Who Killed the American Economy? (A Whodunnit By David Stockman)

StockmanAnyone wishing to understand the decline of the American economy straight out, sans spin, calling a spade a Greenspan with no prisoners taken, no excuses and no gobble-de-gook will be rewarded by David Stockman’s “The Great Deformation.”

Stockman was President Reagan’s Budget Director but he does not spare the Gipper any more than he spares Fed boss Arthur Greenspan or Wall Street. The short version is that with the creation of the Federal Reserve, a means for Congress, Wall Street and the Federal Government to jump into bed together at the cost of the American people became too convenient to pass up. Stockman could well have titled his work: How the Fed Prostituted American Finance. Nor does he write like an economist; it’s understandable.

The book is especially useful since the process it details has been proceeding in most other major economies as well, so the application is world wide. Stockman alludes to the long economic doldrums Japan’s central bank caused there with similar means.

The case is simple: The Fed has flooded the economy and subsidized Wall Street with fiat money and credit at the expense of this and future generations of Americans instead of its older claim of taking away the punch bowl as the party gets rolling. “Too big to fail” really means that protecting Wall Street is more important than the welfare of Americans in Stockman’s view and he makes his case clearly.

The U.S, the E.U, Japan, China, Russia, Argentina, Brazil and many of the rest are in similar straits: More debt than can be repaid, a welfare system that costs more than is available to fund it and in the case of the U.S, expensive military adventures that cannot be financed. And while these have been developing, the productive segments of the American economy have been priced out of the country, leaving cheap service jobs for which illegal aliens compete.

In an attempt to hide this, U.S. leaders are pushing for increased wages, ignoring the fact that artificially raised wages dissolve into resulting higher prices in an already inflating economy. It all becomes clear in Stockman’s book. His style is more polemical than scholarly — indignation gets the better of him at times — but the data are there, profusely. He has written a whodunnit on: “Who Killed the American Economy.” And after reading his evidence, any jury should easily convict.

He covers the Great Depression of the 1930’s on up through recent times, identifying all the suspects and presenting his evidence. That’s a lot of history and it takes a lot of pages (over 700) to lay out, but it is done with ease and clarity.

Those who want to understand how we got into the present economic rush to destruction will find what they are looking for. And yes, the politicians did it …

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About Jack Curtis

Suspicious of government, doubtful of economics, fond of figure skating (but the off-ice part, not so much)
This entry was posted in Economics, Federal Reserve, Government and tagged , , . Bookmark the permalink.

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