I’ve just finished reading Peter Schiff’s book How an Economy Grows and Why it Crashes. He presents a pretty interesting account of the history of the US (more broadly, western) economy in the form of kind of a parable. By general inclination I’m fairly sympathetic to many of the ideas he articulates, particularly because he really tries to relate large scale economic outcomes to fundamental principles (and being a good system theorist from way back, I’m all about first principles :) ).
Having said that, I have a way to go before I can say I’m completely ready to buy into his entire school of thought (essentially the ‘Austrian’ view of economics). I’ve just started reading Nouriel Roubini’s book Crisis Economics, which I think presents a rather more rigorous and nuanced view of some of the same issues. In an early chapter he writes -
In short, the Austrian approach is misguided when it comes to short-term policies…. But when it comes to the medium term and long term, the Austrians have something to teach us.
I’m looking forward to understanding his perspective more deeply.
Nonetheless, regardless of the overall validity of Schiff’s views, what I don’t think can be denied is that he was remarkably prescient in predicting the financial crisis. Here is an excellent collage of video clips in which Schiff stands up to absolute ridicule from a range of commentators who thought his views were complete nonsense prior to the economic crisis. Well, he was right and they were wrong.
Of course the interesting question is whether Schiff is right now – he is currently predicting the impending collapse of the US dollar.