Financial Analyst Warns Inaction Will Lead to 'Mass Starvation'
Despite the â€śpopulist uprisingâ€ť to block the economic bailout, President Bush signed a $700 billion rescue plan Oct. 3. The bailout spurred much debate, including a second dispute between financial analysts Peter Schiff and Stephen Leeb on CNN.
CNNâ€™s â€śYour $$$$$â€ť hosted the heated discussion on Oct. 4. In it, Schiff and Leeb argued about the need for a bailout â€“ which Schiff termed a choice â€śbetween freedom and socialism.â€ť In contrast, Leeb referred to it as a choice between inflation and starvation.
Delaying a bailout would cause â€śmass starvation, not just in this country, all over the globe,â€ť according to Leeb, president of Leeb Capital Management and frequent â€śYour $$$$$â€ť guest. He later repeated the frightening claim saying, â€śif we don't do something, farmers won't be able to grow their crops and the world will starve!â€ť
CNN host Christine Romans compared the financial situation to a â€śdoomsday scenarioâ€ť similar to â€śanticipating nuclear warâ€ť before pushing intervention. â€śShouldnâ€™t it be the responsibility of the federal government to make sure that, even though it might have caused the problems, we have to mitigate disasters?â€ť Romans asked.
Even after Romansâ€™ question, Schiff took an anti-bailout stance. President of Euro Pacific Capital, Schiff said government intervention â€świll pour gasoline onâ€ť the problem that could create a â€śhyperinflationary Depression.â€ť
â€śIf you want the fire to go out, you need to let the free market work,â€ť Schiff said. He opposed the bailout plan saying that it wonâ€™t work and would result in more bailouts and more government intervention. â€śThe stock market will keep falling and the government will take more power and they'll create more damage.â€ť
Leeb countered, arguing that without intervention the free market would grow economic instability and ultimately cause a crisis requiring a higher amount of government control of the economy, â€śa dictatorship maybe.â€ť He attacked Schiffâ€™s position saying, â€śI donâ€™t want to be saluting a dictator in this country, but thatâ€™s what youâ€™re advocating.â€ť
Later in the show, the â€śCNN senior money teamâ€ť returned to the bailout discussion. Romans noted the persistent â€śpopulous outrageâ€ť against the bailout package and asked why many Americans opposed to the bailout are â€śundeterred in their hatred.â€ť
CNN correspondent Susan Lisovicz asserted one reason that the bailout has met so much opposition: â€śI donâ€™t think that it was ever sold to the public as clearly as it should [have been].â€ť
CNNâ€™s Jennifer Westhoven blamed a â€ścredibility gapâ€ť for alienating citizens from supporting the bailout bill. â€śWhen you constantly have officials saying things that turn out to be untrue or extremely questionable [about the economyâ€™s stability], even if theyâ€™re true by the letter, people just donâ€™t believe it right now.â€ť
Westhoven suggested that â€śgapâ€ť stood in the way of people believing that the bailout was necessary.