All Episodes
Previous Next
Jan. 25, 2024 - Ron Paul Liberty Report
27:55
Trump's War on Capitalism - with Guest David Stockman

Former US Congressman, OMB Director, and successful businessman David Stockman (who is also on the Board of the Ron Paul Institute) joins today's Liberty Report to discuss his new book on Trump's economic views. Is Trump really at war with capitalism? Tune in to the program!

|

Time Text
Let's Get to Know David 00:07:24
because we're going to quiz him today about what his politics are.
And we're trying to figure out his economics too.
I think he's pretty good on the economics.
And I understand he's even heard of the Mises Institute and Human Action.
And he writes books.
So I want to welcome our special guest today, David Stockman.
David, say hello.
Good morning or good afternoon.
I'm happy to be with you, Ron.
And we've been having this conversation for 40 years.
I think we're pretty familiar with where each other stands.
And I think on some of the big issues of conservative economics, we obviously stand very much together, and we have been, I would own, since the very beginning.
I would only note when you and I were in Congress in the late 70s, you know, the federal deficit, the total public debt was less than a half trillion dollars.
Here we are at 34 and counting rapidly.
So, you know, that's 72-fold growth just in the period since we've been having this conversation.
Yeah.
What a say hello, Daniel.
Well, I also want to mention that our viewers, I'm sure, know that David is on our board at the Ron Paul Institute.
So we're doubly happy, double plus good to have you here, David.
So thanks for joining us.
Great.
And you've got a new book out, and that's one of the things we're going to talk about.
And we can put up that cover.
It just came out this month.
It's going to be, it's not going to be controversial.
Trump's War on Capitalism with a forward by RFK Jr. brand new book out.
David, and congratulations on the book.
Thank you.
Thank you.
I don't know.
It worries me when we have these wars on things.
You know, I'm always trying to stop them.
So I guess we better stop the war on capitalism, too.
So, no, it's great to have you on the program.
And I'm going to, I want to let our audience get to know David a little bit more because I have a few questions before we get to the details of the war.
And that is, when David went to Congress and we were congressmen together, I remember we were working closer and closer together.
And I thought we sort of had some casual conversations of our strategy because there were two of us.
And it turned out, he says, Ron, but I'm not going to be here.
I'm going to be, you know, the budget director.
I said, wow, I guess I'll never see you again.
So I want to find out how you look at it.
I want to compare Reagan and Trump.
You worked for Reagan, you knew him.
You did a, you know, people say you were responsible for that.
You know, the debt went up under Reagan.
So you have some responsibility there.
And now you work with Reagan.
And how do you compare what you found with him and what's going on with Trump?
Well, those are great questions.
And I want to go back to your point about you were suspicious of me way back then because I had worked for John Anderson.
And it's relevant here because since I had worked for him before I was elected to Congress, the Reagan campaign decided in 1980 that when he was going to have a debate with John Anderson, who was running as an independent candidate, that they better get him prepared.
As you know, Ron, he was quite a debater.
He was one of the most fluent guys on the House floor, even if you might have disagreed with a lot of his positions.
So they said, let's take Reagan off the campaign trail for a whole week, put him in a mock studio.
Let's have a panel raising, asking questions, just like in the debate that was upcoming.
And let's have a stand-in for John Anderson, who might be able to replicate where he'd be coming from.
So they chose me.
So I became John Anderson for a whole week.
Reagan got well prepared for the debate.
I could see how he worked.
He was a great actor, and he had a sense of timing and exactly how to use rhetoric, political language effectively.
And by the end of the week, he was ready to go.
The expectations were very low for that first Reagan-Anderson debate.
He came out much better than expectations.
He was very happy about that because it was late September.
It fueled his campaign.
And the next thing I knew, a month later, I get a call from the campaign: come back, you're going to be Jimmy Carter for a week.
And that was a much harder assignment, as you might well mention.
But we got him prepared for the Jimmy Carter debate.
He practiced that famous line, There you go again, Mr. President, which really sort of clinched the debate.
He won the election, called me a few days later, thanked me for the help in the debate rehearsals, and suggested I might want to be energy secretary.
David, let me ask you: do you think they were going to invite you to have a session with RFK when he gets ready to debate Trump?
Would you like to do that?
Yeah, I think I'd be ready for that.
Good point, good point.
I've been talking to him and trying to convince him on a lot of things that we believe in, and I think he's responsive.
But in any event, President Reagan said, We'd like you to be Secretary of Energy.
You realize how bad it was back then.
We had the Carter program.
We were regulating everything and we were subsidizing everything.
And it was very tempting, but I told him I'd rather be director of OMB.
He wasn't sure what the job was.
