David Stockman – Sundown in America: The State-Wreck Ahead.


David Stockman, former director of the Office of Management and Budget in the early 1980s and author of The Great Deformation, has reappeared in the mainstream within the past 2 years. Stockman’s scathing bat-out-of-hell indictments against ever-increasing American Statism have made him quite a few enemies (namely in the Democratic and Republican establishments), but have also garnered himself quite a few new fans, myself included.

In a recent speech at the Edmond J. Safra Center for Ethics, Harvard Univeristy, Stockman described the present condition of American society as “Sundown in America”: a era where living standards are stalling or even decreasing, where employment is increasingly elusive and insecure, where individuals and families fail to accumulate savings, where taxes are rising in spite of lowered incomes, and where more and more people are manipulated into government dependence every day.

Thankfully, he does not leave us in the dark as to who is responsible for this. Stockman names the Welfare Machine, the Warfare Machine, and the Federal Reserve as the top enemies of prosperity for all in America today. I largely agree with that assertion.

Some highlights:

The median U.S. household income in 2012 was $51,000, but that’s nothing to crow about. That same figure was first reached way back in 1989— meaning that the living standard of Main Street America has gone nowhere for the last quarter century. Since there was no prior span in U.S. history when real household incomes remained dead-in-the-water for 25 years, it cannot be gainsaid that the great American prosperity machine has stalled out… Then, again, not all of the vectors have pointed south. Back in 1989 the Dow-Jones index was at 3,000, and by 2012 it was up five-fold to 15,000. Likewise, the aggregate wealth of the Forbes 400 clocked in at $300 billion back then, and now stands at more than $2 trillion—a gain of 7X.”

“Some other things were rising smartly during the last quarter century, too. The Pentagon budget was $450 billion in today’s dollars during the year in which the Berlin Wall came tumbling down. Now we have no industrial state enemies left on the planet: Russia has become a kleptocracy led by a thief who prefers stealing from his own people rather than his neighbors; and China, as the Sneakers and Apple factory of the world, would collapse into economic chaos almost instantly—if it were actually foolish enough to bomb its 4,000 Wal-Mart outlets in America. Still, facing no serious military threat to the homeland, the defense budget has risen to $650 billion—-that is, it has ballooned by more than 40 percent in constant dollars since the Cold War ended 25 years ago. Washington obviously didn’t get the memo, nor did the Harvard “peace” candidate elected in 2008, who promptly re-hired the Bush national security team and then beat his mandate for plough shares into an even mightier sword than the one bequeathed him by the statesman from Yale he replaced.”

“Finally, we have the leading growth category among all others—-namely, debt and the cheap central bank money that enables it. Notwithstanding the eight years of giant Reagan deficits, the national debt was just $3 trillion or 35 percent of GDP in 1989. Today, of course, it is $17 trillion, where it weighs in at 105 percent of GDP and is gaining heft more rapidly than Jonah Hill prepping for a Hollywood casting call.”

“In due course we will identify the major villainous forces behind these lamentable trends, but note this in passing: The Federal Reserve was created in 1913, and during its first 73 years it grew its balance sheet in turtle-like fashion at a few billion dollars a year, reaching $250 billion by 1987—at which time Alan Greenspan, the lapsed gold bug disciple of Ayn Rand, took over the Fed and chanced to discover the printing press in the basement of the Eccles Building. Alas, the Fed’s balance sheet is now nearly $4 trillion, meaning that it exploded by sixteen hundred percent in the last 25 years, and is currently emitting $4 billion of make-believe money each and every business day.”

So we can summarize the last quarter century thus: What has been growing is the wealth of the rich, the remit of the state, the girth of Wall Street, the debt burden of the people, the prosperity of the beltway and the sway of the three great branches of government which are domiciled there—that is, the warfare state, the welfare state and the central bank. What is flailing, by contrast, is the vast expanse of the Main Street economy where the great majority has experienced stagnant living standards, rising job insecurity, failure to accumulate any material savings, rapidly approaching old age and the certainty of a Hobbesian future where, inexorably, taxes will rise and social benefits will be cut. And what is positively falling is the lower ranks of society whose prospects for jobs, income and a decent living standard have been steadily darkening.

I call this condition “Sundown in America”. It marks the arrival of a dystopic “new normal” where historic notions of perpetual progress and robust economic growth no longer pertain. Even more crucially, these baleful realities are being dangerously obfuscated by the ideological nostrums of both Left and Right.


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