The Guru's of Supply Side Mostly Supplied Themselves EXAMPLE#1

[Knutey]

November 29, 2008
Stockman fraud trial puts Enron in the shade
Reaganomics and the credit crunch are in the dock at David A Stockman’s trial, says Neil Lyndon

The date has been set for what will surely be one of America's trials of the decade. Last week, a New York judge ruled that on May 4, 2009 - more than two years after he was indicted - David A. Stockman will go to trial on charges of fraudulent accounting and of misleading banks and shareholders.

Along with former colleagues who are now co-defendants, Stockman will be accused of overseeing the ruination of Collins and Aikman Corp - a Detroit-based supplier of components to the automotive industry which was founded in 1891 and supported 15,000 jobs worldwide. The sum total of the defendants' alleged malfeasance is $1.35bn.

That is a breathtaking figure even by the standards of Enron and Conrad Black. But David Stockman's trial will be uniquely fascinating because, in many ways, he is an even more emblematic figure of our age than Enron's Kenneth Lay or

Hollinger's Lord Black of Crossharbour.

The greedy yuppie culture of the 1980s, the credit-fuelled property boom of the last 10 years and, especially, the neo-conservative 'trickle-down' economic ambitions of a succession of Republican presidents, have all been embodied in this slight, earnest, dome-headed figure with his big, harvest mouse eyes and even bigger spectacles. Now, by the most acute paradox, as he stands awaiting trial, Stockman has become the living incarnation of the credit crunch and the impending crash of the Western world's economy.

From 1981-1985, David Stockman was President Reagan's budget director, the 20th century's youngest member of the US Cabinet. With his notorious "black books" of economic accounting ever present under his arm, Stockman was Washington's keeper of the holy scriptures of "the Reagan Revolution" which promised to reduce taxes, cut federal government spending and liberate the entrepreneurial spirit of American capitalism.

A former theology student at Harvard who had


Stockman was the mastermind of Reagan’s ‘supply-side’ policies
dabbled in left-wing student politics, he was the mastermind of Reagan's 'supply-side' policies, the theory drawn from Milton Friedman and Friedrich Hayek that government spending inhibited economic growth and that monetary control was the cure for inflation.

Not since Keynes was at the Treasury in the First World War had a more committed economic ideologue occupied so senior a post at the heart of a Western government. And nobody since Keynes has written more revealingly about the clash between abstract economic principles and the overriding demands of political expediency than Stockman did in his own book, The Triumph of Politics. Following his self-confessed failure to achieve the spending cuts and the balanced budget demanded by his creed, Stockman wrote a hair-raisingly detailed study of the Reagan government's fallibilities - including a merciless portrait of the homely old President's economic illiteracy - which is indispensable to the student of government.

After failing to liberate America's entrepreneurial spirit, Stockman gave rein to his own. He took a job with the


Stockman wrote a hair-raisingly detailed study of the Reagan government’s fallibilities
Wall St investment house Salomon Brothers, founded a private equity firm and then a private equity fund, Heartland Industrial Partners. He piled up tens of millions of personal wealth and bought a huge estate outside Greenwich, Connecticut.

It was Heartland which raised the $9bn worth of debt financing from Wall Street through which Stockman and his partners bought controlling interests in failing businesses in America's rustbelt industries. And it was that same debt-laden vehicle which acquired Collins and Aikman, where Stockman installed himself as CEO in 2003.

Less than two years later, Collins and Aikman filed for Chapter 11 protection from its creditors and Stockman was ousted. The historic company was liquidated last year.

Stockman and the others are now charged with falsifying Collins and Aikman's accounts in order to defraud investors and creditors and with siphoning millions of dollars from the ruined company in consultancy fees to Heartland. His lawyer claims he suffered a personal loss of $13m and says: "Here's a guy who was putting money in to keep the company afloat." A jury will decide. The world will watch.

FIRST POSTED SEPTEMBER 5, 2008
 

http://www.thefirstpost.co.uk/45273,features,reaganomics-and-the-credit-crunch-are-in-the-dock-at-david-a-stockman-trial

[BT]

Thought Stockman repudiated Reaganomics.

