David Stockman’s venting again

His new book, “The great Deformation” comes out April 2nd and apparently has something in it to offend most people of all political stripes, an approach that certainly appeals to me – I’ve pre-ordered a copy. A friend of mine heard him speak at Greenwich Library this week and the man’s view of what’s in store for our country and our economy makes me sound like Pollyanna.  From the publisher’s description:

Defying right- and left-wing boxes, David Stockman provides a catalogue of corrupters and defenders of sound money, fiscal rectitude, and free markets. The former includes Franklin Roosevelt, who fathered crony capitalism; Richard Nixon, who destroyed national financial discipline and the Bretton Woods gold-backed dollar; Fed chairmen Greenspan and Bernanke, who fostered our present scourge of bubble finance and addiction to debt and speculation; George W. Bush, who repudiated fiscal rectitude and ballooned the warfare state via senseless wars; and Barack Obama, who revived failed Keynesian “borrow and spend” policies that have driven the national debt to perilous heights.

By contrast, the book also traces a parade of statesmen who championed balanced budgets and financial market discipline including Carter Glass, Harry Truman, Dwight Eisenhower, Bill Simon, Paul Volcker, Bill Clinton, and Sheila Bair.Stockman’s analysis skewers Keynesian spenders and GOP tax-cutters alike, showing how they converged to bloat the welfare state, perpetuate the military-industrial complex, and deplete the revenue base—even as the Fed’s massive money printing allowed politicians to enjoy “deficits without tears.” But these policies have also fueled new financial bubbles and favored Wall Street with cheap money and rigged stock and bond markets, while crushing Main Street savers and punishing family budgets with soaring food and energy costs. The Great Deformation explains how we got here and why these warped, crony capitalist policies are an epochal threat to free market prosperity and American political democracy.

I’m paying for his book, but he can have my advice for free: David, your house is overpriced.


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8 responses to “David Stockman’s venting again

  1. i don’t see how we’re going to get out of this.

  2. Think he takes a look at Greenwich ?

  3. pulled up in OG

    Four little ones on the road to greatness.


  4. AJ

    ‘This Is What It Feels Like To Have Your Life Savings Confiscated By The Global Elite’
    “What would you do if you woke up one day and discovered that the banksters had “legally” stolen about 80 percent of your life savings? Most people seem to assume that most of the depositors that are getting ripped off in Cyprus are “Russian oligarchs” or “wealthy European tycoons”, but the truth is that they are only just part of the story. As you will see below, there are small businesses and aging retirees that have been absolutely devastated by the wealth confiscation that has taken place in Cyprus. Many businesses can no longer meet their payrolls or pay their bills because their funds have been frozen, and many retirees have seen retirement plans that they have been working toward for decades absolutely destroyed in a matter of days…”


    • TheWizard

      The political class is emboldened when they see us accept one tax increase after another, punishing taxes on petroleum and coal energy, (I refuse to refer to them as fossil fuels, that’s the most ignorant term an educated person should never use) and one redistribution scheme after another.
      Of course they feel they can confiscate our accounts. We’ve given very little sign we would do anything about it.

    • Anonymous

      I respectfully disagree with your assessment on Cyprus. The only way depositors are getting even 60% of their money back is due to a bailout from the EU. If true free market rules applied and the banks collapsed they may be lucky to get 10 cents on the Euro in the worse of the banks. While you are correct that it is tragic that many normal Cypriots are suffering terrible hardship I still believe the outcome for depositors would have been far away worse without a partial bailout. It is not as if there was a scenario where they could have got 100% back without greater government bailout and associated moral hazard.

  5. AJ

    Actually, many may be getting only 40 % of their money after the “bail-in”. But they are planning on doing the same thing in America, and, apparently, even your FDIC insured first $250,000 won’t be safe. So you may want to think about removing some or most of your money from the bank because after they empty your account(s) and steal all of your money, I doubt you’ll be as matter-of-fact understanding of the situation, and as detached as to the effects of such “necessities” as you are above.

    Just remember the depositors weren’t the ones who placed the bad bets and they didn’t reap any of the rewards or share in the profits when the bank placed winning bets — they’re just asked (ordered by law) to cover the losses on the bad bets. Bank depositors are the people who didn’t want to, and were told they weren’t, taking any risk when they put their money in the bank. And money is being taken from every bank’s cutomer’s accounts, not just banks that are in default. But, of course, only people who were savers are penalized while those who lived above their means and have nothing in the bank will, apparently, be getting a free ride.

    As I previously posted in part: …Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.” The bank will get the money and we will get stock in the bank….

    …No exception is indicated for “insured deposits” in the U.S., meaning those under $250,000, the deposits we thought were protected by FDIC insurance. This can hardly be an oversight, since it is the FDIC that is issuing the directive….


    • Anonymous

      AJ, I think you hit the nail on the head. Depositors are creditors of the bank, unsecured yes, but senior to most other classes of debt holder. So if you are put deposits in a bank you are taking the bank’s credit risk. This is true and perhaps not understood by many. A bank is not and should not be a risk free institution. That is why JP Morgan Chase pays lower than ING for example. Where I do agree with you is that depositors should be concerned. The appetite to protect depositors in a bailout or a restructuring scenario is severely diminished after 2008.