Stockman’s Broadside
Pundits were buzzing this week, after David Stockman released an op-ed in The New York Times. Ronald Reagan’s former budget director had little good to say about the party he once represented as a congressman and the plan the party’s candidate for vice president is selling:
Thirty years of Republican apostasy — a once grand party’s embrace of the welfare state, the warfare state and the Wall Street-coddling bailout state — have crippled the engines of capitalism and buried us in debt. Mr. Ryan’s sonorous campaign rhetoric about shrinking Big Government and giving tax cuts to “job creators” (read: the top 2 percent) will do nothing to reverse the nation’s economic decline and arrest its fiscal collapse.
This was not the first time Stockman disagreed publicly with his party’s economic policies. Back in 1981, in an article in The Atlantic, William Greider quoted Stockman as saying that Ronald Reagan’s initial tax cut
was always a Trojan horse to bring down the top rate…. It’s kind of hard to sell ‘trickle down.’ So the supply-side formula was the only way to get a tax policy that was really ‘trickle down.’ Supply-side is ‘trickle-down’ theory.”
Stockman also told Greider that, “None of us really understands what’s going on with all these numbers.”
Paul Ryan once worked for Jack Kemp, the Apostle of Supply Side Economics. Stockman still believes that Kemp’s economics were, and are, profoundly misguided:
These doctrines now saddle our bankrupt nation with a roughly $775 billion “defense” budget in a world where we have no advanced industrial state enemies and have been fired (appropriately) as the global policeman.
Ryan’s so called Path to Prosperity, Stockman wrote,
boils down to a fetish for cutting the top marginal income-tax rate for “job creators” — i.e. the superwealthy — to 25 percent and paying for it with an as-yet-undisclosed plan to broaden the tax base. Of the $1 trillion in so-called tax expenditures that the plan would attack, the vast majority would come from slashing popular tax breaks for employer-provided health insurance, mortgage interest, 401(k) accounts, state and local taxes, charitable giving and the like, not to mention low rates on capital gains and dividends. The crony capitalists of K Street already own more than enough Republican votes to stop that train before it leaves the station.
Needless to say, Mr.Stockman is no longer popular among Republicans. But he still has the courage to speak truth to power.
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Anyone who wants to understand budget deficits should read Stockman’s book “The Triumph of Politics” (1985) written after he left the Reagan administration. It isn’t long and gives the inside story of why Reagan’s administration tripled the national debt; something no President since has yet equaled.
But it’s not about statistics and greater wealth inequality and a growing national debt anymore. It’s about “belief” in the power of the supply-side economy, which Stockman happily once endorsed. It is attached to the Reagan legacy, therefore not touchable or debatable, and all the more religious in nature.
Hat’s off for his attempt, but his monetary theories of a younger age are more like scripture, and we are more likely to throw out the prophet than the unpleasant new message.
meant: throw out the prophet with the unpleasant new message.
but but but, I thought Ryan was the next Reagan!?!?
Another article certain not to be commented on by the “I plan on holding my nose and voting the Romney / Ryan” crowd.
Nice article/rant. There is far too much “everyone gets everything” and not enough “we can’t have everything, and we actually don’t need everything” going.
It only took Stockman one year of watching the numbers disintigrate to realize the fallacy of supply-side economics. He admits he fudged the numbers in confrontations with congress for a while yet and I suspect his interview with The Atlantic was his way out and this book was a mea culpa for all his mistakes.
At any rate, the book should not be ignored because the author was badly mistaken, indeed it should be read because he was badly mistaken and realized it. It is as clear a roadmap about the politics surrounding the national debt that I’ve ever read by someone who was there and helped to triple that debt.
I am the world’s worst on economics, so you guys can enlighten me. Did Reagan come in following a bad economic period? Did he and Stockman do anything to pick the economy? Did they pile up all that debt and get no positive results? Would things have worked out better if Carter got reelected? Do all sitmulous programs work and do they increase the deficit a lot, even ibn today’s environment?
Just askin.
So you never heard of Reaganomics?
I’m no economist either, but Stockman’s book was easy to read and understand. Here is a Bloomberg article making comparisons. Why he left out the Johnson years I don’t know because they were the ones that caused a lot of debt that Ford and Carter inherited.
http://www.bloomberg.com/news/2012-06-26/one-president-s-economic-legacy-is-his-successor-s-burden.html
Thanks for that link Ohio. Now I’m feeling even dumber than before.
Found this link that has cool charts on taxation in history.
http://www.businessinsider.com/history-of-tax-rates?op=1
I’ve always felt that Reagan’s action was needed at that time, but then the usefulness stopped. I look no further than Clinton: the economy during his term was pretty good, even accounting for the DotCom bubble.
Point is: any good idea can be taken too far. Right now, I just don’t see income taxes to be the problem. I am, however, completely open to fixing regulations to make them effective yet not constraining, and looking at corporate/business taxes.
Put another way, we need to figure out how to make it more profitable & simpler to do business in this country. The exodus of production from our shores is a CLEAR sign something is wrong there.
dd
It’s hard, hard to find out that FOX and Rush have it all wrong. Not to mention R & R.
Barky, they are all wrong, because it is all BS. Read Marc Pascal’s rant, follow Obama to Iowa and see how he worries about the ethanol/corn problem. Same for R&R. Follow Romney’s tax return travails and concentrate on Biden’s every word.
Ask the NRA which candidate fears them the most. Ask who in 2000 said: “Fannie Mae will have to take on more and more risk” in order to “increase profitability to shareholders.” He added, “This is not a mission of public policy.” And who voted against the coralling of FNMA and FDMC, along with many others.
Why did both parties kill Glass-Steagal and will not reinstate it along with ignoring Simpson-Bowles (yes, Ryan voted against it).
Ask the SCOTUS why they broaden cases so we get a Citizen’s United.
Fox may be an excellent poster child for the right and defend Reagan along with blowhard Rush, but the woods are full of the poison ivy of media folks anxious for more tax and spending, cause BB knows best.
BTW: the Media should bend down kiss the ground and thank the gods for Ryan. They will all get tons of yardage and bonuses talking economics and which way grandma’s wheel chair is being pushed. Portman, Pawlenty, perish the thought.
Sorry for the rant, I think the campaign is wearing my patience down.
Whoops, that rant was general, not at Barky.