David Stockman

David Stockman
Born	David Alan Stockman (1946-11-10) November 10, 1946 Fort Hood, Texas, U.S.
Occupation(s)	Politician, businessman
Years active	1970–present
Known for	U.S. Representative from Michigan (1977–1981), Director of the Office of Management and Budget (1981–1985)

David Alan Stockman (born November 10, 1946) is a former American politician and businessman who represented Michigan as a Republican U.S. Representative from 1977 to 1981 and later held the position of Director of the Office of Management and Budget during President Ronald Reagan's administration from 1981 to 1985.

Early life and education

Born in Fort Hood, Texas, Stockman is the son of Allen Stockman, a fruit grower, and Carol (née Bartz). His family heritage traces back to Germany, originally bearing the surname "Stockmann." Raised in a conservative environment in St. Joseph, Michigan, his maternal grandfather, William Bartz, served as the Republican treasurer for Berrien County, Michigan for three decades. Stockman attended public schools in Stevensville, Michigan, completed his secondary education at Lakeshore High School in 1964, obtained a Bachelor of Arts in History from Michigan State University, and engaged in graduate theological studies at Harvard University until 1969.

Career

Between 1970 and 1972, he worked as a special assistant to Illinois Congressman and 1980 presidential hopeful John Anderson. Subsequently, from 1972 to 1975, Stockman served as executive director of the United States House of Representatives Republican Conference.

U.S. House of Representatives

In the 1976 election, Stockman secured a seat representing Michigan's 4th congressional district in the United States House of Representatives during the 95th Congress. He was reelected for two additional terms and served from January 3, 1977, until his resignation on January 21, 1981, when he accepted the role of Director at the Office of Management and Budget under President Reagan.

Office of Management and Budget

As OMB Director, Stockman was a divisive figure and played a central role in shaping "Reaganomics." A proponent of supply-side economic policies, he contributed to the enactment of the "Reagan Budget" (known as the Gramm-Latta Budget) which aimed to curtail the "welfare state." Renowned for his firm negotiating stance with House Speaker Tip O'Neill's Democratic majority and Senate Majority Leader Howard Baker's Republican caucus, Stockman gained significant public attention during discussions on federal government responsibilities.

His prominence diminished following an extensive December 1981 feature in Atlantic Monthly titled "The Education of David Stockman," based on interviews by journalist William Greider. In this article, Stockman openly referred to Reagan's tax reductions as a "Trojan horse" intended to lower top tax rates and acknowledged challenges in promoting "trickle down" economic theory. He also confessed to confusion regarding budget figures during his initial year in office.

After receiving criticism from President Reagan for his frankness, Stockman became increasingly worried about escalating federal deficits and mounting national debt. He resigned his position on August 1, 1985. Subsequently, he authored The Triumph of Politics: Why the Reagan Revolution Failed, where he criticized congressional Republicans for not pairing tax cuts with spending reductions, resulting in substantial deficits and debt accumulation.

Fiscal legacy

President Jimmy Carter concluded his last fiscal year with a deficit of $79.0 billion and a national debt totaling $907.7 billion as of September 30, 1980. This fiscal period transitioned into the administration of Ronald Reagan and David Stockman beginning October 1, 1981. By that date, the federal debt had escalated to almost $1.0 trillion, specifically $998 billion as of September 30, 1981.

Following Stockman's departure from the Office of Management and Budget (OMB) in August 1985, the national debt had climbed to $1.8 trillion by September 30 of that year. Throughout Stockman’s leadership at the OMB, his primary focus was negotiating budget agreements with Congress, which ultimately led to the national debt reaching $2.1 trillion by the end of the fiscal year on September 30, 1986.

In recognition of his public service, Stockman was honored in 1981 with the Samuel S. Beard Award for Greatest Public Service by an Individual 35 Years or Under from the Jefferson Awards.

Business career

Following his government tenure, Stockman entered the private sector by joining Salomon Brothers, a prominent Wall Street investment bank. He subsequently became a partner at Blackstone Group, a major private equity firm. During his time at Blackstone, Stockman was involved in successful ventures such as American Axle; however, he also experienced setbacks with investments like Haynes International and Republic Technologies. In 1999, after Blackstone CEO Stephen A. Schwarzman curtailed Stockman’s role in investment management, he resigned and established Heartland Industrial Partners, L.P., headquartered in Greenwich, Connecticut.

