Peter Schiff on a walkabout

A friend of mine sent this video to me -- Peter Schiff as "one of the 1%" goes down to the OWS protest in NYC. It's a little long, and some of it is a little too much give and not enough take, but overall it's very interesting. Schiff points out at the very outset that "Capitalism means private profits and private losses." I think THIS is something that has to be talked about. It IS wrong (and, to be fair, the OWS kids have a point here) when they say that we shouldn't socialize the losses. That's NOT fair, and it's a salient point of agreement between the Tea Party Movement and OWS. The point of contention, therefore, seems to be what direction we should go -- socializing the profits, or privatizing the losses. The latter, of course, is preferable, but what is therefore critical is to set up a system whereby we reduce moral hazard and ensure that risk is commensurate with reward (or loss). This is Schiff's argument, and a few of his sparring partners (one of them is particularly good, and probably will be even better as he gets older) recognize this.
Schiff (perhaps in subtle reference to the Keynes-Hayek rap) describes business as "drinking the alcohol the government poured," and concludes that one of the main problems is government intervention, picking winners and losers based on cronyism or "social need," and Wall Street firms' natural desire to be among the "chosen." Bailouts are the ultimate example of making a loser into a winner, and the arbitrariness of these choices introduces a great deal of noise into market communication, which prevents the system from working properly. Furthermore, it creates a huge moral hazard to act recklessly and take on more risk than is perhaps prudent.  If the bartender is irresponsibly buying rounds, it's not really surprising the bar goes wild.
Peter Schiff's only stumble was when dealing with the problem of "more freedom" back "some golden age" that a young black man asked about. Schiff would have done better to have read Clarence Thomas' speech on this matter, who pointed out that "it didn't seem quite that way to black people." Schiff notes there was "certainly more economic freedom" in the past, but could have really hit the ball out of the park if he had pointed out that segregation and other (often government-imposed) hurdles that limited the freedom of black people in the past were (rightly) brought down, and today's young people -- black, white, or otherwise -- have a right to the same economic freedom that (white) people had in the past. Other than that, it's clear that some people in the OWS movement have a legitimate grievance (which is shared by many of the Tea Partiers) while others, quite frankly, are a little slower on the upswing.