Peter Schiff is Insane

Peter Schiff gets a lot of credit these days for going on television and predicting the banking collapse of the current recession, even though some other economists missed it. Through his television appearances, Schiff earned the nickname "Dr. Doom" because of his dire predictions.

So, is Schiff the brilliant prognosticator of the future? Not necessarily. Lots of other people saw the current economic crisis coming, especially the housing bubble, they just lacked the desire or the personality to go on television. Yes, some of Schiff's predictions came true, but even a broken clock is right twice a day.

Before you sell all your belongings and follow Schiff, there are a few things you might want to consider:

He's one tin-foil hat away from being a full blown survivalist, yet he graduated from Berkley. Like Stan Lee says "nuff said".

His father is currently in prison for income tax evasion, not because he's a crook, but because he's a tax protester.

Many of Sciff's investment clients took a beating in 2008. It turns out, hiding your money in Singapore wasn't such a good idea after all.

Sciff follows the Austrian school of economics, or as I like to call it, the "Mad Max" school of economics, whose main tenets are that human beings are too evil and too stupid to ever govern effectively, so the only solution is the thunderdome of absolute laissez-faire.

"Dr. Doom" is a financial adviser for "Dr No." Schiff works for Ron Paul. Birds of a feather flock together, especially when they're both radical libertarians who want to bring down the government.

He was wrong about the dollar and wrong about gold and on his radio show Jan 14, 2009, he said Americans should stock up on guns and ammunition to fight off the wandering hordes of the coming apocalypse. That's just great radio...If you're Art Bell!

Schiff was right that Americans didn't save enough and spent too much on consumer crap made in Asia. Duh! You didn't have to go to Berkley to know that. This has been a known criticism of the American economy far and wide for forty years.

A bear market doesn't make survivalists suddenly brilliant and "right" any more than a bull market means you should invest in rose-colored glasses. A little faith in each other tempered with some common sense will carry you pretty far in this old world. In the mean time, try and avoid the people trying to grab your attention at either end of the pendulum. They're not necessarily all that bright or right.

How Strong is your Artistic Vision

The strength of any artistic endeavor is related directly to the strength and clarity of its vision. Art is an act of communication and the success of that communication depends almost entirely on the clarity and purpose of the message.

For many, there is no purpose. They simply like to paint or sing or act and that becomes the message. You can't expect the world to care if you like doing something. The message has to be something they care about too.

If your message is about something other people care about, and you can express it clearly enough, then you will find your audience and you will be successful, otherwise, be grateful for the friends and family who come to see your work because that's all you'll ever have.

The best example I can think of to illustrate this principal is Ballet Magnificat, right here in Jackson Mississippi. Most people would never think to try and send an evangelical christian message using classical dance. There's almost nothing in the cannon of ballet that carries a christian message, yet that was the goal when Keith and Kathy Thibodeaux started their company in 1986.

Thibodeaux found her success, not among the community of dance lovers, but from the evangelical movement. "Traditional" ballets tended to look down their nose at Ballet Magnificat, but their companies dwindled and died while Thibodeaux's company thrived.

Andrew Wyeth, who died recently was one of America's most successful painters. His message was not cultural or religious, but entirely aesthetic. He had something to say about texture, emotion and color and his work conveyed that message clearly enough and strongly enough to drown out his many critics in the art world.

Wyeth found his greatest success in a time when his work had the least in common with the prevailing trends in painting. He succeeded because successful art has nothing to do with trends or movements in the field. It has to do with how it impacts those outside of the art world, and that's where he found his audience.

If you're an artist hoping for success beyond pleasing yourself, then you have to ask, "what is my message?" and "who wants to hear it?" Once you've discovered these answers, then put your energy in making your message as strong and as clear as you can and more than likely, you will find your audience and find success.

Image Information:

"Late Fall" by Andrew Wyeth; source: http://en.wikipedia.org/wiki/Andrew_Wyeth

"Deliver Us" Source: http://www.balletmagnificat.com

Deepening The River of Our Economy

Right now, everyone is focusing on the crisis in banking as the cause of our economic problems, but I wonder if this is an effect and not a cause.

The financial sector certainly made some really stupid mistakes, but they actually were doing fairly well until something set them off.

When that happened, they realized they had, over the years, removed a lot of the safeguards we installed to protect them. That was the stupid part.

For thirty years, maybe more, maybe twice as long, our economy has been a shallow river. The water moved very fast, but it wasn't very deep.