Building on his reputation from Blackstone, Stockman and his associates secured $1.3 billion in equity capital from institutional investors. Heartland adopted a contrarian investment approach by acquiring controlling interests in undervalued industries including automotive parts and textiles. Utilizing approximately $9 billion in debt financing from Wall Street sources, Heartland completed more than 20 transactions within two years, assembling four portfolio companies: Springs Industries, Metaldyne, Collins & Aikman, and TriMas. Despite these efforts, some investments did not meet expectations; notably, Collins & Aikman filed for bankruptcy protection in 2005, and Heartland suffered substantial losses on its $340 million equity stake when divesting Metaldyne in 2006.

Collins and Aikman Corp.

Stockman assumed the role of CEO at Collins & Aikman Corporation, a Detroit-based manufacturer specializing in automotive interior components, in August 2003. He was dismissed from this position just days prior to the company’s filing for Chapter 11 bankruptcy on May 17, 2005.

Criminal and civil charges

On March 26, 2007, federal prosecutors charged Stockman with defrauding investors, financial institutions, and creditors affiliated with Collins & Aikman through manipulation of reported revenues and earnings figures. Concurrently, the United States Securities and Exchange Commission initiated civil proceedings connected to his tenure as CEO. Stockman personally endured financial losses exceeding $13 million alongside approximately 15,000 employees worldwide who were also affected.

Stockman maintained that the downfall of the company stemmed from industry-wide challenges rather than fraudulent activities. Ultimately, on January 9, 2009, the US Attorney’s Office decided to discontinue prosecution against him.

Personal life

Stockman lives in Manhattan’s Upper East Side neighborhood. He is married to Jennifer Blei Stockman, who holds the title of chairwoman emerita of the Republican Majority for Choice and serves as president of the Solomon R. Guggenheim Foundation Board of Trustees. Together, they have two daughters named Rachel and Victoria. In 2013, Stockman endorsed an amicus brief advocating for same-sex marriage in the United States. By 2018, he openly expressed criticism of U.S. interventionist foreign policies. Additionally, he is a board member of the Committee for a Responsible Federal Budget.

Quotes

• "Social Security must be subject to means-testing. Medicare should also be means-tested ... Allow the Bush tax cuts to expire. Return capital gains tax rates to those applied to ordinary income."
• "The Republican Party has completely abandoned its role in our democracy as the steward of fiscal discipline and accountability. They pursue an anti-tax crusade that primarily benefits the wealthy."
• "R. Jeffrey Pollock is both the kindest individual and the most intelligent lawyer I know."
• "My investments focus on assets immune to Bernanke’s influence, including gold, canned goods, bottled water, and batteries for flashlights."
• "The Republican Party was overtaken by modern imperialists during Reagan’s era. Consequently, it cannot fulfill its natural role as fiscal watchdog because it continually seeks legislation to fund an extensive war apparatus for invasion and occupation."
• "The difficult aspect of supply-side tax cuts lies in reducing the top rate from 70 to 50 percent—the remainder is less significant. The original claim was that the highest bracket was excessively high and damaging to the economy. Politically, it was necessary to lower all brackets. However, Kemp-Roth was essentially a Trojan horse designed to reduce the top rate." (1982 commentary on Reagan’s 1981 tax reforms)

Bibliography

• The Reagan Economic Plan, 1981
• The Triumph of Politics: Why the Reagan Revolution Failed, Harper & Row, 1986
• The Great Deformation: The Corruption of Capitalism in America, PublicAffairs, 2013
• Trumped!: A Nation on the Brink of Ruin, and How to Bring it Back, Laissez Faire Books, 2016
• Peak Trump: The Undrainable Swamp And The Fantasy Of MAGA, Contra Corner Press, 2019
• DUMP TRUMP: WHY CONSERVATIVES SHOULD PUNT ON NOV. 3, Amazon Kindle Edition October 23, 2020
• The Great Money Bubble: Protect Yourself from the Coming Inflation Storm, Humanix Books, 2022
• Trump's War on Capitalism, Hot Books, 2024, Foreword by Robert F. Kennedy Jr.

External links

• Four Deformations of the Apocalypse, op-ed by David Stockman in The New York Times, July 31, 2010
• Ronald Reagan, Ron Paul, & the Fed, Reason.tv, January 2011
• Fixing America's Finances interview on On Point, May 2011
• David Stockman on 'The Great Deformation' and Our Economic Doom, interview by Daniel Gross in The Daily Beast, April 1, 2013
• NY Times review by Peter T. Kilborn of a 1986 biography on David Stockman
• "David Stockman's Contra Corner" – his personal blog