- David Stockman
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David Alan Stockman (born November 10, 1946) is a former U.S. politician and businessman, serving as a Republican U.S. Representative from the state of Michigan (1977–1981) and as the Director of the Office of Management and Budget (1981–1985).
Contents
Early life and education
Stockman was born in Fort Hood, Texas, the son Allen Stockman, a fruit farmer, and Carol (née Bartz).[1] He is of German descent and his family's surname was originally "Stockmann".[2] He was raised in a conservative family and his maternal grandfather, William Bartz, was a Republican county treasurer for 30 years.[citation needed] Stockman was educated at public schools in Stevensville, Michigan. He graduated from Lakeshore High School during 1964 and received a B.A. from Michigan State University, East Lansing, during 1968. He performed graduate studies at Harvard University, 1968–1970 and 1974–1975. He attended Harvard Divinity School.[3]
Political career
He served as special assistant to United States Representative and 1980 Presidential candidate John Anderson of Illinois, 1970–1972, and was executive director, United States House of Representatives Republican Conference, 1972–1975.
Congress
Stockman was elected to the United States House of Representatives for the 95th Congress and was reelected by two subsequent elections, serving from January 3, 1977, until his resignation January 27, 1981, to accept appointment as Director of the Office of Management and Budget for U.S. President Ronald Reagan.
Office of Management and Budget
Stockman became one of the most controversial OMB directors ever during a tenure that lasted until his resignation during August 1985. Committed to the doctrine of supply-side economics, he assisted the approval of the "Reagan Budget" (the Gramm-Latta Budget), which Stockman hoped to be a serious curtailment of the "welfare state", gaining a reputation as a tough negotiator with House Speaker Tip O'Neill's Democratic-controlled House of Representatives and Majority Leader Howard Baker's Republican-controlled Senate. During this period, although only in his early 30s of age, Stockman became well known to the public during the contentious political wrangling concerning the role of the federal government in American society.
Stockman's influence within the Reagan Administration decreased after the Atlantic Monthly magazine published the famous 18,246 word article, "The Education of David Stockman",[3] in its December 1981 issue, based on lengthy interviews Stockman gave to reporter William Greider. The White House's public relations team thereafter attempted to limit the article's damage to Reagan's perceived fiscal-leadership skills. Stockman was quoted as referring to Reagan's tax act as: "I mean, Kemp-Roth [Reagan's 1981 tax cut] was always a Trojan horse to bring down the top rate.... It's kind of hard to sell 'trickle down.' So the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory." Of the budget process during his first year on the job, Mr. Stockman is quoted as saying: "None of us really understands what's going on with all these numbers," which was used as the subtitle of the article.
After Stockman's first year at OMB and after "being taken to the woodshed by the president" due to his candor with Atlantic Monthly's William Greider, Stockman became inspired with the projected trend of increasingly large federal deficits and the rapidly expanding national debt. On 1 August 1985, he resigned OMB and later wrote a memoir of his experience in the Reagan Administration titled The Triumph of Politics: Why the Reagan Revolution Failed (ISBN 0060155604), in which he specifically criticized the failure of congressional Republicans to endorse a reduction of government spending as necessary offsets to the large tax decreases, in order to avoid the creation of large deficits and an increasing national debt.
Fiscal legacy
President Jimmy Carter's last signed and executed fiscal year budget results ended with a $79.0 billion budget deficit, ending during the period of David Stockman's and Ronald Reagan's first year in office, on October 1, 1981. The gross federal national debt had just increased to $1.0 trillion during October 1981 ($998 billion on 30 September 1981). Four and a half years into the Reagan administration, upon Stockman's resignation from the OMB during August 1985, the gross federal debt was $1.8 trillion on 9 September 1985. Stockman's OMB work within the administration during 1981 until August was dedicated to negotiating with the Senate and House about the next fiscal year's budget, executed later during the autumn of 1985, which resulted in the national debt becoming $2.1 trillion at fiscal year end 30 September 1986 and becoming $2.6 trillion at fiscal year end 30 September 1988.
Business career
Having left government, Stockman joined the Wall St. investment bank Salomon Brothers and later became a partner of the now very successful New York–based private equity company, the Blackstone Group.[4] His record was mixed at Blackstone, with some very good investments, such as American Axle, but also several large failures, including Haynes International and Republic Technologies.[5] During 1999, after Blackstone CEO Stephen A. Schwarzman curtailed Stockman's role in managing the investments he had developed,[6] Stockman resigned Blackstone to start his own private equity fund company, Heartland Industrial Partners, L.P., based in Greenwich, Connecticut.[7]
On the strength of his investment record at Blackstone, Stockman and his partners raised $1.3 billion of equity from institutional and other investors. With Stockman's guidance, Heartland used a contrarian investment strategy, buying controlling interests in companies operating in sectors of the U.S. economy that were attracting the least amount of new equity: auto parts and textiles. With the help of about $9 billion in Wall Street debt financing, Heartland completed more than 20 transactions in less than 2 years to create four portfolio companies: Springs Industries, Metaldyne, Collins & Aikman, and TriMas. Several major investments performed very poorly, however. Collins & Aikman filed for bankruptcy during 2005 and when Heartland sold Metaldyne to Asahi Tec Corp. during 2006, Heartland lost most of the $340 million-plus of equity it had invested in the business.[8]
Collins & Aikman Corp.
During August 2003, Stockman installed himself as CEO of Collins & Aikman Corporation, a Detroit-based manufacturer of automotive interior components. He was ousted from that job days before a Chapter 11 filing on May 17, 2005.
