Bob Cropf

Last year’s “Dr. Doom” predicts worse still to come

In Free-market on February 1, 2009 at 12:11 PM

Yesterday, I posted a link to a blog featuring a Marxian take on the economic crisis. Today, we are going the opposite route and featuring a link to a story about Peter Schiff, who predicted with uncanny accuracy, last year’s collapse of the financial markets. Schiff is an adherent of the Austrian free-market economists, Hayek and Van Mises, and a former advisor to Ron Paul, the Republican Congressman with strong libertarian leanings. In the article he says that: “We don’t save and we don’t produce anything anymore. We simply borrow from the rest of the world, and then we spend it. We’ve had a giant party. We bought all these plasma TVs and iPods. We remodeled our houses and took vacations. But you know what? The bills are coming in.”

True to his ideology, he believes that government spending will just make matters worse. Don’t expect things to get better any time soon. Schiff predicts several more years of recession. His solution to the current mess is to let the markets take their course and hope that after all the tough economic times that things will start to get better again.

  1. The question this raises for me that Okun addresses: what is the purpose of an economy? Is it the mere creation of wealth? It is to support your population? These two goals are not always in accordance. Do you sacrifice efficiency for equity?

    The laissez-fair economic position often poses this as grand morality play. The problem is that the immoral acts that the society is paying for were often committed by a few, and in this case, arguably committed by a few who are managing to exempt themselves from the ultimate consequence. NB: this is not a social science argument, this is a value judgment.

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