The Great Deformation: The Corruption of Capitalism in America

The Great Deformation: The Corruption of Capitalism in America

3.8 16
by David Stockman

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A New York Times bestseller

The Great Deformation is a searing look at Washington’s craven response to the recent myriad of financial crises and fiscal cliffs. It counters conventional wisdom with an eighty-year revisionist history of how the American state—especially the Federal Reserve—has fallen prey to the politics of


A New York Times bestseller

The Great Deformation is a searing look at Washington’s craven response to the recent myriad of financial crises and fiscal cliffs. It counters conventional wisdom with an eighty-year revisionist history of how the American state—especially the Federal Reserve—has fallen prey to the politics of crony capitalism and the ideologies of fiscal stimulus, monetary central planning, and financial bailouts. These forces have left the public sector teetering on the edge of political dysfunction and fiscal collapse and have caused America’s private enterprise foundation to morph into a speculative casino that swindles the masses and enriches the few.

Defying right- and left-wing boxes, David Stockman provides a catalogue of corrupters and defenders of sound money, fiscal rectitude, and free markets. The former includes Franklin Roosevelt, who fathered crony capitalism; Richard Nixon, who destroyed national financial discipline and the Bretton Woods gold-backed dollar; Fed chairmen Greenspan and Bernanke, who fostered our present scourge of bubble finance and addiction to debt and speculation; George W. Bush, who repudiated fiscal rectitude and ballooned the warfare state via senseless wars; and Barack Obama, who revived failed Keynesian “borrow and spend” policies that have driven the national debt to perilous heights. By contrast, the book also traces a parade of statesmen who championed balanced budgets and financial market discipline including Carter Glass, Harry Truman, Dwight Eisenhower, Bill Simon, Paul Volcker, Bill Clinton, and Sheila Bair.

Stockman’s analysis skewers Keynesian spenders and GOP tax-cutters alike, showing how they converged to bloat the welfare state, perpetuate the military-industrial complex, and deplete the revenue base—even as the Fed’s massive money printing allowed politicians to enjoy “deficits without tears.” But these policies have also fueled new financial bubbles and favored Wall Street with cheap money and rigged stock and bond markets, while crushing Main Street savers and punishing family budgets with soaring food and energy costs. The Great Deformation explains how we got here and why these warped, crony capitalist policies are an epochal threat to free market prosperity and American political democracy.

Editorial Reviews

The Washington Post - Marcus Brauchli
Even as he indulges his spleen, Stockman produces a persuasive and deeply relevant indictment of a system dangerously akilter.
Publishers Weekly
Stockman, Ronald Reagan's director of the Office of Budget and Management, diagnoses America's political system as a "tyranny of incumbency and money politics" in this extensive treatise. The Troubled Asset Relief Program incited him to begin this history—government interventions being antithetical to the Reaganism—but he argues that short of "sweeping constitutional change," any solution "is so radical it can't happen." Stockman's narrative holds that the government caused the "Great Recession" by saving private entities like AIG, that the roots of the 2007-2008 housing crisis stretch back to the Bretton Woods conference, and that all this behavior is a revival of New Deal Keynesianism. He includes comprehensive lists of heroes and villains; with Ben Bernanke, Hank Paulson, and Alan Greenspan all named among the latter. After several hundred pages of deep analysis, he offers 13 suggestions for a way forward, but the book, otherwise focused and provocative, can't decide whether it is a history or a policy brief; his obsession with history overtakes the need to design a future, and instead of each option receiving due consideration, they're squeezed onto the end. Since Stockman convinced us the problems are nearly insoluble, a more balanced presentation would make this a more functional document. (Apr.)
From the Publisher
Kirkus Reviews
“Stockman performs a real service when he debunks the myths that have been associated with Reagan's conservatism and promotes Eisenhower's fiscal and military conservatism…. Stockman forcefully conveys enormous amounts of knowledge.”
“In The Great Deformation, David Stockman – former US congressman and budget director under Ronald Reagan – tells the story of the recent crisis, and takes direct aim at the conventional wisdom that credits government policy and Ben Bernanke with rescuing Americans from another Great Depression. In this he has made a seminal contribution. But he does much more than this. He offers a sweeping, revisionist account of US economic history from the New Deal to the present. He refutes widely held myths about the Reagan years and the demise of the Soviet Union. He covers the growth and expansion of the warfare state. He shows precisely how the Fed enriches the powerful and shelters them from free markets. He demonstrates the flimsiness of the present so-called recovery. Above all, he shows that attempts to blame our economic problems on "capitalism" are preposterous, and reveal a complete lack of understanding of how the economy has been deformed over the past several decades…Thanks to The Great Deformation, not a shred of the regime’s propaganda is left standing. This is truly the book we have been waiting for, and we owe David Stockman a great debt.”

