Doing well, doing good
After a career that ranged from serving as Richard Nixon’s commerce secretary to starting private equity giant The Blackstone Group, Pete Peterson, MBA’51, pledged $1 billion last year to form the Peter G. Peterson Foundation to spur public action on long-term economic problems in the United States. Its first major initiative was a documentary called I.O.U.S.A.
What made you launch the foundation?
I had a windfall from Blackstone going public, and suddenly I was confronted with the possibility that I would be an instant billionaire. I thought I certainly already had more than enough money. I decided to create a foundation to deal with the issues I’ve been railing about for 25 years—long-term fiscal and economic challenges facing the United States. And I call them undeniable, unsustainable, but politically untouchable. I decided there was room for a foundation—different from certain other think tanks—that would focus on the long-term, and focus on trying to do something about these problems.
The first big project was funding a movie called I.O.U.S.A., which explains the melancholy fiscal future. We have a major number of efforts aimed at young people because they’re largely uninvolved, yet it’s their future that’s imperiled. We’ve given money to mtvU, which partnered with us to create the InDebtEd campaign aimed at college students. InDebtEd has a great website and is currently developing a video game centered on personal financial responsibility.
What do you think it will take for individuals to change? Or politicians?
We’re doing something that I understand is quite rare in foundations—getting involved in citizen engagement and awareness. We have to inform the public because they have been anesthetized by a political process that does not want to tell them the hard truths. We don’t think young people understand their payroll taxes would have to double to cover the current promises that have been made. In my opinion, that is unthinkable. Once people are educated, they also have to be motivated to act. It ultimately has to get expressed in Washington, and we understand that. But first there has to be increased awareness.
Do you think there is something that the business community—including MBAs from Chicago Booth—can do?
Business can be a huge force in Washington when it gets focused and energized. It just has not been focused on these longer term issues. If the business community were to decide these long-term challenges were dangerous to the health of their businesses, they could be a much bigger force than they are now. Most executives know these long-term issues are unsustainable and undeniable, but many are preoccupied with running far more global, competitive businesses, and they probably feel they don’t have the time to get involved in what may turn out to be controversial crusades that deal with these longer-range issues.
Which of the professors you had at the University of Chicago still stand out in your mind?
Milton Friedman, George Stigler, James Lorie, and John Jeuck. George Stigler used to say, “If you have no alternative, you have no problem.” Remembering that, however daunting these long-term fiscal challenges, I decided I had no alternative but to try to do something about these problems. It’s amazing how that Stigler principle has stuck with me in life.
Interviewed by Patricia Houlihan, courtesy of the Chicago Booth Magazine
