An Interview With Pete Peterson

Peter G. Peterson

Image: James Leynse/Getty Images

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Peter G. Peterson is a man of parts: leveraged-buyout billionaire, policy wonk, social lion, and—most recently—the patron of an ambitious new foundation (named, like the Washington think tank he chairs, after himself) that aims to alert Americans to the dangers of mushrooming deficits, exploding entitlements, and gluttonous oil addiction.

At 81—rich, privileged, and well-connected beyond his dreams—Pete Peterson is an unlikely Paul Revere. He's the Nebraska-born son of striving Greek immigrants, who studied hard, excelled in business (rising through the ranks of the McCann Erickson advertising agency and then running Bell & Howell), and impressed the likes of philanthropist John D. Rockefeller III and former Treasury secretary Douglas Dillon with his public-spirited bent. They sponsored his induction into the American Establishment, and Peterson ended up serving as Richard Nixon's international economics expert, and then Commerce secretary, before running Lehman Brothers for more than a decade. In 1985, Peterson was nearly 60—and ripe for a rewarding retirement—when he and a young financial whiz named Stephen Schwarzman decided to start a small private equity firm, the Blackstone Group, whose name was an amalgam of theirs (schwarz meaning black in German and petros meaning stone in Greek). Now the senior chairman of the hugely successful firm, Peterson received $1.8 billion as a result of Blackstone's initial public offering and plans to pump as much as a billion dollars of his own money into his new foundation. Three weeks ago, he sat down with Portfolio.com for an exclusive interview.

Lloyd Grove: You have launched this foundation that is hugely ambitious. It's going to tackle everything from the federal deficit to the insolvency of our health-care system to our energy policy or lack thereof, and any number of other issues. Why should we believe that this one will go beyond its good intentions and bright ideas and actually have some impact on public policy and the way we live?

Pete Peterson: I think that is truly the central question. I was presumably educated at the University of Chicago. One of my professors used to say if you have no alternative, you have no problem. And I would agree that taking on some of these challenges that I call undeniable, unsustainable, and yet untouchable politically up to now, is a very daunting task. But I've thought about the alternative. The alternative is to do nothing essentially and to say that this is just the nature of things in America. But I think of what could possibly happen to this wonderful country that's been so good to me. I think we're at a make-or-break point in America, and if we continue to deny these challenges, which I do think are unsustainable, then in not too many years, we'll become a very different country. And since I'm the lucky, lucky recipient of the American dream—the son of poor Greek immigrant parents who came over here without a penny or without a word of English, with very little education. I had a father who emphasized giving back. I've had a big windfall from the Blackstone public offering. I've got more than enough financially, and I think it's worth a very serious try.

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