David Stockman
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David Alan Stockman (born November 10, 1946) was a U.S. politician and businessman, serving as U.S. Representative from the state of Michigan 1977-1981 and as the Director of the Office of Management and Budget 1981-1985.
Stockman was born in Fort Hood, Texas and educated in the public schools of St. Joseph, Michigan. He graduated from Lakeshore High School in 1964 and received a B.A. from Michigan State University, East Lansing in 1968. He pursued graduate studies at Harvard University, 1968-1970 and 1974-1975. He served as special assistant to United States Representative John Bayard Anderson of Illinois, 1970-1972 and was executive director, United States House of Representatives Republican Conference, 1972-1975.
Stockman was elected to the United States House of Representatives for the Ninety-fifth Congress and was reelected to the Ninety-sixth and Ninety-seventh Congresses, serving from January 3, 1977, until his resignation January 27, 1981 to accept appointment as Director of the Office of Management and Budget under U.S. President Ronald Reagan.
Stockman emerged as one of the most powerful and controversial OMB directors ever during a tenure that lasted until his resignation in August 1985. His legacy is still evidenced over a generation later with the continued expansion of the national debt and the politics of spending growth coupled with tax cuts. Committed to the doctrine of supply-side economics, Stockman took the lead in directing passage 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'Neil's Democratic-controlled House of Representatives and Majority Leader Howard Baker's Republican-controlled Senate.
Stockman became a leading public face of the so-called "Reagan Revolution", and attracted notoriety when he proposed classifying ketchup as a vegetable for the purposes of federally financed school lunch programs (it would make it cheaper to satisfy the requirements on vegetable content of lunches). The suggestion was widely ridiculed, and the proposal was killed.
Stockman's power within the Reagan Administration waned after the Atlantic Monthly magazine published the famous article, "The Education of David Stockman", in its December 1981 issue based on lengthy interviews Stockman gave to reporter William Greider. It led to Stockman being 'taken to the woodshed by Reagan' as the White House's PR team tried to deal with the article's damage to Reagan's perceived fiscal leadership skills. Stockman was quoted as referring to the Reagan Revolution's legacy 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 in 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 turned out to be the subtitle of the 1981 Atlantic Monthly article.
After his first year at OMB and on the heels of 'being taken to the woodshed by the president' over his candor with Atlantic's William Greider, Stockman became disillusioned with the projected trend of increasingly large federal deficits and the rapidly expanding national debt as a result of the Reagan tax cut. (Ronald Reagan's administration inherited a National Debt of $1.0 Trillion at fiscal year end, (10/1/81), of Jimmy Carter's last executed and implemented budget.) In 1986, he wrote a book titled The Triumph of Politics: Why the Reagan Revolution Failed that, in part, specifically criticized the failure of Congressional Republicans to support a reduction in government spending, as necessary offsets to the large tax cuts, that would have avoided the creation of large deficits and an exploding national debt.
He was managing director of Salomon Brothers and eventually became senior managing director of a New York-based investment bank, the Blackstone Group, in the 1990s. He left Blackstone in 1999 to start his own industrial focused private equity firm, appropriately named Heartland Industrial Partners, L.P., based in Greenwich, Connecticut.[1].
On the strength of his investment track record at Blackstone, Stockman and his partners raised $1.3 billion of equity from institutional and other investors. Under Stockman's guidance, Heartland pursued 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.
In August 2003, Stockman installed himself as CEO of Collins & Aikman Corp., a Detroit-based manufacturer of automotive interior components. He was ousted from that role days before a Chapter 11 filing on May 17, 2005.
Stockman lives in Greenwich, Connecticut.[1]
[edit] Footnotes
- ^ a b "Collins & Aikman seeks to emerge from bankruptcy," Bloomberg News article by Jeff Bennett, appearing in The Advocate of Stamford and (identical version, perhaps with changes by the local editor in the common business section for both papers) in the Greenwich Time on September 5, 2006, page A7, The Advocate
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