But once again, he encountered mankind’s shortcomings. A financier who built elaborate deals on foundations of debt, Stockman proclaimed the folly of such ways. He ran afoul of a prosecutor who accused him of not complying with accounting standards that Stockman later concluded didn’t make sense anyway.
Now, he has cast his acid eye on the country’s entire economic edifice. What the former divinity student sees doesn’t merely dismay, it outrages him morally, page after page, chapter after chapter. Stockman’s new tract, “The Great Deformation,” is a kaleidoscopic rant against people, institutions and practices he knows well. He attacks, upends, eviscerates, mocks and denigrates them all, usually with some justification, always in the brutalist prose of a manifesto.
The New Deal was a “political gong show,” and Franklin D. Roosevelt and Richard M. Nixon were “peas in a statist pod.” Morgan Stanley’s former chief executive, John Mack, is a “ruthless gambler and bully who never hesitated to exploit any avenue to make a buck.” Reagan’s defense secretary, Caspar Weinberger, was “obdurate and imperious on everything within his brief.” Alan Greenspan and Milton Friedman get entire chapters dedicated to their free-market heresies.
But here’s the thing: Even as he indulges his spleen, Stockman produces a persuasive and deeply relevant indictment of a system dangerously akilter.
Over the past 40 years, the United States has become a strange fantasy land where many politicians think deficits don’t matter, regulators are closely entwined with their charges, and the Federal Reserve manages the economy through high-stakes, high-risk experimentation. The financial turmoil of the past few years is just a glimpse of what lies at the end of the road we’re on, Stockman warns.
In showing us where it leads, he takes the long way, ambling past the wreckage of fiscal and market calamities dating back a century, pausing to praise the gleaming fiscal conservatism of President Dwight D. Eisenhower, then arriving at the ever-more-dire failures of the last generation.
The country began veering badly off course, Stockman argues, in August 1971. That was when Nixon decided to scrap the international financial arrangement that anchored the dollar’s value to gold and thus other currencies in the decades after World War II. “In an act that cascaded down through the decades, Richard Nixon caused the United States to default on its . . . obligations . . . and thereby inaugurated an era of global trade imbalance, currency pegging and manipulation, massive debt creation, and financial speculation that had no historic antecedents,” Stockman writes. “It became the era of bubble finance.”