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David Stockman: "We've Been Robbed By The Fed"

Fed is a serial bubble machine for the top 1%.

A must watch from Bloomberg.  Stockman is on fire in this clip.

April 3 (Bloomberg) -- David Stockman, former director of the Office of Management and Budget in the Reagan administration, talks about his New York Times op-ed.

Krugman got lost somewhere along the way.




In case you haven't seen it yet.

Sundown in America - NYT David Stockman


Then, when the Fed’s fire hoses started spraying an elephant soup of liquidity injections in every direction and its balance sheet grew by $1.3 trillion in just thirteen weeks compared to $850 billion during its first ninety-four years, I became convinced that the Fed was flying by the seat of its pants, making it up as it went along.  It was evident that its aim was to stop the hissy fit on Wall Street and that the thread of a Great Depression 2.0 was just a cover story for a panicked spree of money printing that exceeded any other episode in recorded human history.

Since the S&P 500 first reached its current level, in March 2000, the mad money printers at the Federal Reserve have expanded their balance sheet sixfold (to $3.2 trillion from $500 billion).  Yet during that stretch, economic output has grown by an average of 1.7 percent a year (the slowest since the Civil War); real business investment has crawled forward at only 0.8 percent per year; and the payroll job count has crept up at a negligible 0.1 percent annually.  Real median family income growth has dropped 8 percent, and the number of full-time middle class jobs, 6 percent.  The real net worth of the ‘bottom’ 90 percent has dropped by one-fourth.  The number of food stamp and disability aid recipients has more than doubled, to 59 million, about one in five Americans.”

The White House, Congress and the Fed, under Mr. Bush and then President Obama, made a series of desperate, reckless maneuvers that were not only unnecessary but ruinous.  The auto bailouts, for example, simply shifted jobs around—particularly to the aging, electorally vital Rust Belt—rather than saving them.  The ‘green energy’ component of Mr. Obama’s stimulus was mainly a nearly $1 billion giveaway to crony capitalists, like the venture capitalist John Doerr and the self-proclaimed outer-space visionary Elon Musk, to make new toys for the affluent.

Less than 5 percent of the $800 billion Obama stimulus went to the truly needy for food stamps, earned-income tax credits and other forms of poverty relief.  The preponderant share ended up in money dumps to state and local governments, pork-barrel infrastructure projects, business tax loopholes and indiscriminate middle-class tax cuts.

The Democratic Keynesians, as intellectually bankrupt as their Republican counterparts (though less hypocritical), had no solution beyond handing out borrowed money to consumers, hoping they would buy a lawn mower, a flat-screen TV or, at least, dinner at Red Lobster.

David Stockman, The Great Deformation


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Reader Comments (18)

Stockman recommends 100% government funding for candidates running for office.

Limiting campaigns to eight weeks is another Stockman idea.


There you go, Jack Lohman.
Apr 9, 2013 at 12:49 PM | Registered CommenterDailyBail
Apr 9, 2013 at 1:12 PM | Registered CommenterDailyBail
Apr 9, 2013 at 1:46 PM | Unregistered CommenterDEB
Stockman has really hit a nerve. My broker sent me this today (from a different firm, not the one I'm with).

"Stockman's Sky is Falling"

Apr 9, 2013 at 2:15 PM | Unregistered CommenterDr. Pitchfork
Wow, Pitch. What's frightening about that newsletter is that the authors seem obvlious to their role in transmitting lies as a small part of the financial sector's house of mirrors. What do their faces look like when they commit such rank horseshit to writing...

"Yet, for four years, economic data have been consistently and relentlessly positive—not booming, but positive."

Are they referring to 50% increase in food stamp users (was 32MM, now 48MM, or 20% of all households) or to the plunging labor force participation rate (which is the result of shifting 10's of millions of unemployed people into disability welfare to game the headline unemployment rate)? Oh, no. Instead of cold reality, they want us to focus on Bernanke's go-to puppet, the stock market:

'And for four years, corporate profits and market capitalization have climbed substantially."

The shills, er, authors, fail to mention that mark-to-market accounting was abandoned in March 2009 in favor of fraudulent asset valuations. The entire market rise thus rests on profits that are false. Aside from merely delaying the ultimate day of reckoning (by duping the nationwide hopium den of TV watchers), it's a trick that works only once. The Fed is likewise out of gimmicks.

