You would think a guy who predicted the economic crisis of 2008 and the recession of 2009 would have gotten a little more traction among conservative Republicans and Tea Party leaders when he ran for the U.S. Senate.
But Peter Schiff has been so ignored by everyone from Jim DeMint to Sarah Palin to Fox News that on Monday he made the unusual admission for a political candidate that he doesn’t have much of a chance in Tuesday’s primary, when Republican voters in Connecticut choose who will face Democratic Attorney General Richard Blumenthal in the race to succeed Sen. Chris Dodd, a Democrat.
“I’m the best candidate but unfortunately I’m not going to be the nominee,” Schiff said in an interview by phone as he criss-crossed the state in an RV.
He immediately softened his admission of likely defeat.
“I’m not saying I’m not going to win. I can still possibly pull it off. But if I end up not being the nominee, it’s just really unfortunate, because not only am I the only person that can deliver the kind of change that the country needs, but I actually have a better chance of beating Dick Blumenthal,” he said.
Schiff’s slip of the tongue is indicative of the degree to which he is an un-politician. But while he is a political outsider, Schiff does not have the advantage of having a PR-friendly occupation, like physician Rand Paul in Kentucky or former NFL player Clint Didier in Washington. Schiff has spent more than 20 years as an investment advisor, and currently is president of EuroPacific Capital, Inc.
But it’s in that role that Schiff began predicting the economic collapse of 2007 and 2008 over a year before it happened. Schiff’s website features a 10-minute montage of Schiff appearing on different cable news talk shows and eliciting a remarkable level of derision, mockery and hostility from others in response to his gloom and doom prognostications.
Schiff’s critics said he had been predicting recessions inaccurately since the beginning of the decade. But Schiff contests that he had never set a date certain and was consistently warning of a the same dynamic: a debt bubble driven in large part by government failure to restrain spending combined with perpetually low interest rate policy by the Federal Reserve.* Regardless, this time he was right.
“There were people that saw this coming, not a whole bunch but Peter Schiff, [and] my father,” said Rand Paul, the GOP nominee for Senate in Kentucky, who participated in a fundraising drive for Schiff last week.
“[Former Federal Reserve Chairman Alan] Greenspan says, ‘Oh nobody could have seen this coming,’ but some smart individuals like Peter Schiff did see it coming. And I think that’s the kind of economic voice that really is lacking right now in Washington,” Paul said last week.
Schiff premised his candidacy on his foresight and economic acumen.
“We don’t need another senator that’s going to blindly follow the bad advice of the Secretary of the Treasury,” Schiff said, referring to the decision in late 2008 to set aside $700 billion for the Troubled Asset Relief Program, which Schiff assails as a taxpayer-funded bailout for Wall Street banks.
“We need somebody like me, that can explain to the other senators why the advice is wrong and why it shouldn’t be followed,” Schiff said. “Why do we need another senator that needs an economic adviser? I don’t. My plan is to go in and advise all the other senators that are clueless.”
But his message and his candidacy never took off. A Quinnipiac poll on Monday showed Schiff trailing Republican frontrunner Linda McMahon, the former CEO of World Wrestling Entertainment, with only 15 percent to McMahon’s 50 percent. Former Congressman Rob Simmons also was far ahead of Schiff, with 28 percent.
Schiff blamed McMahon’s huge lead on her ability to self-fund her campaign. The former fake wrestling mogul has already spent around $20 million of her own money on her campaign and has pledged to spend up to $50 million by the time it is all said and done. Schiff said that means that national Republicans have no incentive to support anyone else, because even if she loses, McMahon’s candidacy will draw significant Democratic resources to the race while leaving GOP money available for elections in other races.
Schiff was endorsed and supported by local Tea Party groups in Connecticut, but he said he could not explain why he had not received endorsements from national conservative figures such as Sen. Jim DeMint, the South Carolina Republican who has helped launch other renegade candidates, or former Alaska Gov. Sarah Palin, whose support has become one of the most sought after blessings for conservative politicians seeking to galvanize grassroots Tea Party movement energy and support.
Palin aides did not respond to questions on the matter, while DeMint has indicated in the past that he did not think Schiff was in a position to win the primary.
A grassroots leader in the Tea Party movement in Kentucky said the answer to Schiff’s political inertia was due to his own lack of enthusiasm for the nuts and bolts of running an effective campaign.
“He didn’t put the energy in early on that he should have. I don’t think he likes campaigning much,” the activist said.
Rob Jordan, who runs the political action committee for the Tea Party-affiliated Washington-based group Freedom Works, confirmed that Schiff’s campaign was lackluster for much of the past year.
“He was saying all the right things, [but] we didn’t see a whole lot of action from him on the campaign front,” said Jordan, whose FreedomWorks PAC has endorsed Republican candidates in nine Senate races so far, including Ken Buck in Colorado, Marco Rubio in Florida and Paul in Kentucky.
McMahon spokesman Ed Patru said that Schiff’s personality may also have served to turn voters off.
“Half of Peter loves to talk; the other half of him doesn’t like to listen. I don’t think most voters found either trait particularly irresistible,” Patru said.
In response to claims by Schiff that McMahon doesn’t understand economics, Patru said that McMahon “has never claimed to be an academic theorist or a celebrity cable talk show economist. She spent 30 years in the real world building a global enterprise from a company that started with one desk.”
“She was the CEO of an NYSE traded billion dollar company that employs nearly 600 people. She understands how jobs are created and how budgets are balanced in the real world, and she clearly has a firm grasp of economic principles,” Patru said.
It is, however, McMahon’s past with WWE – particularly the trove of YouTube videos showing her kicking men in the groin and other exploits in the ring – that poses the greatest risk of being her undoing once the general election begins later this week.
In an interview with ABC’s “Nightline” that aired Monday evening, McMahon offered a wobbly defense of the content featured in WWE episodes.
“You have to think about this, WWE, as a soap opera,” McMahon said. “So there were segments, there were — the whole behind-the-scenes scenarios that would go to building into that. So it was acting, it was — as I said, it’s a soap opera. It went from week to week, episodically. … So sure, there are story lines that are better than others.”
As for Schiff, he remains pessimistic about the nation’s fiscal future.
“We are early in a complete economic collapse. I think we’re going to go through an economic hell in the next few years,” he said. “This is going to be a very period difficult time that Americans are going to live through. It’s going to be widespread unemployment, runaway inflation. …What it means to be an American is going to change dramatically.”
Alex Pappas contributed to this report.
*The article originally stated that Schiff had inaccurately predicted a recession for years, but was updated to reflect Schiff’s position on the accusation.
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