Politico's Weirdo Source
My friends at Politico, Jim VandeHei and Eamon Javers, have a piece this morning about those who advocate doing nothing in the face of our economic crisis. No stimulus, nada, these folks argue.
I think there's an argument for doing nothing but it's so outside the conventional mainstream, far to the right of the House Republicans, that it seems to me incumbent upon Politico, for whom I've written and which I admire, to have noted that some of the experts quoted in their piece have what we might call exotic histories.
The piece quotes Andrew Schiff, as "an investment consultant at Euro-Pacific Capital and a card-carrying member of the stand-tall-against-the-stimulus lobby." He tells Politico: "All this stimulus money is geared toward getting consumers spending and borrowing again. But spending and borrowing were the problem in the first place." This quote and identification make him sound like some typical money guy expressing the kind of fiscal prudence you expect from Hal Holbrooke in Wall Street.
But who is Schiff? His brother is Peter Schiff, the head of the firm, Euro Pacific Capital, and they are both advocates of what's called Austrian economics, the hard-core laissez faire philosophy advocated by Freidrich August von Hayek, Ron Paul and others. Their father, Irwin, is doing time in federal prison as part of the tax honesty movement which believes that our tax laws are unconstitutional. Irwin was known for his crusades against taxes and has done other stints for failure to pay taxes.
Peter Schiff has said that he wished the Fed would be abolished and was a Ron Paul adviser in the last presidential race. Andrew Schiff is the firm's spokesman; Peter is the president. There's not really any daylight between them.
So when you're dealing with people who don't believe in the Federal Reserve and are libertarians of an extreme stripe wouldn't it be good to label them as such?
Politico's not alone though. Andrew Schiff can be found regularly on CNBC and other cable outlets.
Now, to be fair, the Schiffs have actually been prescient as hoardes of libertarian emails are prepared to note. They were extreme economic pessimists when the Dow was soaring. They predicted the market and the economy would tank.
But even a broken clock, so the saying goes, is right twice a day. Consider their argument for abolishing the Fed or restraining it. Imagine how much worse things would be if the Fed had not intervened this year. Of course, the Hayek-Schiff-Paul argument is that the loose money of the Fed, which Paul has called unconstitutional, is the cause of our woes in the first place. And while it's true many economists think Alan Greenspan should have been tighter, the Schiff argument opposes the very creation of the Fed. I suppose if we'd stayed on a barter system we wouldn't have our current housing woes either. We'd be in caves not condos. The Schiffs also had gold climbing to absurd levels as part of their scenario which it hasn't.
All of which is to say, sometimes it pays to identify a source more thoroughly.
Josh
Matt
Eric
"it seems to me incumbent upon Politico, for whom I've written and which I admire"
This, Matt, is a real problem. The goal should be to be the "anti-Politico."
January 28, 2009 3:42 PM | Reply | Permalink
This is a very true point, and I thank you for giving the context that was sorely missing from the Politico article.
January 28, 2009 3:49 PM | Reply | Permalink
Which, if any of these is true:
(1) Journalists are qualified to tell whose understanding of economics and policy views are batshit crazy and whose are not, and they shouldn't give credence to the former.
(2) It's OK to put batshit crazy people in our news stories, even if there ideas have no merit as long as we properly identify their affiliation with the Batshit Institute.
(3) Journalists really have no idea who is batshit cray and who is not, but sometimes they are fooled by guys in nice suits who talk a good game.
(4) "News" is just entertainment and we put the batshit crazy guy on the air cause it's fun so more people watch and we make more money. Yeah! Who cares about proper identification, if it's controversial, go with it.
(5) there is a raging debate among economists right now over why seemingly super intelligent people have diametrically opposed views about what policy to pursue in the current situation, with no apparent empirical proof sufficient enough to convince one side the other is right (to say nothing of explaining to policy makers, journalists, and the public why that is the case). Maybe until this controversy is settled, journalists should be careful to not say that they, or any one else they talk to really knows the answer.
Also what does this mean "I think there's an argument for doing nothing..." Do you really mean there is avalid argument. If so why not share it.
January 28, 2009 3:51 PM | Reply | Permalink
this:
from YOU??!?!
HAHAHAHAHAHAHAHA!
Wow! The irony is so thick it HURTS!
January 28, 2009 3:52 PM | Reply | Permalink
Okay, be nice. I was mean to Cooper for another post today, but this one was actually fun and informative, and I find myself much more advantaged for knowing more about the crazy Schiff family and the willingness of NBC to give them a forum without mentioning that they're batshit insane. I thank Matt Cooper for this post, even though yes, it's ironic, and yes, he used the cover of journalistic ethics to help a friend of his get away with a treasonous act. It's still teh awesome.