He said, I'll talk to some people.
A few days later, he came back and I got that job.
Now, this is all by way of saying the first thing we had to do in January 1981 because of the legacy that we had inherited from Jimmy Carter and from Johnson and everybody who came before was the public debt limit was being threatened to be breached and it was $1 trillion.
We were at $980 or something trillion at that time.
Now, you know, I'm still here, Ron.
You're still here.
It's been a while, but still, it's in the lifetime of people who served back then.
And yet we've gone from less than $1 trillion, which we were very afraid to breach because that was like crossing a Rubicon fiscally.
And here we are today at $34 trillion, and they're not even paying attention.
They're saying, well, let's have another commission to see if we can study what the problem is.
The problem is spending.
The problem is the warfare state.
The problem is the welfare state.
And the problem is both parties have become, I think, kind of a single uniparty that are united on let's let the Fed print as much money as it would like.
The Warfare State's Rise 00:14:46
Let's borrow and spend like there's no tomorrow.
Let's worry about the public debt someday down the road and engage in politics as usual.
Unfortunately, you know, Trump was supposed to be the outsider, the guy who rode in from the north, from New York City, and was going to drain the swamp and begin to reverse the direction.
But when it comes to the core matters of economics, and that's why I wrote this book, he basically was as bad, or if not worse, than almost everybody who had come before, Democrat or Republican alike.
And I talk about the four pillars in the book of conservative economics, fiscal rectitude, sound money, free markets at home and abroad in terms of trade, and strict adherence to constitutional rights and civil liberties.
Well, on those four core pillars, you know, Trump made mincemeat out of them.
His record is among the worst.
And so we could probably go through some of those items here today because I think, you know, he is not the answer to the huge problems that we have.
Well, I think we'll get into that, but right now we're going to ask Daniel to come up with an astute question.
Now you have your chance.
Well, it's interesting because, you know, it was really just about a little under eight years ago, a little over eight years ago, that you wrote another book that was about Trump.
So people might think that you've just got it in for him, you know.
The timing is definitely interesting.
I think some people might say, just playing devil's advocate, it looks like he's going to be the nominee.
It looks like he's going to be up against Biden.
And I would like to hear more from you about your book, what led you to write it.
What would you say to someone that would say back to you, well, why would you do this now when the other option would be Biden, who seems to be a lot worse?
Well, you know, I'm glad you brought that up.
Actually, I had previously written three books against Trump.
The first one was Trump.
Oh, yeah.
The second one, that was 2016.
2018, I wrote a book called Peak Trump.
And then in 2020, I wrote another third book called Dump Trump.
And, you know, I guess I must have figured that the fourth time would be a charm.
And so I've tried once again.
And it's all with the point of view of trying to alert, you know, Republican grassroots voters who I know mean well and are worried about the future of the country that when it comes to these four pillars of conservative economics, Trump is not remotely their man.
In fact, he's made things worse.
Now, the one fact that I bring up, and we can go into many of these, but I think we start with this, is that when Trump became, was sworn in, the public debt was already $20 trillion.
I mean, it was out of control after eight years of Obama.
And frankly, we had the Bushes before that, and they weren't much better.
But the point is, it was $20 trillion when he came in.
When he left, only four years later, it was nearly $28 trillion.
So that's $8 trillion worth of public debt racked up, generated in barely four years.
Now, that's obviously a big number.
It's almost hard for any normal person to grasp, but here's a good way to look at it.
Ask the question, when did we get the first $8 trillion of public debt equal to what Trump did in four years?
The answer is it took us 216 years and 43 presidents from the beginning of the nation up through 205 to generate $8 trillion of public debt.
Trump replicated that in just four years.
So that gives you some sense that this wasn't just a little bit of overdoing it.
It wasn't a little bit of excess when it comes to fiscal excess.
It was off the charts.
It was a thundering setback for everything that we think is important.
Because after all, the public debt is just the reflection.
It's the embodiment of all the projects and spending and interventions and activities of government that shouldn't be happening or should be happening in a much smaller or more efficient way or at the state and local level.
Right.
David, how would your approach be now if they call you up and they got hold of one of those videos of you teaching people how to do debates and they say, what should we do now?
You did, you were deeply involved in supply-side economics and Reaganomics and some good came of it, but we really ended up, we didn't change a course.
It was just it continued.
Why does it fail?
And why is it that we're back to where we are?
If you were asked to be the advisor now and they say, well, you did such a great job, you know, on Reaganomics.
I want to do the same thing with Reagan.
What would you say?
Well, things are different now.
How do we get them to quit spending?
Because I think that, you know, if we don't change this attitude, the appetite for spending by the people, if you don't have fiat money that monetizes the debt, I don't see how technically, if you go to the Congress and say, do this, do that, the pressures are there.
