Tuesday, May 26, 2009

Joining the Austrian Mafia

It looks as though I recently got Don Luskin's attention again. For some reason, Luskin has this thing against Peter Schiff of Euro Pacific Capital, and I am not sure why. Luskin claims that it is because Schiff made some wrong judgments last year when he predicted then what is happening now: that people are getting the heck out of the U.S. Dollar.

I recently pointed out on Lew Rockwell's blog that Luskin still is fixated on going after Schiff, and Luskin fired back, calling me a "mafia capo":

"Austrian" mafia capo Bill Anderson accuses me of "attacking" his boy Schiff by posting the above, claiming that the quotation from Time is something I "declare" rather than an external authority whom I quote. Can these thin-skinned idiots even read?
Actually, I CAN read, and this is what was in the entire paragraph from Time, not just the small passage that Luskin cherry-picked:

This year, though, Schiff's TV bookings are down 75% to 85%, says his younger brother Andrew, who handles p.r. for him. About the only things written about him lately have been negative--the result of financial blogger Michael (Mish) Shedlock's pointing out that Schiff's investment recommendations were money losers in 2008. How could a bear have managed to lose money last year? Schiff was blindsided when global investors piled into dollars and U.S. government bonds during last fall's panic. But that rush to safety has already abated, and over longer periods, Schiff's decade-old strategy of steering clients out of U.S. securities and into commodities and overseas stocks has been a big winner. His investment record surely can't be the reason for his fall from media grace. (Emphasis mine. What I put in italics is what Luskin left out.)

Time added the following:

No, the main issue with Schiff seems to be that he hasn't changed his tune--and it isn't a pleasant tune to listen to. He thinks the "phony economy" of the U.S. is headed for even harder times. He believes that the crisis-fighting measures coming out of Washington are merely delaying the inevitable, debasing the dollar and loading future taxpayers with huge debts.

Why all the invective from Luskin? First, it is personal with him. Luskin got me a gig last fall with Forbes Online to write something about Paul Krugman receiving the Nobel Prize in Economic Science, and I produced "Krugman in Wonderland." Therefore, Luskin now believes that I somehow have betrayed him and am holding on to faulty economic reasoning.

Second, Luskin is a pal of Larry Kudlow, who claimed for a long time that there was no housing bubble, that President George W. Bush's policies were great, and that we were going to have prosperity for many years. When the wheels came off late in 2007 and especially last year, Kudlow had nowhere to turn, as he and his fellow commentators were caught with their pants down.

Third, Luskin and Kudlow have hated Schiff ever since he told Arthur Laffer in 2006 that we were headed for a deep recession, and that the government's scheme of printing money and selling debt abroad was going to run into a brick wall. Anything that contradicts Laffer and Kudlow is heresy to that crowd, and what is worse, Schiff really was right.

Today, Kudlow and the others are behind the government's plan to inflate our way out of this crisis, while Schiff rightly notes that the government's economic policies are a disaster. True, Kudlow and Luskin do not support Obama, but they were firmly behind last year's bailouts and attacked anyone who said that the bailouts would make things worse.

Anyway, I cannot say that I am the best "capo" for the Austrian Mafia, but nonetheless I will put the analysis of Austrian Economics against anything that Kudlow and Luskin throw out there.


Anonymous said...

The only thing I know about the Austrian School is that the University of Vienna is a damn fine institution; however, anyone that can refute the know it all attitude of Don Luskin and the pomposity of the insufferable Larry Kudlow must be doing something right.

Nice work.

Anonymous said...

Instead of point out that emperor is naked, Kudlow and the crew want to argue over what color his underwear is. All the while, they brand the people people who aren't running naked as loons.

PhotoJoe said...

Seems Luskin doesn't allow comments so if I may ask, why does he consider teevee appearances the true acid test of Schiff's strategy's efficacy? Is being popular more important than being correct? Or is the latter a function of the former?

admin said...

Let's see if Kudlow can form a cohesive argument AGAINST Austrian Economics.

If he wants to bloviate......let's see if he can produce something of substance.

Great job btw Bill and keep it up.

Andrew M. Sica said...

Bill - keep up the good work! Someone needs to keep hammering away at these baseless criticisms of the Austrian school. I'm sure glad you aren't letting these frauds get away with it!

