Peter Schiff Discovers No Country For Corporate Profits

Tyler Durden's picture

While the general economy continues to float along a depressionary bottom across all key verticals including housing (quadruple dip), jobs (the "new part-time normal" even as real unemployment has risen to 2012 highs), and manufacturing (contracting for 3rd month in a row and lowest since mid-2009): a bleak picture manifesting itself in a sub-stall speed GDP in the third year after the "recession ended" despite trillions of fiscal and monetary stimulus (not to mention that according to Gluskin Sheff 100% of the developed world is now contracting), one aspect that has not only kept the S&P buoyant, but shoved it to near all time highs, has been the general offset to atrocious labor conditions and low salaries: namely surging corporate profits.

Needless to say (because we have said it many times), corporate profits are no longer surging, and together with corporate revenues, have now peaked on a year over year basis and are declining, but sure enough over the past 3 years, the ability of companies to refinance at ZIRP-levels, and to fire tens of millions of full time workers (offsetting in rare cases by hiring hundreds of thousands of part-time workers) has allowed the build up of a massive cash buffer allowing companies to better prepare for the next systemic crisis, as well as handle the never-ending geopolitical uncertainty. Most importantly, it is this transient yet record profitability, together with now endless central planning intervention by the Fed, that saw the S&P close at the highest level since 2008, a fact which the president will undoubtedly mention and take credit for during the DNC speech in two hours.

So while on one hand corporate profits are something to rejoice over, at least when not blaming them on the previous president, on the other hand it is these same "evil" corporations, in various populist narratives, that are the root of all evil, and are the reason why America's real unemployment rate continues to be sticky in the 15% range.

One such narrative was discovered by none other than Peter Schiff who pulled an OccupyWallStreet (remember that whole Occupy movement?) where but at the Democratic National Convention. What he did, was succeed in exposing some very disturbing prevailing beliefs about the government's role in establishing the 'utility' value of the free market as manifested by corporations, namely that according to a broad cross-section of society, it is the government job to "explicitly outlaw profitability."

We wish to remind readers that this has been done on numerous occasions in the past, but most "effectively" in the Soviet Union's centrally planned regime. Until the USSR's failure of course. The premise of eliminating profitability is also quite popular, and even has its own name: nationalization, and its result in a business "manager" who is perfectly ambivalent if the state owned enterprise makes or loses money. After all the wage is determined by a politburo, and is not a function of the profits, or losses, a business may engender.

Furthermore, it is probably worth reminding that the primary tenet behind capitalism is the production of goods and services for a profit.

Sadly, quite a few of these concepts appear to have not been made clear to not just one or two Americans as the following clip demonstrates.

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fonzannoon's picture

Peter Schiff may not be perfect but he catches way too much shit on here. He is a good dude and he has the right intentions. I am glad he got some exposure here.

Dr. Engali's picture

I have yet to meet anybody who is perfect, but I can say I like Peter Schiff. He is way ahead of the curve.

The Shootist's picture

That boy's sure got an ego though. Hard to swallow when he's wrong, but I like him nonetheless.

economics9698's picture

I like Schiff, pretty insightful.  Von Mises, Rothbard, Rand, Friedman, and a few others.

A Nanny Moose's picture

She needs to be on the lookout for Leprechauns....surely they will be after her lucky charms.

Bananamerican's picture

"Send Schiff a bottle of Bollinger on me....No, make it a case"-Lloyd Blankfein

palmereldritch's picture

I liked this video better than the one where Schiff tries to bootleg moonshine at the M.A.D.D. convention.

redpill's picture

One of my accounts is with Schiff's firm precisely because I admire his guts and his ability to definitively call things.  His stock picks are usually foreign, in appreciating currencies, with good dividends.  As sensible approach to equities as one can have these days, imho.

His venturing into the heart of this beast of fucking lunatics deserves some respect for patience if nothing else.  Granted I probably would have wanted to punch just as many people in the face at the GOP convention, just for different reasons.

Comay Mierda's picture

Schiff you are amazing.  Great books too.  And great radio show 10a-12p EST 

sessinpo's picture

How about the above posters talking only about how they dislike or like Schiff do something a little more constructive and actually talk about what Schiff exposed in the interviews. I think that was why Schiff did it.

Ahmeexnal's picture

Empty chair with teleprompter is a clear giveaway as to the identity of the invisible seated person.

LMAOLORI's picture



ROFL that's pretty good too!

otto skorzeny's picture

not peddling any AIPAC bullshit tonight Ahkneel?