It's automatic by human nature.
And the warmongers, they're going to spend the money.
So it seems like the technical approach, and I think Reaganomics and supply-side economics was a technical thing that more or less was not going to work if you didn't change the people.
Yeah.
Well, you know, I would say maybe there's four slogans I would use.
One, bring the empire home.
Two, shackle the Fed.
Three, balance the budget.
And fourth, you know, start observing the Constitution once again and distribute the powers of government that are legitimate among all three levels of government, not centralize and concentrate everything in Washington.
Now, if someone challenged those principles, I would say, one, they're pretty well based on history.
And secondly, they're based on some big lessons that we learned during the Reagan era.
We failed, he failed to shrink the Leviathan on the Potomac, even as he wanted to very much, because unfortunately, he was a small government man domestically.
But when it came to the Pentagon side of the Potomac, he was the biggest spender that ever came down the pike.
And so what happened was there was a huge defense buildup during those eight years.
We went from Jimmy Carter's already bloated defense budget of $140 billion to $350 billion within eight years.
You know, almost a tripling of the defense budget.
We didn't need that.
The Soviet Union was on its last leg anyway, and quickly and very soon thereafter fell apart.
It was due to the fact that communism doesn't work that centralized command and control economies fail, not because Washington was wasting a huge amount of money on defense.
Most of that money ended up going not into strategic weapons anyway, but into building up the conventional forces, you know, new tanks, 600-ship Navy, more planes and helicopters and other, you know, defense weaponry than you can imagine.
None of that was really needed to combat the Soviet Union because before the decade was over, it was gone.
But once it was put into being, once it was funded, procured, and put into operation, it was an easy way for presidents to be tempted to intervene and occupy, intervene in conflicts and occupy nations all over the planet.
And rather than when the Cold War ended, bringing the empire home, closing the bases and getting back to kind of a Fortress America defense, which is all we needed, that huge Reagan buildup became available for presidents of both parties to launch these forever wars and get us into the mess we're in today.
So the first point then is bring the empire home, cut the defense budget almost in half.
We could go back to $400 billion from the $900 billion we have today, and it would still be enough to maintain our strategic deterrent and to protect the shoreline, the airspace, and fully fund what I think is a far more appropriate concept, which is Fortress America, use the great Atlantic and Pacific moats to provide the inherent protection that is there.
There's no country in the world that could launch a big enough armada to embark on the shores of New Jersey or California.
Well, David, I would say that's a good start.
I think Daniel is itching to ask you another challenging question.
Well, as you say, David, I mean, what happened is you had people like Madeline Albright, who famously said, well, what's the use of having this great military if we don't use it?
Exactly.
And, you know, the point there, Daniel, is that she wouldn't have been able to ask that question or do that if it hadn't been put into being in the 80s.
If they had to go, if Bush, the senior Bush or Clinton had had to go to the Congress for huge increases in defense spending and taxes to go with it in order to expand NATO when we promised Gorbachev that we wouldn't and to intervene multiple times in the Middle East with the wars in Iraq twice, Libya, all the rest of them.
None of this, in my view, would have happened because the military means wouldn't have been there.
So it had a pretty unfortunate long-lasting legacy.
So the lesson we learned is you got to bring the empire home.
Right.
The defense budget and then get the Fed out of the business of monetizing the public debt.
And that's another big reason why Trump is not the answer to our problems.
He spent four years harassing the Fed, demanding even lower interest rates, which were already practically zero, complaining when they tried to begin shrinking their bloated balance sheet, which had gotten to $4.5 trillion, and basically pushed the Fed into an even more dangerous, reckless inflationary policy.
David, I wanted before we're getting low on time now, but I did want to ask you about one current event because I know you do a lot of writing.
Your stuff is always very insightful.
It's always so well documented.
Before we do, I just want to note one thing, which is I saw you got in a dust-up with Bill Browder, who's one of my least favorite people on earth, and I loved your response.
I won't say it on air, but it was a great response.
He is a real creep.
But I want to ask you about Yemen.
You wrote about the folly of President Biden's dust up with the Houthis.
You said, I think it was a week or so ago at least, that this is not going to work.
This is a disaster.
Well, Congress has not been involved at all.
You're finally seeing some people waking up in the Senate saying, what the heck is going on?
Yesterday was an amazing event, which is that the U.S. Navy attempted to escort two Maersk shipping ships with military equipment on it for Israel.
The Houthis, even after nine bombings, they launched an attack on it.
And not only did the ships turn around and go back, but the U.S. Navy turned around and went back.
Something tells me, David, that this is not going as they had hoped.
What is your take on how things are going there?
