Peter Schiff vs. Ben Stein

I've heard jokes about Fox News, but I had no idea it gets that bad. They had a couple of analysts being shouted down by a gaggle of entertainers, and this passed for economic advice?

Sorry, only got half way through. All shouting, no evidence. Not that the analysts could have presented evidence, it would have been shouted over. Fox News is a complete waste of air and airwaves.

Ken Shabby, that's Faux News on a good day.

OT something to put a smile on almost everyones face:
Anne Coulters mouth has literally been wired shut!

http://www.huffingtonpost.com/2008/11/25/ann-coulters-jaw-wired-sh_n_14…

I've never been the type to delight in the injuries of others, but...

Oh well, I'm sure all the people that were wrong have acknowledged their mistakes and have changed their ways...

Laffer invented the "Laffer Curve" beloved by Reaganites, which "proved" that the higher the tax rate the less money the government can gather because people will not be able to spend their excess wealth to grow the economy.

Turns out he wrote the curve on a paper napkin in a restaurant, not in any peer-reviewed paper. I also believe he is not an economist but taught Business Management. The Laffer Curve works in theory; no empirical work has ever been done to find the point at which the feedback loop from high taxation starts to seriously depress the economy.

Reagan was an almost-great President. His main detraction is that he initiated the reign of the stupid over the Republican party. This culminated in the disastrous Bush-Cheney Presidency, like in Cheney's notorious declaration: "Reagan proved that deficits don't matter!"

Here's the funny part about what Schiff was saying. As someone who was locked out of the real estate market because I didn't want to get myself stuck in a subprime loan (which would have been my only option given the way my financials have gone since my divorce,) I could see property values jumping up way out of proportion to what they would have been without the subprime market. I could see my hopes for moving into a house or a condo screwed by this whole thing for several years.

What irritates me about the bailout is that Treasury Dept. wants financial institutions to use the money to lend the country out of the problem that easy lending caused in the first place. Like Schiff warned in 2006, there was no relationship between property value and its price back then, and with the weight of the REO market driving house values back down, recession may be the only way to solve the problem in the long run.

What people forget is that if the Fed keeps dropping the prime rate, then the offset of investment will have less value (interest has to be paid so that money can be lent, and the lower that credit rates are it drives savings rates down.) People are not going to be able to afford to save money if the banks can't pay more in fin charges than the rate of inflation.

I am not an economist, but the other aspect of this recession is proving my suspicion that the money that was being earned by inflated mortgage-backed securities was also being used to inflate the price of oil on the spot market as speculators with no relationship to the oil industry drove the prices up much more than standard supply-and-demand factors could account for. The precipitous drops that we are seeing in the price of oil may be welcome at the pump, but they also signal another looming disaster. Oil speculators that bought on contract and have all ready taken delivery of oil from small producers are going bankrupt and have not been paying on their contracts. The small producers, in order to survive when 90% of their income depended on the oil revenue from their mineral leases, will be forced to sell out to the oil companies such as Shell and Exxon. Watch out.

Things are going to get much worse before they get better. At least we have a president coming into office that has demonstrated his willingness to accept the advice of experts.

One other bit of Schadenfrude in the video, which I would have found funny if the situation were not so dire, was that I was watching the Dow close for that day, as Stein was telling us all how much stocks were going to improve it was closing about 13000. What is it now? It has dropped 36% since January 1, 2008.

Anyone? Anyone? The Laffer Curve.

Ben Stein: wrong on evolution. wrong on the economy.

I hope FoxNews eats crow this Thanksgiving.

Who the heck is this Peter Schiff?!? This guy is either a) really good at his job or b) a descendant of Nostradamus.

I liked the plot were everyone goes against him and laughs him off but in the end he "wins"...

The funny thing is now Ben Stein is more panicked than anyone and is (correctly) demanding Keynesian fiscal stimulus programs.

Mike Haubrich, FCD: "At least we have a president coming into office that has demonstrated his willingness to accept the advice of experts."

Experts like Robert Rubin, another economic bubble-blower and financial instrument deregulator like Greenspan. The key players of Obama's economics team are disciples of Rubin.

http://www.nytimes.com/2008/11/23/business/23citi.html

Summers and Rubin (and Bill Clinton) supported the Gramm-Leach (another Obama advisor) bill that got rid of Depression-era financial regulations.

Dean Baker: The high priests of the bubble economy
http://tpmcafe.talkingpointsmemo.com/2008/11/11/the_high_priests_of_the…

Then again, Nouriel Roubini and Robert Reich are happy with Obama's economic team, which I guess is a good sign.

Aside: Stock prices tripled in '95-00. The housing boom dates back to '97. Under Greenspan credit was so cheap that bubbles were forming everywhere.

Schiff was right, but so were a lot of others: Roubini, Wayne Lochore, Jim Rogers, Nassim Taleb, Meredith Whitney...