Peter Schiff: The Political Theater of the Absurd

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In his most recent podcast, Peter Schiff talked about recent Congressional hearings that featured Rep. Maxine Waters scolding bankers for creating the student debt crisis, ignoring the fact that the student loan program was nationalized a decade ago.

Peter described it as the political theater of the absurd.

Waters grilled the bank CEOs, asking them what they were going to do about all of the students they had saddled with all of this debt. Peter called it the “height of hypocrisy and denial.”

Why did all of these banks make all of these student loans? Because the government guaranteed the loans. That is the only reason the loans were made. Basically, the government went to these banks and said, ‘Hey, we want you to make these loans to these kids and just to make sure that you make them, we will guarantee the debt.’”

And to make this even more absurd, banks don’t make student loans anymore. The government does it directly.

Now, how can the government blame the private sector for the student loan debt when it’s the government that is actually lending the money to the students. I mean, if there was ever a problem that was more obviously caused by government, it’s student loans. Because the government either made the loans or guaranteed the loans, yet now the government is somehow is trying to blame the public sector for the problem and asking what they’re going to do about it? Whats’ the government going to do about it?”

Peter went on and highlighted some of the other absurdities in the hearing, saying the bankers were basically just there to “kiss ass” after getting bailed out by the government in 2008.

Peter also talked a little about inflation in this episode.

The government released its latest inflation numbers late last week. The overall CPI number came in at up 0.4%, slightly above the projection of a 0.3% rise. Year-over-year, the CPI is up 1.9%.

Peter said people should really be focusing on the rising price of oil because that is ultimately going to push that CPI number significantly higher. The price of oil continues to rise despite the fact that the dollar has not fallen.

Peter also pointed out that inflation is one of the reasons we see a rising level of inequality.

One of the reasons that you have this rising inequality is because of the Federal Reserves efforts to pursue inflation. Even Mario Draghi said, ‘I need more inflation, that is our goal. We want inflation.’ Well, that’s been the Fed’s goal. They’re trying to reach their inflation target. Well, that is one of the reasons you’re seeing this wealth gap because inflation hurts the most the poor and the middle class. They don’t have financial assets that benefit from inflation. They earn wages and the value of those wages are destroyed by inflation. The cost of living is going up and the value of their savings, if they have any savings, is going down.”

Simply put, inflation is undermining the living standards of average people.

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