David Stockman, 69, is the former Director of the Office of Management and Budget (1981-85) in the Reagan Administration.
Even by The Donald’s standards his 95 minute long interview with the Washington Post was remarkable. He let loose so many stray shots as to leave the establishment press clucking in a chorus of disbelief. It undoubtedly started with the stink bomb he lobbied at the ” all is awesome” meme about the US economy and stock market:
Donald Trump said in an interview that economic conditions are so perilous that the country is headed for a “very massive recession” and that “it’s a terrible time right now” to invest in the stock market, embracing a distinctly gloomy view of the economy that counters mainstream economic forecasts.
The New York billionaire dismissed concern that his comments — which are exceedingly unusual, if not unprecedented, for a major party front-runner — could potentially affect financial markets.
Now there’s an irony. Presumably the last paragraph was written by Bob Woodward who was once the bête noir of the Washington/Wall Street establishment. But like nearly everyone else in the Imperial City he has been drinking the Kool-Aid for so many decades that he was shocked by Trump’s unfiltered bit of truth-telling about an economy that is failing 90% of the American public.
Worse still, Woodward was apparently dumbfounded that Trump didn’t self-censor his thoughts about the economic troubles ahead for fear of unsettling the Wall Street casino.
That’s right. The cult of the stock market and the notion that the Fed literally controls and powers the US economy, through the transmission belt of Wall Street and soaring financial asset prices, has gotten so deeply embedded in the establishment narrative that even the pedigreed left-wing of the journalistic establishment has been coopted into reflexively chanting the meme.
So imagine Woodward’s consternation when Trump——-the very embodiment of a billionaire financial tycoon—–let loose with the following counterpunch:
“I know the Wall Street people probably better than anybody knows them,” said Trump, who has misfired on such predictions in the past. “I don’t need them.”
Those last four words are what has the Washington GOP establishment in a cold sweat. The fact is, the Washington based apparatus of the GOP is beholden lock, stock and barrel to Wall Street and the broader financial services industry for sustenance. That is, PAC funds and the K-street influence peddling rackets which make life in the Imperial City so copasetic for careerist politicians and their apparatchiks.
Indeed, there is an obvious quid pro quo. The job of the Washington GOP leadership amounts to keeping the free market yokels who frequently get sent to Washington from the conservative provinces busy on everything except the core problem. That is, they are kept distracted whopping it up about neocon war missions abroad, vastly exaggerated terrorist threats at home, the supposed affliction of illegal immigrants who actually do much of America’s low-skill work and the pro-statist agenda of the right-to-lifers, anti-gays and sundry similarly projects of the red state bible-thumpers.
Meanwhile, capitalist prosperity is in existential crisis. The central bank’s free money is destroying honest price discovery in the financial markets, deforming the free market allocation of investment and other economic resources, crushing savers, retirees and real entrepreneurs and generating unspeakable windfalls to traders and speculators.
Indeed, if you are partial to tin foil hats you might even believe that the GOP leaderships’ kid gloves approach to the Fed had in mind the generation of a Bernie Sanders all along. Bernie has arisen because the sum and substance of Fed policy is massive inflation of financial asset values, and therefore a reverse robin hood redistribution of wealth to the 1%.
So what could be more convenient to mobilize the red state base and the blue state left-behinds than a socialist candidacy on the Democratic ticket? Or failing that, a desperate Hillary Clinton who sounds like one?
And do not doubt that the GOP establishment is in league with the Eccles Building and its Wall Street suzerains. Do you remember who was chief economic advisor to Mitt Romney?
None other than a Columbia business professor and Wall Street shill by the name of Glenn Hubbard. During the heat of the campaign he kept the candidate radio silent on the fundamental issue of our times—–the Fed’s usurpation of vast powers of monetary central planning—–and even averred that Bernanke had been doing a fine job. Said professor Hubbard, he should be considered for reappointment!
And don’t even mention the clueless action of Senator McCain in 2008. The man actually suspended his campaign so that he could come back to Washington and help Bush and Paulson bail-out Wall Street; and to authorize the Fed to unleash a torrential spree of money printing that has virtually transformed Wall Street into a dangerous and unstable gambling casino.
Woodward’s snarky observation that Trump has “misfired on such predictions in the past” was especially ripe, but absolutely consistent with the establishment meme that all is fixed and getting better by the day.
Actually, when did the Fed and its gaggle of Wall Street camp-followers ever predict a recession and subsequent financial market crash? There was not a peep from those precincts in 2000 or 2007. It was all about tommyrot like the goldilocks economy, the Great Moderation and a supposedly minor subprime disturbance that was “well contained”.
Yes, most of what Trump has thrown into the debate is outlandish, regrettable, outright deplorable and just plain wrong. The Wall, the ban on Muslims, his call for more torture of enemies, his dog-whistling on race, his cop pandering, his know-nothing position against social security reform and his blatantly sexist name-calling fit some or all of the above categories.
And to the outlandish category, now add the blatantly stupid. To wit, Trump’s promise that he will eliminate the national debt in eight years!
Even there, however, he can perhaps be praised with faint damn. At least he recognizes that our current $19 trillion of national debt will be $22 trillion by the time the next President is in the saddle, and that its a short slide to national bankruptcy from there.
At the end of the day, Trump has petrified the Wall-Street Washington establishment for good reason. He loudly rejects the War Party consensus on foreign intervention. And he has tapped into a deep vein of main street alienation from the phony recovery and economic fixes promulgated by the Fed and its beltway henchman.
We had another jobs Friday celebration by the latter and it amounted to the same old, same old. That is, purportedly 100,000 new jobs in retail and bars and restaurants were added, but still no progress where it counts. There are nearly two million fewer full-time, full-pay jobs than there were when Bill Clinton was packing up his bags to leave the White House.
Even if the likes of Bob Woodward haven’t figured this out, the unschooled Donald Trump apparently has. No wonder they fear Trump Unbound.
Click here for the full Washington Post interview.
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Dr. Eowyn’s post first appeared at Fellowship of the Minds