Peter Schiff for Senate?

[JustSomeDude]

Interesting indeed... http://www.schiffforsenate.com/

And for those of you unfamiliar with Mr. Schiff...

http://www.youtube.com/watch?v=2I0QN-FYkpw
http://www.youtube.com/watch?v=iax_BsNICes

[DFab]

It's funny how so many of the people who were so wrong in the run up to the recession are still brought on these shows as respected analysts and commentators.

So he knew things were going to get bad, but he attributes it to "government intervention?" As I see it, government pretty much let wall street do whatever it wanted, and wall street took the opportunity and ran our economy off a cliff in the pursuit of short term profits. But maybe that's just my fucked up liberal world view. I wonder what "government intervention" he's talking about?

[JustSomeDude]

But maybe that's just my fucked up liberal world view.... I wonder what "government intervention" he's talking about?

If you believe all of the current economic problems are due to some greedy Wall St. firms, I have a bridge in Brooklyn to sell you. As for "government intervention", here's just one example (note the date of the article): http://www.nytimes.com/1999/09/30/bu...prod=permalink

My favorite part: "But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's."

The insane amount of money being printed by the Fed is only worsening the problem, which will culminate in astronomical inflation. If you have a billion dollars in circulation, and suddenly add a trillion more, you just cut the value of each dollar a thousand-fold. The money printing problem isn't partisan politics... it is pie-in-the-sky economics started by the Bush administration, which is now being continued by the Obama administration.

FYI - Peter Schiff was an economic adviser on Ron Paul's campaign. He is on neither side of the aisle. However, if you had to put him in a category, I guess you could say he leans slightly right.

[DFab]

If you believe all of the current economic problems are due to some greedy Wall St. firms, I have a bridge in Brooklyn to sell you. As for "government intervention", here's just one example (note the date of the article): http://www.nytimes.com/1999/09/30/bu...prod=permalink

Fannie and freddie's problem was that they bought the same garbage a lot of other people did: subprime backed mortgage securities. The loans they gave to minorities was not the problem.

http://www.businessweek.com/investin...e_mae_and.html

The insane amount of money being printed by the Fed is only worsening the problem, which will culminate in astronomical inflation. If you have a billion dollars in circulation, and suddenly add a trillion more, you just cut the value of each dollar a thousand-fold. The money printing problem isn't partisan politics... it is pie-in-the-sky economics started by the Bush administration, which is now being continued by the Obama administration.

http://www.nytimes.com/2009/05/29/op...gman.html?_r=2

Where are the majority of bailout dollars going?

And as far as stimulus spending goes, how else are we supposed to stay out of a depression? Or would you prefer a depression to the extra debt we're taking on?

btw, getting rid of Dodd would definitely be a good thing. I'd take Schiff over him anyday.

[THE3BS]

Fannie and freddie's problem was that they bought the same garbage a lot of other people did: subprime backed mortgage securities. The loans they gave to minorities was not the problem.

http://www.businessweek.com/investin...e_mae_and.html

http://www.nytimes.com/2009/05/29/op...gman.html?_r=2

Where are the majority of bailout dollars going?

And as far as stimulus spending goes, how else are we supposed to stay out of a depression? Or would you prefer a depression to the extra debt we're taking on?

btw, getting rid of Dodd would definitely be a good thing. I'd take Schiff over him anyday.

When is the last time a government taking control of private business and printing its own money worked?

Nationalization HAS happened in the past and has ALWAYS had the same results.

Why is America going to produce any different results? The fundamentals of this country have been based on Free Enterprise and capitalism. Our system has show to work historically so why are we implemeting systems that have historically failed?

As far as a depression goes.. We are in one. We've been through one in the past and its a natural cycle that happens in a free market society that will ultimately correct itself. Depression is a part of life. Its a cycle. Let it happen and let it correct itself.

If you make a bad investment choice do you keep throwing money at it or do you cut your losses and walk away? I've done both in my life and I'm doing better then ever because I walked away from the bad investments took what was left and put it into different investments that have turned out well. We might as well put the trillions of stimuluis money into a furnace, at least then it would provide the heat we will soon no longer be able to afford to our homes.

[THE3BS]

Sorry for the spelling in the above post. I did it on the Blackberry and those posts don't always turn out well.

[DFab]

When is the last time a government taking control of private business and printing its own money worked?

Nationalization HAS happened in the past and has ALWAYS had the same results.

