Peter Schiff article in THE WALL STREET JOURNAL/ OPINION

[galtgulch]

Link to article from THE WALL STREET JOURNAL / OPINION JOURNAL

http://online.wsj.com/article/SB123033898448336541.html

OPINION DECEMBER 27, 2008

There's No Pain-Free Cure for Recession

Belt-tightening is required by all, including government.

By PETER SCHIFF

As recession fears cause the nation to embrace greater state control of the economy and unimaginable federal deficits, one searches in vain for debate worthy of the moment. Where there should be an historic clash of ideas, there is only blind resignation and an amorphous queasiness that we are simply sweeping the slouching beast under the rug.

With faith in the free markets now taking a back seat to fear and expediency, nearly the entire political spectrum agrees that the federal government must spend whatever amount is necessary to stabilize the housing market, bail out financial firms, liquefy the credit markets, create jobs and make the recession as shallow and brief as possible. The few who maintain free-market views have been largely marginalized.

Taking the theories of economist John Maynard Keynes as gospel, our most highly respected contemporary economists imagine a complex world in which economics at the personal, corporate and municipal levels are governed by laws far different from those in effect at the national level.

Individuals, companies or cities with heavy debt and shrinking revenues instinctively know that they must reduce spending, tighten their belts, pay down debt and live within their means. But it is axiomatic in Keynesianism that national governments can create and sustain economic activity by injecting printed money into the financial system. In their view, absent the stimuli of the New Deal and World War II, the Depression would never have ended.

On a gut level, we have a hard time with this concept. There is a vague sense of smoke and mirrors, of something being magically created out of nothing. But economics, we are told, is complicated.

It would be irresponsible in the extreme for an individual to forestall a personal recession by taking out newer, bigger loans when the old loans can't be repaid. However, this is precisely what we are planning on a national level.

I believe these ideas hold sway largely because they promise happy, pain-free solutions. They are the economic equivalent of miracle weight-loss programs that require no dieting or exercise. The theories permit economists to claim mystic wisdom, governments to pretend that they have the power to dispel hardship with the whir of a printing press, and voters to believe that they can have recovery without sacrifice.

As a follower of the Austrian School of economics I believe that market forces apply equally to people and nations. The problems we face collectively are no different from those we face individually. Belt tightening is required by all, including government.

Governments cannot create but merely redirect. When the government spends, the money has to come from somewhere. If the government doesn't have a surplus, then it must come from taxes. If taxes don't go up, then it must come from increased borrowing. If lenders won't lend, then it must come from the printing press, which is where all these bailouts are headed. But each additional dollar printed diminishes the value those already in circulation. Something cannot be effortlessly created from nothing.

Similarly, any jobs or other economic activity created by public-sector expansion merely comes at the expense of jobs lost in the private sector. And if the government chooses to save inefficient jobs in select private industries, more efficient jobs will be lost in others. As more factors of production come under government control, the more inefficient our entire economy becomes. Inefficiency lowers productivity, stifles competitiveness and lowers living standards.

If we look at government market interventions through this pragmatic lens, what can we expect from the coming avalanche of federal activism?

By borrowing more than it can ever pay back, the government will guarantee higher inflation for years to come, thereby diminishing the value of all that Americans have saved and acquired. For now the inflationary tide is being held back by the countervailing pressures of bursting asset bubbles in real estate and stocks, forced liquidations in commodities, and troubled retailers slashing prices to unload excess inventory. But when the dust settles, trillions of new dollars will remain, chasing a diminished supply of goods. We will be left with 1970s-style stagflation, only with a much sharper contraction and significantly higher inflation.

The good news is that economics is not all that complicated. The bad news is that our economy is broken and there is nothing the government can do to fix it. However, the free market does have a cure: it's called a recession, and it's not fun, easy or quick. But if we put our faith in the power of government to make the pain go away, we will live with the consequences for generations.

Mr. Schiff is president of Euro Pacific Capital and author of "The Little Book of Bull Moves in Bear Markets" (Wiley, 2008).

[Chris Grieb]

This is a good article.

Galt; Don't get your hopes up too much. I will still keep the heat up when you say silly and stupid items. You posted items predicted Ron Paul's nomination and election. Your participation in the effort to prove that Obama is not natural born citizen was silly at best but these two items are good.

