Economic Growth: Media Appearances and Press Releases

Doug Rediker in Harvard Political Review | 'Sovereign Wealth and Private Equity Funds are Here to Stay'

Communications — Tue, 22 Apr 2008 08:27:00 -0400

New America in the News:

Full article

. . . The new kids on the block, in terms of economic might, are sovereign wealth funds. Clouding their speedy rise are questions raised by Western media and governments about their management and purposes. Do they pose a threat to political stability? “That’s the three-trillion dollar question,” said Douglas Rediker, Co-Director of the Global Strategic Finance Initiative at the New America Foundation, in an interview with HPR. Sovereign wealth funds have never been this big before, or grown at such a pace. The International Monetary Fund has estimated that sovereign wealth funds could account for $12 trillion dollars by 2012.One problem that belies handy analysis of sovereign wealth funds, however, is their sheer diversity. Countries from Norway to Botswana operate sovereign wealth funds, and generalization about their aims or activities is difficult. But uncertainties about the motives of these funds are growing. . .

“The potential to use this finance as a political tool exists,” said Rediker. . . “There have been few if any instances where you can point to political influence having been part of an investment decision,” said Rediker. And it’s difficult to single out sovereign wealth funds for reform, for an important practical reason. Rediker noted that they disclose just as much information as private equity or hedge funds, and since giving up information can mean giving up market advantages, sovereign wealth funds are not keen on it. . . .

Doug Rediker in New York Times | Financier Aims to Buy Struggling Small Banks

Communications — Thu, 17 Apr 2008 14:54:00 -0400

New America in the News:

New York Times | Financier Aims to Buy Struggling Small Banks

. . . “For Abu Dhabi to come in and try to cobble together eight different thrifts into a multibillion-dollar deal is enormously complicated,” said Douglas Rediker, co-director of the Global Strategic Finance Initiative at the New America Foundation, a research organization in Washington. “But Wilbur Ross is an active investor who knows how to do this.” . . .

Doug Rediker in National Journal | New Moves on Wealth Funds

Communications — Sat, 15 Mar 2008 13:46:00 -0400

New America in the News:

New Moves on Wealth Funds (National Journal, subscription only)

. . . Some analysts suggest that the likely ineffectual nature of the forthcoming IMF code of conduct and the reluctance of the Bush administration to take a tougher line reflect the impotence of the United States -- the world's largest debtor nation -- in regulating sovereign wealth funds.

"The leverage is not with us," said Doug Rediker, co-director of the New America Foundation's Global Strategic Finance Initiative. "What happens if the Abu Dhabi Investment Authority says it won't change its ways? What are we going to do? Tell them to keep their money?" . . .

New America in The New York Sun | 'Bloomberg Decries Stimulus Plans'

Communications — Thu, 24 Jan 2008 00:29:00 -0500

New America in the News:

Bloomberg in DC: 'The Jig Is Up': Mayor Decries the Plans for Stimulus (The New York Sun)

"When you need stimulus you cut checks. You've got to get the money out the door," a senior economic adviser to Senator Obama, Austan Goolsbee, said yesterday at a campaign panel organized by the New America Foundation. more

New America in The Hill | 'On stimulus, Sen. McCain, Bush divided'

Communications — Thu, 24 Jan 2008 00:23:00 -0500

New America in the News:

On stimulus, Sen. McCain, Bush divided (The Hill)

“Just raining cash down — which seems like what Congress wants to do—is not going to have much of an effect,” declared Kevin Hassett, a senior McCain adviser, who appeared on a panel at the New America Foundation alongside the economic advisers to the leading Democratic candidates. more

New America in US News & World Report | 'Candidates Push Economic Stimulus Plans'

Communications — Wed, 23 Jan 2008 23:59:00 -0500

New America in the News:

Presidential Candidates Push Economic Stimulus Plans (US News & World Report)

As Republicans and Democrats in Congress negotiate the exact details of an economic stimulus package, that debate was mirrored today among the chief economic advisers to several of the major presidential candidates at a forum at the New America Foundation in Washington, D.C. While none of these plans will be enacted, at least not in full, each adviser claimed his plan shows the superior economic thinking of his respective candidate. more

Sherle Schwenninger in CongressDaily | 'Balance of Payments'

Communications — Wed, 23 Jan 2008 16:37:00 -0500

New America in the News:

Balance of Payments (National Journal's CongressDaily, subscription only)

Recession is looming, but, for once, President Bush and congressional leaders are moving in the same direction and have adopted the mantra that a stimulus should be timely, targeted and temporary.

But, warns Sherle R. Schwenninger, head of the economic growth program at the Washington-based New America Foundation, "if you attempt to counter the downturn with just more supply-side and demand-side initiatives, all you will get is just another bubble. You need structural change." ...

New America in Financial Times | 'Presidential rivals vie over economy'

Communications — Wed, 23 Jan 2008 00:08:00 -0500

New America in the News:

Presidential rivals vie over economy (Financial Times)

The Obama team claims its simpler package could be delivered and take effect more quickly – a claim most economists support. “When you need stimulus you cut checks,” Austan Goolsbee, an adviser to Mr Obama, told the New America Foundation. “You’ve got to get the money out the door.” more

Sherle Schwenninger in CQ Weekly | 'Congress' Role: Help Or Hinder'

Communications — Sun, 20 Jan 2008 16:13:00 -0500

New America in the News:

Congress' Role: Help Or Hinder (CQ Weekly)

"Giving the economy a temporary sugar high of trying to boost consumption will not sustain an economic growth path," said Sherle R. Schwenninger of the New America Foundation, a public policy think tank. "We see a longer-term program being required, which involves public infrastructure. It's more efficient and effective in stimulating both investment and demand and creating jobs." ...

