Felix Rohatyn is a former managing director of Lazard Freres, a former U.S. ambassador to France, a longtime Democrat -- and he supports John Kerry for President. BusinessWeek Senior Writer Marcia Vickers recently spoke with Rohatyn about Kerry's appeal to business. Edited excerpts from their conversation follow:
Q: Is John Kerry trying harder to appeal to businesspeople. And, if so, are more buying his message?
A: I think he's becoming more centrist. Look at how he approached [Senator] John McCain early on as a running mate. That tells you a lot. He's willing to work with both parties.
Primarily, business leaders are concerned about what the [Bush] Administration has done to the finances of this country. It appalls them in terms of the deficit and being really reckless in terms of tax cuts. I'm not worried about an occasional deficit -- and to get out of a recession, in fact, I believe you have to have an occasional one.
But the way they've done it is totally irresponsible. The amount that's been created is astounding. There's a risk to the country and the world financial structure -- to be printing all this money and relying on foreign central banks to keep it from collapsing.
Q: Does it surprise you that the U.S. has gotten into this fiscal situation on [Fed Chairman] Alan Greenspan's watch?
A: Alan Greenspan is a very old friend of mine, but I never thought I'd see him doing this. It astonishes me.
Q: When you say more business leaders are leaning toward Kerry, do you include Wall Streeters, too? Doesn't the big money on Wall Street still go largely to Republicans?
A: There's a difference between New York investment bankers and...people running companies. Wall Streeters are often very tied in with Washington. But I think even a good number of Wall Streeters are asking themselves questions over how they're going to vote. The business leaders across the country -- a good many will vote for Kerry. They're probably not going to say they're doing so, however. At least not many of them. They don't want retribution from Bush in case he's reelected.
Q: Despite rebounding earnings and stock prices going down over the last couple of years, you still think stocks are pricey?
A: Oh, yes. If you look at stock valuations -- sure, they're better than at the height of the bubble in 1999 or early 2000 -- but they're still high on a historical basis.
Q: And business folks are concerned that the stock and real estate markets are frothy, as you say?
A: Yes, but of course there are bigger reasons they're concerned, [one] being the deficit, primarily. People are also appalled at the polarization of this country. Take the gay-marriage issue. There are so many more important issues. To get diverted on that is not inspiring for anyone, really.
Q: You're a longtime, prominent Democrat. Are you sure it's not some wishful thinking on your part that Republicans -- particularly the business community -- are turning to Kerry?
A: I'm a Democrat, but not an ideologue. I have voted for Republicans and supported them through the years, and still do. But I've never seen anything remotely approaching what this Administration has done in building this financial house of cards.
We're fighting a war, and yet we're cutting taxes. Usually, you sell war bonds, incorporate an excess-profits tax -- there are all kinds of things the country can do to try to pay for the war. But not this Administration. Sometimes I think I'm reading a Kafka novel on finance. For more on the Democratic National Convention, see BusinessWeek Online's continuing coverage at www.businessweek.com/election2004.htm