“This thought-provoking book will contribute to important debates on these issues.”

Washington Post
“Stockman produces a persuasive and deeply relevant indictment of a system dangerously akilter…. What Stockman has written is a book that makes clear we are that future generation of the past, inheritors of all the wishful thinking, simple illogic and flawed compromises that produced the near-term benefits our parents and grandparents worried about but ultimately wanted. And now it’s payback time.”

Steve Weinberg, USA Today
“Stockman devotes some of the book to the past five years, joining multiple previous authors who have presented their nominations for the villains and heroes of the 2008 economic collapse. As a book critic and investigative reporter, I have absorbed a dozen of those previous books. Stockman's is my favorite because of his original research, the context he presents (starting with the economic depression of the 1930s), his former insider status, and his apparent political non-partisanship during the endeavor.”

David Weigel, Slate
“I’d read this book 10 times before I read another possible presidential candidate’s memoir of how his Real American Story schooled him in the Audacity of Hope. …a coherent vision of a World Without the Fed.”

Paul B. Farrell, Marketwatch
“His rhetoric in a recent New York Times op-ed piece ignites like Seal Team Six coming at you, flash grenades exploding, assault weapons blazing. No wonder he triggers wild angry, hatred and revenge. Yes, he’s a truth-teller. And truth hurts, flushing out his enemies. Why? They’re sucking trillions from Americans. So you hate him. Counterattack. Big mistake. Don’t dismiss David Stockman. He’s no Kim Jong-Un blow-hard.”

Bruce Krasting “This is a history book. It’s a detailed account of the key events since the Depression that have shaped modern finance. I love history, and I’m familiar with those events. Stockman’s spin on financial history makes for a very good read. There’s something for everyone.”

Reuters Breakingviews
“For anyone whose economics are Austrian, and who agrees with Stockman that crony capitalism and corruption have led both fiscal and monetary policies into a cycle of ever-increasing stimulus and ziggurats of debt, ‘The Great Deformation’ is gloomily persuasive – and bodes ill for the future.”
“Agree with Stockman or not, one can’t deny that he’s a colorful writer!”

Rick Santelli, CNBC “Squawk on the Street”
“What a title…what a book… what a dude!”

Michael Levin,  Huffington Post
“‘Required reading’ is an overused term. In fact, proof of reading The Great Deformation should become a requirement for voting. Bring your dog-eared copy to the polls or stay home. The self-confessed smartest guy in the room has written a compelling, intensely readable book that exhumes aspects of economic history that both Democrats and Republicans likely wish would have stayed hidden. The Great Deformation is the book that everyone in Washington, at the White House on both sides of the aisle in Congress, at the Treasury, and in the lobbyists' offices on K Street, fervently prays that you never read.”
Brett Joshpe, Forbes
“One of the most comprehensive narratives of the financial system’s history in years.”

Kirkus Reviews
Former Michigan congressman and budget director for the Reagan administration Stockman (The Triumph of Politics: The Inside Story of the Reagan Revolution, 1986) tells "the real story [of]…how the nation's conservative party fostered the great fiscal breakdown now upon the land, and got away with it." The author laments the failure of officials to permit the financial collapse of 2008 to run its course. "Had this attack been allowed," he writes, "hundreds of billions in long-term debt and equity capital that underpinned the Wall Street–based speculation machines would have been wiped out." It also would have "implanted an abiding 1930s style generational lesson about the deadly dangers of leveraged speculation." The author insists that such an outcome would have been "a good thing" as well as "profoundly therapeutic," but Stockman fails to offer convincing refutation of the argument that things would have gotten out of control. He chastises Bernanke, Geithner, Paulson and others as agents for Wall Street's financial power, but the author's narrow focus on finance does not adequately address the real threat of a plunge into a depression worse than that of the 1930s. However, Stockman performs a real service when he debunks the myths that have been associated with Reagan's conservatism and promotes Eisenhower's fiscal and military conservatism. Two such myths, which provide the framework for this massive work, are specifically highlighted. First is his analysis of "where the Reagan Revolution's fiscal math hit the shoals," leaving a legacy of permanent "massive deficit finance" and the legend that "deficits didn't matter." Second, he traces the roots of perennial deficits back to Roosevelt's decision to take the country off the gold standard in 1933 and Nixon's ending of the dollar-to-gold convertibility in 1971. Stockman forcefully conveys enormous amounts of knowledge, but some assertions will be found to be contentious.

