He has since that time worked as a private investment adviser, at which difficult profession he has been highly successful, and he has written a number of books, among which the monumental Great Deformation (Public Affairs Press, 2013), is the most notable. The Great Money Bubble contains many vital lessons about money and macroeconomics, and in what follows I'll discuss a few of these. But I'm not able to assess one part of the book.
Stockman identifies a common failing in Keynesian economics and in the monetarism of Milton Friedman and his disciple Ben Bernanke, the most popular alternative to Keynesian economics among mainstream economists. According to both of these doctrines, it is necessary to raise aggregate demand to boost employment during a depression, with government spending, according to Keynes, and with monetary expansion, according to Friedman. Stockman denies the need for the government to manage, holding that the free market can take care of itself. He says:
As a congressman from Michigan in the late 1970s. . . . I didn't think it was the role of politicians to second-guess economic data . . . that resulted from the interactions of millions of workers, employers, entrepreneurs, savers, investors, and speculators on the free market. Decades later, I still don't. Indeed, the idea that market-driven GDP should find its own natural level without a heavy-handed assist from the government was then and remains today the opposite of the reigning orthodoxy. Rather than vibrant, free, productive capitalism, that orthodoxy sees the U.S. economy as a self-contained, hermetically sealed system that is always badly malfunctioning and forever falling short of its potential, thereby requiring constant external stimulus from Washington via its fiscal and central banking branches. . . . That wasn't remotely true even a half century ago when the U.S. economy was more inward looking, but it's utterly preposterous today. That's because the domestic U.S. economy is self-evidently wide open to the overpowering influences of global trade, capital flows, and the relative labor and production costs everywhere on the planet, all at once.