COMMITTEE FOR THE REPUBLIC
Empire Salon with David Stockman
THE GREAT DEFORMATION:
THE CORRUPTION OF CAPITALISM IN AMERICA
Tuesday, February 11, 2014
Cosmos Club: The Main Ballroom
2121 Massachusetts Ave NW
* Robert Steele will attend. Anyone that wishes to get together beforehand (1730) send email to robert.david.steele.vivas [at] gmail [dot]com.
The Democratic and Republican parties engage in political competition over social spending but have chosen to take the warfare state and our too-big-to-fail financial system off the table. The Committee for the Republic provides a forum for citizens of every political persuasion to debate the military-industrial complex and the bailout state. In “The Great Deformation”, David Stockman argues that today’s bubble-prone bailout state and welfare state are rooted in the 20th century warfare state.
Stockman argues that World War I set in motion our current woes. The new Federal Reserve made it possible to finance a massive war deficit. This inflated the economy and gave rise to an unsustainable debt-based expansion of American trade and a giant financial bubble on Wall Street. When the market crashed, the Great Depression spawned the New Deal and the adoption of Keynesian economics. According to Stockman, the Great Depression represented a giant “due bill” from the Great War and its aftermath — not the outbreak of an alleged propensity of market capitalism to succumb to cyclical collapse and depression.
World War II and the Cold War, Stockman argues, perpetuated and reinforced “the Keynesian error”. LBJ’s “guns and butter” destroyed the last vestiges of sound money and financial discipline embodied in the Bretton Woods gold exchange standard. The Reagan assault on “Big Government” was stillborn owing to its simultaneous funding of a vast expansion of warfare state based on false neo-con theories about an Evil Empire that was actually collapsing under the burden of an ossified state socialist regime.
Stockman challenges “the monumental Keynesian error of our times”– the assumption that continuous counter-cyclical interventions by the state’s fiscal and central banking branches are necessary to forestall a repeat of the Great Depression. In time, public finance became a sub-branch of macro-economic policy and the central bank fell hostage to the massive pools of speculative capital spawned by decades of easy money and vast, unsustainable extensions of fiat credit. Rather than saving capitalism from imaginary infirmities, Stockman argues, Keynesian policies are, ironically, generating a state-wreck of fiscal bankruptcy, monetary deformation and crony capitalist usurpation of the taxing, spending and regulatory powers of the American state.
Stockman’s understanding of politics and money comes from a four-decade career spent in Washington and Wall Street: as a Michigan congressman, Reagan budget director, Salomon Brothers and Blackstone partner and a private equity investor in an automobile parts roll-up. After graduating from Michigan State University, he studied the fallibility of man and avoided the draft during the Vietnam war at Harvard Divinity School.
The Committee for the Republic is a citizen-based, non-partisan, nonprofit organization founded in 2003. The Committee sponsors speakers monthly on challenges to the American Republic, including the military-industrial complex, too-big-to-fail banks, campaign finance, and U.S. competitiveness. For questions or requests email [email protected]
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