The "Reagan revolution" in fiscal and economic policy was doomed from the outset by President Reagan's ignorance and stubbornness and by "ultimately incompetent advisers" who deceived the president and the country, former budget director David A. Stockman contends in his book on his White House years.
According to Stockman, the failed attempt to remake the government has created a "massive buildup of public debt" that will "generate cataclysmic economic troubles."
In "The Triumph of Politics: Why the Reagan Revolution Failed," Stockman is sharply critical of the Reagan Cabinet, especially the president's closest White House advisers, and accepts some of the blame for spreading unwarranted economic optimism and creating a "troubling atmosphere of misunderstanding" during his 4 1/2 years as head of the president's Office of Management and Budget.
Excerpts of the book are scheduled to appear tomorrow in Newsweek, which paid $250,000 for serialization rights. According to publishing sources, Harper & Row paid Stockman $2.3 million for the book. Newsweek made its excerpts available yesterday. The book will be available in bookstores on April 23.
In one passage, Stockman predicts that, "If we stay the course we are now on, the decade will end with a worse hyperinflation than the one with which it began."
Stockman frequently questions Reagan's understanding of issues and his willingness to make the hard choices that would have allowed his economic "revolution" to succeed. "Reagan's body of knowledge is primarily impressionistic: he registers anecdotes rather than concepts," Stockman writes.
For example, after Stockman attempted to revive the idea of a contingency tax for the fiscal 1985 budget, Reagan responded with a 20-minute lecture that Stockman found irrelevant.
"What do you do when your president ignores all the palpable relevant facts and wanders in circles?" Stockman writes. "I could not bear to watch this good and decent man go on in this embarrassing way."
Stockman's assessment of Reagan's intelligence is more starkly revealed in another book also scheduled for April publication. In "Stockman: the Man, the Myth, the Future," Owen Ullmann quotes Stockman as saying in an interview that Reagan had a mind "like a trench -- narrow but deep."
Ullmann, the White House correspondent for Knight-Ridder newspapers, says that Stockman made fun of Reagan's age and joked "that the president might be getting a little senile."
In his book and an accompanying interview with Newsweek, Stockman is even harsher in his estimate of the abilities and, in some cases, the motives of other prominent administration officials.
He is particularly critical of a trio of White House aides in the first term -- Edwin Meese III, Michael K. Deaver and Lyn Nofziger -- whom he refers to as "the California crowd" of "personal retainers and electioneering hands." Stockman says that they were "illiterate when it came to the essential equation of policy" and concerned chiefly with the way Reagan came across on the nightly television news.
Stockman is also highly critical of Donald T. Regan, treasury secretary in the first term and current White House chief of staff. Stockman writes that Regan "operated on the 'echo' principle. Whatever the president insisted on, he would try to get -- without regard to the price."
The Stockman critique about the deficiencies of the Reagan economic program follows a pattern established in a controversial 1981 Atlantic article, "The Education of David Stockman," written by William Greider, then an assistant managing editor of The Washington Post. In that article, which nearly cost Stockman his job, the budget director confessed that even he didn't understand some of the budget numbers used by the administration and denounced basic tenets of "Reaganomics."
"I've never believed that just cutting taxes will cause output and employment to expand," Stockman was quoted as saying.
In his book Stockman adds some details to the way in which he tried to close a budget gap with $44 billion in unidentifed savings and rosy and unrealistic economic projections.
He said that if administration economic assumptions had been applied to the "inherited budget policy, [President Jimmy] Carter's mess," that projections to 1986 would have shown Carter policies producing a $365 billion surplus. The projection was not made public even though it was realized in the administration that "the idea we were actually inheriting a huge budget surplus was just plain . . . haywire," Stockman writes.
White House officials yesterday declined to respond to Stockman's accusations. "We do not have any comment to make," said deputy press secretary Peter Roussel. A spokesman for Regan also declined comment.
Senior White House officials said the refusal to respond at this time was the result of a decision not to help promote the book by engaging in a discussion of its allegations or conclusions.
Martin Anderson, a longtime economic adviser to Republican presidents and director of policy development for the Reagan administration in 1981-82, took issue yesterday with some of Stockman's key contentions yet praised him for his service at OMB.
Anderson, a California economist, contended that "Ronald Reagan understood the essentials of economic policy better than David Stockman, who is now an economist." He said that Reagan, acting on the advice of an advisory panel that began its work in the 1980 campaign and included a number of well-known economists, consciously chose a policy designed to restore the economy and create jobs.
"It wasn't a question of people not comprehending," said Anderson, who commented after being read portions of the excerpts. "The choice was between huge deficits and large deficits. The entire weight of the economic advice given the president was to incur the short-term deficit to achieve longer-term gains in the economy."
Anderson said Stockman was "uncomfortable" with this course because it "made him look bad" as budget director. But he said Stockman also achieved far more spending cuts than White House political advisers thought possible and is not giving either the president or himself enough credit for achieving them.
At the time, however, Reagan's rhetoric about his budget proposals did not indicate that they would lead to larger deficits. Instead, he presented his three-year tax cut, which Congress approved in 1981, as the path to a revived economy that would produce a balanced budget within several years.
