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)