To 321gold home page

please click banner to support our sponsor.
Home   Links   Editorials

Plasma Televisions are not Buggy Whips

Peter Schiff
May 13, 2005

Last week, on my second appearance on CNBC's Squawk Box, host Mark Haines mischaracterized my position that the U.S. could not hope to pay for imports solely through reliance on the service sector, as my advocating that the U.S. return to the equivalent of a "Buggy Whip" economy. (His analogy is a reference to the classic economic example of "creative destruction," whereby the invention of a new technology, in this case the automobile, results in the displacement of a mature industry, in this case manufacturers of whips for horse-drawn buggies.)

However, as Mark should have realized, this concept has no relevance whatsoever to America's current abandonment of manufacturing. When buggy whip companies went out of business, America did not start importing foreign made buggy whips. America stopped making buggy whips because people no longer needed them!

Today, the very same highly desirable, state-of-the-art, consumer goods that w