Here's a video from 2006 where Peter Schiff predicts the current crisis. It's funny to hear the other guy telling Peter how stupidly wrong he is. Guess who looks stupid now!
Peter's latest newsletter makes the following chilling prediction, some of which is already coming true:
"The government will now attempt to keep bad loans from failing and real estate prices from falling. Rather then allowing market forces to rein in excess borrowing and replenish savings, it will encourage even more borrowing and drain what is left of our savings pool. Rather than allowing our economy to return to one based on legitimate production, it will continue to encourage reckless consumption."
"In the end, by refusing to allow market forces to work their cure, our economy will inevitably die from the disease. Our economy will now face death by hyperinflation, which will cause a complete loss of confidence in the dollar and result in prices and interest rates skyrocketing out of sight. The evaporation of our national wealth will lead to civil unrest, food and energy shortages, and the possible imposition of martial law. If such a scenario unfolds, what is left of our Constitution will surely be completely shredded."
I think the way that countries are governed is fundamentally broken. Political parties, presidents and elected officials might have made sense a hundred years ago, but it's now hopelessly inefficient.
For example, I am fiscially conservative and socially liberal. However, the party system requires you to vote for a complete package of policies; there's no way to "unbundle" them and vote just for the things you believe in.
This kind of bundling creates huge distortions in the political system, since a party can sometimes win an election simply due to a single divisive issue such as abortion or gay marriage. The idea that a country's fiscal or foreign policy can be decided based on whether a candidate believes in illegalizing abortion is ridiculous.
In the next part of the series I'll describe an alternative system of government that doesn't have this kind of problem.
Elitism is the belief or attitude that those individuals who are considered members of the elite — a select group of people with outstanding personal abilities, intellect, wealth, specialized training or experience, or other distinctive attributes — are those whose views on a matter are to be taken the most seriously or carry the most weight; whose views and/or actions are most likely to be constructive to society as a whole; or whose extraordinary skills, abilities or wisdom render them especially fit to govern.
The term elitism is also sometimes misused to denote situations in which a group of people claiming to possess high abilities or simply an in-group or cadre grant themselves extra privileges at the expense of others. This debased form of elitism may be described as Discrimination.
There's a lot of talk these days about the "failure of the free market". But do free markets actually exist?
A free market is one where the price of a good or service is purely based on how much buyers are prepared to pay. Any market that involves government subsidies or tax breaks is therefore not a free market, since the price of the good or service is affected by the government intervention.
For example, the housing marketplace is not a free market because the government provides tax breaks for homeowners that makes purchasing a house artifically more attractive than renting one. In addition, it allows a home seller to pocket up to $250,000 of profit with no capital gains tax. The government is effectively lowering the cost of home ownership at the expense of renters.
Many people think that a free market implies an unregulated market. This is not true. It's entirely appropriate for a government to enact laws that protect people from antisocial activities such as pollution or misleading advertising.
Healthcare, energy, farming and banking are all examples of markets that are not free. So the phrase "failure of the free market" is misleading since - as far as I can tell - they don't exist.