If you have the stomach for 10 minutes of schadenfreude, you might enjoy watching a series of clips edited together featuring Peter Schiff, president of Euro Pacific Capital, arguing about the economy with a bunch of arrogant and ignorant talking heads on Fox News and the Fox Business Channel. Thanks to Andrew Sullivan for the tip.
The pattern keeps repeating itself: During 2006 and 2007, Schiff made a series of astonishingly prescient predictions of the peril that the economy was headed for, only to be snickered and scoffed at by the likes of Ben Stein and my favorite supply-side genius, Arthur Laffer.
Arthur Laffer provides a heaping load of merriment. After one typical pronouncement of doomsday, Laffer, who can barely disguise his utter scorn, delivers himself of the following (dated sometime in 2006):
No I don't believe any of it whatsoever Michelle. Excuse me, but what he's saying is savings is way down in this country. But wealth has risen dramatically, the United States has never been in better shape, there is no tax increase coming in the next couple of years, monetary policy is spectacular, we have freer trade than ever before ... I think Peter is totally off base, and I just don't know where he is getting his stuff ... There is nothing out there -- we're going to have a nice slowdown but it's not going to be a crash.
The critical part of Laffer's spiel is the assertion, widely echoed by free market evangelists over the past decade, that the disastrous decline in American savings rates was irrelevant because it didn't take into account the vast appreciation of wealth as measured by home equity and stocks.
Now that such stock indexes as NASDAQ are trading at their 1997 levels and home prices are plunging at historically unprecedented rates, it's hard to argue with Schiff's assertion that all that wealth was just plain "phony."