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Friday, September 19, 2014

Reading David Stockman's Deformations

From reading David Stockman's book "The Great Deformation" one wouldn't know his central role in the triumph of Reaganomics in the early 80's. The book drips with condemnations and loathing for his Master, but also is loaded with time honored elitist con arguments from the Point of View of Wall Street and the countries established "old wealth". Reading him is valuable however, because unlike his fellow con artists Stockman has a habit of being relatively honest and is usually factual. For that reason I'm reading him with a figurative red pencil. His book is worth reading if one is able to read it critically. He's famous for an article "The Education of David Stockman" where he dissed his own Administration's policy.

"The Great Deformation: The Corruption of Capitalism in America Hardcover – April 2, 2013 by David A. Stockman (Author)"

David Stockman was one of the architects of Reaganomics. He is famous/infamous for both his sales statements and his disclosures. He was an early defector from wholesale support for Reaganomics, but this book demonstrates that he did so because Reaganomics wasn't conservative enough! He is famous for example for articulating the "Starve the Beast" concept in a conversation with Frederick Hayek. I didn't find any mention of Hayek in this book or even of this conversation but Hayek hovers in his language and conceptualization (possibly because he covered it in his previous books).

Instead he dismisses Reaganomics as another form of Keynesianism. Keynes didn't advocate deficit spending except in the limited temporary circumstance of a liquidity trap, but he attacks Keynesianism savagely, including his own Military Keynesian adventures as Reagan's Budget Director. Indeed, he attacks just about every administration from Roosevelt on and spreads his bile at everyone from Roosevelt to Nixon and onward. Some of it is masterful. Some of it reflects the Neo-liberal, Hayekian Point of View that infuses his book.

He writes about Reagan and Wall Street, sometimes, as if he wasn't there. But he worked at Blackstone and later his own company "Heartland" during much of the period he covers. He seems to pine for the days of sound money when the dollar was backed by Gold but he took advantage of the bubble swindles happening all around him. He also experienced first hand the offshoring and decline of US manufacturing. He ran a manufacturing company "Collins and Aikman" that eventually filed for Chapter ll bankruptcy. He was sued by SEC for manipulating statements. He seems to have avoided indictment because our system is so corrupt that much of the corruption is perfectly legal, and he lost money on the company too.

On the other hand he mostly correctly dissects the sheer dishonesty and greed of our current system, especially at high levels. He correctly identifies the corruption and misdirection that was the execution of TARP. And skewers the reality that TARP bailed out crooks and failed to protect their victims. He loads his book with a lot of history, which is extremely informative. He might be coming at the issues from the right, but he's also skewering people who, right or left, are scoundrels; and telling on the hypocrisy and hubris of people who claim to be conservatives, but are really just cons.

Like I said I'm reading the book with a red pencil as his knives he aims at Progressive economic politics really skewer his own con artist allies. When he talks about "statist" and reckless spending, he's talking about folks who use the same language he's using, play the same games, and belong in the same prisons.

More to come (hopefully)....

Next Chapter: Introduction to the Good Money Debate

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