The government takes over small insolvent banks all the time. They get cut up, and the pieces get sold off. The bank is closed for a day or two, it reopens, all the customers have access to their money. And it works just fine. Nationalization can work, if it's done correctly.

As far as a depression goes.. We are in one. We've been through one in the past and its a natural cycle that happens in a free market society that will ultimately correct itself.

What are you basing this on? How many economists are saying we're currently in a depression? We almost certainly would be in a depression, if it were not for the bailouts and stimulus.

So you prefer depression, and the 25% or so unemployment, and the mass loss of savings, and all the other associated misery that goes with it. That's your choice. I would argue that most people would rather have the government step in to prevent a depression.

Depressions are not natural. The economy, our business practices, and the laws that govern them are all made by us. The market is not magic, there is no invisible hand.

"There can be no worthwhile praise of our economic system without detailed awareness of its pitfalls."

[Shea]

The government takes over small insolvent banks all the time. They get cut up, and the pieces get sold off. The bank is closed for a day or two, it reopens, all the customers have access to their money. And it works just fine. Nationalization can work, if it's done correctly.

What you are referring to is not nationalization. The FDIC does not own a bank, it oversees the selling of assets and ensures that consumers have access to their deposits during the transition. Nationalization never works as well as private enterprise. However I am open if you can give me an example of where it has.

What are you basing this on? How many economists are saying we're currently in a depression? We almost certainly would be in a depression, if it were not for the bailouts and stimulus.

I would ask you the same question, what are you basing your conclusions on? From what reputable source do you get that we would be in a depression if the government didn't spend $787 billion in money we do not have?

Corporate welfare (aka, promoting bad business practices) is an abhorrent waste of our money. Selling ourselves and our children into economic slavery to prop up businesses that have friends in government is not something that should be ever considered good government. It's not too long ago that corporate welfare was much maligned by the left in this country. My how times have changed.

So you prefer depression, and the 25% or so unemployment, and the mass loss of savings, and all the other associated misery that goes with it. That's your choice. I would argue that most people would rather have the government step in to prevent a depression.

Once again I think the premise of your argument is flawed.

Depressions are not natural. The economy, our business practices, and the laws that govern them are all made by us. The market is not magic, there is no invisible hand.

"There can be no worthwhile praise of our economic system without detailed awareness of its pitfalls."

Business cycles are very natural and cannot be controlled, eliminated or ignored. No the market is not magical but it is a far better way to run the economy then by a central planner. Further, there is very much an invisible hand, just because you fail to (or most likely given your political views, don't want to) see it doesn't make it nonexistent. Enlightened self-interest has done more good in this world then all the socialist regimes put together.

Is market capitalism perfect in every way? Of course not, no system is. But the underlying belief that each individual is the most capable, knowledgeable and efficient economic actor is a far more inspiring and optimistic view then one where people are stupid and only through government control can we have any sort of comfortable existence.

The government, that you place so much hope in, does not, nor has it ever nor will it ever, create wealth. It must destroy something in order to make something. Massive government spending (in order to do it in the first place) must take that money OUT of the market first. So essentially you are advocating taking a bucket of water out of a river, walking upstream 10 feet and pouring it back in the river and calling it "growth". Add to that the inherent inefficiencies of government spending and you have an actual net loss of "effective" spending.

So what would be better? What would stave off this 25% unemployment that you pulled out of your ass? Cutting the business tax rates in half. The more money a business has (despite the class warfare crap spewed by the left) the more money they put into their business. What that means is more people working, more equipment being purchased (which means more people working at those businesses) and more economic activity in general. Further a government that doesn't spend more then it takes in would CREATE capital in the economy, meaning more businesses being started, expanding and growing.

You see government essentially competes with the private sector for money. When the government operates under a deficit (which is practically all the time, regardless of who is in power) it has to borrow money. A company needing capital has to go to the market to borrow. Given the choice, an institutional investor will nearly ALWAYS go for a government backed security over a (far more risky) private one. Therefore, the company loses and people are not put to work, equipment is not purchased, etc. But instead we get turtle tunnels, or medicare part D, or paying for some Argentine mistress/New York prostitute.

Government isn't the panacea that you think it is GGRR. It does more harm then good. It is a necessary evil that must be held in check lest it become the all consuming, all important beast it is today.