January 28, 2009 4:10 PM | Reply | Permalink
I thought this post (far from informative) was simply sniping at Politico. I really don't care about Schiff or whether some asshat at Politico quotes him with or without contextualizing him.
I'm just sayin' I don't remember seeing Eric and Josh pissing and moaning about how crappy the other guy is. Their entries are usually more about what's happening in the world and a bit less about how the other guys are writing about what's happening in the world.
This from a guy (me) who was trying to give Matt a chance! His first post I welcomed him unconditionally. In all fairness of course that's before I realized who he was.
January 28, 2009 4:24 PM | Reply | Permalink
The typical identification of a Cooper source: "...he (or is that she) says ...."
At least Politico gave us a name.
January 28, 2009 4:14 PM | Reply | Permalink
Matt,
Here's a link to a piece that absolutely destroys Peter Schiff.
http://globaleconomicanalysis.blogspot.com/2009/01/peter-schiff-was-wrong.html
Sure, he was right about the US housing and stock markets, but that was about it. And sure, he seems like a genius compared to the Ben Steins of the world and Fox Noise and CNBC business pundits, but who doesn't. It seems like he lost his clients millions of dollars and has been betting on zimbabwe-type inflation happening in the US. A little ammo for when the Paulites come knockin'.
January 28, 2009 4:04 PM | Reply | Permalink
Good article. Peter Schiff was right on some things, but he was dead wrong on many others. As mentioned, if you followed his advice you probably would have been worse off than the guy who never heard of him.
January 28, 2009 7:52 PM | Reply | Permalink
Politico = hacks. Forgetting this is always a big mistake.
January 28, 2009 4:43 PM | Reply | Permalink
Politico's a toilet
January 28, 2009 5:19 PM | Reply | Permalink
Yeah... "Weirdo" doesn't come close to doing justice to just how nutty the Schiff Family is. But it is nice to see them called out.
John
January 28, 2009 5:24 PM | Reply | Permalink
Has Politico always sucked so hard? It seems worse in the last two months.
January 28, 2009 5:35 PM | Reply | Permalink
They have always sucked so hard, yep.
January 28, 2009 5:51 PM | Reply | Permalink
Yeah, you're right. A few weeks back there were all those "Has the Obama Presidency failed?" puff pieces that made my little bear testicles hurt, but it seemed like a new kind of hurt. Guess it wasn't.
January 28, 2009 6:03 PM | Reply | Permalink
Your poor bear testicles notwithstanding, you'd be better off to follow Margaret's rule of political discourse: The media is winger dominated by default. An outlet must prove it's progressive bona fides or at a minimum that it can be non partisan in it's coverage before I read it without a skeptical eye....
January 28, 2009 6:17 PM | Reply | Permalink
(c) All of the above
They've sucked since Day 1.
And they've sucked worse since the end of the election.
That doesn't mean that there isn't some useful stuff that comes out of there. As much as they flack for the GOP, you'll find some little bits like Obama's "I won" that are good. The thing that seems to be lacking over there is any sense of slowing down on "reporting" to see if what they're flacking is grounded in the truth. Just because a GOP source gives you a Talking Point doesn't mean that it's the truth.
John
January 28, 2009 6:09 PM | Reply | Permalink
The neo-cons and rightwingers have no problem with an economic depression. Desperate people are willing to do whatever to reach and stay in the life boats of a ship that is going down. Sure the neo-cons are up that a lot of people effectively drown with an economic depression but the huge US prison system, there thanks to the neo-cons, can handle civil unrest. People in the lifeboats will not rock the boat as clearly there is a vast sea of trouble out there and corporations and the super wealthy are always in need of more tax cuts and the country in need of belt tightening in other words the neo-cons can always deliver a deeper economic depression.
January 28, 2009 5:38 PM | Reply | Permalink
Roubini on CNBC - "Davos: Mountains of Doom"
Doing nothing is a policy choice that's for sure
http://www.rgemonitor.com/blog/roubini/255328/davos_coverage_latest_roubini_interviews_on_cnbc
January 28, 2009 5:40 PM | Reply | Permalink
And yet, liberal and left leaning blogs, news organizations and websites,p (including TPM), constantly cite Politico like they have or deserve credibility.
That's not a gripe just an observation. It is constantly amazing to me that people whose opinions I respect lend credibility and therefore legitimacy to flack sheets like Politico or Real Clear Politics.
