David Stockman on America's Fake Money Pandemic
Scott talks to David Stockman about his latest article on the economic fallout from the coronavirus lockdowns. Stockman begins by pointing out a startling fact: though the stock market has now returned to all-time highs, the American job numbers are back down to where they were in the year 2000. This economic bloodbath, he insists, is not the effect of the virus at all-it is simply the result of a forced shutdown that never needed to happen. Why, then, are financial markets doing so well? Only because the Federal Reserve has printed nearly $3 trillion in new money in under three months, says Stockman, which they've used to directly monetize debt. As usual, this kind of heavy-handed intervention in the economy can delay the inevitable crash for a little while, but it is sure to make it more painful when it eventually comes around.
*This interview was recorded on 6/6/20
David Stockman is a former Republican congressman from Michigan and was President Reagan's budget director from 1981 to 1985. After leaving the White House, Stockman became a managing director at Salomon Brothers, and he later founded a private equity fund. David is the founder of David Stockman's Contra Corner, and he is the author of The Great Deformation: The Corruption of Capitalism in America