But Ullman's account of Stockman's recollection of a White House meeting indicates that the president had doubts about the compatibility of his goals after passage of the tax-reduction bill, which House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) warned would cause a huge deficit.
Ullman quotes Stockman as saying that he briefed the president on budgetary difficulties and received "a reaction of general shock" from Reagan and his aides. After Stockman finished the briefing, he quoted Reagan as saying, "If all this was true, maybe Tip O'Neill was right."
Stockman's book concludes that the Reagan goals were unrealistic from the start.
"The true Reagan Revolution never had a chance," Stockman writes. "It defied all of the overwhelming forces, interests and impulses of American democracy. Our Madisonian government of checks and balances . . . and infinitely splintered power is conservative, not radical . . . . It cannot leap into revolutions without falling flat on its face."
In addition, Stockman writes, Reagan "was a consensus politician, not an ideologue. He had no business trying to make a revolution because it wasn't in his bones." The Reagan revolution, Stockman says, "was not Ronald Reagan's agenda in the first place. It was mine, and that of a small cadre of supply-side intellectuals." His "supply-side" reference is to an economic theory, at first embraced and then abandoned by Stockman, that tax reductions will unleash productive forces of such magnitude that they will produce higher government revenues with lower tax rates. In Stockman's terms, the Reagan revolution also meant "a frontal assault on the American welfare state" that would have required politically unacceptable reductions in Social Security and other welfare programs and "complete elimination of subsidies to farmers and businesses."
Speaking of these policies, Stockman writes, "Ronald Reagan proved too kind, gentle and sentimental for that. He always went for hard-luck stories. He sees the plight of real people before anything else. Despite his right-wing image, his ideology and philosophy always take a back seat when he learns that some individual human being might be hurt."
Stockman writes that he now realizes it was a mistake to try to launch a revolution. He chastizes himself for political naivete, writing that despite his experience in Congress, first as a staff assistant and then, for two terms, as a Republican House member from Michigan, he did not understand the most basic rules of legislative politics.
"Our [White House] team has no serious legislative experience or wisdom," Stockman writes. "Most of them had no comprehension of the numbers, and I didn't really care. Mowing down the political resistance was the whole purpose of the Reagan Revolution."
By 1984, Stockman writes, the White House "had become a dreamland. It was holding the American economy hostage to a reckless, unstable fiscal policy based on the politics of high spending and the doctrine of low taxes . . . . It bragged that its policies had worked as never before when, in fact, they had produced fiscal excesses that have never before been imagined.
"I was appalled by the false promises of the 1984 [Reagan presidential] campaign," Stockman writes. "Ronald Reagan had been induced by his advisers and his own illusions to embrace one of the more irresponsible platforms of modern times. He had promised, as it were, to alter the laws of arithmetic . . . . After four years in office, the Reaganites had no more sense that governance involved facing facts and making palatable choices than they had at the beginning."
Stockman castigates many of those Reaganites as uninformed and parochial.
He writes that he was "rolled" by then-secretary of state Alexander M. Haig Jr., who launched an angry "turf battle" that successfully protected foreign aid programs.
He assails Secretary of Defense Caspar W. Weinberger for an "intellectually disreputable" graphics display intended to prevent defense budget cuts. But Stockman defends his own use of a multiple-choice test on the budget designed to get Reagan's attention.
Stockman says that Meese, now the attorney general, as White House counselor "entombed himself beneath a pyramid of paper and disorganization" and "never met a committee he didn't like." He writes that Deaver "never feigned an interest in policy" because he was "busy stage-managing the upcoming inaugural -- hiring elephants and Frank Sinatra."
Not even then-chief of staff James A. Baker III, now the treasury secretary, escapes Stockman's criticism, even though Stockman acknowledges that Baker saved his job after the Greider article.
"Baker was, deep down, neither very versed on matters of policy nor intensely interested in them," Stockman writes. "As long as it was directionally sound, he was satisfied."
Stockman describes a Baker the public has not seen who used vivid and vulgar language on the day Stockman was supposedly "taken to the woodshed" over his candid comments to Greider that appeared in the Atlantic.
With "steely cold" eyes, Stockman writes, Baker told him: "My friend, I want you to listen up good. Your ass is in a sling. All the rest of them want you [expletive]-canned right now.
"If it weren't for me, you'd be a goner already. But I got you one last chance to save yourself. So you're going to do exactly like I tell you. Otherwise, you're finished around here.
"You're going to have lunch with the president. The menu is humble pie. You're going to eat every last mother-[expletive] spoonful of it. You're going to be the most contrite [SOB] this world has ever seen . . . . When you go through the Oval Office door, I want to see that sorry ass of yours dragging on the carpet."
Stockman said that if honest economic estimates had been used, the Reagan revolution would never have been launched. He recounts a Feb. 7, 1981, meeting where he agreed to raise the administration's inflation estimate if Murray Weidenbaum, then chairman of the Council of Economic Advisers, agreed to keep the growth rate "reasonably high."
As Stockman recounts it, Weidenbaum was taunted and asked where his forecast came from. He slapped his belly and replied, "It came right out of here. My visceral computer."
Weidenbaum, in a brief interview yesterday, said he had been accurately quoted by Stockman but defended the economic validity of his growth rate forecast.