How Change Is Stymied

Stockman knew how to use the media, but, like Volcker, he was not going to risk his career and reputation on the uncertain success of establishing a new order of things. When the going got tough, Stockman began meeting secretly with journalist William Greider to establish his escape route.

Sensitive to the deficits projected by the Treasury's static revenue estimates, Stockman had hidden the deficits by assuming a much higher forecast of inflation than we knew Volcker would deliver. I kept warning that Volcker was going to slam on the monetary brakes, but the monetarists in the administration saw the Fed as an inflation machine and did not believe it. I advised Stockman that if Volcker turned off the money, as I was sure he would, the resulting recession would produce deficits that would be blamed on the supply-side policy even though the policy was yet to be implemented. Baker had made enemies of the Democrats. Most of Wall Street and the financial press were against us, and so were the Keynesian economists. Already we were being accused of making a "Laffer curve" forecast that tax cuts would pay for themselves. It would have been much better to forecast deficits, emphasize their exaggeration by static revenue forecasts, cut a deal with the Democrats and stare down the Senate Republicans on the deficit.

But Stockman would not forecast deficits. When Volcker struck, Stockman realized his mistake, and he began planting a story line on Greider that covered Stockman's butt. When Don Regan fired Stockman at the beginning of Reagan's second term, Stockman wrote a book that blamed the deficit on politics that combined tax cuts with increased spending. Greider's article based on his secret sessions with Stockman and Stockman's book played into the hands of the new policy's enemies.

Stockman went on to a million dollar salary on Wall Street. Those of us who had stood firm had to take the heat. The fact that inflation collapsed despite tax cuts and budget deficits, just as supply-side economists said it would, and did not rise as Wall Street and Keynesian economists predicted, was completely ignored. The Reagan economic expansion proceeded as inflation fell year by year. The Phillips curve was gone, vanished. It was a complete vindication of supply-side economics; yet the story presented by economists and media was one of failure.

Having experienced this, I was not surprised by the lies and coverups that have locked our country into years of budget-busting and reputation-destroying wars leading to unwinnable conflict with Russia and China. The United States has devolved to the point where truth has becomed an enemy of the state and of the forces that control the state. Those who lie for the state and the interest groups that control the state are rewarded. Those who tell the truth are punished.

What I have have written above is more than a history. It shows that change in behalf of the public interest is extremely difficult to achieve even when there is leadership and people in positions of power who are willing to accumulate enemies in order to bring needed change. All sorts of things overwhelm change: stupidity, egos, vested interests, lies and propaganda. The list is long.

I have concluded that corruption is so dominant in the US today that change for the better cannot come from internal sources. Change for the better, if it comes, will come from economic collapse resulting from the prostitution of public policy to serve a handful of elites.

My forecast is not altogether bleak. Evil often destroys itself when there is no one else to do it. In the meantime, we can enjoy Stockman's assault on the financial gangsters who are destroying the lives of all of the rest of us and appreciate that Stockman's courage has caught up with his intellect. United, the two produce a powerful voice.