/verbose

[DFab]

What you are referring to is not nationalization. The FDIC does not own a bank, it oversees the selling of assets and ensures that consumers have access to their deposits during the transition. Nationalization never works as well as private enterprise. However I am open if you can give me an example of where it has.

Krugman calls this nationalization, and that's good enough for me. Maybe we have different definitions of nationalization. I don't think nationalization has to mean longterm ownership and control.

I would ask you the same question, what are you basing your conclusions on? From what reputable source do you get that we would be in a depression if the government didn't spend $787 billion in money we do not have?

For me, Krugman is quite reputable, and so is Simon Johnson. There is no universal definition of a depression, but these two and many others were saying earlier this year that we were well on our way if significant action was not taken.

http://www.nytimes.com/2009/02/23/op...gman.html?_r=1

The easiest example of working nationalized systems are Public power companies.

Business cycles are very natural and cannot be controlled, eliminated or ignored. No the market is not magical but it is a far better way to run the economy then by a central planner. Further, there is very much an invisible hand, just because you fail to (or most likely given your political views, don't want to) see it doesn't make it nonexistent. Enlightened self-interest has done more good in this world then all the socialist regimes put together.

Business cycles ARE normal, depressions are not. I would not use the word "natural".

Smart Ass
Wouldn't an "invisiable hand", by definition, be impossible to see.
/Smart Ass

I am not, and nor will I ever advocate socialism. It doesn't work.

The government, that you place so much hope in, does not, nor has it ever nor will it ever, create wealth. It must destroy something in order to make something. Massive government spending (in order to do it in the first place) must take that money OUT of the market first. So essentially you are advocating taking a bucket of water out of a river, walking upstream 10 feet and pouring it back in the river and calling it "growth". Add to that the inherent inefficiencies of government spending and you have an actual net loss of "effective" spending.

I have very little hope in our government as it is currently run. The system is captured, and it stopped working for our benifit a long time ago. I'm advocating for government intervention to prevent depression.

So what would be better? What would stave off this 25% unemployment that you pulled out of your ass? Cutting the business tax rates in half. The more money a business has (despite the class warfare crap spewed by the left) the more money they put into their business. What that means is more people working, more equipment being purchased (which means more people working at those businesses) and more economic activity in general. Further a government that doesn't spend more then it takes in would CREATE capital in the economy, meaning more businesses being started, expanding and growing.

25% unemployment is what happened during the great depression, it didn't come out of my ass. I'm not one to make up numbers.

Cutting business tax, or any other tax for that matter does not guaranty spending. When the economy is in the toilet, people (and businesses) have a tendancy to save money, not spend it. The only way to guaranty spending at a high level is for government to do it directly.

Jobs, equipment purchases, etc. also result from direct government spending. One of the most economically stimulative things we know of are food stamps.

http://money.cnn.com/2008/01/29/news...ysis/index.htm

I would prefer that the government not operate under a deficit, we would be much better off. We should cut spending and restructure the tax code to acheive a surplus and pay off the national debt. I don't believe letting the economy bottom out "naturally" would have helped.

[Shea]

Krugman calls this nationalization, and that's good enough for me. Maybe we have different definitions of nationalization. I don't think nationalization has to mean longterm ownership and control.

For me, Krugman is quite reputable, and so is Simon Johnson. There is no universal definition of a depression, but these two and many others were saying earlier this year that we were well on our way if significant action was not taken.

Krugman is a self-described and very proud liberal (otherwise known as a statist) who firmly believes in government intervention whenever and wherever possible.

I would stand with these guys (http://www.cato.org/special/stimulus...o_stimulus.pdf).

The easiest example of working nationalized systems are Public power companies.

A public power company is a public owned entity (owned by it's customers) and not run by the government. Therefore I would disagree that that is nationalism at work.

Smart Ass
Wouldn't an "invisiable hand", by definition, be impossible to see.
/Smart Ass

Way to dodge the point

I am not, and nor will I ever advocate socialism. It doesn't work.

Actually you do advocate it. Nationalization and socialism are essentially the same thing. You advocate one, you advocate the other.

I have very little hope in our government as it is currently run. The system is captured, and it stopped working for our benifit a long time ago. I'm advocating for government intervention to prevent depression.

This is a confusing statement. On one hand you lament that the government is in it for it's own devices (with which I wholeheartedly agree) but on the other you support it playing it's game because you see some benefit from it. If their goals are not our goals how can you despise their actions at the same time calling them essential?

