'Your $$$$$' Squabble: Experts Argue over 'Socialist' Bailout
Financial experts Peter Schiff and Stephen Leeb faced off on âYour $$$$$,â presenting opposing viewpoints about the looming bailout. Schiff attacked the bailout and âirresponsible monetary policyâ while Leeb defended it saying the Treasury could profit.
CNN senior business correspondent Ali Velshi summed up Schiffâs position Sept. 27 saying, âThose of you who say that we should have a bailout or it should be or we should deal with this â are saying that it is socialist in nature, it is, it is anti-capitalist to intervene in the private markets, when the private markets fail.â
Velshi called the segment âpossibly the debate you should have heard on television last night with two different people with different philosophies explaining what the good and bad of this is.â
Peter Schiff, president of Euro Pacific Capital, staunchly opposed the bailout and warned that it would make things much worse. He said government intervention in the markets was the problem and could not be the solution. Stephen Leeb, president of Leeb Capital Management and frequent âYour $$$$$â guest, supported the bailout and recited claims that the government could make money from the transaction.
Schiff said Americans borrowed and spent their way into bankruptcy, but by bailing out poor decisions âweâre setting a bigger fire.â He claimed to have predicted todayâs financial instability in his 2007 book âCrash Proof.â
âThe economy is collapsing in exactly the way I wrote that it would. But also in that book I was afraid that the government would do exactly what they're doing now and this is worse. We're going die from the cure, not the disease,â Schiff said.
According to Leeb, âyou can interfere.â He said that without a bailout the remaining financial companies, except Berkshire Hathaway, would wind up under government ownership.
He also âone-uppedâ Schiff, citing his own earlier book, "The Coming Economic Collapse" which warned that âif housing prices ever declined it would make the tech bubble look like a picnic ... but we would have to get out of itâ because it would weaken our standing with the rest of the world. Leeb noted âeconomic securityâ threats from nations like
âOur access to resources is gone âŚ Two weeks ago,
Leeb has passionately promoted alternative energy on âYour $$$$$â for months. On June 14, the economist warned that it would be âgame overâ without a âvery comprehensive energy plan.â In another interview May 8, Leeb said âWe have to be prepared to spend trillions of dollarsâ on â50 or 100 Manhattan projectsâ for alternative energy.
In the Sept. 27 CNN broadcast, Schiff spoke out against printing more money and buying up debt. âAll the government can do is create inflation. They donât have any money. Theyâre going to print it,â Schiff warned. Later in the program, Schiff made the point again: âWe canât solve them [economic problems] with a printing press. Go to
Leeb protested the comparison between Bushâs plan and Robert Mugabeâs, saying the two men are âa little bit different.â