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Former Reagan Budget Director David Stockman on what needs to change about U.S. economic policies.
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Read right and -- so -- are.
Where there's already talk of somehow not letting sequestration goes through the president saying analysts.
You know you another bridge of course this all dates back to the grand bargain.
That was supposed to stop all of these are now kicking -- ball -- -- sort of things.
And he gets back into again to the to the idea than.
If if we can't accept even a small pause even those sort of even that's even attempt -- pinch.
And -- end in -- way we live then are we destined to ultimately make -- took a big problem bigger problems I've always said.
It that we jump off a one story building now we drop off jump off a ten story building later is that inevitable from what you see and watch.
I think it's absolutely inevitable and I think it's also the principal.
Opposite of the principle that Reagan had.
He understood there's no gain without some pain if policy is way off track you have to really the end.
And it may be difficult to get from here to there and he was also.
Strongly anti keynesian he actually.
Who earned his economics in the 1920s.
Before all this nonsense from the new deal in the keynesian era.
Became.
You know established policy.
And what we're doing today is just pure keynesian -- kicking you know the economy has to be supported by a trillion dollar deficit if it's not.
Then.
You know we're going to go down the drain and so -- which is nonsense.
We can't live beyond our means we can't keep borrowing from future generations.
Passing out money to everybody transfer payments tax cuts and so forth so that we can have a little more GDP one quarter of the time.
We have to face up to this we did in the 1980s.
The system today is totally incapable and I blame the Fed -- Greenspan.
For creating -- -- of Wall Street coddling.
Because once they started coddling Wall Street and said you know we can allow the stock market did drop by more than 5%.
Are we have to prop up all the too big to fail Wall Street houses that should've taken out there.
David.
You you've you've criticized Mitt Romney a lot -- -- presidential election.
You that you talked about crony capitalism.
And it and in the by the -- -- you've also been have someone of a critic of Paul Ryan is while.
So so who has a solution in other words if Mitt Romney did represent capitalism does the formation of capitalism -- that's going to be featuring a book what is that all about.
Well I think it's getting back to first principles and remembering what we used to think in the seventies and sixties -- 1920s -- Republicans today you know it's just so much.
-- Lincoln day dinner rhetoric Romney talked about the fiscal problem but he was unwilling to cut defense and it's totally out of control he said nothing about Social Security it has to be means tested.
He danced around Medicare which is a monster that's out of control.
The only program that he was willing to name that he would actually cut was big bird -- He Letterman let's look at -- got a minute left but I this I do want to mention this because you've also recently start talking about a housing bubble.
Now for many people we just mainly we've only just now hit terra firma but you're saying already.
It's a bubble that's the lone bright spot in the economy and that's a bubble than who -- -- a lot of trouble.
Yeah because it's the same old money printing by the Fed when you drive the interest rate to zero you're just encouraging the fast money.
To chase the next bubble if we look at these markets that were badly.
Injured during the bust of Phoenix and Southern California Florida.
This is all you know hedge fund money -- LBO money fast money coming and buying them by this dozens and hundreds.
And there's simply in their -- -- trade this isn't healthy thing because these are single family homes spread out and former sub prime neighborhoods.
And there has never been -- for your fifty years -- the real economic basis for institutional investors on Wall Street.
To own single family homes in Scottsdale it's not gonna work this is just easy money.
Chasing prices for a short.
You know short time and we're gonna be back in the so.
You know.
Back with that infamous Atlantic monthly interview.
You talked about being taken out to the -- I I will say that I think the American public is glad that maybe you were taken to the what's -- but you never stopped raising your voice and speaking about two concerns and we all appreciate -- good luck with the book they're here --
