This is really amazing. I had coffee with a young finance guy (just graduating) today and I remarked, “I can’t believe the treatment David Stockman is getting, the proportion of ridicule to actual examination of his arguments. The only analogous thing I can remember is how people treated Ron Paul.”
Seriously, this is insane. Look at this example (HT2 Bob Roddis). Law professor (and apparent expert monetary theorist?) Robert Hockett devotes the majority of his Salon critique to analogizing Stockman to a guy you meet on the subway who casually mentions that he was abducted by aliens. Let me give you a taste, but keep in mind, I’m condensing it; in the original, it’s almost inconceivable how much time the guy spends, developing his goofy analogy.
We’ve all had the feeling: You fall into conversation with some stranger on the subway or bus. Or perhaps you are seated beside him at a concert or some other event. Whatever the venue or circumstance, the conversation goes pleasantly for a while. Your interlocutor makes various interesting observations about this subject or that. He shows himself to experience the world much as do you and most others you’ve known. He might even say something arrestingly perceptive or thoughtful at some juncture during your chat. Then, without warning, it happens: In the middle of a perfectly good sentence he throws in, as a sort of throwaway line or aside, some such observation as, ‘like that time the Venusians performed those experiments on me up on Telos Nine, before taking me back to the Bryant Park carousel and then flying home. (They still call me, you know.)’
Suddenly you feel a bit awkward. Vaguely swindled, even. Your whole conversation, you now realize, has been predicated on a dreadful mistake. And now you don’t know what to do…
Something much like this happened to many of us recently, I suspect, upon reading former Reagan Budget Director David Stockman’s lament in the New York Times. Stockman said much that’s worth saying, especially when said by Republicans. There were denunciations of crony capitalism, for example, and of how ‘too big to fail’s’ become ‘too big to jail.’…
‘Amen, brother,’ I am sure many of us thought, as we read lines like these.
But then it happened. Suddenly Stockman denounced ‘fiat money’ and cursed Nixon for ‘taking us off of the gold standard.’…He cursed Milton Friedman for having preached even disciplined monetary policy. He cursed Social Security and other staples of the good – or at any rate better than savage – society we’ve taken for granted for decades and decades. He cursed public debt like the tribe of austerians now busily dismantling Europe. Then, finally, he called for a complete ‘divorce’ of ‘the market’ and ‘government.’
And so, ‘uh-oh,’ we thought, ‘gotta go … don’t catch his eye.’
This is hard – I don’t want to ‘otherize’ Stockman altogether. But when you hear ‘austerity’ during a debt deflation you hear an idiot. And when you hear ‘gold standard’ you’ve heard as bad as ‘Ayn Rand.’ And when you hear ‘divorce of “the market” from “government”’ you’ve heard … Ayn Rand. You have heard nonsense – complete, utter nonsense.
What then to do?
Maybe you can write an article that focuses on your objections to his arguments? Instead of spending hundreds of words on a hypothetical alien abduction, maybe you can explain why I should listen to a law professor who writes the following as a “truth” that Stockman overlooks?
There is, and can be, no alternative to managed currency (‘fiat money’) – unless we can live with decades and decades of deflation to the point of subsistence-level production, with all of the decades of double-digit unemployment that will entail.
At first I was tempted to ask, if this guy realized that the US has only had a “managed currency” since 1971 (or 1933, depending on how you clock it), at which point we weren’t starting with a subsistence-level economy. But he has to know that, since he’s allegedly schooling Stockman, who of course pointed to these dates as being really bad.
Seriously, just re-read that gem. Not even Paul Krugman would say that switching back to the classical gold standard would lead to subsistence-level production, and I’m not sure he would even agree that it would yield “decades” of double-digit unemployment. And this guy is telling us that Stockman is the analog of a guy claiming to have been abducted by aliens?
For those mainstream-esque economists who never agreed with Ron Paul’s monetary views, and couldn’t understand his popularity with average Joes, this is part of it. Regular people get very suspicious when there is a humongous, apparently orchestrated campaign to remove certain ideas from polite discussion. Or, as this ridiculous Salon article announces to us in its very title: “Reagan aide disqualifies himself from the conversation.”