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David Stockman On Crony Capitalism

Ronald Reagan budget director David Stockman says crony capitalism has left the U.S. economy in giant trouble.  He’s with us.

David Stockman, wunderkind of the Reagan administration and a key architect of the biggest tax cut in U.S. history. (AP)

David Stockman, wunderkind of the Reagan administration and a key architect of the biggest tax cut in U.S. history. (AP)

1980s White House budget director David Stockman was a right-hand man to his boss Ronald Reagan.  Deep in the heart of the Reagan revolution.  In 1985, Stockman resigned.  Moved on.

Now he’s looking back on 80 years of American history and economics and politics – and warning we are in giant trouble.  Practically doomed, Stockman says, by Republican loyalty to the rich, Democrat loyalty to social welfare we can’t afford, crony capitalism, and a Fed run amuck.  There’s plenty of pushback, but he’s out there loud.

This hour, On Point:  David Stockman on American doom.

-Tom Ashbrook

Guest

David Stockman, budget director for President Ronald Reagan from 1981 to 1985. Author of “The Great Deformation: The Corruption of Capitalism in America.”

Roger Lowenstein, contributing writer to the New York Times Magazine and a columnist for Bloomberg News.

From Tom’s Reading List

The New York Times (David Stockman) “Over the last 13 years, the stock market has twice crashed and touched off a recession: American households lost $5 trillion in the 2000 dot-com bust and more than $7 trillion in the 2007 housing crash. Sooner or later — within a few years, I predict — this latest Wall Street bubble, inflated by an egregious flood of phony money from the Federal Reserve rather than real economic gains, will explode, too.”

The Washington Post “The country began veering badly off course, Stockman argues, in August 1971. That was when Nixon decided to scrap the international financial arrangement that anchored the dollar’s value to gold and thus other currencies in the decades after World War II. ‘In an act that cascaded down through the decades, Richard Nixon caused the United States to default on its . . . obligations . . . and thereby inaugurated an era of global trade imbalance, currency pegging and manipulation, massive debt creation, and financial speculation that had no historic antecedents,’ Stockman writes. ‘It became the era of bubble finance.”'”

The Atlantic “David Stockman, formerly a leading conservative Reaganite, now blames some of the economic program that he once supported for the 2008 meltdown and sluggish recovery. But liberal Democrats who may be excited about a Stockman defection will be sorely disappointed: His critique of the Obama economic program is just as strong as what he says about his erstwhile friends in the Republican Party.”

Excerpt: ‘The Great Deformation’ by David Stockman

 

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