Cover image for The great deformation : the corruption of capitalism in America
The great deformation : the corruption of capitalism in America
Stockman, David Alan, 1946- , author.
First edition.
Publication Information:
New York : PublicAffairs, ©2013.
Physical Description:
xviii, 743 pages ; 25 cm
In this revisionist history of the American state, former Reagan budget director and bestselling author David Stockman shows where capitalism went wrong, how it was corrupted, and how it might be restored. He argues that Washington -- and especially the Federal Reserve -- have fallen prey to the politics of crony capitalism and the ideologies of fiscal stimulus, monetary central planning, and financial bailouts. These policies have converged to bloat the welfare state, perpetuate the military-industrial complex, deplete the revenue base, fuel new financial bubbles, favor Wall Street with cheap money, rig stock and bond markets, crush Main Street savers, and punish family budgets with soaring food and energy costs.
The Blackberry Panic of 2008. Paulson's folly : the needless rescue of AIG and Wall Street ; False legends of dark ATMs and failing banks ; Days of crony capitalist plunder -- The Reagan era revisited : false narratives of our times. The Reagan revolution : repudiations and deformations ; Triumph of the warfare state : how the budget battle was lost ; Triumph of the welfare state : how the GOP anti-tax religion was born ; Why the chickens didn't come home to roost : the Nixon abomination of August 1971 -- New Deal legends and the twilight of sound money. New Deal myths of recovery ; The New Deal's true legacy : crony capitalism and fiscal demise ; War finance and the twilight of sound money ; Eisenhower's defense minimum and the last age of fiscal rectitude ; The American empire and the end of sound money ; Milton Friedman's folly : rise of the t-bill standard -- The age of bubble finance. Pork bellies, floating money, and the rise of speculative finance ; Greenspan 2.0 ; Bull market culture and the delusion of quick riches ; Serial bubbles ; The great deformation of capital markets : how Wall Street got huge ; From Washington to Wall Street : roots of the great housing deformation ; How the Fed brought the gambling mania to America's neighborhoods ; The great financial engineering binge ; The great raid on corporate cash ; The rant that shook the Eccles Building : how the Fed got Cramer'd ; When giant LBOs strip-mined the land ; Deals gone wild : rise of the debt zombies ; Bonfires of debt and the road not taken -- Sundown in America : the end of free markets and democracy. Willard M. Romney and the Truman show of bubble finance ; Bonfires of folly : Bernanke's false depression call and the $800 billion Obama stimulus ; Obama's green energy capers : crony capitalist larceny ; The end of free markets : the rampages of crony capitalism in the auto belt ; No recovery on Main Street ; The Bernanke bubble : last gift to the 1 percent ; Sundown in America : the state-wreck ahead ; Another road that could be taken.
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HC106.84 .S76 2013 Adult Non-Fiction Open Shelf
HC106.84 .S76 2013 Adult Non-Fiction Non-Fiction Area
HC106.84 .S76 2013 Adult Non-Fiction Open Shelf
HC106.84 .S76 2013 Adult Non-Fiction Open Shelf
HC106.84 .S76 2013 Adult Non-Fiction Open Shelf
HC106.84 .S76 2013 Adult Non-Fiction Open Shelf
HC106.84 .S76 2013 Adult Non-Fiction Open Shelf
HC106.84 .S76 2013 Adult Non-Fiction Open Shelf

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A New York Times bestseller

The Great Deformation is a searing look at Washington's craven response to the recent myriad of financial crises and fiscal cliffs. It counters conventional wisdom with an eighty-year revisionist history of how the American state--especially the Federal Reserve--has fallen prey to the politics of crony capitalism and the ideologies of fiscal stimulus, monetary central planning, and financial bailouts. These forces have left the public sector teetering on the edge of political dysfunction and fiscal collapse and have caused America's private enterprise foundation to morph into a speculative casino that swindles the masses and enriches the few.

Defying right- and left-wing boxes, David Stockman provides a catalogue of corrupters and defenders of sound money, fiscal rectitude, and free markets. The former includes Franklin Roosevelt, who fathered crony capitalism; Richard Nixon, who destroyed national financial discipline and the Bretton Woods gold-backed dollar; Fed chairmen Greenspan and Bernanke, who fostered our present scourge of bubble finance and addiction to debt and speculation; George W. Bush, who repudiated fiscal rectitude and ballooned the warfare state via senseless wars; and Barack Obama, who revived failed Keynesian "borrow and spend" policies that have driven the national debt to perilous heights. By contrast, the book also traces a parade of statesmen who championed balanced budgets and financial market discipline including Carter Glass, Harry Truman, Dwight Eisenhower, Bill Simon, Paul Volcker, Bill Clinton, and Sheila Bair.

Stockman's analysis skewers Keynesian spenders and GOP tax-cutters alike, showing how they converged to bloat the welfare state, perpetuate the military-industrial complex, and deplete the revenue base--even as the Fed's massive money printing allowed politicians to enjoy "deficits without tears." But these policies have also fueled new financial bubbles and favored Wall Street with cheap money and rigged stock and bond markets, while crushing Main Street savers and punishing family budgets with soaring food and energy costs. The Great Deformation explains how we got here and why these warped, crony capitalist policies are an epochal threat to free market prosperity and American political democracy.

