Peter Schiff for Senate: tilting at windmills?

Ask Republican U.S. Senate candidate Peter Schiff what his solution is to any given problem and he almost always returns to the same talking point: Get the government out of the way and unleash the forces of the free market.

While his talk on Saturday afternoon at Salisbury Town Hall was geared to a friendly group of Northwest Corner Republicans, Schiff is not afraid to spread his message in unpopular quarters. When he was an undergrad at the University of California at Berkeley, Schiff had a life-sized poster of Ronald Reagan hanging on his dormitory room wall — a spectacle that prompted howls of derision on the notoriously left-wing campus.

For the most part, the wealthy stock broker, economist and author of three books is correct. Democrats and Republicans in the federal government are at least as much to blame for our current economic malaise as the forces of unfettered capitalism.

Heck, it’s easy to fault greed and lack of regulation for Wall Street’s near-collapse a year ago and there’s probably some truth to that conventional wisdom. But Schiff makes a compelling case that if not for the actions of the Feds, the economy would be in much better shape.

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At the top of Schiff’s list of government offenses is monetary policy. Was it lack of regulation that caused banks to take outlandish risks and extend mortgages to people who couldn’t afford them? No, he says with a passion that borders on the evangelical. It was the willful action of Ben Bernanke’s Federal Reserve Bank that kept interest rates at artificially low levels.

Schiff, president of his own brokerage firm, Euro Pacific Capital in Westport, speaks with some credibility on these matters. In print and on television, he predicted much of the economic crisis of 2008-09. Low interest rates, he says, have discouraged savings, encouraged overcomsumption and account for the transformation of the United States from the largest creditor nation to the largest debtor nation over the last 40 years.

But then he won me over by repeating something I’ve long suspected is true. As you might expect, Schiff wants to move away from our employer-based health-care system toward a free-market approach. But he contends it was not greed and gouging that caused health insurance premiums to skyrocket over the last two decades, but rather too much government money in the health-care system, coupled with insurance policies that encourage overconsumption of health care at little or no out-of-pocket expense to the consumer.

How true, I thought. What incentive do health-care providers have to keep costs down when they know the government and insurance money will continue to flow in defiance of market forces? Insurance industry profits, he said, account for about 1 percent of health-care spending in the United States, so even if you took away all the companies’ profits, it would do virtually nothing to rein in costs.

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The same can be said, Schiff quickly added, of college tuitions, which have risen at twice the rate of inflation over the past couple of decades. Outrageous increases have been cushioned by corresponding rises in government-backed loans to students. The result: universities that are flush with cash; students who matriculate with crushing liabilities; and a federal government that’s forced to open its wallet when debt-ridden graduates default.

I remain unconvinced, however, that this buoyant and libertarian-leaning former economic advisor to Ron Paul can appeal to the electorate of a blue state that went for Obama in 2008 by a better than 3-2 margin. But, of course, the political landscape has changed greatly since then. Next door in Massachusetts, we had the Scott Brown miracle only a couple of months ago. So who knows?

The 46-year-old Schiff was confident — with some justification — that he could secure the GOP nomination and prevail over the two other major Republican candidates in the race: congressional retread Rob Simmons and wealthy wrestling magnate Linda McMahon, whom he described as “having a lot of baggage.â€

And Schiff, a veteran TV analyst who has appeared regularly on CNBC and Fox News, has a sense of humor. Of his potential Democratic rival for Chris Dodd’s Senate seat, popular state attorney general Richard Blumenthal, Schiff said, “He has spent the last 20 years suing everyone in sight. What will be his message? We’ll sue our way to prosperity?â€

Lakeville resident Terry Cowgill is a former editor and senior writer at The Lakeville Journal Company and host of Conversations With Terry Cowgill on CATV6. He can be reached at terrycowgill@gmail.com.