Krugman has shot back at David Stockman in his NYT blog today:

[CTyankee]

Cranky Old Men

Shorter David Stockman:

We’ve been doomed, yes doomed, ever since FDR took us off the gold standard and introduced unemployment insurance. What about those 80 years of non-doom? Just a series of lucky accidents. Now we’re really doomed. I mean it!

Actually, I was disappointed in Stockman’s piece. I thought there would be some kind of real argument, some presentation, however tendentious, of evidence. Instead it’s just a series of gee-whiz, context- and model-free numbers embedded in a rant — and not even an interesting rant. It’s cranky old man stuff, the kind of thing you get from people who read Investors Business Daily, listen to Rush Limbaugh, and maybe, if they’re unusually teched up, get investment advice from Zero Hedge.

Sad.

[iemitsu]

1. Krugman no only has a brain but he

has a sense of humor.

[CTyankee]

2. Didyou see the Stockman piece? I read it right before I went to Sunday brunch and

was depressed all morning...We talked to a friend about divesting and by the end of the meal I had real indigestion...glad I read Krugman.

[iemitsu]

13. Yeah, it is difficult to know what to do and when to do it

when it comes to retirement investments.
I get so stressed about this that I shut down and ignore the issue rather than deal with it.
But its good to read Krugman and others who model honest smart behavior. At least he seems normal.

[CTyankee]

14. My accountant, who is no lover of Wall St., said my stuff was pretty balanced so Ifelt

a lot better after our taxes were done. Glad he's in synch with my investment guy, who lives far away in Texas.

My question is what happens to the bond funds lots of us have?

[freshwest]

3. Eventually, we'll find that Stockman has bought shares in Independence Park, LLC.

For those who haven't heard of this paradise, it's Glennbeckistan.

[CTyankee]

4. Stockman lives in a pretty cushy house in Greenwich, CT. His wife, Jennifer Blei

Stockman is active in CT NARAL, or was when I was working at Planned Parenthood in the state. We had a yearly event in Greenwich, a good place to raise money for the cause. I had met her but didn't know her, except that she was pretty committed to being Pro-choice. I can only guess that David is, too...but I dunno...

[freshwest]

6. I'm sure they're fine folks, but he has a history.

Office of Management and Budget

Stockman became one of the most controversial OMB directors ever during a tenure that lasted until his resignation during August 1985.

Committed to the doctrine of supply-side economics, he assisted the approval of the "Reagan Budget" (the Gramm-Latta Budget), which Stockman hoped to be a serious curtailment of the "welfare state", gaining a reputation as a tough negotiator with House Speaker Tip O'Neill's Democratic-controlled House of Representatives and Majority Leader Howard Baker's Republican-controlled Senate.

During this period, although only in his early 30s, Stockman became well known to the public during the contentious political wrangling concerning the role of the federal government in American society.

Stockman's influence within the Reagan Administration decreased after the Atlantic Monthly magazine published the famous 18,246 word article, "The Education of David Stockman",[6] in its December 1981 issue, based on lengthy interviews Stockman gave to reporter William Greider. The White House's public relations team thereafter attempted to limit the article's damage to Reagan's perceived fiscal-leadership skills.

Stockman was quoted as referring to Reagan's tax act as: "I mean, Kemp-Roth [Reagan's 1981 tax cut] was always a Trojan horse to bring down the top rate.... It's kind of hard to sell 'trickle down.' So the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory."

[7] Of the budget process during his first year on the job, Mr. Stockman is quoted as saying: "None of us really understands what's going on with all these numbers," which was used as the subtitle of the article.

After Stockman's first year at OMB and after "being taken to the woodshed by the president" due to his candor with Atlantic Monthly's William Greider, Stockman became inspired with the projected trend of increasingly large federal deficits and the rapidly expanding national debt. On 1 August 1985, he resigned OMB and later wrote a memoir of his experience in the Reagan Administration titled The Triumph of Politics: Why the Reagan Revolution Failed (ISBN 0060155604), in which he specifically criticized the failure of congressional Republicans to endorse a reduction of government spending as necessary offsets to the large tax decreases, in order to avoid the creation of large deficits and an increasing national debt.
[edit]

Fiscal legacy

President Jimmy Carter's last signed and executed fiscal year budget results ended with a $79.0 billion budget deficit, ending during the period of David Stockman's and Ronald Reagan's first year in office, on October 1, 1981.[8] The gross federal national debt had just increased to $1.0 trillion during October 1981 ($998 billion on 30 September 1981). By 30 September 1985, four and a half years into the Reagan administration and shortly after Stockman's resignation from the OMB during August 1985, the gross federal debt was $1.8 trillion.[9] Stockman's OMB work within the administration during 1981 until August was dedicated to negotiating with the Senate and House about the next fiscal year's budget, executed later during the autumn of 1985, which resulted in the national debt becoming $2.1 trillion at fiscal year end 30 September 1986.[10]

http://en.wikipedia.org/wiki/David_Stockman#Office_of_Management_and_Budget

Just kidding about the gold and going along with that theme. And I'm sorry, but this man has the destruction of the social safety next and lot of bodies in his closet and is not suffering one bit.

Having lived through those days and seeing what the Reagan policies did across the board, I can't give him a pass. Call me unfair, but what was done to people still puts all of them in the dog house for me, anyway.

