News and Analysis

Friday, March 30, 2012 10:48 a.m.

Federal Reserve critic hits back against Bernanke lectures

Investor Peter Schiff accused Federal Reserve Chairman Ben Bernanke of missing signs of the recession in a lecture held at the Reason Foundation Thursday. Delaney Walsh | Hatchet Photographer

This post was written by Hatchet staff writer Katherine Rodriguez.

Federal Reserve Chairman Ben Bernanke defended the central bank’s role in the financial collapse during his final lecture Thursday to 30 students.

But one of Bernanke’s sharpest critics wanted to tell the other side of the story.

Peter Schiff, an investor and former economic adviser for Rep. Ron Paul, R-Texas, warned that Bernanke presented a “revisionist” history of the recession in a counter-lecture at the Reason Foundation, a public policy think tank.

“Ben Bernanke’s been complacent. The recession was in the Federal Reserve’s power,” Schiff said. “He’s a liar.”

The chief executive officer of both a Connecticut-based broker-dealer and a gold and silver dealer in New York City, Schiff has risen as one of the top libertarian voices against Bernanke after Schiff forecasted the looming recession in his 2007 book “Crash Proof.”

Schiff, whom The Wall Street Journal called a “financial fortune teller for Tea Party activists” in 2010, argued for anti-deficit and anti-inflationary monetary policies at the counter-lecture, which was not sponsored by the University even though about 30 students attended. Ten of whom also enrolled in Bernanke’s class.

“The University wants to have people who worked for the government as mouthpieces,” Schiff said.

He presented a slide-by-slide counterpoint to Bernanke’s four lectures at the GW School of Business, which he said presented a lopsided Keynesian view of economics.

Schiff, who is wary of inflation, said the Fed overreached when it drove interest rates to near-zero and purchased rounds of bonds, an action Bernanke defended Thursday as a way to help the economy recover on the heels of the financial collapse.

Bernanke said in his class that while another financial crisis was “probably unavoidable,” he projected the  country would soon return to stable 3 percent annual growth.

The Federal Reserve failed when the central bankers ignored the housing bubble that built up before the recession, something Bernanke has failed to note in his lectures, Schiff said.

“Students should do their research. Past performance is not indicative of future results,” Schiff said. “The Federal Reserve confused the housing bubble with recovery. When we had this housing bubble, Bernanke said it didn’t exist.”

About ten students enrolled in Bernanke’s class also attended the counter-lecture, saying they wanted to hear another economic perspective on a financial crisis that has divided experts.

“[We’re getting] broad points of views in order to allow us to decide what we think is right, wrong and makes the most sense,” junior economics major David Pomeroy said. “I tend to think the truth lies somewhere in the middle.”


  • J

    Too bad Schiff is not an economist, and never will be. Schiff has been predicting a crisis for years and years and years and years. As has Ron Paul. A stuck clock will be correct twice a day.

  • Nicole

    If you bothered to look anything up on Schiff you’d know that it wasn’t as though he just yelled “recession” for years and years and then finally one came: he presented a detailed account of how exactly things would fall.

  • R. T. Greenwood

    You can lead a horse to water…..when you are at sea in a tidal wave you don’t notice a thing…

    Every aspect of the economy is manipulated by government and the Federal Reserve. The price of gold does not lie. And yes gold IS money and has been for 6,000 years Mr. Bernanke.

    Look at the unprecedented investment bubbles of the last 15 years…, oil futures, housing…all a result of too much money.

    The housing bust was a blatant text book example of malinvestment. This housing bust “recession” put 22% of mortgages underwater and it is a typical U.S. recession Mr. Bernanke? Please…..

    Food and energy inflation are not part of problematic inflation and not valid to use in establishing monetary policy? Please Mr. Bernanke….

    Comparing 1980 inflation with today’s when today’s inflation has been cooked to well done Mr. Bernanke?

    Peter Schiff is absolutely right and so is Nicole. J dude, I have nothing but sorrow for you but Mr. Bernanke does have a job for you.

    fyi – I highly recommend

  • R. T. Greenwood

    Bernanke claimed that the Fed is a major profit center because they made $125 billion in mortgage backed securities. Ron Paul asked BB where did you get the money to buy those MBSs? “We printed it” he said.

    Now that’s a pretty good gig if you can get it.

    Sometimes you wonder how Bernanke keeps a straight face.

  • Disappointed Alumni

    Instead of celebrating our alumni in Congress, the Hatchet once again takes the opportunity to take a story where it didn’t need to go. The statement regarding Reid’s “resentment” towards the university is completely unnecessary. Why can’t you simply be happy to call the Major Leader an alumni and fellow Colonial and call it a day.

  • Esteban Sillypants

    Oh GW don’t flatter yourself. This school isn’t remotely as important as the students who go here make it out to be.

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