Economists can not predict anything. All they can do is explain the past.

Both Bush and McCain saw the financial crises coming. Between 2000 and 2007, Bush sent 17 messages to the public and Congress about the impending financial crisis if Fannie Mae and Freddie Mac were not reformed.

McCain introduced reform bills in 2005 and 2007.

All attempts at reform by Bush and McCain were blocked by the Democrats. So if you are feeling poorer this year than last, take revenge on a Democrat. They are responsible for your plight.

Schiff is a remarkably bright economist, which almost ensures that no one in power will be consulting him anytime in the near future. I've been perusing some of the columns on his website the past few weeks.

I think the problem is his shifty eyes. Have you watched any of the video montages of his cable-TV appearances on YT? No matter how on-target his points are he always looks like he's just come off his Ritalin dosage.

Actually Jake, W. apparently is blaming Wall Street for the mess.

http://abcnews.go.com/print?id=6356046

GIBSON: Do you feel in any way responsible for what's happening?

BUSH: You know, I'm the President during this period of time, but I think when the history of this period is written, people will realize a lot of the decisions that were made on Wall Street took place over a decade or so, before I arrived in President, during I arrived in President.

Now who only knows what "during I arrived in President" means. W. can wash his hands all he wants-Woodrow Wilson's errors may have hindered Hoover but Hoover still took the fall.

W. seems to be doing that a lot in this interview, even:

GIBSON: You've always said there's no do-overs as President. If you had one?

BUSH: I don't know -- the biggest regret of all the presidency has to have been the intelligence failure in Iraq. A lot of people put their reputations on the line and said the weapons of mass destruction is a reason to remove Saddam Hussein. It wasn't just people in my administration; a lot of members in Congress, prior to my arrival in Washington D.C., during the debate on Iraq, a lot of leaders of nations around the world were all looking at the same intelligence. And, you know, that's not a do-over, but I wish the intelligence had been different, I guess.

And later....

GIBSON: Greatest disappointment?

BUSH: Well, I mentioned one, and that is no weapons of mass destruction

As opposed to getting Osama?

We've gone from "the buck stops here" with Harry Truman to "passing the buck" with George W. Bush. A pathetic end to a pathetic presidency. Let's just hope W does not inflict himself on America like that fellow failed president Jimmy Carter has for the last two and half decades. Just go away W.

Schiff is one of those guys who's always predicting the next great depression. Maybe he's right this time, maybe not. A broken clock is right twice a day.

"Ensuring"

I remember a guy being laughed off the air a year ago on Fox, and yet there has been a recession since last December (so we've been told).

You ever get the feeling something ominous is coming?

I mean, if we've been in a recession for a year and it's _just now_ getting reported, how bad are things really?

Schiff was right. Ron Paul was right.

The Bush/Paulson/Bernanke serial bailouts won't solve anything; they will only prolong the pain.

However bad it is, you're probably not going to know about it until the tidal wave is cresting somewhere over your house.

Look, it's not like they audit The Federal Reserve, unfortunately. Congress has basically given them a blank check to print money, while the Treasury Department loots us to prop up failing/failed businesses.

I never thought that President Bush would appoint someone more disastrous than Norman Mineta and Harriet Miers and more inept than Alberto Gonzales, but here he is.

Lex Luther

Correction to my last post: That should have been Julie Myers, i.e. the head of BICE, not the failed SCOTUS nominee.

Eric is right. Schiff is certainly a contrarian but I think it's the specifics of his prediction and not the prediction itself that has made him stand out from the other economists.

Karol, why are you afraid of not hearing the end of it? If the message is correct, then regardless of who the messenger is, it should be repeated from every rooftop in the world. Ron Paul was the only candidate who understood our economic problems as stemming from governments doing their usual job of mucking up markets (chiefly through unsound monetary policy), and he and Schiff have continually pointed out that monetary or fiscal policy won't fix things(particularly when the latter means enormous quantities of new federal debt). Fiscally, he was by far the best that either party had to offer. But Republicans hate him because of the single issue of the Iraq War (when in fact Paul said if we're to go to war, let's do it by the Constitution and have Congress declare it without any more political pretenses). Liberals hate him because he supports limited government.

Now regarding Peter Schiff, there's no commandment that "Thou shalt not speak ill of another Austrian"? So here I go. Schiff is a fellow Austrian, but as I've mentioned here, I view him like Eric does: Schiff is right about the economic problems, but in that he kept predicting it would happen. Any Austrian knows that a system of central banking is sure to have foul-ups like this. Any Austrian knows an economic downturn will be a depression if the feds and Fed sufficiently screw things up.

At least Schiff knows what he's talking about, unlike constant Chicken Little twits like Mark Zandi, who has continually predicted "Recession! Recession!" since at least 1997, then pats himself on the back "See I told you so!" when one happens. Well, for how many years did Red Sox fans say that their team would win the World Series, before they finally did?

I have friends and acquaintances who have locked horns with Schiff, who I regard as a very smart man. But sometimes he views only half the picture. He said the U.S. economy will be in serious trouble, so people should instead...buy European assets. He says Americans don't save enough, but I've never heard him place the blame at the feet of government, whose idiotic tax policies discourage saving. He says Americans consume too much, but as someone who should understand markets, he should realize that wealthier countries tend to consume more than they produce, while poorer countries tend to produce more than they consume. That's the way of things, and it will continue until the wealthier consumers can no longer afford to maintain the pace. It might come sooner, it might come later, but an Austrian should say that "Let the chips fall where they may" according to individuals' decisions, and that government shouldn't try to correct things.

Russ Roberts, also an Austrian, admitted he didn't see any of this coming and acquitted himself well. I personally felt we wouldn't have a housing bubble unless people started losing jobs en masse and thus couldn't afford their homes; I didn't know about all the subprime loans and couldn't predict that people would default when they still had jobs, because they didn't want to make payments for a house worth less than what they paid. It's classic Hayek: no individual or subset of society has all the information. You could get a thousand of the world's most brilliant and knowledgeable economists in a meeting, and you still wouldn't have enough information to "fix things."

Jake is correct that economists cannot really predict; their analysis can extrapolate into the future but is more often wrong than right. Hence the joke, "Economists have successfully forecast 10 of the last 3 recessions." As I've said elsewhere, Austrians can note that something is unsustainable, but in the same way that macroeconomists predict that a current account deficit will start to correct itself: neither knows when it will happen, only that it will eventually happen.