Stockman's star with the Reagan Administration began to decline after the Atlantic Monthly magazine published a William Greider article, The Education of David Stockman" in the December 1981 issue, based on interviews Stockman gave to Greider.
Stockman even in those days understood the power of the corporate elite. Greider reported on Stockman's battle for tax cuts:
The counter-offensive against the cut was led by Commerce Secretary Malcolm Baldrige and U.S. Trade Representative William Brock, who argued eloquently before the budget working group for a partial restoration of Ex-Im funds. By Stockman's account, the two "fought, argued, pounded the table," and the meeting seemed headed for deadlock. "I sort of innocently asked, well, isn't there a terrible political spin on this? It's my impression that most of the money goes to a handful of big corporations, and if we are ever caught not cutting this while we're biting deeply into the social programs, we're going to have big problems." Stockman asked if anyone at the table had any relevant data. Deputy Secretary of the Treasury Tim McNamar thereupon produced a list of Ex-Im's major beneficiaries (a list that Stockman had given him before the meeting). "So then I went into this demagogic tirade about how in the world can I cut food stamps and social services and CETA jobs and EDA jobs and you're going to tell me you can't give up one penny for Boeing?"
With Greider, he was open about the compromises he made in his budget proposal:
ON Capitol Hill, ideological consistency is not a highly ranked virtue but its absence is useful grounds for scolding the opposition. David Stockman endured considerable needling when his budget appeared, revealing that many programs that he had opposed as a congressman had survived. The most glaring was the fast-breeder nuclear reactor at Clinch River, Tennessee. Why hadn't Stockman cut the nuclear subsidy that he had so long criticized? The answer was Senator Howard Baker, of Tennessee, majority leader. "I didn't have to get rolled," Stockman said, "I just got out of the way. It just wasn't worth fighting. This package will go nowhere without Baker, and Clinch River is just life or death to Baker. A very poor reason, I know."
And, then, he laid the bombshell:
"None of us really understands what's going on with all these numbers," Stockman confessed at one point. "parts of the budget between policy action and the economic environment and all the internal mysteries of the budget, and there are a lot of them.You've got so many different budgets out and so many different baselines and such complexity now in the interactive. People are getting from A to B and it's not clear how they are getting there. It's not clear how we got there..."He went on, as it became clear to him that what he saw as necessary budget cuts were not going to be made:
Stockman was changing, in a manner that perhaps he himself did not recognize. His conversations began to reflect a new sense of fatalism, a brittle edge of uncertainty.It was candor such as this in the December 1981 article that resulted in President Reagan infamously taking Stockman "to the woodshed." It was never the same for him at OMB, despite his remaining at OMB into 1985.
"There was a certain dimension of our theory that was unrealistic..."
"The system has an enormous amount of inertia..."
"I don't believe too much in the momentum theory any more..."
"I have a new theory—there are no real conservatives in Congress..."
Now, on the ocassion of Reagan's 100th birthday, Lew Rockwell has taken the opportunity to publish Murray Rothbard's 1989 detailed takedown of the Reagan legacy. Stockman emailed Rockwell and commented on Rothbard's article:
Thanks for reprinting Murray Rothbard’s classic take-down of the “Reagan Revolution.” With the passage of time, the mythology only gets amplified—so people need to be reminded about the truth. I took a modest crack at this in the attached interview in which I reminded readers that the Reagan Revolution was a Lincoln Day Dinner speech! It never actually happened in the real world of fiscal policy. And as you might recall, program after program was saved by stalwart conservatives like Jesse Helms, Ed Meese, etc.There's a lot of hype surrounding Reagan and his legacy, but when all is analyzed and we keep in mind the current situation where the problems that Reagan supposedly solved, the deficit problem, the social security problem, etc. are major clouds over our heads today, the only conclusion that can be reached is one that bucks the positive popular view about Reagan. The truth is as Rothbard and Stockman state it:
There was no Reagan Revolution.Reagan came out of Hollywood a B actor and stayed that way. Always playing the tough guy and fighter for liberty, but never taking one inch of land for the cause. In truth, if he had more range as an actor, he should have played the role of President the way John Banner played the role of Seargeant Schultz in the series Hogan's Heroes. It would have been more honest, becasue when it came to the encroachments against liberty taking place all around Reagan, when he was President, he "saw nothing.".