The Republicans and Democrats both share the blame for the economic mess we find ourselves in. The truth is, everyone in D.C. knew that it was just a matter of time before the shit hit the fan, but no one wanted to stop the party boat from chugging down the Potomac. We should vote the lot of them out. And I don’t know where he’s from, but I’ve got a good candidate to fill at least one of their seats — former Ron Paul economic advisor Peter Schiff, the President of the brokerage firm Euro Pacific Capital. When others were gorging themselves at the all-you-can-eat buffet of reckless American consumption, Schiff cautioned that it was “phony wealth” that we were creating in this country, and that sooner or later we’d have to pay the price. Following is a video of Schiff, shot two years ago, in which he warns very presciently, “we have too much consumption and borrowing, and not enough manufacturing and saving.” A long recession, he said, was inevitable.
“Rather than the recession being resisted, it should be embraced. The disease is all this debt financed consumption.” -Peter Schiff
I wonder what Schiff thinks of the $700 billion bailout… Or, as politicians on both sides of the aisle have begun calling it – “rescue”.
update: We don’t have to wonder what Schiff thinks. Thanks to the magic of YouTube, we know… Here’s a hint, he doesn’t agree with either Obama or McCain.
19 Comments
And, yes, this post was for you Brackache. Consider it an offering.
I am propitiated by your offering, mark.
Oh, Mark, thank you, thank you, thank you. I have to admit that I’ve had a hard time reading some of your posts in the last year or so since I’ve gotten hardcore into economics, but I’m really proud of you for stepping outside of the politics to listen to Schiff. I hope you’ll also check out his books so that you and your family can hold onto the fruits of your labor.
There’s all kinds of stuff like this, whether it’s Art Laffey telling Peter Schiff he’s crazy for suggesting that we may not be in a new age of permanent prosperity, Ron Paul addressing Congress about the housing bubble as early as 2003(!), or countless articles on Mises.org predicting all of this going back many years. Check the link above for more info.
Sometimes it seems like nobody but us Austrian Economics whack-jobs has the balls to comment on the economic posts.
And I should have been more clear in the post… When I said this guy should hold elected office, I was just basing that on the fact that he seemed to know what the fuck was going on relative to the credit consumption orgy. I’m well aware that my fondness for him would evaporate the first time he came out against regulation that I favored. So, no, I haven’t converted to a total free market psychopath. (No offense, Brackache & company.)
You’re in the early stages… overpriced prints at the Shadow Art Fair, selling ad space on your blog, crippling brain-speckling migrains… gooble gobble.
The Austrians, along with the Russians, have completely shut down their trading markets. What do you make of that, Brackache?
I liken Libertarians to unwilling passengers in a commercial jet who know it’s unnatural for a bunch of people to be cruising thousands of feet up in the air at hundreds of miles per hour, and naturally want to get back on the ground, but don’t think it’s important to focus on ideas of how we might land this crazy fucking thing. They just want to talk about how much better it would be securely on the ground.
Why should I make anything of that, Robert? Are you implying that Austrian Economics has been adopted by Austria and Russia? I don’t understand what you’re supposed to be getting at.
I liken people who argue by analogy to the A-team stuck on a raft in the middle of the Indian Ocean for 3 weeks with no supplies: no matter how smart, capable, attractive, or unpredictable the other guys are, B.A. Barrackus will kill and eat them all because I pity the fool who gets stuck on a raft with B.A. Barrackus for three weeks in the middle of the Indian Ocean.
Seriously though, in your analogy, there would be one unwilling libertarian tied up and gagged on the plane with a hundred idiots who have blind faith in unlicensed pilots who don’t believe in the laws of physics.
And the libertarian guy is tied up and gagged because everyone was tired of hearing his pollyanna whining about how they shouldn’t fly the “gas is forever and landing strips are for pussies” airlines, but they needed him to come along to get the group discount.
While I think the analogy is a little bit off, I understand your criticism, Robert, and it’s a clear and common one. It’s often stated that we’re just contrarians bashing everyone else’s plans without giving any positive solutions of our own. But what I’ve learned of how markets work is that they work much like evolution, as examples of spontaneous order. So let us imagine a species that is not yet perfectly suited to it’s environment. We could point out ways in which it could be adapted to be better suited to it’s environment, and thus more able to live to reproduction. Maybe it freezes to death sometimes, so we say it should have more tolerance to cold. Maybe it dies of thirst sometimes, so we say it should conserve water more efficiently. But actually attempting positive solutions is both unnecessary and harmful. It is unnecessary because of evolution. An organism possessing genes that express themselves in a way that allow the organism to survive to reproduction will be more likely to reproduce, and those genes will be proliferated, and on and on and on. It is harmful because of unintended consequences. Yes, we could go in and just tweak the genes to cause increased water retention, but that might in turn cause organ failure due to over-hydration (my apologies to biologists if the specifics of that were nonsense). With evolution, we get the most effective balance, that is the balance that allows the organism to survive to reproduction, between over- and under-hydration.
