Sign in
Become a MarketWatch member today
Paul B. Farrell
May 24, 2011, 12:01 a.m. EDT
By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) "” "My G.O.P. destroyed the U.S. economy." Yes, that is exactly what David Stockman, President Ronald Reagan's director of the Office of Management and Budget, wrote in a New York Times op-ed piece. Not "is destroying," the GOP has "destroyed" the U.S. economy, setting up an "American Apocalypse." And it's getting worse.
Update: With the 2012 election lineup up for grabs, Stockman may be the GOP's best candidate for president. A hero in American politics, he's a rare no-B.S. truth-teller who's been delivering the same message since his 1986 "Triumph of Politics: Why the Reagan Revolution Failed," an expose written after leaving the White House.
Jonathan Weisman reports the decision by Indiana Gov. Mitch Daniels to not enter the 2012 presidential race has allowed other candidates and potential candidates to grab some of the spotlight.
Better yet, he's the kind of fighter who could easily go the distance with Obama on the key issues that will dominate the 2012 election: the economy, employment, interest rates, entitlements, war budgets, the devalued dollar, our rapidly collapsing monetary system, another meltdown.
Last fall, Stockman's hard-hitting op-ed was loaded with jabs like: "If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation's public debt" screams "for austerity and sacrifice," instead, the GOP insisted "the nation's wealthiest taxpayers be spared even a three-percentage-point rate increase." Obama blinked, pulled his punch. Let's get both in the ring. See Paul B. Farrell's "?Reagan insider: GOP destroyed U.S. economy.'
Stockman's latest attack proves he's still a powerful fighter. Recently, Reason magazine's editor-in-chief Nick Gillespie did a long interview with Stockman. The title builds on the book: "The Triumph of Politics Over Economics." But instead of just looking back at the failure of a self-destructive Reaganomics, an older and wiser Stockman focuses us on the paradigm shift that's destroying America from within.
In this new "Triumph of Politics Over Economics" we see America at a crossroads, struggling to redefine itself. Politicians have become the new economists. Politicians and their big money backers and lobbyists now rule the American economy like banana-republic dictators. Stockman calls this corrupt system the new "crony capitalism." The old capitalist economics that made America the world's greatest superpower no longer exist.
Today, professional economists are no more than hired guns for politicians with myopic ideologies and huge bankrolls that make it easy to justify lying, cheating and stealing from investors, workers, consumers, savers and taxpayers. Capitalism has morphed into a monopoly ruled by politicians who are serving a wealthy elite. Competition is a joke. Democracy is a farce. "We the People" no longer exists.
Stockman has seen all of it. And he knows that while his message hasn't stopped the "GOP from destroying the U.S. economy," the coming crisis will trigger another megacrash, bigger than the dot-com crash and subprime meltdown combined.
Indeed, Stockman warns of an inevitability: Another major crisis is necessary to wake up Wall Street and Washington to the fact that Reaganomics really is destroying America from within. We dissected the Stockman-Gillespie interview several times, gleaning 10 principled facts seen fueling the political drama surrounding the 2012 elections and challenging all Americans at this historic turning point, facts demanding we wake up, before it's too late:
Reagan's big government policies "led to the utter failure of spending control." Today America is "living way beyond our means," and yet politicians are incapable of thinking past the next election. "They hear the squeaky wheel, and they respond. "¦ money has become such a massive force in the electoral process" making politicians "slaves" to big money and special-interest lobbyists.
"In pure philosophy, lower tax rates would be better." But when we got a "Republican government in the Bush era "¦ nothing was cut. Everything was ratified. In fact, they added to Medicare through the drug benefit." Our "welfare state that seems immutable politically "¦ you're kidding yourself if you think cutting taxes today is really cutting taxes. We're simply deferring massive tax increases into the future, unfairly and immorally putting huge debt burdens on future generations." Tax-cutting is a "massive Christmas tree of special-interest tax benefits and loopholes "¦ reducing the revenue" and "almost no spending was cut, and the defense budget soared out of control."
"Reagan insider: GOP destroyed U.S. economy, Part 2 http://on.mktw.net/mpNsFB" 11:31 p.m. EDT, May 23, 2011 from MKTWFarrell
"15 ways both bulls and bears can stay happy http://on.mktw.net/mI5unM" 11:48 p.m. EDT, May 16, 2011 from MKTWFarrell
"Bill Gross: The leader Treasury, Fed needs http://on.mktw.net/mGBTBJ" 11:42 p.m. EDT, May 9, 2011 from MKTWFarrell
Paul Farrell writes the column on behavioral economics. He's the author of nine books on personal finance, economics and psychology, including "The Millionaire Code," "The Winning Portfolio," "The Lazy Person's Guide to Investing." Farrell was an investment banker with Morgan Stanley; executive vice president of the Financial News Network; executive vice president of Mercury Entertainment Corp; and associate editor of the Los Angeles Herald Examiner. He has a Juris Doctor and a Doctorate in Psychology.
Political Capital
Putting Republican fear to good use
What Wall Street Won't Tell You
Rapture's back on! Do I sell my home?
The Technical Indicator
S&P 500 survives test of major support
This Week in Japan
Buying Sony and Japan's bad news
Media Web
CNBC's Mark Haines: "?He took no BS'
On the Markets
What the insiders are telling us about stocks
The Economist's Corner
Tear down this ceiling!
Diary of a Recession Baby
Workplace flexibility benefits employers
On Canada
NHL's southern strategy failing
Behavioral Economics
Reagan insider: GOP destroyed economy
Read Full Article »