Peter Schiff's views as an author, investor and free market idealist are no secret: Abolish the Fed, buy gold and avoid the dollar. With that in mind, Sunday night was something of a dream come true for the President of Euro Pacific Capital.

Thanks To Princeton University's Business Today, Schiff went head to head in New York City with St. Louis Federal Reserve President James Bullard and former Federal Reserve Vice Chairman Alan Blinder in a panel titled, "Challenges of the Global Slowdown: Redefining Government Regulation."

It might as well have been called "Schiff Blames the Fed for the Financial Crisis."

We caught up with Schiff after the panel to discuss some of the points mentioned in greater detail. (Click here for our one-on-one intereview with Bullard from the confab.)

Schiff on capitalism

The irony here is that Bullard is being characterized as a dove when, in fact, the opposite may be true. This is no small matter since Bullard will become a voting member of the FOMC in 2010.

So let's review:

The dollar weakness Monday morning was attributed, in part, to Bullard's comments that he would like to see the Fed continue its program of buying mortgage-backed and other asset-backed securities, rather than let it expire on March 31, as currently planned.

As with last week's brouhaha over his comments about the Fed possibly staying on hold until 2012, the headlines about the asset-buying program miss some of the nuance of Bullard's view.

Bullard recommends continuing the program "at a very low level," Dow Jones reports, adding: "As long as we are at zero [percent], we'd be able to send signals to the markets about what we are thinking about the economy, and how much accommodation the economy needs at various points, by adjusting the asset purchases."

In other words, if the asset-buying program is kept open, it can be another tool for the Fed to communicate with the market by means other than moving the Fed funds rate.

After spending some time with Bullard Sunday evening, it's pretty clear to me that he's no dove. As you'll see in the accompanying video, Bullard is very concerned about the potential for asset bubbles and the Fed's role in creating them...

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From The Business Insider, Nov. 23, 2009:

Microsoft (MSFT) wants to pay News Corp (NWS) and other large publishers to de-list their Web sites from Google's (GOOG) search index, the Financial Times reports.

The idea is to force Google (GOOG) to pay for content, thinning its currently fat margins.

Problem is, we can't imagine Google going for it.

For one, the FT reports that Google’s UK director Matt Brittin told a conference last week that Google did not need news content to survive.

“Economically it’s not a big part of how we generate revenue,” he said

For another, we can't imagine links to worthwhile stories originating from News Corp not finding their way onto sites that will happily remain indexed in Google's search engine free of charge.

Still, if News Corp were to "de-list" from Google, we'd expect to see all kinds of ads touting Bing as the only place to find the Wall Street Journal and MySpace pages online. Maybe that'd swing search engine share some, but we doubt it.

More coverage from The Business Insider:

• Droid price drops to $120
• AOL unveils new brand, new logos

From The Business Insider, Nov. 23, 2009:

The New York Times -- not usually the first publication you'd think of when it comes to calling for fiscal prudence -- sounds the alarm over the government's massive debt load.

The premise is that, although we're fine now, borrowing money cheaply, we've got a huge refi coming up, and there's an excellent chance it will be way more expensive.

With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.

In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.

A really astounding fact, noted in the article...

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More coverage from The Busines Insider:

• Ben Bernanke's 1938 parallel
• Goldman super bullish on China

On the heels of Goldman CEO Lloyd Blankenfein's apology for his firm's role in the financial crisis, some of Goldman's largest shareholders are unhappy more of Goldman's prosperity isn't being passed along to them, The WSJ reports.

Despite record net income and compensation, analysts forecast Goldman's 2009 earnings per share will be 22% lower than in 2007, and roughly equal to its 2006 earnings, according to Thomson Financial. The drop in EPS is caused by the more than 100 million shares issued in the past year to bolster Goldman's financial position and capital.

While the article doesn't name the "miffed" shareholders, Goldman's five-largest shareholders as of Sept. 30 are mutual funds:

1. AllianceBernstein
2. Barclays PLC unit
3. State Street unit
4. Vanguard Group
5. Wellington Management

As Aaron and Henry discuss in the video, the standard payout ratio of 50% of profits Wall Street has long enjoyed does not make sense in this economy. Wall Streeters could stomach a lot less, especially when most individual Americans are pocketing a 0% payout.

Of course this mounting criticism comes amid Matt Taibbi's "Vampire Squid" takedown of Goldman this summer...

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Treasury Secretary Tim Geithner took some heavy fire on Capitol Hill Thursday. Days after Oregon Democrat Peter DeFazio called for Geithner's resignation, Texas Republican told the Secretary: "The public has lost all confidence in your ability to do the job."

