Andrew Sullivan posted a fascinating video today of an economist named Peter Schiff repeatedly telling Fox that the economy was about to fall apart and getting openly mocked. It’s long but worth it if you enjoy hating Fox News.

Maybe I’m just stupid, but I really don’t ever understand where the confusion comes from when it comes to finance. At the turn of the century (how awesome is it that we can use that phrase to describe our own era now?), a lot of websites were getting a lot of money from investors. The websites did not have a means of generating income. The dot.com bubble burst and a lot of people lost a lot of money. This year, banks bought and sold a bunch of pieces of paper that had no real value. The lesson to learn from these examples: when you sell something that has no value, people will eventually not want to buy that thing anymore.

The next thing has got to be houses. The price of houses is horribly overinflated. As a result, there are houses everywhere that are not being sold. Soon, house prices are going to drop drastically. When you have a bunch of things that you cannot sell, you either lose all your money on those things or you sell them for far less than you had hoped to get. Yet I feel like every day I read articles by people who claim that house prices are not going to drop that much, or that the market is stabilizing. Doesn’t it just make sense that people’s house values are going to drop through the floor? I would welcome any Fox News pundits who can tell me why I’m wrong.

And as a bonus question, are the automakers asking for help right now because they want to get in on some of that sweet cash before the Bush administration leaves office? I can understand how the fact that Americans don’t have any money would affect their sales, but the economy has really only been officially in trouble for a few months. How could their sales drop that drastically that quickly? They’ve been heading this way for years, and now all of a sudden the crisis is so drastic that we have to subsidize them? Mr. Cavuto: please explain this one to me, as well.