Monday, November 17, 2008

A Little More Peter Schiff

Most of you have seen the video assemblage at Badger. If you haven't, you should. Peter Schiff was Ron Paul's house-economist during the campaign. If nothing else, watch the video to find out who the real jackasses were in the last couple of years--the ones laughing at Schiff.

Now that you've returned from that, here's a bit more from Schiff:

Before the current economic crisis became apparent to all, the most popular fable used to describe America’s uncanny economic resiliency was the story of Goldilocks. It was argued that our economy was skipping down a sunny path of moderate growth, low inflation and rising asset prices. However, a much better parable for our economy over the last decade would have been the story of Humpty Dumpty: a bloated, fragile shell perched on the top of a dangerously high stone wall...

With the Big Three auto makers now in a plainly visible death spiral, the automotive bailout debate is kicking into overdrive. The disagreement hinges on whether a bailout is necessary to support an important industry or whether the unprofitable dinosaurs of the past should be allowed to fail as America focuses on an information-age, service sector, and alternative energy future.

As usual, both sides have it wrong. The government should let the Big Three fail not because we no longer need an auto industry, but because we desperately do.
What we do not need is the bloated, inefficient auto industry that we have today. By allowing the Big Three to fail, their capacity will be turned over to new owners who will be able to acquire the means of production at fire sale prices and hire workers at globally competitive wages. The result will be a more efficient auto industry making cars that people around the world actually want to buy at prices they can afford

That will be done, of course, over the dead bodies of the Big 2.1075's most vociferous boosters: their own (comatose) managements, their UAW spoils-takers, and their partners-in-crime, the Auto Dealers' Associations.

...This week, the bankruptcy filing by Circuit City and a profit warning from Best Buy, served as proof positive that America’s national shopping spree is over. As I have long said, the business model of importing cheap goods for Americans to buy with credit cards was unsustainable. We were told to “Shop till we dropped,” and we did

...home equity extractions and unlimited credit card availability, have been shut down. With only dwindling paychecks to rely on, Americans are justifiably economizing. As a result, many more retailers will file for bankruptcy over the next few years,...

Have a kid footing college on loans? Use your credit cards a lot?

Paulson observed that “illiquidity is raising the cost and reducing the availability of car loans, student loans, and credit cards”, “creating a heavy burden on the American people” and reducing jobs. While all of this is true, this is precisely what needs to happen

Although Congress loves to grandstand about oversight, it has thus far shown no courage to interfere, or even question, the change in strategy. Paulson claims that he is simply rolling with the punches. The truth however, is that the original plan was flawed from inception, as I clearly pointed out in a string of commentaries following his proposal. How could the Treasury Department, with all its funding and PhD’s, not make similar predictions? Paulson is either a liar or completely incompetent. My guess is he is both.

Personally, I'm a bit more forgiving. I think Paulson is attempting to push a cooked spaghetti-noodle up a hill. People are NOT spending because they do not WANT to spend. No amount of "repair" is going to fix that.

Here's the scary part:

As the remnants of America’s shattered economy continue to ooze out over the pavement, look for even more bizarre, draconian, unworkable, and downright dangerous policies to emerge from Washington

Yah. Buy more ammo....

One more thing: if you think your Gummint job is "safe," think again. Taxpayers have been known to revolt.


Reasonable Progressive said...

He may well be right, but no one on either side is going to admit it for probably the next twenty years or so.:)

Those with tremendous foresight are always criticized for telling the truth.

Dad29 said...


Look what happened to Pope Paul VI after Humanae Vitae. Every single one of his predictions has come true...

Reasonable Progressive said...

"If you want peace, work for justice."

Wasn't alive when he was around but he's my favorite pope I never knew.:)