Unlike some of his political opponents, Peter Schiff has long been critical of Fed Chairman Ben Bernanke and his predecessor, Alan Greenspan.
Back in the boom years of 2006, the author, broker and candidate for U.S. Senate was a lonely voice ripping the Fed. In frequent TV appearances and in his 2007 book, “Crash Proof: How to Profit from the Coming Economic Collapse,” Schiff predicted that the U.S. economy was headed for a crisis due largely to the policies pursued by Greenspan and Bernanke. (This at a time when many politicians were heaping praise on Greenspan, Schiff notes.)
“Together the two of them kept interest rates too low, inflated the housing bubble and tried to get consumers to spend too much,” Schiff said in a brief phone interview this afternoon.
“You have these other politicians jumping on the bandwagon now that its popular to bash Bernanke,” Schiff said. “They didn’t say anything about him two or three or four years ago.”
Schiff points out that he is critical of Bernanke for precisely the opposite reason Democratic U.S. Senate candidate Richard Blumenthal is. (In a statement released Friday, Blumenthal criticized Bernanke for failing to embrace the regulatory reforms needed to avoid another economic meltdown, among other things.)
Blumenthal wants more regulation, Schiff said. “He thinks the Fed should be spiking the punchbowl…I think the Fed should be taking the punchbowl away.”
It’s becoming trendy for pols of every partisan stripe to lash out against Bernanke for failing to foresee the financial crisis, Schiff said. But how many of those politicians predicted the dangers ahead themselves, he asked.
“Nobody else understood or cared,” Schiff said. “I saw it coming. I’ve got credibility criticizing Bernanke.”