In an incredulous display of ignorance symptomatic of the underlying
causes of the financial crisis, CNBC anchors laughed their way
through an interview with respected economist Peter Schiff yesterday
as he attempted to explain how an Obama presidency would negatively
impact the U.S. economy.
Erin Burnett and Mark Haines of CNBC's Squawk
on The Street persistently interrupted Schiff, CEO of Euro
Pacific Capital, barely allowing him to finish sentences or even
complete thoughts as he sought to explain how 'Obamanomics' will
not address the problems at the core of the crisis and will instead
"If we have stronger Democratic control of
congress, which certainly looks likely, I think that is going
to make matters worse, because not only does it make it easier
for Obama to get his agenda through, but it also makes it easier
for the Congress to get their stuff through. There's no checks
and balances whatsoever." Schiff explained.
"As an American I think it is a disaster. Not
that I'm a big pro McCain supporter, I think McCain's policies
would also make the situation worse, but unfortunately, I think
if we get Obama in there we get a much bigger mandate. When he
comes into office, it's going to be as if capitalism has been
repudiated and the new mandate is that we need more government,"
"It wasn't the free market, " Schiff urged,
referring to the cause of the economic crisis.
"Remember, if it wasn't for the Federal Reserve,
which is a government entity, keeping interest rates much too
low, we never would have had a housing bubble, we never would
have had a subprime market. If it wasn't for Fannie and Freddie,
which are creatures of government, we never would have had the
moral hazard necessary to allow Americans to borrow more money
than they can repay." asserted Schiff, who served as an economic
advisor to Congressman Ron Paul's Presidential campaign earlier
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Schiff attempted to explain how returning the economy
to the way it was a few years ago, as Obama has promised to do,
is not feasible because it was based on a bubble of borrowing
and spending vast amounts of money.
"Getting Americans spending and borrowing again,
as Obama has urged, is not the cure, it is the disease... He's
going to try and create bigger government, borrow a lot more money
from foreigners, and spend it on government programs designed
to encourage even more consumption, and of course, he is going
to raise taxes..." Schiff urged.
Schiff then had to explain once more that he was
not endorsing McCain by criticizing Obama, much to the confusion
of the anchors who clearly struggled to stretch their imaginations
beyond a right-left political paradigm.
"What you're proposing is never going to fly
politically," Mark Haines spluttered, underlining perfectly
how neither candidate in this election is offering any real change,
and only represents a continuation of the entrenched and failed
system of big government intervention.
Switching gears to talk of investment, Erin Burnett
then made perhaps the most inane statement possible for a financial
"Gold has no inherent value, unlike oil which
does. Gold only has any value in so far as I want to believe it
has value." she stated.
The fact that gold has maintained inherent value
since the dawn of civilization seems to have washed over Ms Burnett,
who clearly believes that paper money, essentially an IOU based
on the perception of its worth, is more valuable than a rare and
Peter Schiff attempted to interject and explain
that Burnett's logic was totally backwards, that it is fiat money
that only has value as long as you want to believe it has, but
the anchor simply spoke over the top of him commenting "This
is a fun conversation".
"It's provocative if nothing else." added
Watch the full cringe inducing exchange:
Schiff has repeatedly warned that America is on
the brink of a long and deep recession, the root causes of which
are continually being touted as solutions by both Presidential
candidates. To describe his warnings as "fun" is astoundingly
Schiff is well respected amongst the major financial publications,
primarily due to the fact that almost three years ago he accurately
forecast that the U.S. housing market was a bubble that would
soon come to bust, and also that the crisis would extend to the
credit lending industry.
Perhaps if more people had listened to voices like
his several years ago, instead of laughing at them, which as we
have seen is still the case, then the economy would not be in
such a dire mess today and we may have a presidential candidate
who speaks of enacting change and actually means it.
Instead the so called free world is today lumbered
with a choice of endorsing a phony messiah or a dead duck, both
representative of the fortified and irradicable Washington elite
punch and judy show.