Peter will make a great Senator for the state of Connecticut, don't you think? ;)

Anonymous said...

Bill: DOW 100,000 LOAF OF BREAD $1,000

ed said...

Thanks Bill. Notice that Luskin's Blog doesn't accept comments. (as far as I could tell.)

Marco2006 said...

Excellent post. I am glad the Austrian Economists are on duty and willing to point out the Emperor’s economy has no clothes.

Unknown said...

Luskin is dishonest and obviously has a weak argument. That is why he cherry picked from the time piece. It amazes me how these statists cling to the boot. Luskin is just another crybaby. I will continue to read and distribute Schiff, Lew,, Woods, Bill and all the other great writers that have given us so much clarity on the economic downfalls of the statist keyensian bootlickers...Peace

Anonymous said...

here is a comparison of Don Luskin versus Peter Schiff search trend comparison on google.I think Don Luskin is a disgusting SOB. I have never seen Peter doing personal attacks on this detestable scum.

Unknown said...

here is a trend comparison on google between Peter and Don. Have you ever seen peter stoop to Don luskin's detestable levels?

Anonymous said...

Don Luskin? The same genius who wrote this brilliant article?

He has done nothing but parrot the status quo line that "everything will be fine" since this whole economic debacle began, and Schiff has done nothing but expose the truth, i.e., that the big brother screwed us over big time. And now that Schiff has been proven correct time and time again it is no wonder that Luskin is upset. He bet on the liars and lost, and I sincerely hope it costs him his credibility. But we all know that won't happen....if Krugman can win a nobel prize, then any old liar can be considered an expert (of course as long as they bend over for the central banking cartel).

All states require an intellectual class of people to lend credibility the obnoxiously ridiculous lies of the state. What Don Luskin and other keynesians do is try to make everything seem so complex that no one should challenge their PhD authority. They willingly provide cover for the massive crimes of the federal government to further their own careers. Don Luskin is truly part of the mafia, the biggest mafia of them all, the US government.

Thanks Bill for exposing these monsters, they know exactly what they are doing.

Brutus said...

Bill, great work as usual.

I think Don Luskin has fallen into the emotional trap known as envy. One of his peers was beginning to rise apart from the pack and now Luskin is attempting to bring him down into the egalitarian abyss. Very sad.

You may be tired of hearing this but I truly admired your work on the Duke rape case. A handful of honest thinkers held a light to the business as usual in this country and were able to spare a few lives in the process. Truly inspiring. They ought to make a movie out of that.

Bill Jones said...

Shedlock was right. Schiff was dead on with his analysis but forgot an old Wall St saying "When they pull the paddy-wagon up to the whorehouse they take the good girls along with the bad." No matter how fundamentally sound a company is, if it's being heavily held by a bunch of panicking and collapsing hedge funds leveraged up the wazoo, that stock is going to get crushed in the short run. One of the lessons of the (first) Great Depression is that sometimes there are no safe places to hide.

Anonymous said...

Bill, you say "Luskin has this thing against Peter Schiff of Euro Pacific Capital, and I am not sure why." Try this: Envy hath no rest.

Anonymous said...

This is the interview that got Luskin so upset

Anonymous said...


For what it's worth, I don't think Kudlow hates Schiff the way Luskin seems to. Heck, Kudlow has Schiff on more than anyone else does. And, it's obvious that Schiff can get on his nerves a bit when he wants to speak for himself as well as the other 3 or 4 guests (sounds like a good concept to me...). This is more or less irrelavent to the rest of your argument about Luskin, but I wouldn't throw Kudlow under the bus with him just yet.

James H

James Redford said...

Peter Schiff understands Austrian economics, and he is a good spokesman for that, at least to an extent.

And Mr. Schiff--to a certain point--understands politics, but his understanding in this regard is good in relation to the received statist dogma.

