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A Panel of Pros

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Recently I was asked to moderate a panel for the Alternative Investment Management LLC annual partners meeting with some of the great legal, political and business minds in the country. There was Bill Daley, the head of J.P. Morgan Chase's Office of Corporate Responsibility and former Secretary of Commerce in the Clinton Administration, Marty Lipton, founding partner of Wachtell, Lipton, Rosen, & Katz and Penny Pritzker, chairwoman of the board of four companies: TransUnion, Classic Residence by Hyatt, The Parking Spot, and Pritzker Realty. There are important issues we're facing and this was a good forum to discuss them with some very knowledgeable people who are committed to the public discourse. Here's a look at what they had to say on issues ranging from regulation to free trade.

JONATHAN TISCH: President Obama, in one of his recent weekly Saturday addresses, said, "We cannot allow the thirst for reckless schemes that produce quick profits and fat executive bonuses to override the security of our entire financial system and leave taxpayers on the hook for cleaning up the mess." Where will we end up in a new regulated environment?

MARTY LIPTON: It's always been the case that following a financial crisis, you get new regulation. I would say that at the moment, it's not at all clear how the administration's regulatory proposals will fare in Congress. There will be additional regulation. The exact structure is not clear. But clearly, the financial world will receive not just new regulation but additional regulatory attention.

JONATHAN TISCH: Everybody knows that Penny was National Finance Chair for President Obama's campaign and is very involved in discussions in Washington that will hopefully lead us out of the down economy that we've seen. Penny, do you worry about too much regulation? Do you also worry that this administration is being viewed as anti-business?

PENNY PRITZKER: I agree with Marty. We're going to have regulation. I think one of the interesting things, and I'd love to hear maybe Bill's take on this is, is that it's a relatively small group of Congressmen and Senators who actually are steeped in the details enough to be able to actually make judgments about the various parts of the regulation. And so I think many of their brethren look to them, unlike health care where I think everybody has an opinion. I think when comes to financial regulation, it's far more complicated. It's far more nuanced. And so looking to the two leaders on either side, Barney Frank and Senator Dodd, you know, they're going to have a big say, I think, in what this regulatory environment looks like.

JONATHAN TISCH: Bill, you were a member of the Clinton Administration. And during those eight years, NAFTA and CAFTA were put in. Trade policy is another big flashpoint, currently. Many people feel that we should be looking more inward and take care of our own economy. What's your sense of, in general, trade policy and some of these programs like NAFTA and CAFTA in today's world?

BILL DALEY: I think NAFTA, which was in the first year of President Clinton's Administration and permanent normal trade for China were probably two of the most important things that happened in a very different period. I think the optimism about globalization, the newness of globalization added to people's desire to be more open to what's going on in the rest of the world.

I think the globalization, you know, those of us who believe in free trade, I think we all lost this, we very much lost this battle because we didn't acknowledge that even though the phrase was always, "Trade's a win-win situation," well my sense has always been that if you walk out of a negotiation and somebody says, "We both won," you probably lost.

JONATHAN TISCH: Penny, you look at a lot of different businesses, a lot of different industries, are you starting to see investments that make sense, that are starting to be attractive? Are we there yet in terms of using capital that you have access to maybe buy some new businesses, buy some new companies?

PENNY PRITZKER: It's getting closer. I think it's getting closer. I think the reality is we don't have leverage or we have very little leverage available to us. And the price or the cost of equity's pretty fixed. So it means pricing has fallen to, you know, 35-45 percent. Anybody who doesn't have to sell isn't selling. But what's starting to happen is some people are having to do something. And they're therefore looking either to bring in equity to help pay down their debt or do other things. And you're seeing it in the public markets. And I think it's getting closer. Do I think it's robust? Not at all.

JONATHAN TISCH: Let me ask one question that came in an email. And it's the question that you hear on a lot of panels, "What keeps you up at night, Marty? Are your concerns terrorism, health care, or the economy, climate change? What do you worry about?"

MARTY LIPTON: Basically, I worry about the economy. I think that the situation is still delicate. I think we're okay. But so many things can go wrong. Penny talked about both the residential and the commercial mortgage problems -- that's going to take a while to work through. If we don't get enough growth to start to reduce the unemployment rate I think, you know, we get up to 12 to 15 percent unemployment, we will have social unrest.

I think it's right that the country as a whole thinks that business, banks, and business generally have disappointed them, and have taken advantage of the country as a whole. And so I think the delicate economy as it relates to society as a whole is the big problem.

JONATHAN TISCH: Penny, what do you worry about?

PENNY PRITZKER: Just to further emphasize this question of social unrest, I think it's a global issue. It's not just an issue in the United States, which if you go to China and you spend time in China, that's what the government in China is concerned about. Their objective is to take people out of poverty. If they can't keep employing another ten, 15 plus million people a year because there isn't a global demand and we're the biggest consumer, and what they see is their big consumer not being able to consume anymore, this is an issue in many, many parts of the world. And I don't see that there's a fix to this in the sense that it's not like in just a few minutes we're going turn around and have this robust global growth in the United States for sure.

JONATHAN TISCH: Bill?

BILL DALEY: I would say it's the geopolitical dangers out there. I think we could survive albeit difficult, an economic collapse. Our parents, grandparents survived the Depression. And we would get through it. But the dangers in terrorism and the Middle East, I think are real. I think the possibilities of that are very real, very dangerous. And to me that trumps everything else.

Jonathan Tisch is Co-Chairman of the Board for Loews Corp., Chairman and CEO of Loews Hotels and host of television's "Beyond the Boardroom with Jonathan Tisch."