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New Edition
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Meet the Author

David A. Stockman was elected as a Michigan congressman in 1976 and joined the Reagan White House in 1981. Serving as budget director, he was one of the key architects of the Reagan Revolution plan to reduce taxes, cut spending, and shrink the role of government. He joined Salomon Brothers in 1985 and later became one of the early partners of the Blackstone Group. During nearly two decades at Blackstone and at a firm he founded, Stockman was a private equity investor. Stockman attended Michigan State University and Harvard Divinity School and then went to Washington as a congressional aide in 1970. He is also the author of the New York Times bestseller The Triumph of Politics: Why the Reagan Revolution Failed.

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The Great Deformation: The Corruption of Capitalism in America 3.8 out of 5 based on 0 ratings. 16 reviews.
Anonymous More than 1 year ago
If you like Kenneth Galbraith you'll be equally impressed by David Stockman's witty, insightful, acebic commentary on economics and the foibles of our economic and political leadership I could also see overtones of P.J. O'Rourke in both style and content. A useful book for college and high school Economics teachers--common sense without graphs, formulas, and Economic "laws." The good news is you get a ton of paper and ink for your money--pages. Carry this puppy around and people will think you are really "in" to Economics.
Anonymous More than 1 year ago
David Stockman explains what has happened to the American economy, but not in an easily understood manner. He jumps around in his topics, he is disorganized, and has a tendency to repeat himself. I have read this book three times to grasp his thesis. Also sometimes he assumes you know the technical details and abbreviations. But overall it is a very comprehensive look at why our economy is failing. The main reason is instead of job growth, the economy and the Federal government have been built on debt. The crash of 2008 was the end of the debt cycle growth. We are basically in a deflationary period, but it is being supported by the Fed's liquidity. Instead of going to Main Street, the asset buying is providing funds to the Federal government to create some economic activity by paying its bills and to the banks to buy stocks and bonds to keep the stock market from falling. That is why Main Street has seen no recovery and Wall Street has.
aPatriot More than 1 year ago
Stockman speaks truth to power and spares no one in this very well researched analysis of the systematic rape and pillage of our economy over the last fifty years. It is not an easy read and it's somewhat repetitive. Nevertheless, it is an invaluable contribution to our knowledge of the serious consequences - intended or not - of allowing an effective merger of the federal government and the banking industry. Americans sense that there are no solutions in sight as we face yet another showdown over the debt ceiling and await nomination of another Federal Reserve Bank chairman. What most do not understand is that our situation is even worse than it appears; this is not a partisan squabble or an academic debate over macroeconomic policy. Rather, it's an institutional crisis that cannot be resolved by traditional means. Unfortunately, there is no easy explanation - which is why Stockman takes over 700 pages to document how we got to this point. The final chapter of less than ten pages offers solutions that are not surprising, given the preceding analysis. Obviously, they are just hints at the radical nature of reforms that will be required to roll back the conquest perpetrated by capitalists and their government cronies. I have different ideas of how to proceed. However, I am grateful to the author for skillfully connecting the dots, and I strongly recommend this book to anyone concerned enough to explore our recent economic history with an open mind.
Anonymous More than 1 year ago
Well written and incisive.
Anonymous More than 1 year ago
The book is a real slog to read. It is unnecessarily long and repetitive, primarily because his material is poorly organized. But the huge virtue of the book, and that which makes it worthwhile is that he tells the truth as best he can. He is the fox who knows where the feathers are hidden.
Anonymous More than 1 year ago
Excellent info but repetitive and long presentation.
Anonymous More than 1 year ago
Outstanding book. Stockman crashes through partisan and ideological lines to show how a long series of missteps have placed the world economic order in great peril. Mixed with biting wit and deep analysis of reams of data, Stockman's observations carry much more force than other more trivial explanations of how things really work and how we got here. His vocabulary is sometimes daunting and the book at first seems disorganized. But there is a clear method to his madness and by the end the reader sits uneasily between fury and alarm, both of which seem utterly justified. Every American voter should have these topics explained to them.
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excellent book
Anonymous More than 1 year ago
Difficult to read -- verbose, larded with unnecessary adjectives (maybe he got paid on this basis?), and poor analogies. The author's grasp of economics is lacking.
Anonymous More than 1 year ago
So far the book is a list of Stockman's negative opinion about everything. Or perhaps that is Stockman's opinion that everything is negative. Everyone that did anything was using the situation for personal political reason. Not functioning as the times made them. The recent Legalized secularizing of Liers from Wall Street gamble with the economy, was the fault of the New Deal's social agenda. 700 pages everything that was wrong literately since 1914 appear to have 7 pages of solutions at the end.
Anonymous More than 1 year ago
If you read this book, you will have achieved a net reduction in new knowledge!