Besides the trial hasn't been held yet.

[Xavier_Onassis]

Reaganomics is dead. Whatever situation gave rise to it, has become defunct.

Stockman used his years as a learning experience. He starts as some sort of idealists, then realizes that the main goal is the enrichment of the few and becomes deceived. Eventually he takes the "if you can't beat 'em, join 'em" view and becomes one of them.

We shall see what the trial brings out. Unless there is a pardon.

[Knutey]

Reaganomics is dead. Whatever situation gave rise to it, has become defunct.

Stockman used his years as a learning experience. He starts as some sort of idealists, then realizes that the main goal is the enrichment of the few and becomes deceived. Eventually he takes the "if you can't beat 'em, join 'em" view and becomes one of them.

We shall see what the trial brings out. Unless there is a pardon.

True- And the language he uses to describe his disgust at the Repub greed is priceless:

STOCKMAN'S dour outlook was reinforced two weeks later, when the Reagan coalition prevailed again in the House and Congress passed the tax-cut legislation with a final frenzy of trading and bargaining. Again, Stockman was not exhilarated by the victory. On the contrary, it seemed to leave a bad taste in his mouth, as though the democratic process had finally succeeded in shocking him by its intensity and its greed. Once again, Stockman participated in the trading -- special tax concessions for oil -- lease holders and real-estate tax shelters, and generous loopholes that virtually eliminated the corporate income tax. Stockman sat in the room and saw it happen.

"Do you realize the greed that came to the forefront?" Stockman asked with wonder. "The hogs were really feeding. The greed level, the level of opportunism, just got out of control."

Indeed, when the Republicans and Democrats began their competition for authorship of tax concessions, Stockman saw the "new political climate" dissolve rather rapidly and be replaced by the reflexes of old politics. Every tax lobby in town, from tax credits for wood-burning stoves to new accounting concessions for small business, moved in on the legislation, and pet amendments for obscure tax advantage and profit became the pivotal issues of legislative action, not the grand theories of supply-side tax reduction. "The politics of the bill turned out to be very traditional. The politics put us back in the game, after we started making concessions. The basic strategy was to match or exceed the Democrats, and we did."

But you are right he got in line for the slop as well.

Knute:He has more money left than OJ so he might beat the rap.

[Plane]

And the part of his plan that didn't work was the failure to cut spending?

[Knutey]

And the part of his plan that didn't work was the failure to cut spending?

Actually, Ronnie did cut domestic spending almost 10% . It was his profligate and mostly wasteful defense spending that expanded his deficits. The argument is that our defense spending  caused the evil empire to fail by trying to keep up. In fact , it looks like it caused both of us to fail with a small respite from the insanity of gross useless spending by Clinton.

http://www.j-bradford-delong.net/movable_type/2004_archives/001014.html

[Plane]

no

http://www.cpcs.umb.edu/labor_notes/files/03710.pdf

Social Program spending rose every year of the Reagan era , but in the parlance of Democrats a rise less than the Democratic promise of a rise is a CUT.

That 10% is ten percent less of a raise than the Democrats were talking about.

Welfare did not get reformend or cut untill Clinton was presidnet.

[Xavier_Onassis]

Social Program spending rose every year of the Reagan era , but in the parlance of Democrats a rise less than the Democratic promise of a rise is a CUT.

==============================
You have to take into account that every years there are more people. Also, inflation means that even if the same person gets paid the same money, the money is worth less this year than last year.

REagan deserves kudos for maybe his hair. Which OF COURSE he dyed.

[Knutey]

no

http://www.cpcs.umb.edu/labor_notes/files/03710.pdf

Social Program spending rose every year of the Reagan era , but in the parlance of Democrats a rise less than the Democratic promise of a rise is a CUT.

That 10% is ten percent less of a raise than the Democrats were talking about.

Welfare did not get reformend or cut untill Clinton was presidnet.

