In Defense of Peter Schiff

James E. Miller, editor-in-chief of Mises Canada, published a defense of Peter Schiff’s forecasting record last week. Miller calls out mainstream financial media as biased Keynesian propagandists, while praising Peter’s willingness to stand by Austrian Economics in the face of public ridicule.

Still, Schiff has a point. He went on national television and endured a deluge of mockery for challenging established opinion. His forecasts, while not always correct, were far more accurate than those of his contemporaries. No one likes an ideologue wedded to a philosophy to the point of redundancy; yet there comes a point when facts are facts. When it mattered, Schiff had both an accurate assessment of the economy and a solid explanation to justify his findings. His advice might have saved the livelihood of millions, had it been taken. To this day, his call was seen as heroically prophetic, even while his philosophical underpinnings are still held in suspicion. He hasn’t earned the benefit of the doubt in the eyes of his Keynesian-minded contemporaries.”

The lack of respect – and even off-putting attitude – showed toward Schiff can be blamed on outright bias. Like any thought-sport, there is accepted doctrine and kooky theories. The winning team is naturally suspicious of anyone who challenges their earned position.

When it comes to mainstream economics, Keynesianism reigns supreme. Central banking is widely viewed as a benefit to the economy; not a meddling danger. The orthodoxy is enforced by believers of what James Grant calls the “PhD standard.” The financial press loves the idea of a few select men guiding the economy toward peak employment. Reporters and commentators need to stay in the good graces of decision-makers to boost their own career. No one would know who Jon Hilsenrath of the Wall Street Journal is if it weren’t for his close contacts to Federal Reserve officials.

Schiff’s Austrian-minded approach to markets is a challenge to acceptable opinion, and he pays the price by burning at the stake on television. The Keynesian revolution didn’t just bring the idea that economies can be fine-tuned with the help of central planners; it brought a high-minded smugness to economic science. It taught aspiring dictators that with enough math formulas and aggressive authority, they could be gods among men. Such conceit is paid for in economic depressions, prolonged unemployment, broken family life, and general societal malaise. The misery wrought by the Keynesians consensus is paramount. Yet it’s practitioners seem immune to considering the simple proposition that their worldview could, in any way, be flawed.”

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