Tuesday, Sept. 13, Peter Schiff, owner of EuroPacific Capital and economic analyst, testified before the Congressional Jobs Committee regarding the recently proposed jobs bill written by one Keynesian academic or another.
If you donâ€™t recognize Schiffâ€™s name, allow me to introduce you. As early as 2005, Schiff was among a handful of economic analysts correctly warning of the real estate bubbleâ€™s imminent burst. In August of 2005, Schiff appeared on CNBC, opposite David Sowerby, stating very clearly the reasons real estate as the foundation of the economy was ending soon.
Schiff states the facts, â€œOur bubble economy rests on the foundation of the housing market, and itâ€™s a very weak foundation. The housing market today is very similar to the Internet market of the late 1990s,â€ Schiff said. â€œYou have speculative mania.â€
This certainly wasnâ€™t the first clue, but the mainstream mediaâ€™s subservience to the federal government should have become significantly more obvious during this time period.
Instead of conducting investigations as to how and why mortgage-lending standards had decreased, or questioning Congressional representatives as to whether the housing market was sustainable â€” anyone with an understanding of the free market could tell you it was not â€” the media continued to regurgitate the vomitus feeble promises of bankers and corporations making billions on the inflation of the bubble.
The Daily Showâ€™s Jon Stewart brought Schiff to his show in June 2009. During the interview, Stewart showed a montage of press clips. While Schiff states astutely why a recession was forthcoming prior to it actually starting, other economists are literally laughing as if heâ€™s Randy Quaid in Independence Day warning of imminent alien invasion.
A thought occurred to me as I watched Schiff testify in front of Congress. Great people in history have traditionally gone against the status quo and spoken against corruption and abuse of power â€” Jesus Christ, Martin Luther King Jr., Elvis, the first guy to eat lobster, and the list goes on.
Yet today in American politics, to go against the grain is to be outcast as â€œunelectableâ€ by the media, such is the case of Ron Paul. As the press moves forward, they have admitted they do not believe heâ€™s electable. Thus, they wonâ€™t give him the same coverage as the apparently â€œelectableâ€ Michele Bachmann or my personal least-favorite Rick Santorum.
In the U.S., the land of the free and the home of the brave, a man who does not have the support of corporations, banks or Wall Street is deemed unelectable. Why wonâ€™t the media ask the question, â€œWhy donâ€™t the banks etc. support Ron Paul?â€ Because they suck at their mission, is the short answer.
Whatâ€™s the common fabric between Ron Paul and Peter Schiff? First, Schiff was Paulâ€™s lead financial advisor during Paulâ€™s 2008 presidential candidacy. Second: knowledge. They both understand that the pressâ€™ obsession with â€œjob creationâ€ is pandering to the least common denominator. The economy is at the beginning of a very bad recession.
Follow that? All the doom and gloom for the last four years? The beginning. When Schiff testified before Congress last week he argued knowledgeably for the reasons why the economy has stagnated and why government stimulus will not correct the economy, despite the hopes and dreams of every Keynesian politician and aide in the District of Corruption.
Important note, Keynes economic theories essentially stated government spending should take over during recessions. This is the lynchpin of our two-party system lately, and itâ€™s been the dominant force behind the Democratic Partyâ€™s platform seemingly forever.
However, the modern politician only uses that which furthers their agenda. The Constitution is absolutely the Supreme Law of the Land when the other party is violating its edicts but an inconvenient obstacle when their party is in power.
Thus, Keynes also said government should build reserves of revenues during years of economic growth. Guess which half of the theory sees practice today.
Schiff testified he wants to see the federal government get out of the way of the economy. Personally, when a man with a record of accurate analysis and prediction states an opinion with conviction, Iâ€™m going to listen to him, not the devil on my shoulder telling me to do more.
But this isnâ€™t the country we live in anymore.
The federal government is going to continue to drag the economy down, and all the discussion of raising or lowering taxes and whether to cut spending is all rhetoric for the talking heads.
Seth Stern is a senior journalism major. His column appears Mondays in the Collegian. He can be reached at email@example.com.