Tuesday, Nov 4, 2008
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 perpetuate them.
"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," he continued.
"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 this year.
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.
- A d v e r t i s e m e n t
Switching gears to talk of investment, Erin Burnett then made perhaps the most inane statement possible for a financial journalist;
"Gold has no inerrant 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 inerrant 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 precious metal.
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 Haines dismissively.
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 twisted.
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.