The Fed Succession

[The Minsky Moment]

Who wrote Reagan's budget proposals?  Not Ronald himself.
The available evidence suggests his Budget Director had a big role . . .

[Admiral Yi]

He had a big and widely publicized role in trying to persuade Ronnie to trim his deficits.

[The Minsky Moment]

He had a big and widely publicized role in trying to persuade Ronnie to trim his deficits.

Deficits went up under Reagan because defense spending when up and because tax revenue went down after the 81 cuts.  Those were budgets developed and proposed by Stockman's OMB.
Like Augustine, Stockman waited to get religion until after sinning.

[The Brain]

Death by 81 cuts?

[Admiral Yi]

He "proposed" those budgets insofar as he signed off on the official document that the White House presented to Congress.  What I'm looking at is the role he took in the internal debates about the budget.  It's a matter of public record that he sought to convince Reagan to reduce deficits.  If you have some evidence that he had previously argued internally for expanding them, feel free to share.

[The Minsky Moment]

I don't dispute that within the administration, Stockman argued for additional spending cuts that had no chance of being enacted by Congress or even supported by the administration.  I understand he now explains this as the consequence of political naivete or simple incompetence (not understanding the complexities of the budget).  That is not a profile in courage to me.  The fact is that he stuck around for fourt years, and put his name on budget proposals that expanded the deficits.

The question is this thread is whether his views on monetary policy should be respected.  Nothing in his OMB experience or his resignation suggests that.  OTOH Stockman is one of the higher profile advocates of a return to the pre-1933 gold standard. 

He is a crank.

[Admiral Yi]

That is not a profile in courage to me.

To argue for doing the right thing, with no support, to the displeasure of your boss, is the quintessence of courage.

[Razgovory]

That is not a profile in courage to me.

To argue for doing the right thing, with no support, to the displeasure of your boss, is the quintessence of courage.

I once got fired for something like that.  I am a profile of courage.

[Admiral Yi]

Good for you.

What was the job?

[Razgovory]

Good for you.

What was the job?

Burger flipper.  Though in retrospect it might have had more to do with the fact I slammed a co-worker's face onto the griddle.  In my defense, it wasn't on and he kept calling me "goober".

[The Minsky Moment]

To argue for doing the right thing, with no support, to the displeasure of your boss, is the quintessence of courage.

Stockman didn't give a crap about deficits, he wanted to cut spending for its own sake.  He was one of the original "starve the beast" theorists.  He supported the Kemp-Roth cuts, because in his own words "The plan was to have a strategic deficit that would give you an argument for cutting back the programs that weren't desired."  He succeeded in created the "strategic deficit" but despite all his contacts in the House, he failed to convince Congress to restrain spending.  That was a fool's errand anyways, because the President he served for was committed to a big ramp up in defense spending, a fact Stockman knew when he took the job.  His response to his failure was to use a Washington Post reporter to leak damaging information and attack the Cabinet.  Was Reagan displeased?  Absolutely.  Was there any adverse consequence to Stockman?  No.  Because Reagan was loyal to him even if he wasn't loyal to Reagan.

There was nothing courageous in the episode.  It was the typical spectacle of a Washington player working the system in pursuit of the agenda; the only distinction is that Stockman, secure in the warm glow of Reagan's affection, felt sufficiently confident to backstab his colleagues openly.

Following his famous "education," Stockman served another four years at OMB, each year proposing a budget that increased deficits.  I would not say he supported the right thing internally either.  The administration was committed to the defense buildup, and with hindsight, that was the right decision.  Even without the benefit of hindsight, Stockman knew coming in that defense spending was non-negotiable.  So once he was "educated" into learning that supply side budgeting wouldn't work a la Laffer, he should have reversed positions on tax cuts.  Of course, he never did so, and the very useful reform of the tax system didn't happen until after he left. 

He resgined to take a lucrative job at Salomon and trade in on his government experience and contacts, and so he could make even more money publishing a book attacking the administration from the safety his new private sector sinecure.

I think our definitions of courage may differ.

[CountDeMoney]

Heh, I remember Stockman.  One of the more fun messes in the Reagan Administration.  Went from one of the original Reaganauts to Traitor in a flash, especially when his first book was published.

[Admiral Yi]

Joan:

You may be right about Stockman's agenda but that's not how it was generally reported in the media at the time of the woodshed incident, and some time ago he wrote an op-ed for the NYT castigating current Republicans for their addiction to low tax Keynesian stimulus.  That definitely is not the position of a starve the beast trickster.

[citizen k]

Yellen gets the nod tomorrow.