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by SixFigureStart | October 06, 2009


"Private Equity King" David Rubenstein evidently didn’t get to where he is today by wasting time talking; his delivery is so rapid that it’s almost impossible to take notes on what he’s saying without losing track of where he’s going next. He fires stats and figures with an ease that you know a teleprompter must be involved, but that doesn’t make them any less frightening: he recaps that the national debt is running at around $11.8 trillion (and as high as $57 trillion when you factor in a ton of other stuff I wasn’t quick enough to write down). He points out that the annual deficit is at $1.5 trillion and rising. Unemployment, he reminds us, is at 9.8%, double where it was at its trough not so long ago, and with 7.6 million jobs having disappeared this year. On top of all of that, he has a ton of other stats, way too numerous to mention.

The bottom line, according to the co-founder of the Carlyle Group, is that inflation is coming, unemployment rates are rising to the point where 7 or 8 percent will be the new normal, benefits such as Medicare and Medicaid are facing drastic cuts, and the deficit is going to have to be dealt with. In short: a much bleaker future for the US. “We are much less significant than we were before” in terms of being a world economic power, he says.

Growth, too, seems to be a thing of the past in the U.S., with Rubenstein predicting growth rates of 1 to 2 percent in coming years, compared to rates over 10 percent in developing economies.

Also, financial centers are shifting away from New York, and the sector is likely to be much less attractive in years to come as a place to work.So is there a good side? (Apologies for the note form that follows, but that’s all I had time to get down):

Hot areas in coming years: “Distressed investing…is one of the most attractive areas.” Energy. Both carbon-related and alternative energy. Healthcare: because of the baby boomers. From 17 percent of GDP now to around 20 percent in a few years. Natural resources.

Advice for leaders: “Focus on areas that are likely to grow.” If you’re talented but in a bad area, it’s unlikely that you’ll succeed.
“Avoid leverage.”
“Don’t take no for an answer. Persist.”
“Take some entrepreneurial risk in your career.”
“Improve your skills of persuasion”—one of the most important elements in business.
“Think like a leader. Don’t think like a follower.”
“Get talented partners.”
“Don’t worry about making money over the longer term.”
“If you’re really good at what you do, money will flow to you.”
“You’ve got to love what you do. If you don’t love it, think about what else you could do”—this from a man who’s had multiple careers.

Jeffrey Sachs is up next.

--Posted by Phil Stott, Vault Staff Writer


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