During the past week, I have been travelling across America and lugging with me a controversial new book, The Great Deformation, by David Stockman. “Lugging” is particularly apt: this behemoth has 743 pages and weighs several pounds, at least in old-fashioned print. Perhaps that is no surprise: Stockman, a private equity player who served as budget director in the 1980s government of Ronald Reagan, is a distinctly angry man - with a lot to say. Most notably, he believes that the American government has badly lost its way in the past few decades, because crony capitalism has perverted policy-making and upturned free market principles. As a result, the country is now drowning in uncontrollable debt that will eventually bring it down and destroy the credibility of the Federal Reserve.
“At the heart of The Great Deformation is a rogue central bank that has abandoned every vestige of sound money... Standing at the edge of the financial abyss, the Fed is hostage to its own four-decade excursion in money printing,” thunders Stockman. And this is not just hurting the nation but wrongfully enriching numerous bankers too, he argues. “While Main Street was still licking its wounds, Wall Street greeted the Fed's announcement of quantitative easing... as a horn call to a fox hunt,” he writes, hurling vitriol at “arrogant princes of Wall Street” (such as John Mack, the former CEO of Morgan Stanley) who were bailed out in 2008 by Hank Paulson (the former Treasury secretary).
What should we make of this? When I hauled the book on to my first flight, my initial reaction was one of irritation. In today's Twitter-obsessed age, it seems odd that anyone needs so many pages to make a case; a decent editor could have easily trimmed Stockman's text in half and created more structure. And while the style is entertaining, after several hundred pages the vitriol loses its ability to shock.