I was sympathetic to people who got burned in 2008. But the vast majority of them didn't learn a goddamn thing from it and are falling for frauds that are even more transparently ridiculous this go-round. Frankly, when the oncoming freight train of reality wipes them completely out, I'm just gonna laugh this time.
Apr 9, 2013 at 4:30 PM | Registered CommenterCheyenne
Wow is right. Anectdotally, one can walk down Main Street here where I live and see the results of this great market. Empty store fronts, homeless guys hanging about and crowds lining up at the soup kitchens, food pantries, and other social outreach programs. We're living the dream here I'm tellin ya. Jesus Christ just what a steaming pile this country has become.
Apr 9, 2013 at 7:57 PM | Unregistered CommenterSKINFLINT
Thanks DB, got to hand it to him on that!
Apr 9, 2013 at 8:22 PM | Unregistered CommenterJack Lohman
Apr 9, 2013 at 9:03 PM | Unregistered CommenterSKINFLINT
The gub-mint monitors US "chatter" like they would any enemy and what they're hearing is a public awakening to their dirty deeds...past, present and future. They are preparing for our PROVOKED response as they watch and listen to the rising giant they have aroused. The world is watching our gub-mint and will be very vocal as to their response against it's citizens. Will our own military finally say enough is enough and arrest these traitors who swore to protect the constitution and are hell bent on it's destruction? We'll see....
Apr 10, 2013 at 4:38 AM | Unregistered Commenterchiller
Re: portfolio managers response article.

Wonder if these 3 authors are selling? My guess is yes. And I think that's the first time I heard Ron Paul called a "short seller."

New inventions? Really? You can't eat an iPad.

Funny how stealth Keyensians (maybe not so stealth) just gloss over or fail to mention massive, unpayable (without hyperinflation) public debt.

These ass clowns should be embarrassed. Nothing scientific or thoughtful in this analysis or response. It's just paper selling...
Apr 10, 2013 at 5:20 PM | Unregistered CommenterJosie
Not anecdotally, I happened to be in Baltimore today for some work. Ladies and Gents, I am here to tell you that I am shocked. I can assume Detroit looks worse than this because of it's size. Dont know about Pittsburgh, or any other former steel town. I know Niagara is bad, but not as bad as this. The place looks like a third world country in some pockets only made worse by the fact that people still live in these pockets. Certainly this is no accident. Don't know if any of you have been to Camden NJ. but that place also is just total squalor. It's almost incomprehensible. Locally http://www.carrollcountytimes.com/news/opinion/letters/letter-westminster-changing-for-the-worst/article_a05e6e33-50fe-5241-9dfe-4ce0b095f032.html This is our home folks and it is being destroyed without cause nor consent.
Apr 10, 2013 at 10:39 PM | Unregistered CommenterSKINFLINT

As you know I lived in Baltimore while working at Alex Brown in the 90s. I lived right downtown, near the baseball stadium. Less than 6 blocks from my apartment the wasteland began, just on the other side of MLK Blvd. It was a blight for miles. I can only imagine how much worse it has become. There were audible gunshots nightly emanating from the public housing projects. An absolute war zone.
Apr 10, 2013 at 11:36 PM | Registered CommenterDailyBail
If this guy gets any more play in the news media the Super Rich will find a deep hole to drop him in! The truth for the Super Rich is deadly,they hate it. They are crazy but they are still in power and they are still dangerous.
Apr 10, 2013 at 11:49 PM | Unregistered Commenterbob
DB After my divorce in 88 I spent some time living on Paca Street. Yea, there was squalor and running gun battles. I never slept near the window. It was a slum area to be sure, but in no way was it like this. I snapped some pictures and will try to send some to you. Just hard to believe.
Apr 11, 2013 at 7:12 AM | Unregistered CommenterSKINFLINT
To all who still read this blog, which was a shining light of truth for years, I give you Alan Grayson:


Former Fed inquisitor and enemy, now, and likely always complete sell-out whore...
Feb 11, 2016 at 11:55 AM | Unregistered CommenterJosie
The Cayman islands. That certainly does not pass the smell test. A bizzare twist. Good read.
Feb 13, 2016 at 8:36 AM | Unregistered Commenterskinflint
Josie is spot on. Sell-outs seem to be a dime a dozen but that should be expected and noted. My best to you Josie (and others) and may the fish be with you.

Feb 13, 2016 at 7:47 PM | Unregistered Commenterjohn

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