Edited December 29, 2008 by Chris Grieb

[galtgulch]

This is a good article.

Galt; Don't get your hopes up too much. I will still keep the heat up when you say silly and stupid items. You posted items predicted Ron Paul's nomination and election. Your participation in the effort to prove that Obama is not natural born citizen was silly at best but these two items are good.

Chris,

I wish you would let a sleeping dog lie regarding the Ron Paul campaign. At least he did ignite a movement among many who might otherwise have been disheartened by the outrageous choices we had to choose from. It is unfortunate that this great country has been so misled for generations. Better ideas have been thought of as we know but remain in the minority although their numbers are growing. It is almost hard to tell which would be worse among the two major parties, one leading to medieval theocracy, the other to fascist totalitarianism.

Regarding the natural borne citizenship thing. If the gentleman had nothing to hide why would he spend a fortune hiring three law firms to keep others from finding out the truth? It actually had nothing to do with his birth certificate although I do not know where he was born and it might have been in Kenya. The issue is one of definition of what the founders meant by "natural born citizen."

If they meant that both parents should be American citizens in order for the future president to NOT have divided loyalty which he would have if one parent were citizen of another country, say Britain, as his father was undoubtedly Kenyan hence a British citizen and subject.

I do not think it is either silly or stupid to want the Constitution to be respected and object to what amounts to ad hominem arguments of yours, which is at least unbecoming of one who should honor legitimate debate.

OT www.campaignforliberty.com membership now, 29 Dec 08 6PM 97725

galt

Edited December 29, 2008 by galtgulch

[F L Light]

This is a good article.

Galt; Don't get your hopes up too much. I will still keep the heat up when you say silly and stupid items. You posted items predicted Ron Paul's nomination and election. Your participation in the effort to prove that Obama is not natural born citizen was silly at best but these two items are good.

Chris,

I wish you would let a sleeping dog lie regarding the Ron Paul campaign. At least he did ignite a movement among many who might otherwise have been disheartened by the outrageous choices we had to choose from. It is unfortunate that this great country has been so misled for generations. Better ideas have been thought of as we know but remain in the minority although their numbers are growing. It is almost hard to tell which would be worse among the two major parties, one leading to medieval theocracy, the other to fascist totalitarianism.

Regarding the natural borne citizenship thing. If the gentleman had nothing to hide why would he spend a fortune hiring three law firms to keep others from finding out the truth? It actually had nothing to do with his birth certificate although I do not know where he was born and it might have been in Kenya. The issue is one of definition of what the founders meant by "natural born citizen."

If they meant that both parents should be American citizens in order for the future president to NOT have divided loyalty which he would have if one parent were citizen of another country, say Britain, as his father was undoubtedly Kenyan hence a British citizen and subject.

I do not think it is either silly or stupid to want the Constitution to be respected and object to what amounts to ad hominem arguments of yours, which is at least unbecoming of one who should honor legitimate debate.

OT www.campaignforliberty.com membership now, 29 Dec 08 6PM 97725

galt

On the birth certificate his religion would have been revealed.

[Chris Grieb]

This is a good article.

Galt; Don't get your hopes up too much. I will still keep the heat up when you say silly and stupid items. You posted items predicted Ron Paul's nomination and election. Your participation in the effort to prove that Obama is not natural born citizen was silly at best but these two items are good.

Chris,

I wish you would let a sleeping dog lie regarding the Ron Paul campaign. At least he did ignite a movement among many who might otherwise have been disheartened by the outrageous choices we had to choose from. It is unfortunate that this great country has been so misled for generations. Better ideas have been thought of as we know but remain in the minority although their numbers are growing. It is almost hard to tell which would be worse among the two major parties, one leading to medieval theocracy, the other to fascist totalitarianism.

Regarding the natural borne citizenship thing. If the gentleman had nothing to hide why would he spend a fortune hiring three law firms to keep others from finding out the truth? It actually had nothing to do with his birth certificate although I do not know where he was born and it might have been in Kenya. The issue is one of definition of what the founders meant by "natural born citizen."

If they meant that both parents should be American citizens in order for the future president to NOT have divided loyalty which he would have if one parent were citizen of another country, say Britain, as his father was undoubtedly Kenyan hence a British citizen and subject.

