For years Pete Peterson has been the Don Quixote of economic policy circles, trying to talk fiscal sense into what he deems recklessly profligate Washington politicians.
The exLehman Brothers CEO and Nixon administration Commerce secretary has written several books highlighting the dangers of runaway entitlement spending. Few listened. His 1999 tome, Gray Dawn, warned that the retirement of the baby boom generation would trigger a Social Security crisis; it sold 35,000 copies. That was respectable, but Peterson's ideas weren't exactly sweeping the nation, either.
Five years and some $500 billion in federal budget deficits later, Peterson is finally gaining a wider audience. His latest effort, Running on Empty: How the Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It, debuted August 1 at No. 13 on the New York Times nonfiction bestseller list.
"For one of my books, this is very good but rather shocking news," jokes Peterson over a late-July breakfast of cereal and fruit in a wood-paneled conference room in the midtown Manhattan offices of Blackstone Group, the private equity and merger advisory firm he chairs. Why are more people listening now? "Things are getting much more urgent," he says. "The 77 million boomers begin retiring in only five years. This entitlement tsunami is no longer that abstract, far-off thing we could conveniently ignore."
Running on Empty criticizes both Republican supply-side economics and Democrats' plans to repeal tax cuts and increase federal spending. So which presidential candidate would better handle the economy? The lifelong Republican appears to be leaning toward Democrat John Kerry. "President Bush has demonstrated his inclination," says Peterson, referring to the current administration's huge deficits. Kerry, on the other hand, is being advised by deficit hawks like Clinton-era Treasury secretary Bob Rubin and Rubin's onetime deputy, Roger Altman (a former Lehman partner of Peterson's). "They're very solid, fiscally responsible types," Peterson asserts. "If John Kerry promotes people like these, and if he follows their advice -- two big ifs -- I'd be very encouraged."