Peter G. Peterson is an American entrepreneur, investment banker and politician. He served as United States Secretary of Commerce during the Nixon administration and was Chairman of the Council on Foreign Relations Council on Foreign Relations until his retirement in 2007. Peter co-founded the Blackstone Group, a private equity firm, in 1985 and retired in 2008 as its Senior Chairman. He is the author of the book Running On Empty: How The Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It. Peterson was Chairman of the Federal Reserve Bank Federal Reserve Bank of New York from 2000 to 2004 and is founding Chairman of the Peter G. Peterson Institute for International Economics.
Peter G. Peterson
Originally I was brought up in the middle of Nebraska in a small, rural town – 1,733 to Boston
and 1,733 to San Francisco.
Very profoundly. My parents were Greek immigrants. They came here without a penny,
without a word of English and a third grade education. And they moved out to mid-
Nebraska because that’s where their relatives were. My father took a job no one else would
take – washing dishes on the caboose of a Union Pacific railroad that was being built.
It was steaming hot there, which I guess is the reason no one wanted to take the job. And he
ate on the caboose, and slept on the caboose. He saved up virtually everything he
made, which he turned into the inevitable Greek restaurant – 24 hours a day,
seven days a week for 25 years.
It never closed. And he was there all too many of those hours, weeks, and years. I didn’t see him as much as I liked because he’d leave by 6:00 in the morning and he’d come home about 9:00 at night pretty much exhausted. So my brother and myself could spend a few minutes with him then, usually providing some hot water and salt for his legs that were swollen with varicose veins. But he was a great model of working, achieving, and saving for the future. He believed deeply in America. He believed deeply in the American dream, and we seemed to have forgotten these days that the American dream is all about your children doing better than you did. And one of the reasons he saved was that he wanted, as he put it, “to buy us the best education money could buy”. And indeed he did. So I learned a great deal from him about focusing on the future, focusing on your goals, saving and investing. My mother was also a Greek immigrant. She spent most of her time cooking and making all the clothes we wore, which at times got pretty embarrassing. She did everything. She washed, ironed, scrubbed, mowed the lawn. If there’s anything she didn’t do around the house, I don’t know. Then during World War II when they built an Air Force Base near this small town, the business exploded in size, and she worked many, many hours there, too. But for much of her life, she was the typical American homemaker I would say. And we saw infinitely more of her than we did of him.
Probably. The firstborn son psychologically, as we all know, has certain advantages and certain problems. In my case I was treated like a prince, and I had the great advantage during the first three years or so of probably their developing a pretty healthy sense of self-esteem and affection. I ran into . . . We ran into a tragedy, however, when I was four. My one-year old sister died suddenly from Croup, a form of pneumonia I guess. And she was my mother’s attempt to be born again, you might say, through her daughter. Because these Greek wives lived very tough lives, given how their husbands were working. And when she lost her beloved daughter, she went into very deep mourning. And I, as a child who normally . . . I think we think of ourselves as the center of the solar system. Everything revolves around us. We’re responsible for everything and so forth. I guess I wondered why, as my mother withdrew into the deepest, deepest depression psychologically, what I did to cause her to abandon me. And added to my complexities I guess you’d say, I formed a pattern of having to achieve and having to be perfect so I could somehow regain her affection and her attention. And that’s had some good points and that’s had some bad points, because trying to achieve perfection can be productive; and it also can be a very destructive process for a while. So she had quite an impact on me.
Well I was pretty dumb about recognizing whatever talents I do have. George Ball, the great Under Secretary of State and one of my partners at Lehman used to refer to me as relentlessly analytical. So I’m pretty good at analyzing problems, getting the facts, raising the right questions and so forth. It took . . . I’m also a peculiar combination of a total mechanical klutz in the sense that I’m incapable of operating the most simple machine or fixing them; but I’ve also been rather creative on asking questions. That is, inventing the questions. But I went through some job changes early on which reflected a certain, almost invincible ignorance of my qualities. I did my graduate work at the University of Chicago, and Adam Smith taught us about comparative advantage. And I knew how to focus on your comparative advantage. So for reasons that aren’t clear at all to me, I went into retailing and was Assistant Manager of a toy department at Christmas if you can believe that. And if that experience played to my comparative advantages, I can’t imagine what they were. So I quickly got out of that business and got into the market research and analysis business where I belonged. And later on in the advertising business where I could combine whatever analytical ability I had with working with the creative people by asking them questions and suggesting problems that need to be solved without knowing how to solve them. So I think my talents are somewhere along the line of analyzing things and having a certain sense maybe of where the world is going, and being reasonably creative in asking the questions that sometimes lead to creative answers. .