Criminal and civil charges
On March 26, 2007, federal prosecutors in Manhattan indicted Stockman in "a scheme ... to defraud [Collins & Aikman]'s investors, banks and creditors by manipulating C&A's reported revenues and earnings." At the same time, the Securities and Exchange Commission brought civil charges against Stockman related to actions he performed while CEO of Collins & Aikman.[9] Stockman suffered a personal financial loss, estimated at $13 million, along with losses suffered by as many as 15,000 Collins & Aikman employees worldwide. Stockman said in a statement posted on his law company's website that the company's end was the consequence of an industry decline, not fraud.[10] On January 9, 2009, the U.S. Attorney's Office announced that it did not intend to prosecute Stockman for this case.
Personal life
Stockman lives in Greenwich, Connecticut.[7] He is married to the former Jennifer Blei and is the father of two children, Rachel and Victoria. Jennifer Blei Stockman is a chairperson emeritus of the Republican Majority for Choice,[11] and President of the Solomon R. Guggenheim Foundation Board of Trustees.[12]
Quotes
“I invest in anything that Bernanke can’t destroy, including gold, canned beans, bottled water and flashlight batteries."[13]
"(Extending the Bush tax cuts is) rank demagoguery. We should call it for what it is. If these people were all put into a room on penalty of death to come up with how much they could cut, they couldn't come up with $50 billion, when the problem is $1.3 trillion. So, to stand before the public and rub raw this anti-tax sentiment, the Republican Party, as much as it pains me to say this, should be ashamed of themselves."[14]
"The Republican Party has totally abdicated its job in our democracy, which is to act as the guardian of fiscal discipline and responsibility. They're on an anti-tax jihad -- one that benefits the prosperous classes."[15]
References
- ^ Hunter, Marjorie (December 12, 1980). "Office of Management and Budget David Alan Stockman; Strong Support From Kemp Chosen by House Republicans Views on Economy". The New York Times. http://select.nytimes.com/gst/abstract.html?res=F30717F93F5512728DDDAB0994DA415B8084F1D3.
- ^ http://www.stockmanfamily.net/news65.htm
- ^ a b William Greider (December 1981). "The Education of David Stockman". The Atlantic Online. http://www.theatlantic.com/doc/print/198112/david-stockman.
- ^ David Carey and John E. Morris, King of Capital: The Remarkable Rise, Fall and Rise Again of Steve Schwarzman and Blackstone (Crown 2010), pp. 125-27.
- ^ Ibid., pp. 144-47.
- ^ Ibid., p. 146.
- ^ a b "Collins & Aikman seeks to emerge from bankruptcy," Bloomberg News article by Jeff Bennett, published in the newspaper The Advocate of Stamford and (identical version, perhaps with changes by the local editor in the common business section for both newspapers) in the Greenwich Time on September 5, 2006, page A7, The Advocate
- ^ David Carey and Lou Whiteman, "PE firms find buyer for Metaldyne," The Deal, Sept. 1, 2006.
- ^ "Stockman Outsmarts Self in Detroit by Doron Levin". Bloomberg, March 29, 2007
- ^ "Ex-Collins Chief David Stockman Charged With Fraud (Update10)". Bloomberg. March 26, 2007. http://www.bloomberg.com/apps/news?pid=20601103&sid=adfH6qwori34&refer=us. Retrieved 2010-08-02.
- ^ About Us Republican Majority for Choice
- ^ Trustees Guggenheim Foundation
- ^ http://www.cnbc.com/id/39539248
- ^ "Deficits: The Battle Over Taxing The Rich". CBS News. October 28, 2010. http://www.cbsnews.com/stories/2010/10/28/60minutes/main6999906.shtml.
- ^ Dickinson, Tim (Nov. 9, 2011). "How the GOP Became the Party of the Rich". Rolling Stone. http://www.rollingstone.com/politics/news/how-the-gop-became-the-party-of-the-rich-20111109. Retrieved 2011-11-10.
External links
- Biography at the Biographical Directory of the United States Congress
- Voting record maintained by The Washington Post
- Appearances on C-SPAN programs
- Ronald Reagan, Ron Paul, & the Fed: Q&A with David Stockman, Reason.tv
- Fixing America’s Finances interview on On Point.
United States House of Representatives Preceded by
Edward HutchinsonMember of the U.S. House of Representatives
from Michigan's 4th congressional district
1977–1981Succeeded by
Mark D. SiljanderPolitical offices Preceded by
James T. McIntyreDirector of the Office of Management and Budget
Served under: Ronald Reagan
1981–1985Succeeded by
James C. Miller IIIPrivate equity and venture capital investors Investment strategy 
History History of private equity and venture capital · Early history of private equity · Private equity in the 1980s · Private equity in the 1990s · Private equity in the 2000sInvestor types Private equity investors · Venture capitalists · Corporate raidersDirectors of the United States Office of Management and Budget Dawes · Lord · Roop · Douglas · D W Bell · Smith · Webb · Pace · Lawton · Dodge · Hughes · Brundage · Stans · D E Bell · Gordon · Schultze · Zwick · Mayo · Shultz · Weinberger · Ash · Lynn · Lance · McIntyre · Stockman · Miller · Wright · Darman · Panetta · Rivlin · Raines · Lew · Daniels · Bolten · Portman · Nussle · Orszag · Zients (Acting) · Lew
Categories:- 1946 births
- Living people
- Directors of the Office of Management and Budget
- Members of the United States House of Representatives from Michigan
- People from Greenwich, Connecticut
- People from Berrien County, Michigan
- Michigan State University alumni
- Private equity and venture capital investors
- Blackstone Group
- Michigan Republicans
- People from Texas
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