January 28, 2009 5:50 PM | Reply | Permalink
Excellent work, Matthew & TPM ... Please help us all keep up with the bogus info coming from Politico as they slip more and more into the sewer hand-in-hand with Drudge and become the conservative web news source for FoxNews. This has been a steady decline since the beginning of last year's primary season.
January 28, 2009 6:06 PM | Reply | Permalink
Politico is becoming more and more fringe right-nutso every day. To much acclaim, have you read the comments that people leave there? Nixon was a hippie compared to Politico's most fervent followers.
I really don't see fit for your saying how wonderful they are while you are revealing a bit of how they really are. That frankly is DC and media bullshit, not liberal coverage for TMP.
January 28, 2009 6:09 PM | Reply | Permalink
"Politico, for whom I've written and which I admire"
I consider this a serious problem.
Why are we all suddenly linking to Politico? Why drive traffic to them? Have they changed their stripes? Matt's own article points out how they biased their story with a phony expert.
January 28, 2009 6:58 PM | Reply | Permalink
Why does it matter how extreme Schiff has been about issues like the Fed, when his comments are clearly lumped in with those "libertarian Cato Institute" people?
Javers and VandeHei have clearly placed this guy on the fringe of the argument and are not making him sound like some main stream economist. The fact is that his spend and borrow comment is pretty accurate, and its truth isn't going to be changed by the nuttiness of the person saying it.
So I am not going to jump on top of the scrum pile, but this is definitely not Cooper's best piece.
January 28, 2009 7:06 PM | Reply | Permalink
Politico? Puh-leeze.
January 28, 2009 7:38 PM | Reply | Permalink
This was unconvincing for me.
There are a whole lot of arguments against simply pumping one trillion in federal-freaking-Chinese-financed-debt into crappy companies and government agencies. He just happens to support this AND some conservative views. So what?
Being anti-tax is not enough for me to consign anyone to the unreliable pile. In fact, I don't like categorical dismissal of any person - show me the argument, and defeat the argument anew.
Liberals needs to be much, much better than the witch-hunters on the other side of the aisle.
January 28, 2009 9:42 PM | Reply | Permalink
Schiff's track record is not perfect, but his argument against the Fed is rock solid. A central bank that sets interest rates and can manipulate the money supply is the worst type of central planning, which I thought we learned last century doesnt work. Either way, the idea that without the Fed we are back to barter is absurd. Ending the Fed is the equivalent of taking a credit card away from an irresponsible borrower. The Fed's reckless credit creation caused the roaring 20s, the 1970s stagflation, and the more recent internet, real estate, commodity, and (now) cash bubbles. They're good at blowing bubbles, thats for sure!
January 28, 2009 9:50 PM | Reply | Permalink
And let's not forget that it was the Fed who recently doled out 1.2 trillion in credit to . . . well, we don't know whom they doled it out to, do we, since they aren't telling, despite being asked repeatedly by the fearless and dogged new rep from Florida, Grayson?
January 29, 2009 1:10 AM | Reply | Permalink
David Korten has an interesting argument for "doing nothing," from the ecological perspective that the financial system ups and downs are gauges of activity within a mirage in which nothing of actual value is produced. Thus, he advocates a policy of letting the financial sector's worst offenders and their CEOS/shareholders etc. fail, coupled with a brief nationalization of the healthy portions just long enough to devolve them back to community banking institutions. I like his proposal. I'm sick of paying the bad guys to spin out their cons on the rest of us in perpetuity.
Democracy Now interview transcript is here:
http://www.democracynow.org/2009/1/26/david_korten_agenda_for_a_new
January 28, 2009 11:20 PM | Reply | Permalink
I love it, TPM: Don't let discretion get the better of you! Damn those fools who think civil discourse rules-the-roost when you can call names and sling mud against those whom you philosophically disagree.
"Weirdo"? Really? Because his opinions differ from yours?
I'm pretty sure this means that Al-Qaeda has won. Way to go Matt.
January 29, 2009 12:54 AM | Reply | Permalink
What you fail to grasp is that fractional reserve banking and the perpetual growth economic pardigm is totally dependent upon growth in usable energy supply.
Net usable energy is in decline. Existing giant oil fields are depleting at a rate of 6-9% annually and not being make up for by new oil coming on line.
A new, more sustainable economic model is needed. The old rules, governed by cheap and plentiful energy, just don't apply anymore. It is not in the media's, government's or mega-corporations's best interest to face this untractable problem and so it is not openly discussed as the root cause of the economic collapse, but that is my suggestion.
January 29, 2009 2:17 PM | Reply | Permalink