Stockman, if you remember, was the perfect Picture of Dorian Gray Republican counter-persona hiding behind the broad-shouldered, muscular cowboy image Reagan projected when he was lecturing the world about how poor people had to give up the welfare tit and do their own damn work. The self-reliant tough-guy act was the public face of Republican economics, but laboring quietly behind the facade was Stockman, a rail-thin bean-counting geek with giant glasses who preached the supply-side lunacy of giving the rich a helping hand in the ostensible hope that wealth would magically trickle downhill.
Stockman was once the arch-priest of supply-side economics, but he's had a conversion over the years. In a piece blasting the legacy of Republican economic policy entitled "The Four Deformations of the Apocalypse" Stockman essentially argues that Reaganomics evolved into a policy that fused the worst aspects of the traditional economic strategies of both the right and the left:
Republicans used to believe that prosperity depended upon the regular balancing of accounts — in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses, too. But the new catechism, as practiced by Republican policymakers for decades now, has amounted to little more than money printing and deficit finance — vulgar Keynesianism robed in the ideological vestments of the prosperous classes... This approach has not simply made a mockery of traditional party ideals. It has also led to the serial financial bubbles and Wall Street depredations that have crippled our economy.
The line about "Keynesianism robed in the ideological vestments of the prosperous classes" is a truth that is both brutally accurate and unfortunately a little too subtle for the Tea Partiers and disaffected Republicans who ought naturally to be struck by it with the most violence. Stockman here is on to a basic truth about the direction in which the economy has evolved in the last decades: a seemingly endless campaign of reckless borrowing and money-printing, undertaken with the aim of propping up an Atlas class whose prosperity under Randian/Greenspanian dogma must be guaranteed at all costs. This goes far beyond the original supply-side thinking of cutting taxes to give the employer class an incentive to create jobs. Instead, this is a welfare state on crack, indulging in massive public borrowing to fuel what Stockman calls the "vast, unproductive expansion of our financial sector." He goes on:
Here, Republicans have been oblivious to the grave danger of flooding financial markets with freely printed money and, at the same time, removing traditional restrictions on leverage and speculation. As a result, the combined assets of conventional banks and the so-called shadow banking system (including investment banks and finance companies) grew from a mere $500 billion in 1970 to $30 trillion by September 2008.But the trillion-dollar conglomerates that inhabit this new financial world are not free enterprises. They are rather wards of the state, extracting billions from the economy with a lot of pointless speculation in stocks, bonds, commodities and derivatives. They could never have survived, much less thrived, if their deposits had not been government-guaranteed and if they hadn't been able to obtain virtually free money from the Fed's discount window to cover their bad bets.
I was a little depressed upon reading this because it immediately struck me that Stockman had summed up in a few elegant paragraphs the main point of my upcoming book Griftopia (shameless plug alert) and that he had done so online, for free, while my version currently costs $17.16 on Amazon.com. The fact that it was David Stockman scooping me was sort of doubly hard to take. But it's still interesting that this sort of talk is slowly gaining momentum in some Republican circles, where there's increasing acceptance of the notion that a monstrous betrayal of so-called traditional conservative economic ideals began to take place in the Reagan years.
An additional twist to the story that Stockman didn't write about is that this same betrayal was also furthered by post-Mondale "New Democrats" of the Clinton/Gore genus, who preached fiscal conservatism while curled up in bed with the same "unproductive" financial sector Stockman writes about. Stockman seems mostly to pointing the finger at his own party, which is titilating in a schadenfreude sort of way, but the Apocalypse he talks about was really a bipartisan creation. Anyway it will be interesting to see if Stockman's little peek behind the curtain of American oligarchy will get any traction at all, or whether it will quickly disappear under the mountain of news about the Ground Zero Mosque and the Jet Blue nut-job and Justin Bieber as one would expect. I'm betting on the latter, but something is better than nothing, I guess.
p.s. speaking of Justin Bieber, I know I'm late on this too, but I just caught my first Bieber video -- I must have been asleep for the last two years while the world lost its fucking mind. I don't want to say anything mean about a child, but I don't get it -- his videos look like soft-core kiddie porn set to elevator music. Is this a joke? Can someone explain this phenomenon to me? I'm seriously asking. I used to wonder about the Arab countries where David Hasselhoff music is worshipped, but how do we explain this Bieber thing? If the answer is just that I'm too old and don't get it, I can accept that, I just need to know.