Peter Schiff: How He Would Fix America
I don’t know how anyone can disagree with all that.
And the ones who agree have started a grassroots campaign asking him to run for U.S. Senate. It’s at www.schiff2010.com.
The more I read, the more I like this guy. Here’s Peter Schiff in US News talking about how dumb it is for the government to be trying to create the illusion of value in the real estate market:
“They are trying to maintain high home prices by keeping interest rates low. That’s how they want to create more affordable housing. What’s a much more efficient way [to create more affordable housing] is to let home prices fall so that houses become more affordable because they are cheaper. And so people don’t have to borrow as much money to buy a house. These low interest rates are only temporary. They can’t stay down here.”
And this:
“It’s interesting: Initially, Fannie and Freddie’s mission was to help houses be affordable. Now, their mission is to keep housing prices expensive. They are trying to prop up prices and not let them come down. That’s the kind of stuff that the government did in the Great Depression. The government tried to stop food prices from coming down; they were destroying cattle and plowing under fields because they didn’t want food prices to go down. In bad economic times, they were trying to maintain high food prices so that people who are unemployed have to spend more money to eat. So, now they are trying to maintain high home prices. It’s stupid. Why not let home prices fall so that people can buy houses cheaper?”
And finally:
“…the government is trying to artificially prop up houses because as housing prices fall it exposes the extent of the damage in all these lending institutions that hold all these mortgages. And they are trying to maintain the illusion of home equity to the American public so they will spend more and save less, which ultimately undermines our economy.“
(emphasis is mine)
I just don’t get how anyone with a working brain can think it’s a good idea for the government to pump money into banks to prop up a system that clearly doesn’t work. Let it break, then fix it. All they’re doing is putting hundreds of billions of dollars of band-aids on it.
Bailout: I hate it. I think it’s a terrible idea. When the problem is too many loans, too many bad loans, too many loans that can’t be paid back, etc., the last thing the government should be doing is giving money to banks so they can keep making loans. We don’t need more loans, we need less; and we need more savings.
Below is a video by an economic guy named Peter Schiff. I don’t know much about him, but I like what I know. Here’s a long video of him that apparently includes clips from 2006 and 2007. I’ve only watched the very first quote he gives (goes up to the 1:15 mark or so), and he is spot on:
“Sometimes medicine tastes bad, but you gotta swallow it.” Agreed.
Schiff, by the way, was an economic adviser to Ron Paul during this year’s campaign.