Customer Reviews

The Triumph Of Politics: The Inside Story of the Reagan Revolution

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It's unfortunate that a couple of my fellow reviewers let their partisan ire blind them to the valuable lessons in national fiscal policy in this book. Stockman's basic thesis is that the supply-side revolution had three main components:(1) a large tax cut package, (2) "painful" spending cuts, and (3) a hard-money monetary policy. Stockman makes a very persuasive argument that the Reagan Administration was unwilling to soften hard-line stance on the tax cut when it was obvious that (2) was not being taken care of and (3) was inconsistent with this policy. Even when the dangers of this course became clear, the Administration shut its eyes to reality and hoped for the best.

Contrary to the reviewer below, I don't think Stockman argues that the Laffer curve was "discredited" in an intellectual sense, but rather that it was only applicable in an inflationary economy; Paul Volcker's tightening actions at the Federal Reserve denied this crucial condition. As to the reviewer with the childish "liberal propaganda" claim, Stockman clearly makes the point that Republicans and Democrats alike were unwilling to make the drastic spending cuts needed to offset the revenue loss. (And regardless of your political affiliation, I'm not sure how you can defend the economic wisdom of a president who doesn't understand such rudimentary concepts as the difference between current and constant dollars). And as to the idea that Rosy Scenario wasn't all that important, how else would you explain that the mounting debt feared by Stockman actually materialized? Say what you will, Stockman's predictions turned out to be right. It would be wrong to characterize Stockman's book as an attack on Republicans, or supply-side economics per se. It is rather a warning to would-be ideologues who would attempt to impose their dreams on an uncooperative world, a lesson that both liberals and conservatives should take to heart.

David Stockman, the former head of the OMB (1980-1986), does an outstanding job of explaining the government's inability to control the explosive growth in national debt levels. In Stockman's memoirs there are no heroes or villians, just varying gradations of politicians dedicated to "bringing home the bacon" to their districts while piously proclaiming their allegiance to balancing the budget and restoring fiscal sanity to the political process. Republicans are portrayed as replicas of their Democratic counterparts, equally adept at seizing national assets for their paymasters. Perhaps Stockman's greatest sin, in the eyes of his former conservative comrades, was his depiction of Ronald Reagan as an old, harmless softy whose refusal to demand discipline from his staff, party, and the American people helped contribute to the deficit chaos that ensued during his tenure.

If I had to describe this book in one sentence it would be Hunter Thompson meets Alan Greenspan. The author had a writing style that was machine gun fast with the sentences almost slapping you to attention. But before you jump into the book I would suggest digging up those old college Finance, Accounting and Economics textbooks because this author does not provide a basic course in government budgetary matters, you have to earn this books respect. The uniqueness of the book does not stop there; I have never read a book with more nicknames and odd adjectives used in describing people and events. It was almost if the author had some odd personality defect that forced him to ascribe nicknames to people.

The author covers his years in the OMB for Reagan, but to be fair he really spends about 80% of the book on the first budget and the process he went through to get it passed into law. If you are a fan of detail, this book has it by the bushel full. He takes the reader into every meeting, phone conversation and thought about the process. You see just exactly how much horse-trading and arm-twisting there is in this process and you come away feeling a little unclean. This is where the author finally comes to his point, which is that, the Reagan revolutions plan of dramatically reduced tax rates and government services failed. The tax cuts happened, but the spending reductions never had a chance. This, of course, created the massive government deficits that we have been living with for the past 20 plus years. Overall this is the most interesting part of the book. His realization that the budgets he worked on and the overall outcome could be more harmful to the long term interests of the US then if the old system would have been left in place.

Let me end this review by stating that I have never read a book by anybody so conservative as this man. Conservative is being kind, he is a hard core Libertarian who comes across as the only good government program is a dead government program type. He railed against all programs, even taking on school lunches for poor kids and wheel chair assistance programs for the poor. He could not stand government regulations either. He went into one section stating that seat belt and safety glass requirements for car manufactures were unnecessary and overbearing government intrusions into the private sector. Overall I felt the book was a bit too jumpy for me in the writing style and the detail was about 25% too much. There are interesting parts, but describing the 5th meeting on some section of the budget was a bit dull.

David Stockman's "The Triumph of Politics" is a sober look at how the chronic budget deficits of the past quarter-century came to be.

Stockman was the OMB director for Ronald Reagan in Reagan's first term. The president's large tax cut passed in 1981. However, when it came time to pass the commensurate spending cuts to ensure that budget deficits did not go into orbit, Stockman was dismayed to learn just how tenacious the special interests were in defending all of their spending--only a few token cuts here and there could be made without committing political suicide.

