NOTE TO READERS
I am in the throes of finishing a book on the upheaval represented by the Trump candidacy and movement. It is an exploration of how 30 years of Bubble Finance policies at the Fed, feckless interventions abroad and mushrooming Big government and debt at home have brought America to its current ruinous condition.
It also delves into the good and bad of the Trump campaign and platform and outlines a more consistent way forward based on free markets, fiscal rectitude, sound money, constitutional liberty, non-intervention abroad, minimalist government at home and decentralized political rule.
In order to complete the manuscript on a timely basis, I will not be doing daily posts for the next week or two. Instead, I will post excerpts from the book that crystalize its key themes and which also relate to the on-going gong show in the presidential campaigns and in the financial and economic arenas. The first of these is included below.
I am also working with my partners at Agora Financial on a new version of Contra Corner. More information on that will be coming early next month.
TRUMPED! A NATION ON THE BRINK OF RUIN.....AND HOW TO BRING IT BACK
By David A. Stockman
.........First there were seventeen. At length, there was one. And now there is even a chance he may become President.
Donald Trump’s wildly improbable capture of the GOP nomination and rise toward the White House is surely the most significant upheaval in American politics since Ronald Reagan.
Yet the rise of Trump----and Bernie Sanders, too----vastly transcends ordinary politics. In fact, it reaches deep into a ruined national economy that has morphed into rank casino capitalism under the misguided policies and faithless rule of the Washington/Wall Street elites.
This epic deformation has delivered historically unprecedented setbacks and resentments to the bottom 90% of American households. They have seen their real wealth and living standards steadily deteriorate for several decades now, even as vast financial windfalls have accrued to the elite few at the very top.
To be sure, the proximate cause of this year’s election upheaval is similar to that in Reagan’s time. Back then, an era of drastic bipartisan mis-governance generated an electoral impulse to sweep out the Washington stables.
Now, however, it is not just the beltway political class but the very foundation of American economic life that is under attack. What remained of healthy market capitalism in Reagan’s time is no more.
It has been battered by 30 years of madcap money printing at the Fed, a debilitating $50 trillion explosion of public and private debt and the boom-and-bust of serial financial bubbles that drain productivity and efficiency and channel economic resources to speculators and wasteful malinvestments.
Unfortunately, this policy-induced rot at the foundations of the US economy has bred a profusion of public fears and scapegoats. Illegal immigrants, bad trade deals and the unfair mercantilist practices of China and many other foreign governments have taken the blame---especially in Donald Trump’s campaign patter.
But these scapegoats are either irrelevant or symptoms. The real problem is not free trade or free entry of people.
To the contrary, America’s faltering economy has been made in Washington DC, not at the illegal crossing routes on the Arizona border or the containership berths at Long Beach. For more than three decades the nation’s central banks have flooded the US and world economies with too much free money and Washington politicians have accommodated the beltway lobbyists and racketeers and the country’s huge entitlement constituencies with too much free boot.
So the real disease is bad money and towering debts. The actual culprits are the Wall Street/Washington policy elites who have embraced statist solutions which aggrandize their own power and wealth.
That much, at least, Donald Trump has right. Throwing-out the careerists, pettifoggers, hypocrites, ideologues, racketeers, power-seekers and snobs who have brought about the current ruin is at least a start in the right direction.
What made American great once upon a time, of course, was free markets, fiscal rectitude, sound money, constitutional liberty, non-intervention abroad, minimalist government at home and decentralized political rule.
Whether Donald Trump gets that part of the equation remains to be seen.
Then again, the GOP establishment has failed, the Democrats are clueless and the mainstream media and punditry is overtly hostile.
So if the ideals of world peace, capitalist prosperity and constitutional liberty are to survive at all, it’s up to the Donald.
That might seem like cold comfort. But a nation that has been Trumped is a people coming back to life. Americans don’t want to take it anymore. They want their existing rulers to take a permanent hike.
And that’s a start.