Dawn J. Bennett, host of Financial Myth Busting and founder and CEO of Bennett Group Financial Services, recently interviewed David Stockman, a bestselling author and former director of the Office of Management and Budget, on her show. In the interview, they discuss Donald Trump’s candidacy for President.
In Stockman’s latest book, Trumped! A Nation on the Brink of Ruin… And How to Bring it Back, he argues that Trump’s candidacy can be directly credited to the increasing notion that the American economy is rigged and only helping those at the top. He notes in his interview with Bennett that Trump is currently capitalizing on the Populist wave because “the rubes are in revolt”.
“They’re treated as rubes by the Washington/Wall Street bicoastal elite and they’ve had enough and I think Trump’s phenomenal rise is reflective of that,” he said. “Now, how that translates into fundamental change in policy… that’s a huge, open question.”
On Trump’s economic policy plan, Stockman says he thinks the three things Trump needs to address are:
- The Fed and how we can basically launch a campaign that says 2% inflation targeting has to go because that is a mortal threat to purchasing power or wages throughout America.
- Zero percent interest rate or interest rate pegging has to go because that is savaging millions of retirees and savers.
- We don’t need an activist Fed intervening massively in the market day in and day out, we’ll need to go to a much more restrained, passive liquidity provision system, but the heart of it would be let the free market, let interest rates do their job. If we had flexible or mobile interest rates both in the money market and across the yield curve, this market would begin finally to reorient itself and heal itself from this tremendous bubble distortion and malinvestment that’s occurring today.
“We need something different and we need to pay for it with spending cuts, and that’s probably an area where a lot work needs to be done on the Trump program if it’s going to make a difference assuming he’s elected,” said Stockman.
While Stockman is not a Trump supporter, he believes he is a preferable to Hilary Clinton and the third party candidates.
“Hillary represents a 30-year old bag of deplorables. I’m not talking about her supporters like she did with Trump. I’m talking about her ideas,” Stockman said. “She has never seen a war she didn’t like. She is a hundred percent behind this whole bubble finance regime at the Fed. She thinks Janet Yellen is some kind of superhero. She thinks that we can make the economy prosper by even more meddling and intervention and control from Washington and obviously we have 30 years now proving that because the economy after this limp recovery is now grinding to a halt.”
He continued, “I think we’re near the edge of a recession, and think about it – it means that in the last 16 years the average growth rate has been 1.6% or less than half of what it was historically, and that’s only if you credit the inflation measures used by the Washington statistical mills. If you have an honest measure of inflation, I doubt the real economy for most of America has grown at all over the last period.”