Vampyroteuthis infernalis's picture

Dems are the clueless Marxist lot in our political system. This should be expected. No good comments can be made about the other side either except they are a little more aware of economics.

FEDbuster's picture

There is no "thought or reason" in the democratic party, only emotion.  I have tried to have some very reasonable and respectful discussions with my Mom (who is a die hard Obama fan), but her positions are all based on emotions.  I have given up trying to open her mind to the realities of economics.

I am afraid the same thing is happening with the republicans, too.   The neocons have become very emotional in their "love and hate" of certain things.

Ron Paul was the only guy who made any sense to me, and now he is gone (although on Leno he joked of resting up for a 2016 run).  The whole political landscape is sad and depressing (two more emotions).

monad's picture

You just know Debt Brother was watching Clint Eastwood, and Clint Eastwood knew it too. The chair was just an excuse to address Debt Brother, live. Clint Eastwood 2012 

Tom in AZ's picture

You people are out of your minds repeating the drivel coming out the those cultists.

A Nanny Moose's picture

I brought my blue tennis shoes. How 'bout you?

vast-dom's picture

schiff is sharp. he can go to either convention and get the net same result: all sides scary. all people really. 


 homo sap limitless stupidity no cap can cap.



AnAnonymous's picture

'Americans' are a very uniform group indeed.

Does not make up for the rest of humanity even though in 'American' myth, only 'Americans' are human beings...

Matt's picture

Looks like he is adopting Michael Moore's style of interview, with specifically targetted, carefully worded loaded questions, and you only show the people that agree with your questions.

Lewshine's picture

Your misguided compassion for individuals who validate that there should be an IQ test given to receive the right to vote...Or in your case, procreate...Is hysterical!

Matt's picture

First, Compassion? I was not saying anything about the people in the video, but commenting on the style of questioning posed by Peter Schiff.

Second, I don't think you understand what Rights are. They are inalienable.

Third, "I don't like what your saying, so I'm going to lash out with a personal attack! ha ha!"

People naturally want to agree with other people when talking face to face. Put a camera in their face, and they really want to be cooperative. How you word your questions helps you get people to give the answers you want. How many people did he talk to, in order to make this clip? 100, and choose the top 3?

This is exactly the same techniques used by Michael Moore or Borat, to make your target group appear how you want them to appear.


SilverIsKing's picture

So Matt, if Peter Schiff approached you and put a camera in your face and asked you the same question he asked in the video, how would you respond?

Matt's picture

The first guy had it right: "thank you for your time, I gotta go". 

Any of these "comedy guys", Jon Stewart, Michael Moore, Bill Maher, or apparently Peter Schiff, they have a tendency to creatively edit to create whatever image they want. The only way to win is not to play.

SilverIsKing's picture

Why not answer truthfully?  Aren't you capable of that?  If you tell him what you honestly think, how can that be a bad thing?

Imagine if he had a video of him asking all these people this question and each time he asked, the person refused to answer.  Wouldn't that make a similar statement about these folks in the video?

AnAnonymous's picture

How could it?

Funny duo dancing as it often happens with 'Americans'...

here's an example:
People naturally want to agree with other people when talking face to face. Put a camera in their face, and they really want to be cooperative. How you word your questions helps you get people to give the answers you want.

How could it make a similar statement if 'americans' refused to comment? It would blow the perception of cooperation as they would display the option of willingness to cooperate.

Second, the other 'american' provided an answer. 'Americans' know no freedom of speech and as usual, only use that concept to conceal what 'Americans' rely on: censorship.

The first 'American' stated it as it is: when you have no power to censor, it is useless to participate to the 'American' game. Schiff has all the power of edition so he has the power to censor.

And the other 'American' could not take it: as he feels he is on the same side as Schiff who has the power, people walking away from the power scheme are lost assets, an insult on the power structure.

'Americans' run a business of extorting the weak, farming the poor. In such conditions, you simply dont walk away.

Very entertaining and shows how 'Americans' work in duos.

What is concealed? US citizen nature. 'Americans' are duplicitous. Who cares what they tell on a camera? They wont tell their objectives.

On the very contrary, 'Americans' telling outright how 'Americanism' is would have been very surprising.

Expect 'Americans' to propagate and fancy over, not report facts...

Matt's picture

"Why not answer truthfully?  Aren't you capable of that?  If you tell him what you honestly think, how can that be a bad thing?"


