David Stockman wrote of the irreversible decline of America like a man possessed. In what surely must be a précis of his recently published book, Stockman goes on for 2,700 words about the collapse of America. It is a historical ramble, going back to the New Deal, cataloging the criminal failings of monetary policy and the bi-partisan destruction that our politicians have unleashed on everything that once made America great. Don't get me wrong, I have my moments of being a schoolmarmish debt scold and find in Stockman a soul mate of sorts in his understanding of the deep-seated corruption that has aided and abetted the financialization of our economy to the detriment of the common weal. But his is the writing of a man on the verge of a nervous breakdown.
Sitting at the opposite end of the political spectrum, Jeffrey Sachs makes observations that are very similar to those made by Stockman. He too sees an economy in decline, one that has failed the middle class and that is systemically unable to compete with the rising global economic powers. But unlike Stockman--who concludes that America has reached "end-stage metastasis" and with despondency concludes that there is nothing to be done because "the way out would be so radical it can’t happen"--Sachs mirrors Stockman in his litany of the ills that afflict us, but then offers up surprisingly small bore solutions. Where Stockman would undo the corrosive intertwining of politics and commerce that have characterized western civilization at least since Niccolò Machiavelli was the advisor the Medici family, Sachs proposes a prescription of increased investment in transportation infrastructure, solar and wind power, and job skills training. Where Stockman is unrelenting, Sachs is decidedly unconvincing.
Stockman and Sachs are not strangers to charting the course of radical economic change. Stockman was a leading figure in the Reagan Revolution--where he served as Reagan's Director of the Office of Management and Budget--implementing the supply-side economics and "deficits don't matter" policies that are now the target of his critique. Indeed, in the midst of a rant that casts the net of blame widely, Stockman excuses only himself, offering his version of Captain Louis Renault's apologia--I am shocked, shocked to find that gambling is going on in here--telling us that he resigned as OMB Director when he perceived the "destruction of fiscal rectitude under Ronald Reagan." But he offers this with no sense of irony that the policies that he eagerly embraced in his 30s are the very ones that three decades later he now sees as central to our national decline.
Jeffrey Sachs’ revolutionary moment came almost a decade after Stockman. Like Stockman, Sachs was in his mid-30s when, as a Harvard economist, he served as an advisor to Mikhail Gorbachev and then Boris Yeltsin during the end stage of the collapse of the Soviet Union. While Sachs has denied his complicity in the massive theft of Russian natural resource wealth that ensued, the privatization of Russian industry that was central to the Yeltsin-era economic program became the engendered the rise of the Russian oligarchs.
The death of Boris Berezovsky last month in the wake of legal battles with Roman Abramovich was a stark reminder of the enduring fortunes that were created in the chaotic end of the Soviet Union. While Bloomberg News describes Berezovsky as a self-made billionaire, this is a charitable description. Berezovsky and Abramovich together acquired Russian state-owned oil assets that then comprised one of the world's largest oil companies for literally pennies on the dollar, an opportunity made possible only by the tragic mix of the deep corruption of the Russian state and the intellectual firepower of the Boris Yeltsin's advisory team, of which Jeffrey Sachs was a prominent member. Using words that evoke Stockman’s, Sachs resigned from Russia after a few years, having "found corruption to be growing and out of control."
In a way, Stockman and Sachs were each naifs whose intellectual capabilities fell prey to the political will to power. Jeffrey Sachs engaged in the world of international economics at a unique moment and crafted strategies for the complex restructuring of failed socialist economies. But where Sachs saw a theoretical path to recapitalizing a bankrupt economy, the Boris Yeltsin’s coterie of kleptocrats found a means to amass unimaginable personal wealth. No doubt Sachs was shaken to see how well intended advice on how to bring new capital into the failing Russian economy could be turned to personal and political avarice.
For his part, when David Stockman was at the height of his power, he was wont to say that he understood how the world worked. It was a notion that was central to his youthful arrogance. But like Sachs, Stockman did not understand the world he was in as much as he thought, and in large measure, the destruction of fiscal rectitude that he so decries came on his watch. Stockman failed to see how legitimizing unbalanced budgets would completely transform our politics, how it relieved Congress of the singular duty for which they are elected: the duty to make choices. Henceforth, they would not have to choose between cutting services or raising taxes, they could have it all, and increase services and entitlements even as they cut taxes.
As a young man in his 30s, David Stockman offered the intellectual rationale for the fiscal profligacy that he now decries as the source of our demise. As a young man in his 30s, Sachs became an intellectual superstar on an international stage, only to be humiliated as the co-creator of the greatest theft in world history. They each write with a passion about the problems facing our country today, yet each seems to wonder why no one seems to be listening. Perhaps it is because neither talks honestly about the role he played in what each clearly sees as a tragic moment in our history.
Stockman and Sachs each helped to set in motion historical forces that plague the United States and Russia to this day, and in each case it was because of the unintended consequences of making large scale changes in highly complex economic and social systems. Our economy today has been beset by the consequences of a number of deliberate public policy initiatives, including free trade, financial services deregulation, and education reform, that each have had and continue to have dramatic and adverse impacts on our society and our economy that were not intended by those who supported those changes.
The deep pain and tragedy of unintended consequences are experiences that Stockman and Sachs share, and that they each carry with them to this day. We need them to write about that, because that is where they have the greatest insight to offer, and the side of their stories that people most need to understand.