Money  /  Longread

The Education of David Stockman

"None of us really understands what's going on with all these numbers."
AP Photo/Barry Thumma

Stockman felt protected from local pressures, in a way that most members of Congress do not—partly by the Republicanism of the district but also by the consistency of his ideology. Since he had a clear, strong view of what government ought and ought not to do, he found it easier to resist claims that seemed illegitimate, no matter who their sponsors might be. “Too many politicians are intimidated by the squeaking wheel, in my judgment. Regardless of their ideological viewpoint, they’re able to incorporate the squealing wheel into their general position. If the proposal is pro-business, they call it conservative. If they’re from Nebraska, it’s pro-farmer. It’s whatever serves the constituencies.”

This was the core of his complaint against the modern liberalism launched by Franklin Roosevelt’s New Deal. He did not quarrel with the need for basic social-welfare programs, such as unemployment insurance or Social Security; he agreed that the government must regulate private enterprise to protect general health and safety. But liberal politics in its later stages had lost the ability to judge claims, and so yielded to all of them, Stockman thought, creating what he describes as “constituency-based choice-making,” which could no longer address larger national interests, including fiscal control. As Stockman saw it, this process did not ameliorate social inequities; it created new ones by yielding to powerful interest groups at the expense of everyone else. “What happens is the politicization of the society. All decisions flow to the center. Once we decide to allocate credit to certain activities—and we’re doing that on a massive scale—or to allocate the capital for energy development, the levels of competency and morality fall. Then the outcomes in society begin to look more and more like the work of brute muscle. The other thing it does is destroy ideas. Once things are allocated by political muscle, by regional claims, there are no longer idea-based agendas.”

Across the river from St. Joe’s, Stockman drove through the deserted Main Street of Benton Harbor, his favorite example of failed liberalism. Once it had been a prosperous commercial center, but now most of its stores and buildings were boarded up and vacant except for an occasional storefront church or social-service agency. As highways and suburban shopping centers pulled away commerce, the downtown collapsed, whites moved, and the city became predominantly black and overwhelmingly poor. The federal government’s various efforts to revive Benton Harbor had quite visibly failed.

“When you have powerful underlying demographic and economic forces at work, federal intervention efforts designed to reverse the tide turn out to have rather anemic effect,” Stockman said, surveying the dilapidated storefronts. “I wouldn’t be surprised if $100 million had been spent here in the last twenty years. Urban renewal, CETA, model cities, they’ve had everything. And the results? No impact whatever.”

The drastic failure seemed to please him, for it confirmed his view of how the world works. As budget director, he intended to proceed against many of the programs that fed money to the poor blacks of Benton Harbor, morally confident because he knew from personal observation that the federal revitalization money did not deliver what such programs promised. But he would also go after the Economic Development Administration (EDA) grants for the comfortable towns and the Farmers Home Administration loans for communities that could pay for their own sewers and the subsidized credit for farmers and business—the federal guarantees for economic interests that ought to take their own risks. He was confident of his theory, because, in terms of the Michigan countryside where he grew up, he saw it as equitable and fundamentally moral.