Well I’m a huge believer in dumb luck. I think dumb luck beats smart planning much more often than we would like to admit. People have incorrectly praised my quite varied career, including government service and public service. And if I could explain how I got into going into Washington and President Nixon’s White House, and later to his cabinet, I was working at 39th South Purcell in Chicago. I used to walk to the railroad stations. It’s a lot cheaper. And one day I noticed that 19th South Purcell, there was a University of Chicago graduate school. Well I’d been playing to Northwestern where I’d done my undergraduate work, but it was all the way across Chicago. And since it was night school, it would have taken me 20-30 minutes to get over there and 20-30 minutes to get back. So I said, you know, “Maybe I ought to go to the University of Chicago. It’s supposed to be a pretty good place.” So that’s where I went, to the University of Chicago. It had nothing to do with career planning or anything of the sort. It was there that I made some of the best friends that I have on the faculty – Milton Freedman, George Steigler, George Schultz. And George later, you’ll recall, became a very senior figure in the Nixon administration. He became Secretary of Labor, Office of Management and Budget, Secretary of Treasury; and then later in the Reagan administration Secretary of State. And George and I had worked very closely together at the University of Chicago, and I had taught there for about four or five years part-time at night. So one day he called me and said, “President Nixon wants to see you tomorrow.” So I go to Washington, I end up in the Oval Office, and the president pointed out to me that he thought economics was gonna become terribly important at the vortex of foreign policy. He and Henry Kissinger, my good friend, had a very complicated relationship. For some reason he felt he needed to tell me that Henry didn’t know a damn thing about economics. And what was worse, he didn’t know what he didn’t know. So he went and set up a new council counterpart of the National Security Council, and I was to head it. Well this wasn’t anything I had planned or anything. And I look back on that. I’ve been immensely grateful for my public service opportunity. Some of the most exciting experiences of broadening I ever had. It has led to my being involved with some great non-profit organizations. I just stepped down after 22 years as Chairman of the Council on Foreign Relations. I’m the Founding Chairman of the so-called Peterson Institute for International Economics. I’m one of the founders of the Concord Coalition. And I doubt very much I would have done those things if I hadn’t gone to Washington. And I doubt I’d gone to Washington if I hadn’t had . . . if I didn’t happen to have an office at 39th South Purcell in South Chicago, and didn’t happen to have a downtown school at 19th and South Purcell. So never, never underestimate the role of luck in life. And I think the trick . . . I’ve forgotten who the councilman was in New York who once said, “I’ve seen my opportunities and I took ‘em.” I think it’s important when you do have something that luck thrusts upon you to somehow be made in such a way psychologically that, as Paul Tilley said once, “If you’re comfortable with ambiguity, that’s what you need when you’re in a rapidly changing world.” So I say dumb luck and taking advantage of your opportunities will often lead to more interesting places than long term, smart career planning.
Sure. I do a lot of traveling around the world, and in government I got to know other governments as well. It’s a remarkable country with regard to its absence of barriers, its resilience, its responsiveness. Just think of it. When my father started his restaurant in the 1920s, the restaurant was petitioned by the Ku Klux Klan saying, “Don’t eat with the Greek.” There were no blacks there, so I guess they figured the Greeks were the next most desirable target. Now we go from a situation like that to where . . . If anybody’s been prejudiced against me because I was Greek, I’ve been unaware of it. I worked in the 1960s with . . . when I was CEO of a company called ________ with Martin Luther King. And I went through the tragic division of races among the . . . of the ‘60s where blacks were formally and most often informally blocked from all kinds of participation in American life – business, social, political. And I look today to Barack Obama, and I think it’s quite possible today that a black could be elected President of the United States. And that’s taken place in a remarkably short period of time. So this is a country with limitless frontiers and very few barriers. And if you work hard, and you study hard, and you’ve got good luck, you can do very well in this country. Recorded On: 7/26/07