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Peter Schiff & The Recession

Peter Schiff recently wrote in the Wall Street Journal that a recession is not only inevitable, but necessary for any ultimate economic recovery. In his closing paragraph he points out that "the free market does have a cure [for a sick economy]: it's called a recession".

That's not very pleasant, and I realize the words "free market" in the current political climate  make a lot of people reach for garlic and silver bullets. But we got into this mess largely because the Federal Reserve, during the 2000-2001 recession, was in too much of a hurry to get us out of it. Cash was pumped into the system that distorted housing prices and credit markets and we are paying for it now. Schiff himself made this argument (better than I'm making it, I might add)in an earlier article entitled Don't Blame Capitalism.


Critics call everything the "free market". That's the trouble - when there's a blend of capitalism and socialism, you can attribute bad things, or boons, to either.

It still amuses me to see people blame long hospital waiting lists in NZ on the profit motive, though.