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Fight of the Century: Summers vs. Schiff on the Economy
In one corner — weighing in as the named leader of Obama’s National Economic Council — is Lawrence Summers, boasting a “have-your-cake-and-eat-it-too” treasure chest of hope.
In the other corner — weighing in as one of those lonely voices in the wilderness who predicted the current mess — is Peter Schiff, offering nothing more impressive than a “pain-before-gain” bucket of cold water.
I predict this match will go the full 15 rounds with no knock outs. My gut hopes Summers wins on points. My brain tells me Schiff probably will. (Perhaps Ronald Brownstein should referee.)
3 Responses to “Fight of the Century: Summers vs. Schiff on the Economy”
Pete,
Schiff is an idiot. I don't care if he “predicted” our current situation. As has been noted in other places, if you keep predicting the same thing for years in a cyclical system eventually you'll be “right”. If you do some research you'll also find people pointing out that Schiff was right about a collapse but wrong about what would actually serve as the trigger of it, a pretty major point to miss. In addition his own fund has dropped 50%, proving that he badly misunderstands the real current economy and has absolutely no clue about the realities of a modern major recession. For another piece of evidence that he is in fact a fool here is a quote from the very article you linked to.
This belief in the Austrian School of Economics certainly explains his inability to truly understand what is going on. Consider this part (Unchallenged on WikiPedia) of the article on it.
So…when it comes to economics who decides what axioms are self-evident and what facts are undeniable? Austrian School believers (to the best of my knowledge) reject modern behavioral economics completely and I have yet to see one AS believer who believes government regulation has any legitimate role in the economy. Schiff got lucky and as a hyper-conservative is being heavily pumped up by certain segments of society. Just google his name and look at some of the bilge also believed in by his supporters. I found a fascinating little blog where they also believed the collapse was part of a conspiracy to force the United States to accept the creation of the Amero, eliminating the dollar.
To be fair, other Austrian followers like here not only correctly called the collapse, but for the right reasons and had many posts on why Schiff was wrong about the mechanism. He's also called all the conspiracy theorists nuts and said that while the government shouldn't have a role, he knew it was going to and the point should be to support individuals in need instead of wasting it on companies.
But the main thing about the Austrian philosophy is its complete willingness to see any amount of human suffering in the service of the free market. They constantly insist that the government should have absolutely no role in fixing market screw-ups no matter how extreme. The majority of them will join in the chorus blaming government for the problem no matter what the geniuses in the private sector do wrong and please take a look at my quote and last paragraph. The whole Austrian School is the most purely ideological train of thought in economics, even more so than the Chicago School and that's really saying something. That's why I have no respect for its followers.