Ed Driscoll

The Collapse of Jon Corzine

“Thus, the Obama stimulus, which wasted a trillion dollars of our children’s future earnings, was inspired and perhaps designed by an inveterate reckless gambler and financial mismanager.” Needless to say, there’s plenty of red meat here on the former governor of New Jersey from Ross Kaminsky of the American Spectator:

In the end, Corzine’s [Long Term Capital Management]-related activities cost Goldman about half a billion dollars. In other words, he wasn’t forced out of Goldman because he didn’t “consult” with other partners. It was because he was, and obviously remains, an out-of-control gambler—and I say that as a professional trader inclined to give other traders the benefit of the doubt.

IT WASN’T JUST HIS Goldman activities that should have given MF Global second thoughts before hiring Jon Corzine. His financial management of the State of New Jersey while serving as its governor from 2006 to 2010 was little short of professional misconduct.

Perhaps the best description of Corzine’s mismanagement came, not surprisingly, from his successor, Chris Christie, in a February 2011 speech at the American Enterprise Institute:

When I came into office we confronted a $2.2 billion budget deficit for fiscal year ’10. The one that had five months left. The one that Governor Corzine told me was just fine, cruise path into the end of the fiscal year; Governor, don’t worry about it, everything is fine. $2.2 billion…Imagine that. The state that has the second highest per capita income in America had so over-spent, over-borrowed, and over-taxed—that it would not meet payroll in March of 2010. So we acted immediately to use the executive authority of the governorship to impound $2.2 billion in projected spending…without raising taxes on the people of the state who had had their taxes raised and fees 115 times in the eight years preceding my governorship. 115 tax and fee increases in eight years.

Corzine has given nearly $3 million dollars to Democrats, mostly through donations to the Democratic National Committee, as well as serving as major “bundler” for Barack Obama’s presidential campaigns.

So it should come as no surprise that two of Jon Corzine’s biggest supporters are Barack Obama and Vice President Joe Biden. At a Corzine campaign rally in Edison, New Jersey, in October 2009, speaking of the administration’s quandary regarding how to deal with the banking turmoil in 2008, Biden made it clear why, in retrospect, the Obama administration’s economic policies are so reckless and confused:

I literally picked up the phone and called Jon Corzine and said “Jon, what do you think we should do?” The reason why we called Jon is because we knew he knew about the economy, about world markets, about how we had to respond, unlike almost anyone we knew.

Biden went on to say that Corzine gave the administration the framework for a national economic recovery plan. Thus, the Obama stimulus, which wasted a trillion dollars of our children’s future earnings, was inspired and perhaps designed by an inveterate reckless gambler and financial mismanager.

Maybe (soon to be) poor Jonny C is just accident-prone. After all, a 2007 SUV accident (in which Corzine was a front-seat passenger) left him with multiple broken bones, in critical condition, and breathing through a tube. The state trooper driving the vehicle was going 91 MPH (presumably with Corzine’s consent) and Corzine was not wearing his seat belt. If that isn’t a perfect analogy for Jon Corzine’s professional career, I don’t know what is. And maybe he accidentally had a two-year affair with the president of one of New Jersey’s largest state employee unions, after which his ex-wife, Joanne, said that “Jon did let his family down, and he’ll probably let New Jersey down, too.”

Seriously, who would hire this guy?

Read the whole thing. Back in 2004, John Fund wrote an essay for the Wall Street Journal titled “Louisiana North,” calling New Jersey a “pit of corruption.” (And it is.) If Kaminsky’s descriptions of Corzine’s financial misadventures are accurate, the state had a legendary — and as Kaminsky writes, reckless — riverboat gambler sitting in the captain’s chair of the riverboat.