The problem with Mr. Schiff isn't his economic understanding, as that is, roughly, as advanced as any of us within the Austrian camp. The problem with his overall analysis is that he avoids a deep analysis of politics. That is, he knows that the politicians' actions will be hurtful to a genuine recovery, and so he rightly rejects the nonsense that they could be a fount of wisdom in pulling us out of this mess. But he totally avoids the massive amounts of empirical evidence that the establishment want this result, and are using what they created to drive world society to a certain result which they desire.[1]

By that I don't mean the politicians, as they're just puppets. Our recent history in the banker bailouts makes clear (as if it needed to be made more clear) that they're not beholden to the people, but instead get told what to do by interests who are higher than them. (As the politicians did the right thing to begin with on this matter, voting against the bailouts--as they knew how utterly unpopular it was with the people. But the higher interests came in and made clear to the politicians that this wasn't optional for them, regardless of how the people feel about it.)

And now the globalist oligarchy are openly talking about their intentions. It's hardly as if I'm imputing anything to anyone--the power-elite are being rather open about where they are taking the world, and they even openly state that this economic crisis is a wonderful opportunity to them to build their global bank and global government.

But the problem in talking frankly about such matters is that many people have been so conditioned for so many decades to knee-jerkingly reject seriously considering such information that even now when the establishment talk openly about where they're taking the world--i.e., a one-world government which they term the "New World Order"--people who wish to avoid reality attempt to make light of it all with an attempted bon mot.

So what are we, as liberty-lovers, to do about this deplorable intellectual state among the popular culture? The answer is that we as truth-teller have to get over our fear of being made fun of. We can document these things. It's not like we're saying anything that's not documented up one side and down the other by what the elites themselves have said. They're the crazies. But the problem in relating how crazy they are is that they are so crazy. It's as if they have an intellectual shield protecting them because few people will accept just how criminally insane they are.

James Redford said...

People generally are more than willing to accept the petty criminality by the establishment. Of course, they're corrupt. But *that* corrupt? No way, they can't be that diabolical. That's just too much--that's too hardcore. Sure, serial-killers do those things, but not the people who rule over us!

And herein is what's key. Those who rule over us aren't insane at all--except in the ultimate sense, and in that sense they're utterly insane. There's been an unbroken chain going back thousands of years of knowledge passed down within governments. (The chain metaphor is quite apt here, as each link in the chain is different and physically separate, yet they are each all connected.) Governments fall and governments come, but the governments that come obtain the esoteric knowledge that was in the government they take over: the chain of knowledge is never broken (yes, no doubt some documents may be burnt and servants killed before the incoming regime can take over, but not all the documents can be burnt, and most of the servants will persist to serve the incoming regime, along with their knowledge with them). They know what they're doing. They're not dumb. This is a script. They're playing society like a fiddle.

Mr. Schiff goes wrong in thinking that foreign stocks will be safe. They won't be. This will be a global conflagration.

Mr. Schiff's analysis on this matter would be, roughly, correct if the Asian governments would proceed with what would make their own populace the economically strongest. But what will instead happen is that they'll see this crisis as a golden opportunity to take further control over their own economies. These governments will do what they find to be in their best interests, which will not be what Mr. Schiff thinks is best.

And that's where Mr. Schiff goes wrong. His understanding of economics is fine. And his understanding of politics is better than most. But his understanding of politics isn't good enough.

And by the way, you were right, Prof. Anderson, about the Obama administration wanting the U.S. economy to collapse. Of course, they're just tools of the same powers that owned the elder and junior Bush administrations.



1. "Michael Rozeff's Lethal Naïveté on Conspiracy," Sir Nigel Edmond III, February 24, 2009;action=display;threadid=21829

Robert B said...

"Mr. Schiff's analysis on this matter would be, roughly, correct if the Asian governments would proceed with what would make their own populace the economically strongest. But what will instead happen is that they'll see this crisis as a golden opportunity to take further control over their own economies. These governments will do what they find to be in their best interests, which will not be what Mr. Schiff thinks is best."

Thing is the Chinese govt owns a lot of "private" corporations via 10 year joint ventures with Western multinationals, front companies for the PLA, etc. The govt of China is also trying to insulate itself as much as possible from the dollar crash that is coming as best as they can. It remains to be seen though how well they will be able to weather the storm when it comes. I don't think the Asian stocks will be immune since the advent of globalization and economic interdependence, but the East is the new base of global manufacturing now, which means they will be the engine for real wealth creation, while us here in the US will be totally screwed!!!!

RAMZPAUL said...

Schiff and many others don’t understand how money is created. I think they really believe there a literal printing press at the Fed.