You clearly don't understand how this style of "interview" works.

First, interview several people, and edit out the ones that don't give the answers you want.

Ask loaded questions, in the form of yes or no, and if the target tries to give a long form answer, pressure them into a "simple yes or no, answer the question".

Word your questions awkwardly, and say them really fast so the person doesn't get a clear picture of exactly what you are asking.

Get three Yes answers in a row, and you greatly increase the odds of getting a Yes to question number 4.

You can see his view is going to be slanted and edited to show what he wants right at the start with "wait a minute, this is the Democrat National Convention, they don't want to work".

His first question: " Do you think it is fair that corporations make all these profits?"

He wants a yes or no answer. The answer is more complicated, but he has already framed it as a simple yes or no. Which corporations? Profits gained through tax loopholes and regulatory capture, or corporate profits gained through legitamate success?

He is the one who follows her answer with "that's right, we need to ban profits!" then cuts to the next person, so we don't see what her reply or reaction is.

HD's picture

Schiff is one of the few people that even when I agree with him - I still want to punch him in the face. He seems to work at being as obnoxious as possible.

fonzannoon's picture

he has to be. takes thick skin to get laughed at for years until he was right. takes balls to have the courage of your convictions too.

Taint Boil's picture



I love Schiff too, but yes I do agree with your statement [face punch]. If you are good, you don’t have to tell anybody ……… they will know.

SilverIsKing's picture

My suggestion...put on a Peter Schiff mask and punch yourself in the face a few times.

Eireann go Brach's picture

I like Schiff too! Tyler needs to give him more exposure here, not sure why he does not! Especially when Compared to that old bastard Biderman and some other folks who get an audience on ZH!

prains's picture

Jingoistic xenophobic (I'm the best) americans scare me too

Mareka's picture

I am only for outlawing corporate profits when the corporation in question is only still in existence as a result of government intervention, i.e, Goldman Sachs, AIG, JP Morgan.  The planets finally aligned in a way to rid the world of these parasitic M.F.ers and my government had to jump in and save them using my money.

Snidley Whipsnae's picture

It is more than just Democrats that scare me. All those that lend their weight and presence to any ideological gathering, without giving serious thought, scare me.

H L Mencken put it well: "[D]emocracy gives [the beatification of mediocrity] a certain appearance of objective and demonstrable truth. The mob man, functioning as citizen, gets a feeling that he is really important to the world—that he is genuinely running things. Out of his maudlin herding after rogues and mountebanks there comes to him a sense of vast and mysterious power—which is what makes archbishops, police sergeants, the grand goblins of the Ku Klux and other such magnificoes happy. And out of it there comes, too, a conviction that he is somehow wise, that his views are taken seriously by his betters—which is what makes United States Senators, fortune tellers and Young Intellectuals happy. Finally, there comes out of it a glowing consciousness of a high duty triumphantly done which is what makes hangmen and husbands happy."


unrulian's picture

i don't think they're scary.....just stupid... however, moon bases and mormon leaders...that's scary.

Freddie's picture

Yeah let's grab corporate profits.  Start with all the libtards or Dem frielndly companies first like Apple, Google, Microshaft, Amazon,  Elon Musks shit companies, Starbucks, McDonalds faux shit food, Berkshire Hathways, Facebook - wait no profits there.

How about grab the "profits" Corzine stole and throw his ass in jail.  

sessinpo's picture

But unfortunately Hayek didn't take into account corruption or cronyism. Thus even in a totalitarian system, you don't have equality. In any system, there will be those that have more "equality" then others.

slaughterer's picture

OT: commodities and Nikkei not looking so good right now on overnight futures market.   Why is that? 

fonzannoon's picture

Because 160k on the NFP tomorrow is a done deal. Fed is absolutely on hold next week. But lets be clear there is no going back from here. The data has to stay good. Like real bullshit good. No way they levitate this market without real good bullshit data in the absence of QE.

flacon's picture

Not so fast:

Fed Likely to Ease Even With Strong Jobs Report

fonzannoon's picture

I would love to see that. Love it. Lets send crude off the charts, couple it with a treasury selloff and watch gold shoot up. Then after a week or two at best, watch the market sell the news. Have at it.

WonderDawg's picture

I'd love it, too. My TLT puts would zoom, which I think they'll do anyway, but why leave anything to chance? Bring it on.

The calls I bought on SWHC today are flying, and I'm sure a little QE would be good for them, too.