Cutting business tax, or any other tax for that matter does not guaranty spending. When the economy is in the toilet, people (and businesses) have a tendancy to save money, not spend it. The only way to guaranty spending at a high level is for government to do it directly.

This is a fallacy that the left uses all the time. "Only government can spend during recession/depression because businesses will horde money". It is a very static view of money and shallow view of how economies work.

So let's say for the sake of argument, that businesses do what you say they will and "save money, not spend it". What happens to it? Do they bury it in the back yard? Do they stuff it in a mattress until the economy heats up again? No, they invest it or at the very least put it in a bank. Either of those two CREATE capital.

Option A: They invest it. Companies with excess cash look for a way for that money to benefit them (and sitting on it doesn't do any good, in fact it's a losing proposition). They start looking for options in the market, be it startups that need capital (IPO's) or bonds/stocks. Either way, they benefit from a return and the recipient gets capital for whatever they needed (new equipment, a new school/bridge, if muni's, etc)

Option B: They bank it. So Option A didn't work because the economy is so utterly shit and they are risk averse so they put it in a savings account at Wells Fargo (at a crappy interest rate). What is the benefit to that? Banks are "for profit" enterprises and they don't make money sitting on your savings PAYING YOU interest. The only way they make money is by turning around and loaning that money out (after keeping a certain percentage in reserve per Fed requirement) at an even higher interest rate. Who cares what they lend it for, new house, car, kids college, whatever. That money is now directly helping (at least) three individuals (the business that put it in the bank, the bank and the borrower).

Money is ALWAYS active and it is most efficiently used, directed and a benefit to/by the individual pursuing their own self-interest (that invisible hand that you say doesn't exist).

Jobs, equipment purchases, etc. also result from direct government spending. One of the most economically stimulative things we know of are food stamps.

One of the points I'm trying to get across to you is that there is no such thing as "direct government spending". The money HAS to come from somewhere else...unless of course they just print it, which has a horrific effect on the economy but that is a different subject.

Say I have $100 in discretionary income. I can spend it how I see fit to better my life. By spending that $100 I have a $100 impact on the economy.

Now government comes along and says "we need that $100 to boost the economy!" and takes it. So now I am out $100 and the government has $100 to spend. The IRS takes that $100 and pays it's overhead and gives the remainder to the Treasury...so say $95 makes it there. The government now has $95 to spend. Congress passes some bullshit spending bill, laden with port, pet projects, graft, etc and rings up the Treasury telling them they need $90 ('cause Treasury has overhead too) to go to the Dept of Transportation to build a turtle tunnel in Florida.

DoT, under US law has to pay it's subcontractors "prevailing" wages that are usually higher then a private sector job. So let's say 10% higher, so I am getting $81 of work for my $90. But then again DoT has overhead too, so really $76. But wait...if you have ever seen a government construction project in action, I'm being very generous. Let's say there is a 8A, small business or minority set aside in the solicitation, that means double (at least) markups wooohoo!

So at best we are getting a 30% reduction in economic impact. Now if I had kept my $100, my impact is immediate. How long does a government contract/project take to get off the ground?

Of course, this is over simplyfying in order to make a point. People are paid through those overhead charges and the overpayments in wages are put back into the economy. But the end result is money not impacting the economy in a timely, efficient and direct manner. Government is the WORST possible actor in the economy and we should minimize it's influence and power at EVERY possible turn...not give it the keys to the candy store and tell it to behave.

I would prefer that the government not operate under a deficit, we would be much better off. We should cut spending and restructure the tax code to acheive a surplus and pay off the national debt. I don't believe letting the economy bottom out "naturally" would have helped.

I agree with everything except the last part. Bad actors and business that have gotten to where they are through poor choices/management should NOT be rewarded. They should be let to fall and in their absence better, stronger companies will emerge. Government picking winners and losers is one of the reasons we got into this mess in the first place.

[Theory123]

Wow I just came across this post in a search. All I got to say is Peter Schiff was right! Silver and Gold are skyrocketing! The "Black Market" portion of my investment portfolio is doing very well....!

Krugman and Bernanke have never said anything right. Well I take that back...Krugman did say that the housing market was a bubble but that doesn't count as much. He is a die hard Keynesian.

A great speech by Schiff at the Ludwig Von Mises Institute.
http://www.youtube.com/watch?v=EgMclXX5msc

GGRR you need to read "Economics in One Lesson" by Henry Hazlitt and google "Austrian Economics".

