David Stockman wrote a comprehensive polemic economic analysis in the New York Times Sundown in America: How Crony Capitalism has Left Us State Wrecked
Also from the New York Times – A Gallery of Economic Villains and Heroes as a companion piece
Some retorts to Stockman’s article worth noting:
Stockman’s Sky is Falling from First Trust
Yes, there are people caught in the web of government
over-spending and crippling-regulation. Yes, the Fed has
created too much fiat currency. Yes, big government is creating
a large class of people who think living off the government is a
right. But, the market is still working. Banks are not
transmitting the Fed’s largesse; M2 is growing at a modest clip.
Moreover, new technology is creating massive opportunities for
those who grasp its power.
In other words, the sky is falling at the same time the sky
is the limit
another take on the Stockman article from Mark Perry- http://www.aei-ideas.org/2013/03/if-profits-are-the-mothers-milk-of-stocks-weve-got-a-stock-market-rally-that-could-be-sustainable-for-a-long-time/
Some of Perry’s readers’ comments are also noteworthy.
some very random HKO comments
1. The problem with covering 80 years of economic history in a single article is that too much information can be more misleading than not enough. When we throw Keynes, Milton Friedman and Arthur Laffer into the same bag of blame we avoid clarity. Keynes and Friedman alike may object to the actions proposed in their name. Because Friedman developed a monetary interpretation of the Great Depression does not mean that he would advise using the Fed to cover for fiscal irresponsibility. And Laffer and his curve did not universally claim that all tax cuts would increase revenue. He provided a tool for looking at the dynamics of tax cuts and making us see that there is much more than a one to one correlation on increases in rates and a corresponding change in revenue.
2. How can Calvin Coolidge be a hero when Laffer is a villain. As I noted here in Calvin Coolidge Explains the Laffer Curve, they understood the same tax dynamic.
3. Few economic thinkers from either side of the aisle would propose either the debt we have or the policy of bailing out bondholders and shareholders on Wall Street, yet here we are. Instead of using our intellectual capacities to better understand our problems we choose to believe academic elitists who think we can magically avoid the problems we do not understand. How do good people commit immoral acts- one little moral lapse at a time. Likewise we suffer foolish acts by only looking at the near term. I keep returning to the quote of Stanislaw Lec- (Somewhat paraphrased ) “Every snowflake pleads innocent but it is still an avalanche.”
4. Such intellectual hubris is especially dangerous in the hands of politicians who are perpetual suckers for claims of providing benefits without paying for them.
5. In Nassim Nicholas Taleb’s “Antifragile: Things That Gain from Disorder.” he noted that every plane crash makes flight safer for the next flight. Small losses are the best way to avert large losses. A government that wants to solve all of our problems makes us more dependent and more vulnerable to large problems.
6. Stockman recounts problems most of us are aware of and thus we may be on the way to solving them. I recall the doomers in the days of Carter who never foresaw the focus of Volcker (appointed by Carter) to bring inflation under control. How many remember the prophetic warnings of Harry Brown, Howard Ruff and Doug Casey who said no country has ever brought such inflation under control. They were all wrong.
7. Never underestimate the ability to draw the wrong conclusion from indisputable facts. http://www.rebelyid.com/2008/05/in-the-face-of-irrefutable-evidence/
8. When everybody knows the problem they are likely to miss the solution. I would be more concerned if we were reading about another permanently high plateau.
9. It is hard to dismiss one of the critic’s observations that we have achieved enormous economic growth during the entire period that Stockman laments. The crushing of animal spirits that we have experienced may provide quite an economic propellant when a few changes are made.
10. Stockman’s noted problems are not to be slighted and do present serious challenges, but it is much easier to criticize a certain past than a very uncertain future.