Monday, April 9, 2012


On April 5, 2012, Peter Schiff wrote an excellent article explaining why President Obama is so confused, befuddled and so completely WRONG about how economies work. While spouting leftist dogma that resonates with most Democrats and many Republicans, the President continues to display his ignorance of economics shared by many, if not most, Americans. It's called OBAMA'S PRETZEL LOGIC.

Here's an excerpt:

While it is true that the American middle class rose in tandem with her economic might, it was the success of the country’s industrialists that allowed the middle class to arise. Capitalism unleashed the productive capacity of entrepreneurs and workers, which brought down the cost of goods to the point that high levels of consumption were possible for a wider cross section of individuals. While Henry Ford, as Obama noted, paid his workers well enough to buy Ford cars, those high wages would never have been possible, or his products affordable, if not for the personal innovation he, and other American industrialists, brought to the table in the first place.

The economists that Obama follows believe that business will only create jobs once they know consumers have the money to buy their products. But just as wet sidewalks don’t cause rain, consumption does not lead to production. Rather, production leads to consumption. Something must be produced before it can be consumed.

Once again, I encourage you to read Peter Schiff's excellent article in its entirety, OBAMA'S PRETZEL LOGIC.
I hope you enjoy reading it as much as I did, because it is spot on.

You can also buy Peter's recent book, HOW AN ECONOMY GROWS AND WHY IT CRASHES (which I have recommended here before) on Earlier this year the book stimulated a multi-week discussion on market economics in my friends Ari Armstrong and Amanda Muell's LIBERTY IN THE BOOKS monthly discussion group in Denver (scroll down to see Peter's book).

Yours in Liberty,


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