Clive Crook's Groupthink

I stayed in my apartment in Astoria, Queens last night because of a dental appointment this afternoon.  Because I keep basic cable there, I watched the mainstream Bloomberg news channel.  Luckily, David Stockman was on.

Stockman has written an interesting book, The Great Deformation,  in which he predicts a collapse of the dollar and advocates a gold standard.  Stockman's prescription is contrary to the preferences of Wall Street, Bloomberg LP, big businessmen, and bankers. However, it is not outlandish.  Without Stockman's insider knowledge of the Reagan administration, I advocate the same ideas; I am delighted to see him on mainstream television.

The program involved former Reagan official  Stockman debating Bloomberg's Clive Crook, a good-looking journalist with an English accent.  Crook says that he likes some of Stockman's analysis, but he longs for "the old David Stockman" who was mainstream and did not advocate outlandish ideas like  dissolution of the federal government  and a gold standard.  Crook was dismissive and insulting; his argument was ad hominem and unsubstantial.  Instead of saying why he thinks that a gold standard won't work, Crook claimed that by advocating a gold standard Stockman placed himself outside the mainstream.

Most good ideas are rejected at first. Nikoa Tesla was told that AC electricity was a perpetual motion scheme; talking pictures were thought to be a fad, as was television.  Who cares if the US establishment, which has created the current dismal social-and-economic situation, finds Stockman's ideas to be outlandish? Their failed ideas have destroyed America's progress.

Anyone who has studied group dynamics knows that Crook's tactics are characteristic of groupthink.  All groups depend on conformity.  Although the pro-Fed establishment is not a small group in the same sense as the jury in Twelve Angry Men, it is a group with norms.  The historical record of the current financial system has been poor all along. The Fed caused the Great Depression; it caused the 1970s Stagflation, and Stockman is right: It has gotten worse since Alan Greenspan's appointment during the Reagan years.

Because the in-group faces a great loss if it loses the Fed or sees restrictions placed on its ability to print money for itself, it needs to defend the status quo. Rather than defend the indefensible, Crook applies power-and-influence tactics aimed at silencing Stockman.  

In a sense, Crook is right: Stockman's ideas are irrelevant to the current group in power. This includes both Democrats and Republicans.  When the Fed was established in 1913, the founders did not anticipate abolition of the gold standard. An argument for abolition of the gold standard would have seemed irrelevant to Woodrow Wilson, who had been a gold Democrat (he did not vote for William Jennings Bryan in 1896).   Twenty years later FDR abolished the gold standard.  The reverse can occur today.