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After The Great Deformation——The Next Challenge
After The Great Deformation——The Next Challenge
David Stockman has written the finest piece of financial journalism of our generation: The Great Deformation: The Corruption of American Capitalism. It shows how we got into the mess we are in.
Blame the government. Then blame us. It is our government. We must not parrot Flip Wilson’s Geraldine: “The devil made me do it!”
Stockman has followed up his book with a website: David Stockman’s Contra Corner. He posts daily articles, not on how we slouching toward Gomorrah, but how we are being dragged toward Armageddon. He has identified the culprits: the “dirty dozen” who compose the Federal Reserve System’s Federal Open Market Committee (FOMC).
Stockman is now trapped by his own enterprise. He is going to have to write a 300-page book, along with a multi-episode YouTube documentary:Up from Armageddon. It should be released in year three of the coming recession. Trust me: it’s coming. Trust Stockman: it’s going to last at least three years.
The book/documentary should have three sections: (1) how deep in the hole we really are; (2) how we got into this hole; (3) how we can get out.
Section 3 will be this: “Rebuilding from the Ground Up.” Here, he must offer a grand design: the way things ought to be after the rebuilding. But he must also offer a practical, step-by-step strategy. As Karl Marx often wrote, but never actually delivered: “from theory to practice.”
Each chapter of Up from Armageddon should have a link back to his site: proof. No footnotes needed. (Note: the links should be shortened links:http://bit.ly.)
Will the government/Federal Reserve do any of this? Of course not. But we need a field manual on what can and should be done. When the FED responds to the crisis by doing everything wrong — count on this — he can write a follow-up, I-told-you-so book: Another Fine Mess.
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Why Markets Are Manic—-The Fed Is Addicted To The ‘Easy Button’
Why Markets Are Manic—-The Fed Is Addicted To The ‘Easy Button’
Later this week another Fed meeting will pass with the policy rate still pinned to the zero bound. The month of May will make the 77th consecutive month of ZIRP—–an outcome that would have been utterly unimaginable even a decade ago; and most especially not with the unemployment rate at 5.5% and after 23 quarters had elapsed since the official end of the recession.
There never was an Armageddon-like crisis in 2008 that justified all this; it all happened because two emotionally unstable and misguided high officials—-Ben Bernanke and Hank Paulson—-panicked Washington into the utterly false fear that Great Depression 2.0 was at hand.
I debunked this urban legend by chapter and verse in The Great Deformation, but suffice it to say here that not withstanding all the crony capitalist larceny that this financial terrorism enabled, it is impossible with the stock market at 2100—-50% above its pre-crisis level—that there remains any justification for maintaining these “extraordinary policies” seven years later.
In fact, the Fed’s cowardly dithering for yet another meeting this week has precious little to do with the so-called Great Financial Crisis—-the ostensible reason why we ended up with perpetual free money subsidies for financial market speculators. Instead, it is a product of a policy ideology and insular culture that has been building at the Fed and most other major central banks for more than two decades.
Central bankers now have their big fat thumbs perpetually on the Easy Button because they are addicted to it. In the case of the Fed, it has been in a rate cutting or rate holding mode during 80% of the time since 1990. Stated differently, during 240 of the last 304 months, the Fed has been riding the Easy Button.
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David Stockman Interview: The Global Economy Has Entered The Crack-Up Phase
David Stockman Interview: The Global Economy Has Entered The Crack-Up Phase
Transcript of David Stockman’s Interview By Chris Martenson at Peak Prosperity
Chris Martenson: Welcome to this Peak Prosperity podcast. I am your host, Chris Martenson. It’s a central banker world and that world is increasingly volatile, deformed, and full of risks. Today, we’re speaking with a guest I am especially keen to interview, Mr. David Stockman, economic policymaker, politician, and financier. Mr. Stockman represented Southern Michigan in the US House of Representatives from 1976 to 1981 and later served as the Director of the Office of Management and Budget in the Reagan administration and was the youngest cabinet member of the twentieth century.
Since then, he has held executive positions in many of the most influential banking, buy-out, and private equity firms including the Blackstone Group and Salomon Brothers. He is author of The Great Deformation: The Corruption of Capitalism in America, which is a blunt and sometimes delightfully and deservedly scathing examination of the various fiscal and policy blunders that have degraded our current and future hopes for prosperity. Be sure to have your blood pressure medication handy as you read it because not only does it detail a litany of regulatory and policy blunders of the recent past, it reads like it was lifted from today’s headlines.
He also runs the popular and excellent website, David Stockman’s Contra Corner, where he both blogs and assembles other excellent economic content for you to read, so be sure to visit it regularly.
Welcome, David. It’s an honor to have you as our guest.
…click on the above link to read the rest of the article…
