More David Stockman: “If this sounds like advice to get out of the markets and hide out in cash, it is.”

stockman

This is not necessarily my advice. It is David Stockman’s, just to be clear. We don’t offer investment advice here.

Attached is an excellent op-ed in the New York Times from David Stockman which comes on the heals of the release of his new book, The Great Deformation, which we reviewed in the previous post.

In the op-ed Stockman explains that in order to get a handle on things economically, in order to restore some sanity to markets,  in order to root out the system of crony capitalism we now live under, radical changes must be implemented. Changes which are too radical for reality (at least current reality) Stockman readily admits.

Key to it all is a separation of free enterprise and the state. But I don’t see Jack “Mr. Citibank” Lew going for that anytime soon. Or Mr. Obama giving back the “donations” from big business to Organizing for Action. Or nearly anyone in Congress sending back any checks or turning away lobbyists.

(From The New York Times)

As the federal government and its central-bank sidekick, the Fed, have groped for one goal after another — smoothing out the business cycle, minimizing inflation and unemployment at the same time, rolling out a giant social insurance blanket, promoting homeownership, subsidizing medical care, propping up old industries (agriculture, automobiles) and fostering new ones (“clean” energy, biotechnology) and, above all, bailing out Wall Street — they have now succumbed to overload, overreach and outside capture by powerful interests. The modern Keynesian state is broke, paralyzed and mired in empty ritual incantations about stimulating “demand,” even as it fosters a mutant crony capitalism that periodically lavishes the top 1 percent with speculative windfalls.

Click here for the article.