David Stockman and the Cult of Gloom

The American tradition of the jeremiad is older than the republic, itself. But that doesn't make it useful.

FROM THE ATLANTIC | APRIL 3, 2013

We think of spring as a time of cherry blossoms and renewed hope, as we slough off the depths of winter and ease into the warmer months. These bright days seem a strange time to encounter the by-now widely circulated warnings of impending doom by Ronald Reagan's budget director, and current gadfly, David Stockman.

In a long essay in the New York Times drawn from his lengthy and just-published book The Great Deformation, Stockman this week made an impassioned plea for Americans to wake up to the looming crisis just ahead. This crisis, he predicts, will be triggered by a stock market collapse that will remove any lingering illusion that we are OK: "When it bursts, there will be no new round of bailouts like the ones the banks got in 2008. Instead, America will descend into an era of zero-sum austerity and virulent political conflict, extinguishing even today's feeble remnants of economic growth."

Stockman has many proposed solutions ‑- abolish Medicare, means-test Social Security -‑ but little hope of any change. The system is broken, the die is cast, sell, sell, sell, sit with cash in your mattress and hope we can make it through the reckoning.

Usually, such crib notes of an argument do it injustice. But the above is not a caricature of what Stockman predicts. It's what he believes to be the imminent fate of America. He is an unusually erudite and eloquent voice, but his message is so stark that it's almost impossible to violate by reducing it to its bare minimum.

It's remarkable how much play these views get and how much traction they have. The tradition of jeremiads extends back to the dawn of recorded history; the biblical The prophet Jeremiah railed against the flaws and failings of the Israelites, and though he was ridiculed for delivering an unheeded message, in the fullness of time his words came back to haunt his people. American society is infused with that tradition. Just read the sermons of any number of 17th century New England pastors who decried the immorality and sloth of their congregations, or various Great Awakenings that called people to return to the right way or risk God's wrath and misery.

Today's jeremiads are decidedly more secular - though you can still hear religious ones in churches and temples scattered through the land. But the ones that grab the public's imagination are now economic rather than religious, warning of collapse unless we all wake from our stupor of greed and debt-infused denial. Stockman is the voice du jour, but he joins a chorus. The financial world hears frequently from Marc Faber, known affectionately as "Dr. Doom" for his frequent prognostications of bad times ahead. On CNBC yesterday, he pronounced that soon every country will be Cyprus, with insolvent banks and governments raiding deposits. "It will happen everywhere in the world, in Western democracies," Faber said. "You have more people that vote for a living than work for a living. I think you have to be prepared to lose 20 to 30 percent. I think you're lucky if you don't lose your life."

And there are others, of course. Ever since the financial implosion of 2008, Nouriel Roubini has been traversing the lecture and consulting circuit with his dour analysis of the global financial system and its multiple flaws. Jim Rogers, who once worked with George Soros and famously rode his motorcycle across the globe, sits in Singapore and rails against the foolishness of central bankers and lemming-like investors while predicting China's inevitable rise and global supremacy. Meanwhile, Stockman-like strains of end-of-days debt-laden pessimism infuse the Tea Party and work their way into the Washington mainstream.

All these voices follow the first law of doomsday predictions: Don't give a date. Yes, Stockman has said his script will play out "in a few years," but that is both sufficiently vague and sufficiently soon to sound simultaneously alarming and be effectively impossible to argue against. As long as you don't give a specific time when the world will end, the system implode, the markets crash, you can always -- and in today's pessimistic culture, credibly -- say it might not have happened yet but it will soon. At a time when fear is at a premium, those arguments stick. Stockman is getting reams of attention (including this column ...). But someone who predicts that the future will witness a technology-infused solution to many of our current concerns? Not so much.

And that is the most salient issue. We are so immersed in our moment of anxiety that we take such extreme warnings very seriously. We listen to other, less dire perspectives more skeptically. That is almost exactly the obverse of the climate in the 1990s or the 1950s. Few now remember Fortune magazine issuing a book in 1956 called The Fabulous Future in which presidential candidate Adlai Stevenson spoke of "the most extraordinary growth any nation or civilization has ever experienced," labor leader George Meany predicted "ever-rising" living standards and media executive David Sarnoff gushed, "There is no element of material progress we know today that will not seem from the vantage point of 1980 a fumbling prelude."

In 1999 the chief executive officer of search engine AskJeeves declared to me in an interview that he wanted to give people "perfect information" in order to liberate and empower everyone to create a brave new world. You could throw a dart at a large pile of magazine, books and commentary in either decade and find effusive views about the limitless future, and those voices were seen as credible, compelling and newsworthy. Today, such views would gain little traction, let alone respect.

These oscillations themselves obscure the simple truth that our views about the future usually says less about what will happen then than about how we feel now. As the saying goes, predictions are tricky, especially about the future. None of us know what will unfold, and the human legacy of accurately gauging what will happen is poor at best.

Of course, Stockman might be right, and the jeremiads can be useful if they force us to focus on issues we are otherwise ignoring. Surely, political and economic policy can use constant improvement. But as for the odds of him being right, the past is suggestive if not predictive: The end of the world, the collapse of an old regime, the implosion of order -‑ those are rare, rare, rare. Even the crisis of 2008, as damaging as it was, did not fundamentally change the world as we know it, however much it raised the fear of the end. Current warnings of the end need to be placed in the context of a remarkably stable time, if not an easy one. Stockman and the rest of the doomsday chorus have not revealed any hidden truths; they simply loudly voice concerns widely shared. As such, they are a voice of collective angst, just as surely as the utopians of years past were beacons of collective hope. We should listen to the warnings, but given how paralyzing fear can be, let's not invest them with crystal-ball clarity and so make them more real than they are.

"The Edgy Optimist" column is initially published at Reuters.com, an Atlantic partner site.

Source: https://www.theatlantic.com/business/archi...