Outsourced to Felix Salmon:
Ben Stein Watch: March 2, 2008 - Finance Blog - Felix Salmon - Market Movers - Portfolio.com: I have to admit I harbored some hope that Ben Stein wouldn't have a column in the NYT this week. After all, he had three columns in December, two in January, and only one in February - simple extrapolation would have denied him any columns in March at all. But it was not to be, and today he has decided to defend Exxon Mobil, in classic Stein fashion:
When Mr. Obama or his Democratic rival, my fellow Yale Law School graduate Hillary Rodham Clinton, go after the oil companies and want to take away their profits, they are basically seeking to lower the income of the ordinary American.
The whole concept here is wrong: ordinary Americans do not get income from Exxon Mobil. They certainly don't get dividend income, and they probably don't even have exposure to Exxon's stock price, either. (See Yves Smith for much more detail.) But at least there's a glimmer of sense in the idea that Exxon Mobil stock is widely held. What makes this a uniquely Steinian sentence is the random detour to Yale Law School. I think Stein knows, in his heart of hearts, that he's mostly talking nonsense, and so he needs to impress upon us occasional biographical factoids in order to justify his status as a NYT pundit.
But back to the column. Stein continues by telling us that Exxon's "employees are overwhelmingly not millionaires" - this by way of defending the company against charges that it's making excess profits. Ben, profits are what is left over after you've paid your employees. When someone like Barack Obama complains that Exxon Mobil's profits are too high, that's clearly not the same thing as complaining that its employees are overpaid.
I shan't go into Stein's slightly peculiar idea that having Exxon Mobil working overseas oil fields somehow makes OPEC less effective. But I shall leave as an exercise for the reader the task of finding counterexamples which disprove this statement of his:
Envy is simply not good economics. It has never led anywhere except to trouble.
I'll start things off: How about the French Revolution?
Yes, Ben, you're quite right to say that "we need the oil companies" - although I don't think that's "a scary fact". What we don't need is for those oil companies to make more than $40 billion a year in profits - that's money left over not only after paying employees, but also after reinvestment in exploration and R&D. Those profits don't help Exxon, they help Exxon's shareholders. You're one of those shareholders, I'm sure. But while America might need Exxon Mobil, it surely doesn't need Ben Stein.