I do not think it is either silly or stupid to want the Constitution to be respected and object to what amounts to ad hominem arguments of yours, which is at least unbecoming of one who should honor legitimate debate.

OT www.campaignforliberty.com membership now, 29 Dec 08 6PM 97725

galt

On the birth certificate his religion would have been revealed.

FW; My birth certificate has nothing about religion. Galt; Give me some statement from a Founder that this was the Founding Father's intent. Find one statement in the debate on the 14th Amendment that Natural born citizen meant both parents had to be American citizens

[galtgulch]

On the birth certificate his religion would have been revealed.

F.L. Light,

Please inform me just which religion you believe would have been revealed on a birth certificate!

Don't you get to choose your own religion once you reach a certain age? I hardly think the religion of one's parents automatically becomes one's own as if one had no choice in the matter. Regardless of the religious convictions of his parents Obama certainly has the right to find his own religious beliefs. We get to see shortly whether Obama has abandoned the premises and beliefs of his mentors, especially those of the more radical, fundamentalist Marxist ideas he was exposed to growing up.

OT www.campaignforliberty.com membership now, 29 Dec 08 6PM 97725; 30 Dec 7 AM 97768

galt

[Alfonso Jones]

On the birth certificate his religion would have been revealed.

F.L. Light,

Please inform me just which religion you believe would have been revealed on a birth certificate!

Don't you get to choose your own religion once you reach a certain age? I hardly think the religion of one's parents automatically becomes one's own as if one had no choice in the matter. Regardless of the religious convictions of his parents Obama certainly has the right to find his own religious beliefs. We get to see shortly whether Obama has abandoned the premises and beliefs of his mentors, especially those of the more radical, fundamentalist Marxist ideas he was exposed to growing up.

OT www.campaignforliberty.com membership now, 29 Dec 08 6PM 97725; 30 Dec 7 AM 97768

galt

Galt -

I think you can get a good idea of Obama's beliefs by examining what Wright taught. Obama sat still for that for about 20 years, and called the man his spiritual mentor. Even if a birth certificate did show "religion" we should remember that:

1) It would be the religion or one or both of his parents,

and

2) Religion is often a nominal matter in the West. Someone might write a designation down which had more to do with their parentage than their beliefs or their behaviors.

Bill P

[BaalChatzaf]

Galt -

I think you can get a good idea of Obama's beliefs by examining what Wright taught. Obama sat still for that for about 20 years, and called the man his spiritual mentor. Even if a birth certificate did show "religion" we should remember that:

1) It would be the religion or one or both of his parents,

and

2) Religion is often a nominal matter in the West. Someone might write a designation down which had more to do with their parentage than their beliefs or their behaviors.

Bill P

In addition to which one's religion has no legal weight regarding eligibility to hold office in the United States.

The "no religious test" clause of the United States Constitution is found in Article VI, section 3, and states that:

The Senators and Representatives before mentioned, and the Members of the several State Legislatures, and all executive and judicial Officers, both of the United States and of the several States, shall be bound by Oath or Affirmation, to support this Constitution; but no religious test shall ever be required as a qualification to any office or public trust under the United States.

Even if Barak Obama were a Shi'ite or a Sunni and prayed in a Mosque five times daily it would make no legal difference. Likewise if anyone were a pagan who worshiped Zeus or Athena, it would make no difference. Or even if one were an atheist. In order to take the office, one can either take an oath or make an affirmation.

We have several more cultural barriers to breach in the United States.

1. An openly gay person elected as president. We already have openly gay people in congress, for example, Barney Frank of Massachussetts.

2. An overt atheist elected as president. The closest to that was Thomas Jefferson who was an extreme deist and an anti-trinitarian.

3. A female elected as president

4. A transgender elected as president.

My guess is that a female will be elected as president or assume the office in the lifetime of many of you who are reading this.

Ba'al Chatzaf

[Alfonso Jones]

Galt -

I think you can get a good idea of Obama's beliefs by examining what Wright taught. Obama sat still for that for about 20 years, and called the man his spiritual mentor. Even if a birth certificate did show "religion" we should remember that:

1) It would be the religion or one or both of his parents,

and

2) Religion is often a nominal matter in the West. Someone might write a designation down which had more to do with their parentage than their beliefs or their behaviors.

