• 12 Sep 2011 at 5:32 PM

Steve Schwarzman Has Some Helpful Ideas For Obama

He gets it: no more comparing Obama to Hitler. The new plan is subtlety, which is why the Blackstone boss took to the FT today to show the President an olive branch. Then he whacked Obama with it repeatedly.

His best piece of advice? If you really want to fix what ails America, maybe you should get a private equity executive to turn things around. Just saying.

The US economy resembles a business badly needing turnround. Its growth is anaemic. Like many a faltering business, it has too much debt. No one, least of all S&P, believes that the latest deficit reduction package will solve this. There is too little investment. Corporations and consumers are cautious about spending, while the recent sharp drop in equity prices shows that investors do not want to risk capital in the market.

My firm has invested in, and advised on, hundreds of businesses in the past 25 years and we’ve seen companies successfully overcome such challenges.

But until someone can think of a person who (1) has experience in private equity and (2) would consider taking the job of running the country, Schwarzman’s got to deal with the people who are in charge now. And he knows that, historically speaking, recessions and inequality don’t always end well for the people eating the crab claws:

I believe that most Americans will be willing to sacrifice for economic stability and a bright future for our children, if the deal falls equitably on all shoulders. I know I’d prefer the short-term pain while working together towards a shared solution to the long-term pain of another recession, social unrest, or worse.

The sacrifices he calls for include a flat tax, reducing Medicare and Social Security, and otherwise cutting programs that Schwarzman relies on to get by. Not a sacrifice he’s willing to make, however, would be treating carried interest as ordinary income.

The toughest sacrifice for some to accept, however, will not be financial but emotional: to get our country back on track, not only will you have to accept lower Social Security payments, you’ll also have to spend less time making fun of Steve Schwarzman for demanding that you accept lower Social Security payments.

This problem began when the administration sought to attribute blame for the financial and economic crisis and alienated large segments of the business and banking community. They cast them as villains regardless of their culpability. Predictably, business reacted with fear and limited economic expansion, hiring and new lending. … Unless we end targeted class warfare in the US, we cannot solve our economic problems or stop a long period of potential decline.

An olive branch to Obama: I will share the pain (FT, Blackstone)

109 comments (hidden to protect delicate sensibilities)
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Comments (109)

  1. Posted by Roomy Khan | September 12, 2011 at 5:39 PM

    Awesome tags! About as exciting as Bobby Flay's face.

  2. Posted by Still Missing Bess | September 12, 2011 at 5:39 PM

    The most important question this post fails to answer is why is Steve's watch sitting like that on his wrist? Poor form.

    Also amazed there is no chart accompanying this showing the correlation of carried interest to defecit reduction.

  3. Posted by Guest | September 12, 2011 at 5:46 PM

    Wait, isn't there a PE guy running for President?

    – AIG Political Quant

  4. Posted by Idiot Savant | September 12, 2011 at 5:49 PM

    A chart showing DEFECIT reduction would be something.

  5. Posted by Roger Waters | September 12, 2011 at 5:58 PM

    The way you made them suffer, your poor PE managers, fills me with the urge to DEFECATE!!!

  6. Posted by Guest | September 12, 2011 at 5:59 PM

    Disparaging class warfare when you're in top 0.1% of the nation by net worth is the NKI.

  7. Posted by Rip Van Winkle | September 12, 2011 at 6:02 PM

    "For the first time in my 40-year career in finance, I am genuinely concerned by our long-term economic prospects."

    Really? No concerns when the government had to come into take care of Bear, Freddie, Fannie, AIG, GM, Citi, BofA? Now is the very, very first time that you're concerned?

  8. Posted by Stone Crab | September 12, 2011 at 6:08 PM

    He qualified it with the term "genuinely."

  9. Posted by Sean | September 12, 2011 at 6:11 PM

    Did anyone ever notice leaders of financial institutions tend to favor policy that would bolster their bonus?

  10. Posted by Steve S. | September 12, 2011 at 6:22 PM

    Might want to fire up the zero generator on your calculator there, Tex.

  11. Posted by Guest | September 12, 2011 at 6:34 PM

    You tell 'em Steve.

    Those gov't clowns are loading up on debt like its a tax shield.

  12. Posted by trojan_ | September 12, 2011 at 6:55 PM

    Old Killing It, circa 1888
    -A.W. Mellon

  13. Posted by Guest | September 12, 2011 at 6:58 PM

    Surprised Matt didnt link his earlier post on Carlyle's IPO or PE=debt loading tax shield.

  14. Posted by bogey4 | September 12, 2011 at 6:58 PM

    He deserves a good kick in the balls.

  15. Posted by nice_sentiment_but | September 12, 2011 at 7:35 PM

    balance sheets of governments with floating exchange rates, independent monetary policy, and fiat currency are not anything like corporations, households, individuals.

    but then again, when steve graduated college we were under the gold standard… so….

  16. Posted by Classy Warfare | September 12, 2011 at 7:46 PM

    I only wish I could be as big of a patriot as Steve – screw all of the little people in Stamford, bring me more pizzas bitchez. They don’t need a car to deliver pizza anyway, but I do need another Honda. They don’t need Medicare to fix their busted hips from walking too much, but I need another knee surgery because too much pizza and squash in my own private court. They don’t need cheap loans, but I must have forgivable ones for staying here and employing their loser asses.

    ~UBS MD

  17. Posted by Classy Warfare | September 12, 2011 at 8:26 PM

    I only wish I could be as big of a patriot as Steve – screw all of the little people in Stamford, bring me more pizzas. They don't need a car to deliver pizza anyway, but I do need another Honda. They don't need Medicare to fix their busted hips from walking too much, but I need another knee surgery because too much pizza and squash in my own private court. They don't need cheap loans, but I must have forgivable ones for staying here and employing the losers.

    ~UBS MD

  18. Posted by Brooke | September 12, 2011 at 9:18 PM

    The clutter in his office is too distracting.

    This website has turned into crap.

  19. Posted by early_hominid | September 12, 2011 at 10:11 PM

    That, Steve, is the shittiest fitting suit I've seen in a long time.

    your tailor = member of Fight Club?

  20. Posted by Tuckhead | September 12, 2011 at 10:45 PM

    Kill yourself

  21. Posted by geoffgeoffgeoff | September 13, 2011 at 1:31 AM

    He looks so "deer hunted" in that pic.

  22. Posted by Cut Me | September 13, 2011 at 9:33 AM

    That was merely a flesh wound.
    -Black Knight, Blackstone Guard

  23. Posted by Guest | September 13, 2011 at 11:18 AM

    Instead of defecating, try decafinating.

  24. Posted by guest | September 13, 2011 at 11:30 AM

    Should have said "with all due respect " first, then you can say anything after.

  25. Posted by JohnAGordon | September 13, 2011 at 11:55 AM

    The central misconception in Steve's comments is that government is NOT a business. Different motives, drivers, customers, etc. That being said, some aspects of business management are useful in government.

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    Too Matt, Didn't Read….

    We need more lulz mixed-in with the depressing news Matt.

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