While these comments were notably terse, it's not unusual for politicians to take shots at a Treasury Secretary or Fed Chairman in order to score points with their constituents. It's a key part of the "dog and pony show."

What is unusual is for a sitting Secretary or Chairman to return the favor, as Geithner did yesterday, telling Brady: "What I can't take responsibility is for the legacy of the crises you've bequeathed this country."

There's obviously a "we inherited a disaster" mentality in the Obama administration and maybe this was just partisan politics and another example of how civility is in ever-decreasing supply in Washington. Or maybe Geithner is getting tired of the criticism and thinking about moving to the private sector sooner vs. later, as Henry Blodget writes.

The other issue here is why Geithner is getting such heat now when the economy is on firmer footing and the crisis seems to have passed. Some possibilities...

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Are we on the verge of total economic collapse?

Don't laugh. The french firm Societe Generale thinks so.

The brokerage firm has put the fear of God in clients recently by predicting that developed economies and markets are going to collapse under a monster debt load and that gold is going to soar to $6,000 an ounce.

Fortunately, not everyone feels that way.

Many on Wall Street, in fact, have suddenly gotten quite bullish after missing a lot of the extraordinary 65% rally we've had since the lows of March. Hopefully, these folks--the "V-shaped recovery" crowd--are right, and the bad news of the last couple of years will soon be a distant memory.

Aaron and I are skeptical, though. The aftermath of debt-fueled financial crises like the one we went through usually lasts for many years, if not decades. Japan has been struggling to right its ship since its own bubble burst in 1990, and the country still isn't growing strongly again. (Japan's stock market, meanwhile, trades at a fifth of its 1989 high).

A fight has broken out among economists about whether what ails the country is too much spending or too much debt.

Debt fear-mongers, such as Niall Ferguson, believe that the country's wild borrowing and spending spree has put us on the road to ruin.

"Stimulists," such as Paul Krugman and our guest, professor James K. Galbraith of the Univ. of Texas, believe that spending aggressively and piling up debt is by far the lesser of two evils and that we need to launch a second stimulus immediately. 

Why do professors Krugman and Galbraith believe this? 

Because, in their opinion, skyrocketing debt is far less of a concern than letting the country's people and productive capacity lie fallow for the decade or more that it will take back to get to full employment.

Earlier:

• "A Govt. Not Run by the Financial Sector": Galbraith's Rx for Financial Reform
• "A Truly Extraordinary Slump": Reports of Recovery Premature, Galbraith Says

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The post-op on the great crash of 2008 continued in Washington Thursday as the Joint Economic Committee (JEC) held a hearing on financial reform.

"Unfortunately, the regulatory regime that failed so terribly leading up to the financial crisis is precisely the regulatory regime we have today," Treasury Secretary Geithner declared. "We need comprehensive financial reform."

As a former executive director of the JEC and professor of government/business relations at University of Texas, James Galbraith knows a bit about public policy. As the son of esteemed economist and "The Great Crash" author John Kenneth Galbraith, he also knows something about what it takes to put the pieces back together after a speculative boom and bust.

There is a way to have a financial system with a "reasonable degree of stability" and "serves a public purpose," Galbraith says. "But it does require having a government which is not run by the financial sector."

Galbraith didn't use the term "Government Sachs," but said "we're not going to get where we need to get...if you have this revolving door where all the people from Wall Street go down to Washington and offer their services and basically serve their own worldview and the financial interests of their friends."

While there seems to be no discussion of prohibiting the sort of "public service" practiced by so many alums of Goldman Sachs, or of reinstating Glass-Steagall (something he also supports), Galbraith says there is some progress being made on the reform front...

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Disappointing reports this week on housing starts and foreclosures, as well as the index of leading economic indicators, have cast a bit of a pall on the "robust recovery" story, putting a crimp in the stock market's ascent in the process.

University of Texas professor James Galbraith was never a believer in the V-shaped recovery and says it's going to take a very long time for the U.S. to recover from a "truly extraordinary slump."

What the optimists are missing is the impact the housing bust is having on both American's ability to borrow and banks willingness to lend. The resulting credit contraction will prevent this recovery from following the path of those following prior post-war recessions, he says.

"There's no question the U.S. economy has stabilized but [it] remains very weak and will likely continue to be weak," Galbraith says. "There's very little sign the benefits that are being felt on Wall Street will be felt in the broader country anytime soon."

Galbraith predicts the unemployment rate will continue to rise into 2010 and decline "very slowly" thereafter. The U.S. economy needs "substantially greater policy intervention," he says, focused on the following...

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