Unless the government repeals its bailout and stimulus plans, another recession or depression is inevitable, Connecticut U.S. Senatorial candidate Peter Schiff told an audience of 70 at the School of Management on Thursday.
“As compared to other countries, we have a lot more rope with which to hang ourselves,” he said. “But eventually, we will hang ourselves.”
During his talk, entitled “The Financial Crisis and What It Means for Students,” Schiff, an economist and the president of the Westport, Conn.-based brokerage firm Euro Pacific Capital, blamed the Federal Reserve and both the Bush and Obama administrations for intervening in the financial markets and causing the current economic downturn. Although the lecture was part of a non-partisan seminar series by the Yale Biotechnology & Pharmaceutical Society, Schiff, who is a former campaign staffer for Republican Party candidate Ron Paul, also focused on his attempt to win U.S. Sen. Christopher Dodd’s seat.
Likening the Federal Reserve’s behavior and the federal stimulus package plans to drugs meant to mask the pain of recession, Schiff warned that the economy could soon go through even more painful withdrawals.
“The government pretends to have a magic elixir that makes the pain go away,” said Schiff, a self-described Republican with libertarian sympathies.
Attributing the 2008 financial collapse to low interest rates following the 2000 dot-com bubble burst, during which shareholders lost billions of dollars as the stock prices of several online companies suddenly dropped, Schiff said the government’s high spending can only temporarily prevent a currency crisis and hyperinflation.
“Jobs aren’t created because the government passed bills,” he said. “They are lost when the government passes bills. The economy is getting starved for capital because the government is spending so much.”
Schiff added that he is so pessimistic about the current economic climate that he encourages his clients to invest overseas.
Turning to his campaign, he said he can bring his financial expertise to Washington. He added that the only permanent solution for the recession is to allow the interest rate to go to free market levels.
Referring to fellow competitors in the Republican primary, Linda McMahon and Robert Simmons, as an “entrepreneur with limited knowledge on economics” and a “career politician,” respectively, Schiff said he tried to base his platform on “honesty” about the nation’s economic situation.
“We are doomed unless I’m elected,” he added, jokingly.
The five audience members interviewed said Schiff had a good grasp of how the financial crisis occurred, even if they did not completely agree with everything he said.
“I’ve personally been following Schiff and his intellectual debtors for years,” audience member Ted Sonnier MUS ’10 said. “But I personally think his likelihood of being elected is a long shot.”
According to a January Quinnipiac University poll, Schiff currently is behind McMahon and Simmons in the Republican primary, with 4 percent of the vote. McMahon has 27 of the vote, while Simmons has 37 percent.