The Great Deformation

The Great Deformation by David Stockman offers a penetrating analysis of American economic history and its disorienting trajectory over the past eight decades. Through a compelling narrative, Stockman unravels the intricate web of political and economic decisions that have shaped the United States into what he terms a 'crony capitalist' state. The book meticulously examines the bipartisan abandonment of fiscal discipline, monetary integrity, and principled governance, resulting in a nation teetering on the precipice of financial collapse and systemic dysfunction. Engaging and provocative, this work is an essential read for anyone interested in understanding the underlying causes of contemporary economic challenges.

An extensively researched, The Great Deformation challenges the prevailing narratives with a revisionist approach, highlighting how the American government, particularly the Federal Reserve, has succumbed to the influences of crony capitalism, fiscal stimulus, monetary central planning, and financial bailouts. Stockman's critique spans 80 years of economic and political history, spotlighting the deviation from sound financial principles that have placed both the public sector and private enterprise in precarious positions.

Stockman identifies a series of key figures who, in his view, significantly contributed to the erosion of fiscal responsibility and the rise of crony capitalism. He scrutinises Franklin Roosevelt's New Deal policies, which he contends seeded crony capitalism. Richard Nixon is depicted as undermining financial discipline and dismantling the Bretton Woods gold-backed dollar system. Federal Reserve chairmen Alan Greenspan and Ben Bernanke are accused of fostering the culture of bubble finance, dependency on debt, and rampant speculation.

The analysis extends to modern presidencies, criticising George W. Bush for abandoning fiscal conservatism and expanding the warfare state through costly conflicts, and Barack Obama for reviving Keynesian economic policies that exacerbated national debt to alarming levels. Stockman also contrasts these figures with statesmen who upheld principles of balanced budgets and financial discipline, such as Carter Glass, Harry Truman, Dwight Eisenhower, Bill Simon, Paul Volcker, Bill Clinton, and Sheila Bair.

Illuminating the bipartisan failings, Stockman argues that both Keynesian spenders and GOP tax-cutters have conspired to inflate the welfare state, sustain the military-industrial complex, and undermine the nation's revenue base. This situation is exacerbated by the Federal Reserve's aggressive money printing, which has allowed politicians to run deficits with minimal immediate consequences while artificially inflating financial markets. As a result, Wall Street has thrived on inexpensive capital and manipulated markets while Main Street and average American families suffer from rising living costs and economic instability.

The Great Deformation dissects how these misguided policies have precipitated various financial bubbles and why these distorted, crony capitalist policies jeopardise the future of free market prosperity and the integrity of American political democracy. Thought-provoking and meticulously detailed, Stockman's work provides a critical framework for understanding the past, questioning the present, and contemplating the future of American economic and political landscapes.