joins me now. Actor and economist Ben Stein is with us from Los Angeles tonight.
Thanks so much for spending some of your Thanksgiving weekend with us, Ben. Glad you're here.

BEN STEIN, ACTOR AND ECONOMIST: It's better than being at home eating.

COLLINS: Better than that, huh? Let me ask you this, now holiday shopping, we've heard a little bit about the numbers. Is this really going to help the country spend its way into economic recovery?

STEIN: Well, the country is already in a very, very strong recovery. Astonishingly strong recovery. The GDP numbers are breathtakingly high, up over eight percent in the last quarter.

But retail spending is 70 percent -- consumer spending, rather, is 70 percent of the economy. Big numbers in the Christmas period which accounts for a very disproportionately large amount of all retail sales will be very, very helpful. And as your last commentator said, especially if they're not too heavily discounted, the profits will be great.

I spoke to some people at Wal-Mart. They're expecting a very big Christmas, and they ought to know. They're the most well run retail company in the world. I think we can expect a giant shot in the arm to an economy that's already reviving rapidly.

COLLINS: Well, let's talk about the consumer spending then for a minute. Every time we see consumer spending and consumer confidence and all of those numbers, is it always a good thing?

STEIN: It's a good thing. There is one caveat, though. People are not saving enough. We do need to have a lot of people spending, but we also need to have people saving.

We've got 77 million Americans in the baby boom generation racing towards retirement. They cannot spend their way into a secure retirement. They've got to be saving lots and lots of different and diversified financial assets.

So we need to have good spending, but we also need good saving. They have got to go hand in hand, especially for people my age. COLLINS: Your age. You're just a young pup.

STEIN: Yes. I'm 59. No, I'm 59. And there are lots and lots of people like me who need to prepare for retirement.

COLLINS: Absolutely.

STEIN: We've got to spend, but we've also got to save.

COLLINS: Well, let's talk about that then, saving. You know, a lot of people obviously putting their money in the stock market, or at least in the past. Now people little bit more afraid to do that. Where should they be putting their savings?

STEIN: Lots and lots of diversified things. Stocks, broadly diversified. I like index funds. Broadly diversified mutual funds are basically the same thing.

Medium to very short-term bonds. No long-term bonds. Real estate investment, trusts.

If they're smart and can be their own plumbers and roofers, their own little apartment houses. Some amount of cash, annuities, variable annuities. These are all very good things to have.

Diversification is the number one most blessed word in the investors' lexicon. That means dictionary.

COLLINS: Absolutely. You know, but these economic indicators are -- there are still a lot of people without jobs, even though they are sitting at home...

STEIN: Well, may I disagree with you for a minute? There are a lot of people without jobs. And any involuntary employment is too much.

But by standards of the whole post-war era, the amount of unemployment we have now is not very large. And considering how many of those people are the breadwinners and how many are unemployed for more than three months at a time, the number is not large at all. It's not going to have a big impact on retail sales. It really isn't.

An awful lot of people that are unemployed are teenagers or people between jobs who will very soon get jobs. The effect on families is not huge. Any is too much, but it's not huge by historical standards at all.

This is going to be a gangbusters holiday season. I think the real danger is the economy may be heating up too fast and we may be looking at some inflation.

One of your previous commentators said the price of luxury goods is going up. As a man whose wife wants him to get her a seven-carat diamond, I can vouch for the fact that that's true. And I can tell you that the cost of lots and lots of goods is going to go up. Anything not made in China I suspect is going to be going up. COLLINS: So you think pretty much anybody who wants to be working could be working right now? Is that what you're saying?

STEIN: No, not everywhere, and certainly not at the jobs that they want. But the amount of unemployment of breadwinners who are unemployed involuntarily for a prolonged period is quite small, and it's dropping rapidly. It's not going to have a big impact on the sales over this holiday season.

But I hasten to add that for anyone who is involuntarily unemployed, it's a horrifying experience, I've been there. It's a terrible, place to be, and I sympathize with them. But for the nation as a whole, it's not going to have a big impact.

COLLINS: All right. Ben Stein, thanks so much for being with us tonight. We sure do appreciate your time.

STEIN: Thank you. I'm honored.

COLLINS: And happy -- what are we calling it today -- turkey sandwich day, I guess, huh?

STEIN: All right. Turkey sandwich and left over stuffing.

COLLINS: Love it.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com