That is an version of Time-Journey Thursdays, a journey by The Atlantic’s archives to contextualize the current and floor pleasant treasures. Join right here.
One of many nice weaknesses of the Donald Trump presidency is its failure to be taught or heed historical past. (In case you are or know a member of the administration, take into account spending a while in our archive!)
“His understanding of worldwide occasions, his understanding of worldwide historical past, his understanding of U.S. historical past was actually restricted,” former Secretary of State Rex Tillerson complained of the president in 2021. “It’s actually exhausting to have a dialog with somebody who doesn’t even perceive the idea for why we’re speaking about this.”
This restricted historic information can produce ironic outcomes. When Trump allies brag that the president has introduced “the most effective and the brightest” to the White Home, the phrase is apt, however not in the best way they imply: That expression entered widespread parlance when David Halberstam used it because the title of his basic e-book about how an earlier wave of academically gifted however inexperienced staffers got here from personal trade to the Kennedy and Johnson administrations, identical to Elon Musk’s crew on the U.S. DOGE Service, and blundered into disaster.
The Atlantic’s archive accommodates one other cautionary story, from a era later, for the Trump administration. “The Training of David Stockman” is a narrative of cost-cutting zeal and ideological certainty crashing up in opposition to the tough actuality of how politics and authorities work. (I used to be reminded of this parallel by a Substack e-newsletter from the writer and journalist Peter Osnos, a former Atlantic contributor.) Musk is just not the primary individual to consider that in the event you’re sensible and ruthless sufficient, you’ll be able to bend the U.S. price range to your whim.
In 1980, Ronald Reagan gained the presidency and sought to usher in a brand new age of fiscal austerity whereas additionally growing the Pentagon’s price range. Provide-side economics, which basically argued that tax cuts would pay for themselves by inducing financial development, was simply coming into vogue, and fiscally conservative dogma about tax cuts requiring price range cuts was out. The person in command of reconciling all of Reagan’s guarantees was David Stockman, a former Michigan consultant, whom Reagan named to guide the Workplace of Administration and Funds. The query the brand new administration confronted was: “How is it doable to lift protection spending, minimize revenue taxes, and stability the price range—all on the identical time?” A part of Stockman’s schooling was the revelation that it was not.
Stockman agreed to a collection of embargoed interviews with William Greider, then an assistant managing editor at The Washington Submit and later a outstanding progressive economics commentator; he died in 2019. Over the course of eight months, in 1981, the lads met frequently for breakfast on the Hay-Adams lodge, throughout from the White Home, beneath an settlement that their conversations in regards to the administration’s new insurance policies could be made public later—“after the season’s battles had been over.”
Like Musk as we speak, Stockman was ready to make use of the sturdy assist of the president to maneuver shortly and overwhelm members of the Cupboard or Congress who may need objected. “Stockman’s company did in a number of weeks what usually consumes months; the method was made simpler as a result of the conventional opposition forces had no time to marshal both their arguments or their constituents and since the President was totally in tune with Stockman,” Greider wrote.
However Stockman couldn’t overcome math. When you account for protection spending (which Reagan wished to extend), Social Safety, Medicare, Medicaid, veterans’ and federal retirees’ advantages, and curiosity funds on the nationwide debt, he may fiddle with solely 17 p.c of all federal spending to be able to stability the price range. “One may denounce explicit packages as wasteful, as pointless and ineffective, even loopy”—that sounds rather a lot like Musk recently—“however David Stockman knew that he couldn’t escape these primary dimensions of federal spending,” Greider wrote. Immediately, in accordance to the Heart on Funds and Coverage Priorities, excluding the identical packages leaves roughly 21 p.c of the price range to play with, however the primary challenges are the identical. When Musk promised to seek out at the very least $1 trillion in cuts to the roughly $7 trillion federal price range, he was both mendacity or ill-informed.
Stockman additionally needed to deal with the financial results of his proposals. When staffers fed Reagan’s plan for slashing taxes and mountaineering protection spending into a pc mannequin, the outcomes had been dire. If the numbers had been made public, Greider wrote, “the monetary markets that Stockman sought to reassure would as a substitute be panicked. Rates of interest, already excessive, would go larger; the expectation of long-term inflation could be confirmed.” Sounds acquainted.
Because the yr went on, Stockman appeared to turn out to be totally disillusioned. “None of us actually understands what’s happening with all these numbers,” he advised Greider. “You’ve bought so many various budgets out and so many various baselines and such complexity now within the interactive components of the price range between coverage motion and the financial setting and all the interior mysteries of the price range, and there are loads of them. Persons are getting from A to B and it’s not clear how they’re getting there.” His candor bought him in hassle. He was, in his personal phrases, “taken to the woodshed” by Reagan after the story’s publication.
Immediately, Musk insists that he and his group are smarter than everybody else within the authorities, but they maintain making errors brought on by their hubris or their lack of information, to say nothing of their penchant for spreading lies and misinformation. “One of many issues we unintentionally canceled very briefly was Ebola prevention,” Musk stated at a latest Cupboard assembly. Though Musk claimed that this system has been restored, The Washington Submit has reported in any other case. Musk additionally retains making an attempt to take credit score for cuts DOGE isn’t making—in a single case, a contract that expired 20 years in the past. Stockman did the identical: The Reagan administration sought credit score for cuts made by Jimmy Carter.
The large distinction is that Stockman, although an ideologue, really cared in regards to the authorities functioning effectively. Musk and his presidential patron haven’t demonstrated the identical impulse. Immediately, the worldwide financial system appears on the verge of main modifications: Free commerce is dropping favor, Pax Americana is fading, and what comes subsequent is unclear. Stockman noticed peril in moments resembling this. “Each time there are nice strains or modifications within the financial system, it tends to generate crackpot theories,” Stockman advised Greider. The warning has aged effectively.