You might want to actually read what you post:

If Ronald Reagan has his way, the
federal budget for the 1983 fiscal year
2 (beginning next October) will rise $34.3
billion. to $757.6 billion. The entire increase
is more than accounted for by
military spending, which will rise $59 Z billion, to $216 billion.
Q Total spending on entitlement pro-
J grams such as Social Security will aIso
increase, but the amount of money actually
received by most of the poor,
elderly, and ill will decrease. The
budget increases here are accounted for
by rises in Social Security and Medicare
spending, necessitated by the growing
number of older Americans, rising
medical costs, and to a lesser extent,
cost-of-living provisions.

The only domestic things he didnt cut was what he couldnt cut but he made his fatcat RW warmongering contributors richer. I know I worked for one at the time.

[Plane]

no

http://www.cpcs.umb.edu/labor_notes/files/03710.pdf

Social Program spending rose every year of the Reagan era , but in the parlance of Democrats a rise less than the Democratic promise of a rise is a CUT.

That 10% is ten percent less of a raise than the Democrats were talking about.

Welfare did not get reformend or cut until Clinton was president.

You might want to actually read what you post:

If Ronald Reagan has his way, the
federal budget for the 1983 fiscal year
2 (beginning next October) will rise $34.3
billion. to $757.6 billion. The entire increase
is more than accounted for by
military spending, which will rise $59 Z billion, to $216 billion.
Q Total spending on entitlement pro-
J grams such as Social Security will also
increase, but the amount of money actually
received by most of the poor,
elderly, and ill will decrease. The
budget increases here are accounted for
by rises in Social Security and Medicare
spending, necessitated by the growing
number of older Americans, rising
medical costs, and to a lesser extent,
cost-of-living provisions.

The only domestic things he didn't cut was what he couldn't cut but he made his fatcat RW warmongering contributors richer. I know I worked for one at the time.

That is right, the word CUT is an outright lie.

An increase smaller than demanded is not a cut .

I can easily stand by my statement , welfare was not cut during the Reagan era , social spending or every type increased each year, but if you don't care that I know better you can keep calling an increase a "cut" if you please.

[Plane]

Social Program spending rose every year of the Reagan era , but in the parlance of Democrats a rise less than the Democratic promise of a rise is a CUT.

==============================
You have to take into account that every years there are more people. Also, inflation means that even if the same person gets paid the same money, the money is worth less this year than last year.

REagan deserves kudos for maybe his hair. Which OF COURSE he dyed.

During Reagans tenure it did not become difficult to qualify for Welfare , perhaps he might have liked to do that but it was Clinton that could go to that China.

The Increases in social programs were mostly in response to inflation , but inflation was flatter during the Reagan regime than the Carter Regime.

Even if the increases were small , calling them "Cuts" is unfair and untrue.

[Xavier_Onassis]

If you spend $100 on ten people one year, and $102 on twelve people the next year, I suppose you would not call this a cut.

To the ten people who were in the group before it expanded, though, it was a cut in what they received: instead of $10, they received only $8.50, and that would buy only 80% of what they originally received, due to inflation.

Call it a cut or don't. Hell, call it "Bob" if you like, but the point is obvious.

[Plane]

If you spend $100 on ten people one year, and $102 on twelve people the next year, I suppose you would not call this a cut.

To the ten people who were in the group before it expanded, though, it was a cut in what they received: instead of $10, they received only $8.50, and that would buy only 80% of what they originally received, due to inflation.

Call it a cut or don't. Hell, call it "Bob" if you like, but the point is obvious.

It is so obvious that it doesn't matter that it isn't true.

In what respect were social programs cut on a per capata basis , when the entitlement was not cut on a percapata basis?

You can call it a cut or you can call it Bob but if it fits the dictionary definition of an increase why does it hurt your feelings to call it what it is?

[Xavier_Onassis]

It doesn't hurt my feelings at all. This was not my issue to start with.

I was just explaining how it could be a cut from one perspective and not another.

[Plane]

It doesn't hurt my feelings at all. This was not my issue to start with.

I was just explaining how it could be a cut from one perspective and not another.

It isn't a cut from the perspective of arithmatic.