Dave Stockman..............well worth 45 mins of your life.

[lektrode]

Re: Dave Stockman..............well worth 45 mins of your life.

I believe it was Sen. Walter Mondale of Minnesota who called Reaganomics exactly what it was: "Voodoo Economics". Reagan (and his Stockman in the background) chose the "grow our way out of debt" strategy which came from Arthur Laffer's, supply-side economics.

Oh how I can remember Ronald Reagan speaking at the Republican Party conventions: "Tax and spend liberals have pushed America into bankruptcy because their policies are bankrupt...... We need to get the gorilla of big government off of our backs...

it would appear, mr steve, that statement (in bold) is truer TODAY, than it has _ever_ been and the true "Voodoo Economics" started earlier and methinks stockman calls it dead-on right here:

http://www.chrismartenson.com/page/t...kman-blame-fed

Chris Martenson: Well, so we’ve got the Federal Reserve headed by Bernanke. They’ve maybe [been] prescribing some excellent cures. Unfortunately, they have the wrong diagnosis, with ritual incantations. So Bernanke, is he Darth Vader, or is he a witch doctor? We’ve got some good metaphors to work with here.


David Stockman: Maybe we could apply both of them. But you know, I think, if you look at Operation Twist, there’s also an irony to it, which I think people who are trying to understand what’s happened, not just in the last year or two but the last decades or few, would be interested in. And that is the original Operation Twist, ironically, which I think was implemented in February or March 1961, was done as a valiant effort -- although misguided -- to protect the gold dollar, okay? It was still under the old exchange rate, and the threat at that point was there was a lot of hot money flowing out of the US because they worried about the expansionary fiscal policy and new economics of the new administration coming in -- and properly so -- Kennedy and all of those Keynesian advisors he had from Harvard. And so the Treasury, which was still run by orthodox people -- including Douglas Dillon, who became Secretary of the Treasury -- came up with an expedient whereby they could sharply raise short-term interest rates.

They pressured the Fed to do that in order to stem the outflow of hot money and support the dollar and support the waning days of the gold exchange standard. And, on the other hand, [they] wanted to push down the long-term interest rate to encourage investment and growth. But the point is, today, the aim is the opposite. Bernanke’s trying to destroy the dollar with Operation Twist and all the other monetary medicine that he’s dispensed. And yet, it didn’t work in 1961, for a good purpose. And today, to reincarnate Operation Twist as part of this capital market and currency market destruction that’s underway, I think is quite ironic.

[lektrode]

Re: Dave Stockman..............well worth 45 mins of your life.

...Why was he not railing against Reagan's profligate spending when he was part of the administration?

it appears that he _was_ ??

http://www.chrismartenson.com/page/t...kman-blame-fed

Chris Martenson: It’s interesting. You know, I think it was a little over a year ago in the New York Times, you had an op-ed piece titled “The Four Deformations of the Apocalypse.” And if I paraphrase, you essentially said that Democrats lean towards, maybe, 'tax and spend' and the Republicans lean towards 'borrow and spend,' but that there’s really no effective daylight between their spending habits. Certainly there is, if we look at marginal priorities for where the money goes, but not in terms of either the amounts of the long term -- even short term -- fiscal prudence. What’s the reality of the situation? And how, when, or even why will economic or fiscal reality finally gain purchase with our decision makers?


David Stockman: Well, you know, that’s the heart of the crisis. It’s deep and stubborn. And it begins with the fact that after the early 1980s, we developed two free lunch parties in this country. The Democrats were always the free-lunch party of the welfare state and the Great Society programs and so forth. And the job of the Republican party, which was accomplished pretty reasonably under Eisenhower and, actually, initially under Nixon, who then finally threw in the towel and went totally Keynesian, but at least in 1969, he was attempting to maintain some fiscal discipline. So the job of the Republican party was to be the party that said no, the party that was the watchdog of the Treasury, the party that raised for the public the issue of fiscal discipline and the consequences of not maintaining it.

