Sunday, August 17, 2014

Book Review - The Great Deformation

The Great Deformation, by David Stockman of Reagan admin fame, is a detailed and precise account of how (among other things) socialism, central banking, monetary policy, and corruption in the financial service sector has so warped and distorted the pricing mechanism of the financial markets that it has ultimately impaired and crippled the free market from functioning properly.  Lacking this VITAL economic tool, the economy has since mal-invested in many bubbles resulting in a stagnation of our economy and no real economic growth, as well as no real hope for the future.

Ironically, those two lengthy sentences also epitomize the book because it is both lengthy and (unless you're an economist) doesn't make a lot of sense to the average person - thus the tragic and paradoxical nature of this otherwise excellent book.

There is absolutely NO DOUBT as to the quality, precision and workmanship Mr. Stockman put into this book.  His ability to explain precisely what was going on, who was responsible for it (the financial crisis), as well as his masterful use of the English language to explain it, is unrivaled.  The problem is that this brilliant piece of work has no obvious audience.

If you are an average person trying to understand the financial problems of the US and western civilization in general, this IS the book for you to read.  The problem is that it's written at such a high level of "economicness" you won't understand half of it and would have to commit to further educating yourself about economics that it would take a SOLID two months of DEDICATED self-education in the field.

Ironically, if you ARE educated in the field, and managed to be one of the few economists with his head out of his ass and Keynes' dick out of your mouth, you will certainly understand it, but it will be nothing new to you.  Mayhaps some details or observations you didn't know about (there are plenty in the book), but again, if you have the slightest bit of intellectual honesty and a drop of Austrian economic blood in your veins you will be fully aware of Mr. Stockman's points and positions.

Thus the tragedy about Mr. Stockman's book.

I would love to recommend it to beginners in economics as it is the veritable bible and account of what caused our current financial woes.  But it would be speaking in tongues to them.

And I would strongly recommend it to my economic's just they already know what Mr. Stockman wrote.

The true value of this book is sadly what many of us do so on a day to day basis:

Writing for posterity. 

If there is a "primary" reason to own this book it is because it is a brilliant and detailed account and accord of what PRECISELY happened during the build up to, and the consequences of, the financial crisis and future crises that are about to happen.  It is not a novel to be consumed and then discussed at an intellectual light-weight "book club" in the suburbs sipping on $7 cup of Joe's at Starbucks pining when your sugar daddy husband is going to buy you another Range Rover, but rather a reference guide to consult when having serious discussions, and certainly policy issues if saner heads are ever elected into office.  In short, it is as if you took "50 Shades of Grey" and multiplied it by -1.

Not very exciting, but infinitely practical and helpful to society if they ever cared to give it two shits about it.

Thankfully, Mr. Stockman has a very good outline where, though titled eccentrically, chapters are labelled (more or less) categorically allowing you to consult topics specific to your interests/needs.  I would NOT recommend anybody read it cover to cover (which I did effectively while driving to Seattle and back via audio book), but instead purchase it and use it as a reference book for any point in time where discussion or debate requires an authoritative source as to the causes and consequences of the country's current finances.

You can find Mr. Stockman's book here and his other literary works here

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