YMMV, and that's okay with me.

[CTyankee]

11. I'm not defending his theories at all. I agree with Krugman.

I don't know what to think of Stockman today (I agree with you about him during Reagan's admin). He might be just a little crazy, that's my current thinking after reading that irresponsible rant in the NYT today. This "bury your money in your back yard" thinking is just a little crazy, don't you think?

[freshwest]

12. It's a bit crazy, but it appeals to a certain audience that's getting bigger.

Stockman may be going that way, but then he appeared to have always been a zealot from the Wikipedia piece. I've reads some praise of him, because the GOP of that era, despite laying the groundwork for destruction of the New Deal entirely, were not all as socially conservative as the current crop is. That grew under the aegis of Reagan with the televangelists, and it's gone around the bend. Stockman may be attempting to go the route of Paul Craig Roberts, who was called the 'father of Reaganomics' and still says that he supports the overall plan.

Roberts is revered and seen as an intellectual light. He is the darling of the Tea Party, Ron Paul, Alex Jones, Patriot crowd. They all talk about the wisdom of 'Austrian economics,' gold, silver and stocking up for the collapse of society. In fact, they are banking on it and cleaning up shilling for the same system pushed by the Koch brothers.

We see some of these gurus and ideas paraded here from time to time along with rails against the banksters, the Federal Reserve and other stuff that is usually hidden quickly, because it's TOS territory. Same sources. Even Romney, Ryan, Gingrich and Sanctorum went out of their way to appeal to the CTers.

These guys say things that are common sense, although bound with fear. Paul Craig Roberts is much like the surprising subject of the Tim Wise piece called 'Of Broken Clocks, Presidential Candidates, and the Confusion of Certain White Liberals.'

I think Stockman wants in on a piece of this. AFAIK, Preppers and Gun Freedom Fanatics are not in economic straits. Their passions require a good deal of cash or credit. They vote and contribute to a lot of media.

I hope that answers what you asked but logically, no, it's not crazy to try to hold onto things. We have those on the left who are no different in their fears of global collapse - just different cause offered for the their most treasured TEOTWAWKI. I've heard this for twenty years. The real TEOTWAWKI is Obama, and the right knows it. The end of their world as they knew it has happened, but it's not the end for everyone. It never is, even though sometimes in our disgust, we might wish that!

[steve2470]

5. k&r nt

[Ruby the Liberal]

7. According to BI.com Stockman's book is released on Tuesday

*yawn*

Looks like he is stirring shit to get his name out there...

[winter is coming]

8. I guess he's jockeying for prime position on the remainder tables.

It's really bad when your book is stacked behind/underneath Sarah Palin's stuff.

[CTyankee]

10. Expect him on Morning Joe and god knows where else in 3..2..1..

[Dawson Leery]

9. One problem with the right, including traditional conservatives

is they see doom around the corner in everything.

[magical thyme]

15. somebody posted an old article about Stockman which stated he isn't actually an economist

So right there, although he made some interesting points in the article, on the whole he lost me.

One thing I've found is that when people stray into areas that are not areas that they've lived and breathed for a lifetime (including their formal education), they inevitably are missing at least one or two critical facts that undermine everything they're spouting.

So for economic matters, I follow Krugman the most, and not just because he is an actual nobel prize winning PhD economist either.

A couple years back some org or other did a study of economic predictions from 100 or so well known economists, politicians and pundits. Krugman topped the list hands down, not just more accurate, but far more accurate than #2 and the rest of the list. I'm not sure where Stockman fell on the list (if he even made the list).

I made a note of the top 5 prognosticators, along with the bottom 6.

Best:
1. Paul Krugman
2. Maureen Dowd
3. Ed Rendell
4. Chuck Schumer
5. Nancy Pelosi

Worst (as in, worth listening to and then believing the opposite :
1. Cal Thomas
2. Lindsey Graham
3. Carl Levin
4. Joe Lieberman
5. Sam Donaldson
6. George Will

[CTyankee]

16. Stockman was never trained in Economics. At Harvard he studied social sciences and

then went on the Harvard's Divinity School, thinking he would be some sort of theological philosopher, but he lost interest there, too and went into politics.

As you can see in this brief piece, Krugman rather politely but pointedly made clear that Stockman didn't measure up with his reference to Stockman's lack of any models or data studies, the type of stuff Krugman does all the time, like any working economist. Business Insider calls Krugman's piece as "brief but brutal."

I don't know if Stockman really cares very much or cares too much. He may be "teched" as Krugman puts it...

[adigal]

17. Did anyone read his book? Or hear his interview on NPR??

I didn't know he was a conservative, and he didn't sound like one. He said the only govt spending we could afford were entitlements: Medicare and Social Security. Everything else, including the military, would have to go, or we are crashing into sunset. And he said that since no one in the govt would do this, our best days were behind us.

I don't know, what he said made a lot of sense to me. Yes, I would prefer to think all will be well, but maybe it's time to buy some gold. (Kidding, sort of. )

[CTyankee]

18. we hear that yakety-yak all the time...government spending BAD.

They never talk about solutions such as lifting the cap on wages subject to SS tax. Never. They never talk about universal, Medicare for all health care. Never. It makes me think they really don't want to solve the problem, they are just using their doom and gloom to do what they've always wanted to do: get rid of SS and Medicare.