1 thought on ““Fiscal jabberwocky””

  1. AMLTrojan

    “Reagan’s OMB director” is as useful a past job title in describing David Stockman as “LBJ’s Attorney General” describes Ramsey Clark. If you want a better perspective on David Stockman and how seriously one should take him, just look at his post-political career:

    Business Career
    Having left government, Stockman joined the Wall St. investment bank Salomon Brothers and later became a partner at the now highly successful New York–based private equity firm, the Blackstone Group. His record was mixed at Blackstone, with some very good investments, such as American Axle, but also several large writeoffs, including Haynes International and Republic Technologies. In 1999, after Blackstone CEO Stephen A. Schwarzman curtailed Stockman’s role in managing the investments he had spearheaded, Stockman left Blackstone to start his own private equity fund, Heartland Industrial Partners, L.P., based in Greenwich, Connecticut.

    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. Several major investments performed very poorly, however. Collins & Aikman filed for bankruptcy in 2005 and when Heartland sold Metaldyne to Asahi Tec Corp. in 2006, Heartland lost most of the $340 million-plus of equity it had invested in the business.

    Collins & Aikman Corp.
    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.

    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 took while CEO of Collins & Aikman. 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 firm’s Web site that the company’s collapse was the consequence of an industry melt-down, not fraud. On January 9, 2009, the U.S. Attorney’s Office announced that it did not intend to prosecute Stockman in this case.

    I don’t understand why your filter for who to take seriously in politics is stricter for candidates and officeholders than pundits and commentators.

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