Recently, Pete Peterson, founder of Blackstone Group and former cabinet member under Nixon, sold his company and received over $1 billion in the sale. Claiming a philanthropic goal of saving the world, he set up a foundation and gave it $1 billion to do just that. And what does this foundation do? It is set up to provide grants and ‘operational activities’ to ‘promote responsibility and accountability.’ In Mr. Peterson’s eyes, the current economic crisis is caused by people not saving enough and not living within their means. He think we are addicted to debt and that in itself is the fundamental issue. If only we could be more responsible individuals, he thinks, everything will come up smelling roses in the future.
He’s dead wrong. We need more than a tweak here or adjustment there, we need an overhaul. We need to figure out what didn’t work and why, and fix that. It is the principles themselves that have failed, not the details of their application.