Stockman's book is still relevant today. Given that a) the Baby Boomers have now begun retiring, b) we ran large budget deficits even during the blazing economy of 2003-07 before the Boomers began retiring in earnest and putting more pressure on Social Security and Medicare, c) voters really, really, don't like tax increases, and d) voters really, really, don't like spending cuts, unbearable pressure will soon be put on the system. One wonders how the budget conundrum will be solved during the 2010s, when a much larger percentage of the Boomers will have retired and the nation's fiscal day of reckoning will no longer be something that can be kicked down the road.

David A. Stockman served as Director of the Office of Management and Budget (OMB) during former President Reagan's first term. President Reagan's platform advocated cutting taxes, eliminating wasteful Government programs, balancing the Federal budget by 1984, and a stronger United States military.

Congressmen, Senators, lobbyists and President Reagan's staff members all had differing priorities. In "The Triumph of Politics: ..." Mr. Stockman discusses an endless stream of strategies and legislative compromises designed to implement President Reagan's platform. Tax cuts are passed, existing programs are cut, and the military is strengthened. But the Federal budget never is balanced because tax increases were forbidden and the compromises placed off-limits many expensive Government programs.

The result is troubling. Former President Carter's proposed 1986 budget would have included an $80 billion deficit (pg. 358). In April 1983 President Reagan's budget "guaranteed $200 billion per year of deficits for the foreseeable future" (pg. 370) that will "consume two-thirds of the nation's net private savings to fund the federal deficit" (pg. 378) and require "$100 billion per year inflow of foreign capital to finance our twin deficits -- trade and the federal budget." (pg. 379). Mr. Stockman believed this huge recurring deficit was not sustainable and that compensating tax increases were not politically acceptable. Mr. Stockman left Government after President Reagan's re-election.

Today we face similar issues. Our trade and Federal deficits continue to grow, a Federal income tax cut was implemented recently, and the United States military is being strengthened. These are similarities -- what is the difference? ***Capitalization.*** In President Reagan's time, economists discussed the possibility of returning to the 'gold standard' (pg. 50) -- tying the dollar's value to the Government's precious metal holdings. Today the United States economy depends upon consumer spending and the amount of remaining credit card credit and home equity. Today our economy is based upon credit rather than capital.

Stockman's book essentially provides overwhelming evidence that supply side economics was an intellectual fraud from the start.Stockman established that, even if all of the planned spending cuts had been approved,which was a pipe dream from the start(ANYONE WHO BELIEVES THAT THE AMERICAN PEOPLE WERE GOING TO SUPPORT THE ELIMINATION OF THE ENVIRONMENTAL PROTECTION AGENCY,DEPARTMENT OF EDUCATION,AND DEPARTMENTOF COMMERCE IS REALLY LIVING IN THE TWILIGHT ZONE)the deficits in the federal budget would have continued to explode.
There is one area that Stockman really does not cover sufficiently.This area was the deregulation and privatization of the financial sector of the economy that allowed the Wall Street speculators and investment banks,aided by all of the major commercial banks and the Federal Reserve Board in Washington,to escape from the bottle of regulation that had been imposed on them since 1933.The last Securities and Exchange chairman to take his mandate to protect society from financial speculation and manipulation seriously was Bill Casy(1971-1973).The Reagan administration relied on the same kind of faulty supply side analysis from Wall Street(A Laffer,J Wanniski,and G Gilder were all closely connected to the Wall Street investment bank speculators )to support financial deregulation .This program was carried out by Phil and Wendy Gramm and others.The result was the creation of a shadow banking structure that is currently(2006-2008) collapsing.Naturally,they seek massive (and have been getting)government bailouts to protect them from economic obliteration.THe wisdom of Adam Smith could have prevented all of this.Simply prevent the supply side speculators from getting their hands on the bank loans needed to leverage their debt positions in the first place.This is what has not been done since 1978.

Without really addressing the issue in depth, Stockman shows that the "Reagan Revolution" failed because it was not Reagans Revolution. As noted above, the "revolution" had three parts: (1) the tax cut (2) the spending cuts and (3) "hard money." The only part that Reagan ever really embraced was the tax cut. The rest was the brain child of Stockman and Phil Grahm; although the Kemp/Laffer/Wanninski crowd all favored the gold standard but never really fought for it once they got the tax cut.

Its obvious that Reagan swallowed the Laffer Curce hook line and sinker (see the Flynt Michigan Speech) but it seems he never had the will or the understanding for spending cuts and hard money.

The stongest feature of the book is Stockmans admission and exposition of the fact that even if all of the spending cuts he asked for were enacted, triple digit deficits would have accumulated anyway.

