awards

Peter G. Peterson, Chairman, Blackstone Group
September 21, 2005
Thank you, Rabbi Schneier for what you said. And, I am more than honored to even be in the same company as Prime Minister Howard and Jorma Ollila. I don't deserve those kind words...but then I have arthritis and I don't deserve that either, so what the heck.

I'm going to be brief and, perhaps uncharacteristically, to the point. I think it is natural to feel that at an Appeal of Conscience Award dinner I can admit that I have a very guilty conscience. I do so tonight as a citizen, businessman, father of five, and a grandfather of nine. I also do so for our collective misdeeds as well as my own.

I know that moralizing does not come convincingly from an investment banker. But, perhaps at this ecumenical evening, you might at least listen to my confession of sins.

First, where do I come from?

Both my parents came to America penniless from impoverished Greek farming villages. Neither had any formal education, nor could they speak or understand a single word of English. Both mourned leaving their family, perhaps never to see them again. At the same time, both had a daunting mix of fear of what they might confront in this strange,

new land and of hope that the American Dream would be real for them, too.

My father took a job that no one else would take, as a dishwasher in a steamy kitchen of a caboose of a Union Pacific railroad car. He worked and slept there, and literally saved everything he earned. Some of these savings went to his impoverished family in Greece. The rest was invested in the proverbial Greek restaurant-his own-distinguished not for its cuisine, to be sure, but for the fact that it was open 24 hours a day, for 365 days a year, and for 25 years. And, alas, he worked there in his Kearney, Nebraska restaurant for all too many of these hours, days and years.

His vision of the American Dream, included himself and my mother, of course, but it certainly included his two sons as well. As he put it, he would buy us the best education money could buy so that we would have better lives than he. And I stand here tonight as the very lucky beneficiary of that vision and dream, and of the lessons my parents taught me.

Millions of others in my parent's generation also had not only the shared vision of the future and the shared responsibility for that future, but also the required sense of shared sacrifice to fulfill that future. If they were to wage the biggest war in history and provide, for example, for a G.I. Bill of Rights for returning veterans, they would have to pay for it. No free lunch for them.

Today, we face deficits and debts that would have been unthinkable in times past. We face unfunded promises for Social Security and Medicare, for 77 million baby boomers that aggregate trillions of dollars more than the entire net worth of the country. We recklessly and casually borrow nearly $3 billion every workday from foreign sources - an unthinkable amount equivalent to about 7% of the entire Gross Domestic Product of the country. We now confront the added burdens of hundreds of billions of dollars for the Katrina disaster, and we have the protracted and costly Iraq war, of course.

Long before Katrina, the vast majority of serious experts called this outlook utterly unsustainable. Speaking of unsustainable, a colleague in the Nixon administration, Herbert Stein, used to say "if something is unsustainable, it tends to stop." And, he said "If you don't like that one, how about if your horse dies, I suggest you dismount." Are we deluded enough to believe that we can continue to ride this horse? So, faced with this daunting future, what is the political response? I am an equal opportunity basher. I bash both parties, including my own. At a time of ballooning deficits as far as the eye can see, a protracted and costly war, the biggest domestic reconstruction effort in history, what are our political leaders asking us to give up? For example, what is the continuing preoccupation of many in my own party, the Republican party? It is, how do the Pete Petersons of this world get their income tax cuts made permanent and their estate taxes eliminated?

One might at well ask: In this all gain and no pain, all get and no give political world, has it become too politically incorrect or self-destructive to ever suggest that there are times when some of us mightbe expected to give up something for the greater good? I say: Shame on us all. What about my role, our role, as businessmen? Tom Friedman, the New York Times columnist among others, recently referred to us as MIAs - Missing In Action. He wondered why, for example, so few in the business community speak out about our soaring budget deficits and our unprecedented trade and current account deficits. Certainly our public policy leaders had made clear their sense of urgency. Former Federal Reserve Chairman, Paul Volcker recently wrote, "All together, the circumstances seem to be as dangerous and intractable as any I could remember, and I can remember for a long time."

And if we, as business persons, don't take the lead out of genuine civic concern, shouldn't we do so out of collective self-interest? That started me thinking. Was it romantic to imagine that there were ever many corporate statesmen? How many such business leaders have I known about? My memory is returned to the years just after World War II. The world was overwhelmed by colossal challenges. At home, we were managing the transition from a wartime society - including the demobilization of many millions of soldiers - to a peaceful, prosperous economy. Abroad, we were trying to rebuild a shattered world economy devoid of rules or institutions. A band of business leaders changed American history, including Paul Hoffman of Studebaker, Marion Folsom of Eastman Kodak and Bill Benton of Benton and Bowles. Recall that the 1930s had been defined by depression, isolationism, and beggar-thy-neighbor trade wars. In retrospect, the list of initiatives undertaken by this hearty band of businessmen is breathtaking: The Employment Act of 1946, The Bretton Woods Institutions, and the Marshall Plan. These business leaders not only formulated the policies, but took the lead in selling them and implementing them. When the Marshall Plan was announced, most Americans were wary of foreign adventures. Only 14% approved. Then these wise men of business went to work and helped lead a massive public educational effort. Eventually, America changed its mind. And what about our roles as parents and grandparents? I clearly need to add to my shallow moral portfolio, and do that now by quoting the noted German theologian, Dietrich Bonhoeffer, who once said, "The ultimate test of a moral society is the kind of world it passes on to its children."

We might ask, "Would we parents and grandparents knowingly slip a huge and hidden check to our own children and grandchildren for our free lunch?" "Of course not," we would say. We would never do that to our own children. Well, that is precisely what we are doing. How big is the hidden check? Think of it in these terms. My children's and grandchildren's payroll taxes would need to be more than doubled to cover the cost of Social Security and Medicare. This is unthinkable. Economically. Politically. And I would add, morally.

So I would like to call on us as citizens, as business people, as parents, as grandparents to confess our sins and to share in the sacrifices to meet our shared responsibilities.

And while we're at it, shouldn't you religious leaders, like those of you who are here tonight, help lead the way in what is nothing less than a moral reawakening of our great country? Come on in and march arm in arm. We need a movement. Let's move.
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