PoliticalAction.com Blog

by Ron Paul

Statement before the US House of Representatives opposing resolution on Iran, June 19, 2009

I rise in reluctant opposition to H Res 560, which condemns the Iranian government for its recent actions during the unrest in that country. While I never condone violence, much less the violence that governments are only too willing to mete out to their own citizens, I am always very cautious about “condemning” the actions of governments overseas. As an elected member of the United States House of Representatives, I have always questioned our constitutional authority to sit in judgment of the actions of foreign governments of which we are not representatives. I have always hesitated when my colleagues rush to pronounce final judgment on events thousands of miles away about which we know very little. And we know very little beyond limited press reports about what is happening in Iran.

Of course I do not support attempts by foreign governments to suppress the democratic aspirations of their people, but when is the last time we condemned Saudi Arabia or Egypt or the many other countries where unlike in Iran there is no opportunity to exercise any substantial vote on political leadership? It seems our criticism is selective and applied when there are political points to be made. I have admired President Obama’s cautious approach to the situation in Iran and I would have preferred that we in the House had acted similarly.

I adhere to the foreign policy of our Founders, who advised that we not interfere in the internal affairs of countries overseas. I believe that is the best policy for the United States, for our national security and for our prosperity. I urge my colleagues to reject this and all similar meddling resolutions.

www.chinaview.cn 2009-06-15
By Jing Zhao Cesarone

CHICAGO, June 14 (Xinhua) — Taking issue with the Obama Administration’s contention that the economy is showing signs of recovery, Peter Schiff, a well-known American economic commentator, firmly believes that this economy will never recover unless the government changes its policies of taxing, spending and expanding the government.

Schiff, currently serving as president and chief global strategist of the brokerage firm Euro Pacific Capital Inc, told Xinhua during an exclusive interview on Saturday that “the things the government is doing with the economy only put us into deeper debt and deeper trouble. All they will probably do is buy us time, interfere with the current situation and postpone the unpleasant consequences in exchange for more damage in the future.”

Regarding recent numbers showing slight growth in retail sales and a dip in first-time jobless claims, Schiff said, “they’re depending on that to reign in the massive deficits they’re creating. But they aren’t doing anything that will lead to recovery; they’re doing the opposite!”

As an expert on money, economic theory, and international investing, Schiff is best known for his prescient predictions of the economic crisis of 2008. He is one of the few investment advisors to have correctly called the current bear market before it began.

He said, “the Obama Administration will be like Jimmy Carter’s. They’re going to tell everyone to ‘sacrifice’ to support a government that is just too large and too powerful. Regarding interest rates, Schiff noted, “We may have reduced interest rates now, but with higher inflation, we will have to raise them in the future. Then, we will have recession, rising prices, and no available credit. This will smother any potential for recovery.”

Turning to the unemployment rate, Schiff pointed out, “the current headline unemployment rate of 9.5 percent does not truly capture the situation on the ground because it ignores those who are ‘marginally attached’ to the workforce; 16 percent is more realistic representation of the situation, and I estimate about a 20 percent unemployment rate by the end of this year.”

Commenting on the government’s stimulus plan and its effect on job creation, Schiff said: “The kind of jobs created by the government stimulus are not productive and viable for the economy, but the private sector is forced to subsidize them. Not only are they a drain on the real economy via taxation, they also divert human capital from private businesses.”

Then what should the government do to bring the economy back on track? Schiff advised: “If the government changes its policies, the economy will start to recover immediately. But the symptoms will get worse before they get better. It’s like ripping off a band-aid — they’re so worried about the pain that they’re pulling it off slowly. If they just ripped it off, it might hurt a lot for a second, but then it would be over and we could move on.”

Schiff criticized the Federal Reserve as the ultimate culprit in this crisis. He said, “in response to the dot-com bust, Alan Greenspan kept interest rates artificially low to stimulate the economy. The only thing he stimulated was an artificial boom in real estate and stocks. Now, we’re paying for that with a recession.”

“Instead of allowing this restructuring to happen, Ben Bernanke has dropped interest rates to near-zero and started intervening directly in the market. He’s ‘monetizing’ Treasury debt to make up for a drop in foreign demand. These policies will lead to a collapse in the dollar, which will be much worse than the current crisis,” he added.

Schiff is a supporter of the Austrian School of Economics and the Ludwig von Mises Institute, and was an economic adviser for Ron Paul’s campaign in the 2008 Republican Party primaries, through which Schiff also expressed support for sound money, limited government, and free market capitalism.