So, in this situation, the genetic modifying scientist that wants to just go in and “fix” the organism is akin to the economic interventionist. I’m the “free evolution” biologist over here saying why that’s a bad idea, how it will just result in organ failure, and thus in an organism less likely to survive to reproduction. True, all I’m doing is bashing other ideas of positive action, and not proposing any of my own, but do I really need to?
What gives me some comfort, though, is that evolution and markets will always end up winning. Centrally planned genetic modification and evolution are not two systems that we can pick from, that we can argue about which one is better and then choose to go with that one. Even if the mad scientist does succeed in creating some monstrosity that never goes thirsty in it’s short life before it’s pancreas bursts, evolution will always be waiting in the wings to take over and return equilibrium. The only question is how many of those poor creatures will have to live a painful life before evolution does it’s work.
Schiff had this to say today:
I really didn’t mean much by my Austria/Russia comment. I was mostly just trying to get you talking about it, ’cause I have no idea what to make of it. I thought you just might have some insights I could benefit from.
I wasn’t actually trying to argue anything there using that goofy little analogy. I’m not the kind to use analogy in argument. I use analogies to rattle people’s cages and to mock people. With you, I was engaging purely in the former. I am not so stupid as to think analogies make good points in argument, but I don’t fault you for thinking I might be. I can see that most people don’t know the difference, so it should surprise anyone whenever they encounter anyone who does. I do appreciate your comments, and I think I share the perceptions suggested by the details you added to my goofy little analogy.
I also appreciate Mike’s excellent response and summary. I follow, and I’m pretty excited that my stupid little comment brought out such intelligent responses from you guys. It’s kinda cool.
You know how sometimes you’re on an airplane next to a huge dick, spouting nonsense, and he mocks you by using a bad analogy, and you respond with something so brilliant that it makes him respect you – so much so that he subdues a flight attendant and makes a PS announcement about how great you are? Well, this was kind of like that.
“The Republicans and Democrats both share the blame”
Republicans held majority control of both the Senate and House of Representatives from January 1995 through January 2007, and of course have had the executive branch since January 2001.
Robert,
FYI: When libertarians refer to Austrian economic theory, they’re not talking about the economic system of Austria. The economic theory developed by Austrians such as Ludwig von Mises has nothing to do with economic policy in Austria.
Austrian theory seems quite valuable to me, although I’m no self-styled Austrian proponent myself. My thinking is more along the lines of free market mutualism, i.e. freed market advocacy for non-psychopaths.
Freeman, yes I assumed the economic policies Libertarians talk about couldn’t possibly be actually in practice anywhere. I am sure they would all have moved to that place if it existed. I was just mentioning the closing of the markets in Austria and Russia because I feel I have very little idea as to what that would mean in terms of consequences. I figured Brackache would have a comment about it. The thought of it occurred to me just because of the mention of Austria. I’m sort of simple minded and I don’t hold any illusions about my depth of understanding of economic theories. I appreciate all the talk about it though. I don’t mind picking up a little knowledge on the subject.
Ooooooooooo, Robert’s Booji Boy! And he would have gotten away with it too if it weren’t for that meddling “remember me” box.
Of course I’m Booji Boy. I’m behind all the idiotic comments on this site, if you really must know. The really dumb ones I post under my neo-con screen names designated republican and ytown. I’ve also taken to posting favorite youtube music video clips (as you may have noticed above) out of a sense of guilt. I feel like I owe something to the poor fuckers who make the mistake of reading my comments.
It’s all part of my “fantasy” life, which involves all sorts of things ranging from sexually humiliating women who’s power I resent, to dreaming up new ways I might bring Mark’s blog crashing down in flames. My real life is boring and miserable.
My entire masturbatory life centers around this site. I have a bet with myself that, either in the posts themselves, or by following a link, I can find something to masturbate to every day for a year. I’m 45 days into it now. So far, so good.
That’s all I ask, Bob…that the level of sarcasm and mockery here meet a certain reasonable minimum standard, and you’ve clearly achieved that. Bless you.