By: Ronald D. Struck                                                               August 2001

O'REILLY ECONOMICS

I am a regular watcher of Bill O’Reilly’s commentary show on Fox News, but his "no spin" rule doesn't appear to apply to his own economic views.  He seems to think the economy can be “fixed” and if people loose money there has to be someone to hold responsible.  He needs to start telling people to assume the responsibility for their own decisions.

No one can jawbone or tinker with the market over the long haul, including Greenspan.  If there is a bubble, or something fundamentally amiss in the market, at best, Greenspan's impact would be on the margin and short term.  Japan is an example.  Their problems are fundamental and zero interest rates are not going to solve them.

History is replete with examples of investors getting greedy and jumping onto bubble bandwagons.  Then, when the market turns against them, like Mr. O’Reilly, they blame everyone except themselves - the Fed, the government, those corrupt money mongers on Wall Street, whoever.  The person whose money is being invested is responsible.

There are no rules saying when and in what to invest.  Markets go up and markets go down.  If returns on investments appear to good to be true, they probably are.  However, safer investments, like government bonds, are shunned because their returns are too low.  The bubble is generating great returns so why not jump onboard and take a ride, everyone else is.  

But, higher returns mean higher risks.  And, when the bubble busts and investors refuse to accept responsibility for their own decisions, they not only lose money but they also give the government ammunition to justify increasing its control over everyone's lives.  After all, the folks Bill is always looking out for are only supposed to make money on their investments.  When they do, they feel like they're gurus.  It's so easy they can't understand why everyone's not doing it.

When they don’t, it's someone else's fault.  After all, everyone knows that the market is too complicated for laymen to understand.  Therefore, everyone, including prudent investors, should be required to stay in really safe investments, say something like the social security fund.  The returns are lousy but investors don't have to worry about market downturns.  Forget the fact that there are very safe securities available, like U.S. government bonds, that beat the abysmal returns generated on deposits in the social security fund.

By the way, Mr. O’Reilly has said that his money is invested through mutual funds run by his company, and he took a beating in the downturn.  People have written to thank him because they listened to his market concerns and moved out of stocks at only 4% losses instead of 50%.  Why didn't he move his money out of harms- way too?  A big company like his doesn't give him options to participate in different types of risk-weighted funds, albeit at lower returns?

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