Moreover, the foolish Rosy scenario assumption (which was the real cause of the deficits) boggles the mind and I credit Stockman for fessing up to it. It is astounding that such intelligent men thought they could create unprecedented economic growth overnight, and then had the nerve to base the federal budget on such assumptions. Unfortunately the current president fell into this same trap, at least in part, during the tax cut debate this spring. (Nearly every economist except those in OMB and CBO realizes that the surpluss projections were nonsense.)

All in all this is a very good, very well documented and very honest book. A good companion is Daniel Patrick Moynihan's "Came the Revolution: Argument in the Reagan Era"

Interesting how old these reviews are. I agree with all of them in one way or another, but what stands out NOW is the way Stockman zapped the energy program...all of it...windmills, solar, gasohol....gone with no defenders. The entitlements had lobbyists, even Headstart.

What he does not seem to have considered that having cut the programs to balance the budget the need would not have gone away. How could the private sector have come in to fill the needs that clearly were there.

I think Stockman's book is not only a terrific picture of the goings on in the Executive these 5 years, but also a good picture, seldom seen of how politics in the White House works, how it is working today and the disfunctional relationship between the 2 branches of government.

In 1980 Ronald Reagan promised to cut taxes, increase military spending, and balance the budget by 1984! Was this a campaign promise, or a conscious lie? This is the true confession of an insider on the Reagan team. It seems that cutting taxes was the easy part, it just required passing a popular law. Spending created benefits for groups who will object to any reduction. Machiavelli noted that any changed law is difficult because those who benefit from the old way are united in objection, but those who would benefit from the new way have not experienced the proposed benefits.

Stockman says "poverty programs" could not be reduced, and blames it on politicians like Bob Dole and George McGovern (p.410). Don't they represent food producing area whose products can be bought with food stamps? Don't the grocery chains profit from these sales? Don't other chain stores profit from any money not spent on food? Stockman only looked at one part of this system, and used his prejudgment to condemn this part. He did not understand the working of the system.

The book tells of the results of the "Atlantic" article on Washington. Stockman seemed surprised that his rivals and political enemies ganged up on him (p.6)! He also seemed surprised that those with opposing politics could misquote him! (It does show how the press can be controlled to target a politician.) Senator Lowell Weicker described Stockman this way: "He's had his head up his ... from day one" (p.389). This books supports that opinion; why else would he write a very readable book about his mistakes?

Pages 10-11 tell about "an inflation-swollen economy". But he dances around the control of the money supply by a Private Banking Cartel (pp.62-3), an important subject. Stockman blames "politicians" for debasement of the currency, but ignores the fact of who controls the politicians! If Corporate Capitalists control politicians, then they must be the ones who benefit from controlled inflation. The topic of the "gold standard" masks the fact that silver has been used for money for countless centuries, right down to 1964 in America (remember silver dimes?). Weicker's location of Stockman's head rings true here.

Reagan's picked biographer said he was senile by his second term, and may have been in his first. Page 10 supports this opinion. What does this say about our political system? Has anything like this happened since a dead El Cid was tied to a horse?

Stockman's "revolution" required redefining fairness (p.11). It meant an absolute limit on Social Security payouts. Everyone working pays into Social Security, but the benefits are skewed towards longevity (which may omit the oppressed and exploited classes). Cui bono?

Page 41 lists the economic problems of the 1970s: speculation over production (the rewards of capital gains over income), and inflation (devaluation of the dollar). Stabilizing the dollar (a silver standard), and higher marginal tax rates appear to be the correct and untried cure. The Chrysler Corporation bail-out resulted from the Rockefeller-controlled forced borrowing; this is censored here (p.42). Dumping Rockefeller's bankers and putting UAW representatives on Chrysler's board did save it for the next twenty years.

David Stockman wanted to do what was best for the American economy: balance the budget, end trade protectionism, and cut special-interest-group subsidies.

He failed, even with Republicans in power, because many Republicans (they are named in the book) blocked his efforts and in fact acted more like Democrats.

I think the concise writing style is great. There is a description of Stockman's upbringing in Michigan. Then blow-by-blow explanation of his work in Washington. The epilogue sums it all up, including a warning for the future which we can see now in 2012 was entirely correct.

I first glanced at the title "The Triumph of Politics" and thought this book was about the greatness of Reagan's capitalist economic policies, brought about by democracy. Quickly, I figured out that the title is sarcastic because in fact narrow-minded short-term-thinking voters and politicians "triumphed" in their efforts to ruin the economy with dumb policies.

John Christmas, author of "Democracy Society"