Well, it's not going as anyone would hope.
We shouldn't be there.
The Red Sea is not a pond in our backyard that we need to safeguard and monitor.
If because of the fallout and the conflict between the Arab states and countries aligned with Iran and Israel, at the moment, the Red Sea-Suez channel of trade is disrupted.
Well, that's 6,000 miles from China to Europe.
If they have to go around the Cape of Africa, that's 9,000.
It's a little bit extra cost.
And it's not our job to be the policeman of the Red Sea or the Persian Gulf.
We shouldn't have any of the forces that are there now in harm's way.
You know, the one thing that Trump did try to do, was basically get us out of some of these situations in the Middle East.
But when it came even to Syria, which was ridiculous, why do we still have forces in Syria?
Several thousand.
He couldn't even get that done because even though he ordered it to be done, nobody paid attention to what he was saying.
Why We Shouldn't Be Policemen 00:04:44
So now they're there.
This conflict is going on.
They're sitting ducks to be attacked.
And then you have the usual suspects in Washington saying, well, we've got to retaliate because Americans are being harmed.
Well, when you put yourself in harm's way, you're going to be harmed.
And the answer is not to escalate the conflict.
The answer is to get the hell out of there.
And, you know, it's just part of the whole sequence.
The reason why we need to bring the empire home and get these bases closed, get these aircraft carriers put in mothballs.
You know, we don't need aircraft carriers.
If the Russia is really a big threat to us, remember our GDP is $26 trillion, theirs is two, so I don't know why you would figure that.
But we've got 12 aircraft carriers, aircraft carrier battle groups with all their escort ships and planes and so forth.
They cost billions and billions a year to run.
What does Russia have?
They have one aircraft carrier that's been in dry dock for the last three years and doesn't even have a modern system catapult to launch fighter aircraft.
When you look at the facts in the world, I think you come down on the side of what in the world are we doing other than allowing the military-industrial intelligence complex to continue to put enormous fiscal burdens on us that we can't afford.
David, we're going to finish up here soon, but I do have a question because I'm fascinated with people's ideas and where they originated, how they might change.
And I think you mentioned how long we've known each other.
I think it's like 48 years.
And you went into Congress in 76 is the year I went into Congress the first time.
And what I'm always fascinated with is was there an event that said, hey, you know, we can, in a way, talk about John Anderson, but as time went on, you know, I had a lot of respect for him, but we still saw him as a liberal.
Was there an event that struck you and say, you know, maybe I don't have this ironed out yet.
You know, maybe I have to change this attitude.
Was there an event or an individual?
Because I think you would not disapprove of me saying you are a libertarian non-interventionist.
You believe in liberty and you challenge it and you express it so well.
Is there an event or an individual that you think influenced you in that transition?
Well, there was an event, Ron, and I'm glad you bring this up.
And I was a young staffer.
I started in 1970 working for John Anderson.
I was staff director of the Republican caucus.
And when Nixon closed the gold window and declared a national emergency and then had John Connolly out there telling the rest of the world, the dollar is our currency and your problem.
And then they imposed comprehensive wage and price controls on everything.
I mean, rent controls, profit controls, price controls on everything.
You might remember that.
That was 1971 and it went through to, I think, 1974.
But I was in charge of research, among other things, for the Republican caucus in the House.
And as we got into all of the disruption and, you know, just irrationality that was unleashed by the Nixon program across the board, you know, I started to read some conservative economics to try to figure out how in the hell this was happening.
And I think that was really the Rubicon I crossed in the early 1970s.
The other thing is I found that it was helpful to John Anderson on social issues.
He was a bit of a liberal, as you say, but on economics, he was pretty solid.
And that, you know, kept the caucus reasonably satisfied with his leadership.
Very good.
We are going to close.
This has been a great interview.
We're very glad you could Come on, David.
And before we leave, why don't you tell our viewers the most easy way where they can find your book and whether it's Amazon or some other place.
Come Forward, David 00:00:59
Yeah.
Yeah, well, thanks.
Sure, yeah.
I mean, it's in the usual places.
It's on Amazon, very easy to order.
There's the cover, Trump's War and Capitalism.
We didn't get into the fact very interestingly that Robert Kennedy Jr. has written a foreword to it, but I think it's indicative of the fact that here we are 40 years later and people from both sides of the spectrum are coming together because even he believes we can't borrow our way to prosperity and he believes we got to bring the empire home.
And he was shocked by the lockdowns and the shutdowns that occurred during the pandemic.
So there's a lot of hope that maybe a new alignment can come together as we go forward.
Okay, once again, David, I want to thank you very much for joining us today.
I'm sure our viewers enjoyed the program.
Export Selection