Our monetary system is based on credit, not government fiat. And credit has been collapsing over the past couple of years. That is why all the predictions of hyper inflation (which doomers have predicted since the 1980s) have proven false.

Here is a video I did on the subject:

Anonymous said...

RAMZpaul, of course they understand that to create money, the Fed no longer has to print bills like in Hungary and Austria, but rather can create bank credit and manipulate interest rates. "Printing money" simply means increasing the money supply. And if this is not inflationary, how do you explain the recent inflationary bubble in real estate and finance?

Anonymous said...

It has become a trend of sorts that the people desperately attacking Schiff are doing so on any small piece of hope that they can cling onto.

Like purposely taking something totally out of context or judging a whole philosophy of investing based on one years returns, and which actually fared better than what the S&P 500 index did.

I cannot fathom how anyone could be investing or trusting money with these people that are constantly wrong and keep digging themselves deeper by attacking Schiff?

Good work on replying to Luskin, though I can't understand why he gets any attention at all in any media.

J.K. Baltzersen said...
This comment has been removed by the author.
J.K. Baltzersen said...

Prof. Anderson,

I fully support the "Austrian" fight against the Keynesian madness, but there's one little thing: I wish you would stop referring to the Nobel Memorial Prize as a Nobel Prize.

William L. Anderson said...

I agree that the Nobel in economics is misnamed, and I will try to include all the terms in the future. However, there are times when I just don't feel like writing out everything.

Even given all of this, the Nobel Memorial Prize in Economic Science (given by the central bank of Sweden), is seen as some sort of intellectual vindication for those who receive it. It has been my contention that recently, these "prizes" have become much more politicized.

For example, my sense is that Krugman won his award at this time because of his ideological missives in the New York Times, even though his trade theory (that he developed a good while back) certainly has fallen into the category of what has been honored in the past. Likewise, I contend that Al Gore won because of the politics of "climate change," as opposed to any great thing he has done.

J.K. Baltzersen said...


I often refer to the prize as the Nobel Memorial Prize. That is not the full name. I concede that, and I could also admit that such a shortening could be comprehensible to a smaller audience.

I agree also that the Nobel Peace Prize, whose awarders are completely separate from those of the Memorial Prize, is a disgrace. However, what can you expect from a committee of Norwegian politicos?

Al Gore, whom we protested against when he was in Oslo to receive the prize with a Ron Paul rally, certainly did not deserve it. The rationale was supposedly that preventing mass migration would give conflicts. The alarmist climate theories are dubious at best, and so are the predictions of the resulting mass migrations.

When Al Gore spoke in Oslo City Hall, he was talking about war against climate change. Peace indeed!

Anonymous said...

There is something fishy about Luskin's relationship with Austrian economics. During the POTUS primaries, he lauded Ron Paul a few times on TV. Then he joined Paul's campaign for like one day before quiting and becoming an advisor for John McCain. Say what?! I don't know how any thinking person could do that and therefore I don't trust Luskin. I don't think he is an honest person nor does he have a consistent belief system. My guess is that he is a sell out who will change his tune in order to get in with the right crowds (like Kudlow and the bankers) and further his career.

Anonymous said...

The Nobel Prizes are very political in nature. Often awarded long after they should be to a person because of the fear(?) that to award it too early might be a mistake. This has happened in the sciences quite often.

Anonymous said...

Dr. Anderson:

THis is off topic but can you answer this question for me. What happens to the stock of a stockholder in a company, say GM, when that company decalres bankruptcy? Should said stockholder use the certificate to start a fire?

William L. Anderson said...

to 2:23:

That depends entirely upon the quality of the paper on which the stock certificate is written. Now, if it is somewhat soft, perhaps it might make good toilet paper, although it might not dissolve well in one's drain pipes.

I would suggest also using one to light a cigar, should one be so politically incorrect as to puff on a good stogie once in a while.

After the Civil War, some people used Confederate money to paper their walls. Perhaps a nice design of GM stocks would make a great touch in one's office!

So, as you can see, there are many uses for GM stock certificates. The only limitation is the limitation upon one's creativity!

Anonymous said...

Dr. Anderson:

Since I don't smoke, I guess that I will follow the decorating tip!

Thank you.


Blogger said...

Sprinter - Function One (160BPM)