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Felix Salmon

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Ben Stein Takes On Goldman Sachs, Internet Goes for Stein's Sack

Ben Stein
Er, maybe Ben Stein should stick to giving models math quizzes? After his op-ed on Goldman Sachs appeared in Times yesterday, his colleagues in economics seem rather determined to push him off the playground. In the piece, which appeared on the front page of the business section, Stein dismissed a report from current Wall Street golden child Goldman Sachs, in which Goldman economist Jan Hatzius postulates the subprime mess will affect lending so much, home prices will drop by 15 percent, making way for the economy to stagnate, if not completely collapse. Stein's argument was that this is unlikely to happen, because the Fed would step in and give lenders liquidity. Then he took his skepticism one step further, alleging that Hatzius, guided by the "invisible government of Goldman," was "selling fear" in order to promote the bank's trading policies, which include collaterized mortgage obligations, and that they should probably be investigated for less-than-sterling conduct. In response, the Internet went bananas.

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