[Ted]

Schiff has been running his loud mouth for a while . Maybe he and Kudlow can go to Washington and and prove something before i can start to believe them. What a bunch of losers !!!

[Theory123]

I don't think they stand a chance getting into Washington. No one will vote for a message that they don't want to hear.

[dirkterrell]

The big mistake was the repeal of (parts of) the Glass-Steagall act in 1999. I believe firms that deal with banking need to be separate from those that do speculative, leveraged investing. The Great Depression and the current mess have that issue as one of their driving factors. You would think that the former would have taught us enough of a lesson about those dangers.

The bankers knew that they could take on the riskiest activities because they knew the government would be there to bail them out. They even knew the investments would blow up and bet on that. The normal corrective force (failure and liquidation) against such stupidity was removed, so they played the game. Now we have a ton of bad credit out there that needs to be removed but won't because the politicians know that it will bring on some pretty tough economic times. If we had taken our lumps and let things fail as they should have, the pain would be less than what we are facing. They'll keep stringing it out as long as they can but the damage grows with every delay.

[Finklestein87]

This thread is INTENSE

[Rhino]

http://www.your-story.org/hilbroy-ad...rrency-242951/

For Zimbabwe, who just two years ago was the world model on economic and monetary destruction, and hyperinflationary chaos, is now finding itself on the opposite end of the US dollar, and calling for a change from this global currency to a new gold backed money system.

When the county who first brought you the 100 trillion dollar bill starts distancing itself from your money, you're in trouble.



http://www.outsidethebeltway.com/200...ed-or-created/

So it cost between $228,000 and $631,000 PER JOB created? From the article " It would’ve been cheaper if we’d just written all 3.6 million people a check for $100,000.00 and called it a day."

Better spending through gubbermint indeed.

[modette99]

To hard to read some of the posters post here. First of all we are around 17-18% Unemployment. Remember the figure they put out is people that are claiming unemployment, once you drop off collecting it does not mean that person is any less unemployed, it just means they are not counted by the Government in collecting benefits. So when the news hypes .1 drop in unemployment that means NOTHING...so you had .1 not being counted anymore...LOL

Even if you create 20,000 new jobs in CO, you still had how many become Unemployed, and how many int he past that might not be counted. Typically it is taught in political science classes if the Gov says 9% its really double. So yeah it is not 25% (at least here in CO) but its still way to high.

The dollar is the other issue. First off we should never have a private organization like the Federal Reserve or Treasury print our money. We are the only idiot country that pays interest on the money they print, because we don't print it actually. What a stupid system there.

Then you got way too much money being printed, and spent by the Federal Government on pointless things. Obamacare for starters could drive us under. $680 Billion a year on Military is nuts, China spends something like $200 billion...so do we really need to spend $480 billion more then China!!!

I would like to see Homeland Security cut or merged with FBI, CIA which both of those should also be trimmed down. I would like to see the State Department trimmed, do we really need fancy Embassies around the world in countries that really don't matter? A big part of cutting the military would be to close bases in Germany, Japan, and many other places we don't need them...that act alone would cut big bucks. Bases should be kept on US Soil...you don't see China, Russia, or any of the European countries with fancy bases all over the world (the UK and France had them, but pretty much closed them all).

Things are only just starting, I expect much worst down the road mainly do to the needless spending. But maybe that is what we need to start over. Revolutions are not a bad thing, yeah it might be hard for 5-10 years but we are in need of one...that would be change we could count on.

[dirkterrell]

Denninger had some thoughts on these matters this morning:

http://www.market-ticker.org/akcs-www?post=186397

[Ted]

$680 Billion a year on Military is nuts, China spends something like $200 billion...so do we really need to spend $480 billion more then China!!!

I would like to see Homeland Security cut or merged with FBI, CIA which both of those should also be trimmed down. I would like to see the State Department trimmed, do we really need fancy Embassies around the world in countries that really don't matter? A big part of cutting the military would be to close bases in Germany, Japan, and many other places we don't need them...that act alone would cut big bucks. Bases should be kept on US Soil...you don't see China, Russia, or any of the European countries with fancy bases all over the world (the UK and France had them, but pretty much closed them all).

.

Ron Paul is your guy . Send him some $$$$$

[modette99]

Ron Paul is your guy . Send him some $$$$$

I would never send any candidate money...but I will vote for the guy.