Author Notes

Adam LeBor is an author, journalist, and literary critic based in Budapest. He writes for The Economist, The Times (London), Monocle, and numerous other publications, and also reviews books for the New York Times. He has been a foreign correspondent since 1991, covering the collapse of communism and the Yugoslav wars, and has worked in more than thirty countries. He is the author of seven critically acclaimed non fiction books, including the ground-breaking Hitler's Secret Bankers, and two novels. His books have been published in twelve languages.

Reviews 2

Booklist Review

Stockman, veteran of the Reagan White House and Wall Street, offers his self-described polemic, a wide-ranging indictment of the American government-economic complex; free markets and democracy have been under long-term attack, and the author explains why we have myriad problems, perhaps intractable. He indicates the book contains much original interpretation of financial and public policy events and trends of the last century, even a revisionist framework. Stockman concludes his lengthy controversial argument with: the cure . . . is to return to sound money and fiscal rectitude and to correct the great error initiated during the New Deal . . . . In pursuing humanitarian purposes the state cannot and need not attempt to manage the business cycle or goose the free market with stimulants for more growth and jobs; nor can it afford the universal entitlements of social insurance. Its job is to be a trustee for citizens left behind, maintaining a sturdy, fair and efficient safety net. This thought-provoking book will contribute to important debates on these issues.--Whaley, Mary Copyright 2010 Booklist

Publisher's Weekly Review

Stockman, Ronald Reagan's director of the Office of Budget and Management, diagnoses America's political system as a "tyranny of incumbency and money politics" in this extensive treatise. The Troubled Asset Relief Program incited him to begin this history-government interventions being antithetical to the Reaganism-but he argues that short of "sweeping constitutional change," any solution "is so radical it can't happen." Stockman's narrative holds that the government caused the "Great Recession" by saving private entities like AIG, that the roots of the 2007-2008 housing crisis stretch back to the Bretton Woods conference, and that all this behavior is a revival of New Deal Keynesianism. He includes comprehensive lists of heroes and villains; with Ben Bernanke, Hank Paulson, and Alan Greenspan all named among the latter. After several hundred pages of deep analysis, he offers 13 suggestions for a way forward, but the book, otherwise focused and provocative, can't decide whether it is a history or a policy brief; his obsession with history overtakes the need to design a future, and instead of each option receiving due consideration, they're squeezed onto the end. Since Stockman convinced us the problems are nearly insoluble, a more balanced presentation would make this a more functional document. (Apr.) © Copyright PWxyz, LLC. All rights reserved.

Table of Contents

Introductionp. ix
Part I The Blackberry Panic of 2008
1 Paulson's Folly: The Needless Rescue of AIG and Wall Streetp. 3
2 False Legends of Dark ATMs and Failing Banksp. 19
3 Days of Crony Capitalist Plunderp. 35
Part II The Reagan Era Revisited: False Narratives of Our Times
4 The Reagan Revolution: Repudiations and Deformationsp. 55
5 Triumph of the Warfare State: How the Budget Battle Was Lostp. 70
6 Triumph of the Welfare State: How the GOP Anti-Tax Religion Was Bornp. 87
7 Why the Chickens Didn't Come Home to Roost: The Nixon Abomination of August 1971p. 108
Part III New Deal Legends and the Twilight of Sound Money
8 New Deal Myths of Recoveryp. 137
9 The New Deal's True Legacy: Crony Capitalism and Fiscal Demisep. 169
10 War Finance and the Twilight of Sound Moneyp. 195
11 Eisenhower's Defense Minimum and the Last Age of Fiscal Rectitudep. 213
12 The American Empire and the End of Sound Moneyp. 235
13 Milton Friedman's Folly: Rise of the T-Bill Standardp. 260
Part IV The Age of Bubble Finance
14 Pork Bellies, Floating Money, and the Rise of Speculative Financep. 281
15 Greenspan 2.0p. 320
16 Bull Market Culture and the Delusion of Quick Richesp. 343
17 Serial Bubblesp. 361
18 The Great Deformation of Capital Markets: How Wall Street Got Hugep. 382
19 From Washington to Wall Street: Roots of the Great Housing Deformationp. 404
20 How the Fed Brought the Gambling Mania to America's Neighborhoodsp. 425
21 The Great Financial Engineering Bingep. 443
22 The Great Raid on Corporate Cashp. 455
23 The Rant That Shook the Eccles Building: How the Fed Got Cramer'dp. 475
24 When Giant LBOs Strip-Mined the Landp. 501
25 Deals Gone Wild: Rise of the Debt Zombiesp. 520
26 Bonfires of Debt and the Road Not Takenp. 537
Part V Sundown in America: The End of Free Markets and Democracy
27 Willard M. Romney and the Truman Show of Bubble Financep. 551
28 Bonfires of Folly: Bernanke's False Depression Call and the $800 Billion Obama Stimulusp. 577
29 Obama's Green Energy Capers: Crony Capitalist Larcenyp. 598
30 The End of Free Markets: The Rampages of Crony Capitalism in the Auto Beltp. 613
31 No Recovery on Main Streetp. 631
32 The Bernanke Bubble: Last Gift to the 1 Percentp. 649
33 Sundown in America: The State-Wreck Aheadp. 672
34 Another Road That Could Be Takenp. 706
Note on Sourcesp. 713
Indexp. 719
About the Authorp. 743