Well, after 1980, I was a supply sider, but not a free-lunch supply sider. And when the free-lunch version of supply sides set in and then became party doctrine, we ended up by 2010 with both parties wanting to give away the credit of the United States. The Democrats with more spending or defending the spending was their entitlements that were growing insupportably like Medicare or Social Security. And the Republicans cutting taxes randomly, continuously, and under every imaginable economic circumstance without offsetting spending cuts or a total framework of fiscal discipline. So we get to the point today where you now have Republicans saying no taxes, any way, any shape, any form, when the revenue is at fifteen percent of GDP, the lowest in history. And you have the Democrats defending what I call the twenty-four-percent line; that’s where spending is. And you have the President a few days ago threatening to veto a bill if it reforms entitlements and is put on his desk and it doesn’t tax the rich at the same time.


Now, that is a prescription for Banana Republic fiscal policy at best, and even more irresponsibility if you look at the real facts. Now, why did we get into a situation where our democracy became deformed and both parties became free-lunch parties and we no longer have a fiscally conservative party left? I blame it on the Fed. I blame it on the 1971 decision by Nixon to close the gold window and let the dollar float. Because out of that has evolved -- or morphed -- a central banking policy in the world that absorbs unlimited amounts of government debt. And so we went on what I call the 'T-bill standard' or the 'federal debt standard.' And the other central banks of the emerging mercantilist Asian economies -- Japan, Korea, and now, especially, the People’s Printing Press of China -- have absorbed this massive emission of debt that otherwise would’ve created powerful negative consequences that would’ve forced politicians to act long ago. But as long as the debt… In other words, higher interest rates, pressure for inflationary monetary policy, and the actual appearance of price inflation. But we got away for twenty or twenty-five years with, you know, to use the phrase, “deficits without tears.” And because all the bonds on the margin were being absorbed by the central banks.

[aaron]

Re: Dave Stockman..............well worth 45 mins of your life.

Stockman -> FIREman who 'got his' and now wants to criticize. I would like him to return ALL the money he 'earned', then talk about his new religion. In a couple of years perhaps we will have the CEO's of BoA and Chase talking about the evils of fractional reserve banking and the FED.

F____ Him.

(OK FRED?)

[Raz]

Re: Dave Stockman..............well worth 45 mins of your life.

It is worse than that.

Stockman was part of the Reagan administration as much for ideology as for any other skills.

The agenda he's pushing today is Voodoo Economics all over again. Why was he not railing against Reagan's profligate spending when he was part of the administration?

Oh, right, because he wasn't under commission then, as he is now, to chop entitlements.

So very true.

And these guys (who controled the power-of-the-purse each and every year from 1981-1994)
had nothing to do with all that overspending.

[Shakespear]

Re: Dave Stockman..............well worth 45 mins of your life.

The Democrats with more spending or defending the spending was their entitlements that were growing insupportably like Medicare or Social Security.

So it is "their entitlements" Medicare and Social Security that caused it all Such as crock of #S^&*(.

His memory has a gap regard choices such as "If you want more Guns then there will be Less Butter (eventually)"

[c1ue]

Re: Dave Stockman..............well worth 45 mins of your life.

Well, you know, that’s the heart of the crisis. It’s deep and stubborn. And it begins with the fact that after the early 1980s, we developed two free lunch parties in this country. The Democrats were always the free-lunch party of the welfare state and the Great Society programs and so forth. And the job of the Republican party, which was accomplished pretty reasonably under Eisenhower and, actually, initially under Nixon, who then finally threw in the towel and went totally Keynesian, but at least in 1969, he was attempting to maintain some fiscal discipline. So the job of the Republican party was to be the party that said no, the party that was the watchdog of the Treasury, the party that raised for the public the issue of fiscal discipline and the consequences of not maintaining it.

Well, after 1980, I was a supply sider, but not a free-lunch supply sider.

This is revisionism of the highest degree.

Stockman was put into the CBO in 1981 by Reagan; for him to say that he was somehow an outsider who opposed the Reagan policies is pure farce.

Did Stockman resign in a huff over profligate 'free lunch supply side economics'?

I think not.

For that matter, what exactly is 'free lunch supply side economics'? Is that the one where you cut taxes even though spending is profligate - or in other words was Stockman advocating raising taxes in 1981? Or was he advocating less spending in 1981?

I wasn't following politics back then so I do not know, but I strongly suspect he did neither.

Note that my view isn't that supply side economics is 100% false (free lunch or whatever type); there is justification for what Reagan did in a one-time, never to be repeated in a generation, kind of sense.

However, Reagan's success with this policy directly led to said policy becoming the 'new normal' in federal government fiscal philosophy.

That philosophy is a huge factor in where we are today.