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JEFFREY BROWN (Newshour): Next, another economic meltdown. That's the dire prediction of a former White House budget director, who argues in a recent book that Wall Street and Washington are broken.
NewsHour economics correspondent Paul Solman has the first of two takes on the government's role in the economic recovery, part of his regular reporting: Making Sen$e of financial news.
PAUL SOLMAN (Newshour): Libertarian David Stockman has been a controversial figure since he quit the Reagan administration as budget chief in 1985, blaming it for failing to take deficits seriously. He became rich and legally embroiled as a leveraged buyout financier. He faced accounting fraud charges that were later dropped.
Now he's become visible again as author of "The Great Deformation," a hefty screed that attacks the left and right alike. But, mainly, it attacks government economic intervention. It begins with the crash of '08.
Stockman thinks it was long overdue.
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PAUL SOLMAN: So, you think our economy, perhaps our society as a whole, is on the one hand wussified -- we can't take any pain -- and, on the other hand, controlled by a group of people in whose interests it is to preserve things as they are?
DAVID STOCKMAN, Former Reagan Administration Budget Director: Sure. It's two sides of the same coin.
The purpose of Washington is to prop up the powerful. If you're running a small business in Indiana, they're not going to bail you out. You have to have size. You have to have clout. Essentially, we have a very unfair system today where the bus drivers are paying taxes, so that we can give Social Security to old people that are rich, and we can bail out companies like G.E. Capital and Goldman Sachs and AIG and all the rest of them that never should have been near the taxpayers' dollar.
So we would have had a serious recession, but no Great Depression, no black hole.
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