« Welcome to the machine. | Home | Failing to plan is succeeding to amuse. »
November 28, 2008
Time to assign fortune-telling points.
Ready to review what economic pundits were saying in the run-up to our Glorious Triumphant Econmomic Blow-Up Spectacular? Take a few minutes over the holiday weekend to watch a retrospective comparison of the prescient and the Polyannas.
Peter Schiff of Euro Pacific Capital is featured in the video below as one of the former (add Paul Krugman to that list); Arthur Laffer, Ben Stein, and a number of other cheerleaders make up the latter.
Here's Schiff discussing the U.S. economy's inflated home values, impossibly lax lending standards, over-dependence on consumption, and ridiculous lack of savings on CNBC in August of 2006 as his co-prognosticators fall all over themselves in shocked disbelief at his irrational pessimism:
The basic problem with the U.S. economy is we have too much consumption and borrowing, and not enough production and savings. And what's gonna happen is, the American consumer is basically gonna stop consuming and start rebuilding his savings—especially when he sees his home equity evaporate—and when you have the economy 70% consumption, you can't address those imbalances without a recession.You know, rather than the recession being resisted, it should really be embraced. Because the disease is all this debt-financed consumption. The cure is that we stop consuming and start saving and producing again, and that's a recession. And sometimes medicine tastes bad, but you gotta swallow it.
...when you see the stock market come down, and the real estate bubble burst, all that phony wealth is gonna evaporate. And all that's gonna be left is all the debt that we accumulated to foreigners against that.
Phew! Good thing none of that actually happened.
