Ben Stein gets his clown suit back

Michael Kinsley had borrowed it to write about Blackstone. Poor Ben, who must have thought he owned that subject, then had to find something else to write about. Hey, how about backdating? Nobody's done that before.

Problem is, Ben needed a financial expert to explain it to him. So he went, where else?, to his friend Al Franken, the genius behind Air America (remember that?). Here's how Ben said Al explained it to him.

The insiders were supposed to be paying a random price, say $100 a share, for the stock. Instead, they cooked the books so they always got to buy the stock at less than a randomly selected price. The company and the ordinary stockholders were thus cheated, defrauded, “inside traded” out of the difference between the rigged price and what the nonrigged price would have been. This is the basic measure of damages, it seems to me, and it’s owed by the miscreants — and the directors and officers who let them get away with it — to the company and shareholders. The company is not the villain — it’s the victim. How this could be seen any other way is now simply a mystery to me. We don’t need any complex calculations about the stock price before and after a disclosure of backdating. Just take the difference between what the option price should have been if it had been awarded fairly and what it was, and have the insiders pay it back, as well as some fair exemplary amount, and you’re all set.

And to prove this is right (and hopefully to make people forget that he used to write speeches for Richard Nixon), Ben quotes Martin Luther King (who probably didn't know he was talking about backdating) and something about how our soldiers in Iraq are dying from Botox treatments (at least that what I think Ben was saying).

But listen Ben, if you can get it through those big floppy ears: the executives didn't pay a "random" price, they got a negotiated price, and at that they may have over-estimated their compensation, as I've explained. The problem if any, is that the backdating may have obscured the firms' accounting expenses. But it's not clear this was a material nondisclosure, since the option price was disclosed, and that was likely reflected in stock price.

But Ben don't need no stinkin facts. He dismisses all this as "clever 'law and economics' methods," blows his big horn takes a pratfall and exits stage left.

Is this some of the stunning journalism that the NYT needs to protect from short-term-minded shareholders?