Two years ago, we found ourselves in a situation where growth in the the world's economy was outstripping the resources we built to fuel it. The problem was fuel itself. We were too reliant on fossil fuels and when demand outpaced supply, we saw fuel prices more than double.

Energy costs are a fundamental building block of any economy, and you can't double the cost of energy without having serious repercussions throughout the rest of the system. Fuel prices doubled and the economy stalled. When the economy stalled, it created a major back flow in the banking system so the banking system broke.

As painful as this recession is, it may have come not a moment too soon. Without a slow down in the world's economy we were facing the serious problem of literally running out of energy. This recession may give us just enough time to correct the problem before it's too late.

The river of our economy overflowed its banks and threatened the villages in the valley below.

Alternative forms of energy have been a part of our economy for more than seventy years, but they were only a small part. Instead we supplied our demand for energy with fossil fuels as a commodity. It was more profitable in the short-run, but lead to two major problems: global warming and dwindling supply.

Renewable forms of energy are part of the infrastructure, not a commodity. Wind, solar, tidal, thermal, hydroelectric, even nuclear energies cost more to build on the front end, but then they are free from the fluctuations of the commodity market as they are self-supplying to a large extent.

Our energy has always come from a mix of infrastructure sources like hydroelectric and commodity sources like natural gas and oil, but in the past the ratio of that mix was something like 10% infrastructure and 90% commodity, leaving us incredibly vulnerable to the fluctuations of commodity markets.

Suppose we change that ratio, to say 60% renewable infrastructure sources and 40% non-renewable commodity sources. We need to retain that 40% from commodity sources because they're more flexible and can respond to fluctuations in demand, but it's unlikely demand will ever fall below the 60% provided by infrastructure sources.

To do this will require a genuine increase in both leadership and responsibility in the public and corporate sector. Some will say we can never expect that kind of performance in people, people are too greedy and too stupid, but I say we can. We can accomplish anything we want to.

Hell, we went to the moon strapped to the tip of an over-glorified bottle rocket. We can do anything.

By changing the mix of where we get our energy, by investing in our energy infrastructure, we deepen the river of our economy. The water won't move as fast, but more will flow past us and our future will be more secure.

Image: Hoover Dam from the air; Source Wikipedia http://en.wikipedia.org/wiki/Hoover_Dam

Sins of the Father

The worst mistakes of the Bush presidency were trying to correct the mistakes his father made.

Lots of people are saying the presidency of George W Bush was the worst in American history. I think it's way too soon to say such a thing, but he certainly didn't have an easy eight years either.

After serving as Vice President, George H Bush ran for President and uttered this phrase "read my lips, no new taxes." He was elected, and as president he chose not to veto a democratic backed bill that raised taxes.

It actually was a pretty good bill and was a direct contributor to the budget surplus of the Clinton administration. The republicans hated it though and saw it as a betrayal of their Republican ideals, which many think was a significant factor leading to his unsuccessful run against Bill Clinton.

When George W Bush became president, he saw this as indicating he should never cooperate with the Democrats in congress. Although he ran for president as a "uniter", once in office, Bush almost never reached out to the Democrats unless he knew they were already on their backs. This policy of not crossing party lines made Bush one of the more divisive presidents in the last hundred years, which is ironic because his predecessor, Bill Clinton, was most successful when he crossed party lines.

The other time Bush tried to correct what he saw as his father's mistakes was with Iraq. Republicans had long criticised George H Bush for not ousting Saddam Hussein during the first Gulf War. Bush said he did not have a UN mandate for ousting Hussein and they had achieved the primary objectives of the war to push Iraq back within their own borders, so he brought the troops home.

When George W Bush became president, he was overly eager to oust Hussein at the first sign of trouble in the middle east. After 9/11 Bush had overwhelming public support for pretty much anything he wanted to do in the middle east so he chose to invade Iraq based on some pretty shaky intelligence.

Once in Iraq, he learned that ousting Hussein was fairly easy, but rebuilding a stable country out of Iraq afterwards was very, very difficult.

One of the benefits of putting term limits on the U.S. President is that they can't go back and amend what they see as their earlier mistakes. Each new president starts with a fresh slate to make his own unique mistakes.

The term limit legislation didn't foresee a son following his father as president, though, or that the son might want to revisit his father's decisions. This may not be a situation that comes up very often, but it's worth remembering when it does.