Bill P

In addition to which one's religion has no legal weight regarding eligibility to hold office in the United States.

The "no religious test" clause of the United States Constitution is found in Article VI, section 3, and states that:

The Senators and Representatives before mentioned, and the Members of the several State Legislatures, and all executive and judicial Officers, both of the United States and of the several States, shall be bound by Oath or Affirmation, to support this Constitution; but no religious test shall ever be required as a qualification to any office or public trust under the United States.

Even if Barak Obama were a Shi'ite or a Sunni and prayed in a Mosque five times daily it would make no legal difference. Likewise if anyone were a pagan who worshiped Zeus or Athena, it would make no difference. Or even if one were an atheist. In order to take the office, one can either take an oath or make an affirmation.

We have several more cultural barriers to breach in the United States.

1. An openly gay person elected as president. We already have openly gay people in congress, for example, Barney Frank of Massachussetts.

2. An overt atheist elected as president. The closest to that was Thomas Jefferson who was an extreme deist and an anti-trinitarian.

3. A female elected as president

4. A transgender elected as president.

My guess is that a female will be elected as president or assume the office in the lifetime of many of you who are reading this.

Ba'al Chatzaf

I hope it was clear to all that there is no religious test for the office of president. I sort of assume folks have a passing familiarity with the United States constitution (Check out Article VI.).

Bill P

[Chris Grieb]

On the birth certificate his religion would have been revealed.

F.L. Light,

Please inform me just which religion you believe would have been revealed on a birth certificate!

Don't you get to choose your own religion once you reach a certain age? I hardly think the religion of one's parents automatically becomes one's own as if one had no choice in the matter. Regardless of the religious convictions of his parents Obama certainly has the right to find his own religious beliefs. We get to see shortly whether Obama has abandoned the premises and beliefs of his mentors, especially those of the more radical, fundamentalist Marxist ideas he was exposed to growing up.

OT www.campaignforliberty.com membership now, 29 Dec 08 6PM 97725; 30 Dec 7 AM 97768

galt

Galt; The above post was absolutely correct. We had something of the same argument on OL when Keith Allison was sworn into Congress. Let me add that I agree completely that we will find out if Obama has abandoned his Marxist ideas.

[BaalChatzaf]

I hope it was clear to all that there is no religious test for the office of president. I sort of assume folks have a passing familiarity with the United States constitution (Check out Article VI.).

Bill P

You are very optimistic. Americans on the average read less than two books a year. Why do you suppose they are familiar with the contents of the U.S. Constitution, especially the main body of the document separate from the Bill of Rights?

The red-necks are probably very familiar with the second amendment and not very much beyond that.

Ba'al Chatzaf

[Alfonso Jones]

I hope it was clear to all that there is no religious test for the office of president. I sort of assume folks have a passing familiarity with the United States constitution (Check out Article VI.).

Bill P

You are very optimistic. Americans on the average read less than two books a year. Why do you suppose they are familiar with the contents of the U.S. Constitution, especially the main body of the document separate from the Bill of Rights?

The red-necks are probably very familiar with the second amendment and not very much beyond that.

Ba'al Chatzaf

Bob -

There are at least two levels here:

1) I know that when I was in junior high school, and then again in high school, we STUDIED the U.S. Constitution. That means - - - in detail. We had to learn quite a lot, and be able to pass a real test.

2) I am guessing that readers of OL (which was the context for my comment above) would be above the typical "red-neck" level.

Bill P

[galtgulch]

On the birth certificate his religion would have been revealed.

F.L. Light,

Please inform me just which religion you believe would have been revealed on a birth certificate!

Don't you get to choose your own religion once you reach a certain age? I hardly think the religion of one's parents automatically becomes one's own as if one had no choice in the matter. Regardless of the religious convictions of his parents Obama certainly has the right to find his own religious beliefs. We get to see shortly whether Obama has abandoned the premises and beliefs of his mentors, especially those of the more radical, fundamentalist Marxist ideas he was exposed to growing up.

OT www.campaignforliberty.com membership now, 29 Dec 08 6PM 97725; 30 Dec 7 AM 97768, 8PM 97806

galt

Galt; The above post was absolutely correct. We had something of the same argument on OL when Keith Allison was sworn into Congress. Let me add that I agree completely that we will find out if Obama has abandoned his Marxist ideas.