The Great Deformation By David Stockman Online. Book Details: Language: English Published Original Language Unknown, Isbn: , Publisher. DAVID A. STOCKMAN 18 The Great Deformation of Capital Markets: How Wall Street. Got Huge .. the roots of the Great Deformation, difficult in the extreme. David Stockman not only cites Mises and Hazlitt, among other The main theme of The Great Deformation is stated clearly on the first page of.

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Still it is important to remember that its not a science because many of the deformtaion of this art will make all the motions alluding to it being so if not outright claiming so. Even with the stories and shocking data, I still found it hard to concentrate.

A careful study of the rise of the modern global-harmonization efforts around all matters of public policy, indicate we are in a neo-mercantilist era. Sep 09, John Boettcher rated it it was amazing. Warehouse credit lines, GSE’s, a legislative agenda and an accommodating Fed all conspired to create a speculative feeding frenzy which met an inevitable unhappy ending. I very much agree with him that Wall Street should have to take losses on poor investments and preposterous and unnecessary speculative practices like the mortgage machine created in the run-up to the crisis.

It purports to set things right by taking away the financial games that have hidden the true cost of government from the public as well as the policy-makers, reconnecting the tax base with the real bills coming due. People would have pulled all their deposits from the main street banks since all their other sources of liquidity would have dried up who in turn would all be lining up at the Fed hoping it does a Bagehot and lends them money against their loan portfolios.

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Stockman sees this chronically loose monetary policy as doing little to help the “Main Street” economy, but everything to help Wall Street, which he believes has turned the Fed into its lap dog. He may be Chicken Little crying that the sky is falling but he convinced me and I’m ducking for shelter! Virtually free money, procured in the repo and other short-term markets, is used davix fund aggressive leveraged speculation that drives the prices of stocks and other financial assets to unsustainable levels that inevitably collapse in crashes such as occurred in The Road to Ruin: The fig leaf of its inflation mandate and the battering the price of manufactured goods took when China entered the world arena.


In another story, a head government official recounts the CEO of Goldman Sachs coercing him into providing the banks with bailout, lest their be dire consequences.

He’s also got plenty of criticism for others, particularly, but not limited to, Presidents Bush and Obama, Fed Chairman Bernanke, past Treasury Secretary Hank Paulson, financial columnist Paul Krugman, and many others. Go find me better. The real deformatikn here is taking unarguable actual events in our recent economic history and crafting nuanced narratives of them built on mostly accepted ones, or at least controversially accepted ones.

Thereafter, except for a few periods of attempts at fiscal responsibility by principled leaders such as Dwight Eisenhower, the levers of power over economic policy came ever more into the hands of misguided ideologues who regarded Keynes’s ideas as valid, and self-serving cynics such defofmation Richard Nixon, willing to sacrifice everything on the altar of reelection.

I stofkman getting into the financial weeds, especially when it includes dacid endless tales of despicable lies and bad behavior behind smiling faces. It was, paradoxically, the Reagan administration that gave rise to the belief that “deficits don’t grwat, a notion that has metathesized into a lethal mantra now three decades later in the era of Barak Obama.

Stockman’s economic arguments seem reasoned, yet other experts continue to dismiss his reasoned approach. It is important for us to understand what is happening and how we got here if we are to change course. Still, I’ve learned to trust him, and I find most of his case compelling, despite his exaggerations, his unwillingness to see much good or wisdom in anyone, or his inability to offer practical solutions to the problem he describes.

It’s a rational notion.

The so-called green energy “investments” of the Obama administration are hauled out into the daylight for a righteous thrashing. He takes the reader through all of the United States’ bubbles since before the Great Depression and explains the causes of each one. He covers the growth and expansion of the warfare state. It’s vicious and it’s sickening, but I know. These pages of the book are fact-packed, well-written, fast-paced, gripping, revealing and downright forensic in their description.

In his view, Keynesian policymakers are like doctors continuously upping the dosage of bad medicine in a self-defeating effort to cure a disease they themselves have caused. In the Federal Government gave the Federal Reserve the cartel power to manage the financial system, giving it special privileges and protections that have become a total moral hazard for those of us living today.

This was a long, but fun reading odyssey for me. Bush in even lower regard for accelerating the fiscal doomsday clock by embracing big government, costly military entanglements and lower taxes for rich people all at the same time.


The dark heart of this evil system, according to the author, is the Federal Reserve, especially as it has been run by Alan Greenspan and Ben Bernanke. He writes in the rolling cadences of an angry prophet, and he at times allows passion to outrun his logic.

The Great Deformation: The Corruption of Capitalism in America

Paper money could be exchanged for gold. They showed the undeniable correlation between the collapse of GDP and the money supply, but proved no causation whatsoever. This book illustrates how the United States arrived at our current predicament, of a strangled economy the result of government that could not leave the economy to function on its own, believing it must intervene to improve it.

From the Thomas Amendment’s destruction of hard currency to the ad hoc grab bag of bureaucratic agencies which bloated the administrative state to the origins of farm belt cronyism, no doubt remains that FDR’s true legacy is “the patron saint of crony capitalism.

The Great Deformation: The Corruption of Capitalism in America by David A. Stockman

This low rating is unusual for me, and most other reviewers rated it more highly. Yes, it’s that good. It is candid and, to begin with, refreshing, but after a while I found it wearing on me. Nothing in that base understanding lends itself to hard science. Each time, Greenspan and then his successor Ben Bernanke, lowered interest rates to prop up the economy when that, as Stockman rightly points out, was exactly the wrong thing to do because it avoided the necessary business failures that would have warned speculators of the damage they could suffer from foolish investment decisions.

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Cheap printed money from Greenspan and Bernanke’s Fed, along with Friedmanesque freshwater free-market ideology fuelled speculative finance. The book is wonderful proof we should abolish the fed, restore the gold standard, and embrace Austrian Economics https: He repeats himself too often and goes into too much detail on some specific companies who received bailouts or stimulus money.