Doug Rediker in AP | 'Foreign Investments Spur Concern on Hill'

Communications — Tue, 15 Jan 2008 11:38:00 -0500

New America in the News:

Foreign Investments Spur Concern on Hill (AP article appearing in Forbes and BusinessWeek)
The flow of funds from overseas could bolster the U.S. dollar, and sovereign wealth funds are the type of long-term investors that can stabilize the financial markets, said Doug Rediker, co-director of the international finance group at the New America Foundation. ...

Sherle Schwenninger in Las Vegas Sun | 'Fix the economy, but how?'

Communications — Mon, 14 Jan 2008 10:56:00 -0500

New America in the News:
Fix the economy, but how? (Las Vegas Sun)

As the partisan narratives emerge in Washington, Sherle Schwenninger at the New American Foundation, a Washington think tank, says they won’t work because the national downturn is more than a temporary blip. Schwenninger thinks the economy needs to be weaned from its dependence on consumer spending in favor of government infrastructure projects that could grow the economy. He is pushing to give cash to the states to modernize airports, fix roads or build electrical transmission lines, which Nevada needs to do to carry solar power across the region. ...

Sherle Schwenninger Quoted in NY Times | News Analysis on the Economy

Communications — Tue, 08 Jan 2008 10:18:00 -0500

New America in the News:
The Debate Over How and How Long - News Analysis on the Economy (New York Times)
“It would mean much more of the stimulus actually goes to creating jobs,” said Sherle R. Schwenninger, head of the economic growth program at the New America Foundation...

Sherle Schwenninger in Civil Engineering Magazine | 'The Infrastructure Crisis'

Communications — Tue, 01 Jan 2008 11:15:00 -0500

New America in the News:

The Infrastructure Crisis (Civil Engineering Magazine)

... The fact that the infrastructure has not been a national priority is evident from key economic data. From 1950 to 1970, for example, the United States devoted 3 percent of its gross domestic product (GDP) to infrastructure spending; since 1980, however, spending on infrastructure has been cut by a third, to just 2 percent of GDP, notes Sherle R. Schwenninger, the New York City–based director of the economic growth program of the New America Foundation, a Washington, D.C., think tank. The result has been a huge shortfall of needed investments, explains Schwenninger. ...

At present, infrastructure spending often gets crowded out by “other pressing expenditures that are more day to day” in the federal government’s annual budgetary fights, notes the New America Foundation’s Schwenninger, who wrote about the need for a capital budget in Ten Big Ideas for a New America, a report issued by that group in February 2007. But a capital budget would end these battles over distinguishing a capital expenditure from an operating expense and enable the nation to spread the costs of capital improvements over time rather than delay such investments to keep within annual budgetary limits, Schwenninger explains. more

Ellen Seidman in U.S. News & World on Bush's Mortgage Plan

Communications — Fri, 07 Dec 2007 13:26:00 -0500

New America in the News:

The devil is in the details of President Bush's plan to curb the nation's escalating home foreclosures by freezing for five years the introductory "teaser" interest rates on many subprime loans. Borrowers who qualify—Bush estimates that up to 1.2 million might be eligible—will also have the option of refinancing into a new mortgage or switching to a loan insured by the Federal Housing Administration.

Lenders had already been working out deals with strapped subprime borrowers, but only a small number of homeowners have been able to renegotiate their loans. Bush's plan aims to speed up these deals by laying out criteria to help lenders determine who is eligible for help. "We hope that these guidelines will be adopted as reasonable and customary standard practice across the entire servicing industry," said Treasury Secretary Henry Paulson, who helped broker the deal with other regulators and mortgage lenders. Here are six things you should know about the plan:

It will benefit only a small group of subprime borrowers. ...

Borrowers must ask for help. ...

The plan is not a "silver bullet." ...

Questions remain about how it will work. ...

This is an industry-led deal, not a government bailout. ...

The plan will become a hot political issue. This is a bold step for an administration that has, until recently, insisted that the task of refinancing mortgage loans should be handled on a case-by-case basis. "There are obviously significant limitations on what they're willing to do, but I don't think we would have gotten this plan out of the administration that came into office in 2001," says Ellen Seidman, former director of both the Office of Thrift Supervision and the Federal Deposit Insurance Corp., who now heads a project at the New America Foundation. As the presidential election nears, the health of the economy—and how candidates will deal with the mortgage crisis—is gaining political importance. Some Democratic candidates argued that the plan doesn't go far enough and proposed their own plans. Hillary Clinton, for example, proposed an across-the-board rate freeze and a moratorium on foreclosures. John Edwards said he would freeze interest rates for seven years. ...

For the complete article, please follow this link.

J. Galbraith and Economic Growth Forum in Atlanta Journal Constitution

Communications — Fri, 30 Nov 2007 13:51:00 -0500

New America in the News:

The home foreclosure crisis slamming into the nation's neighborhoods is having the effect of about "one Hurricane Katrina per month," James K. Galbraith, an economist with the University of Texas at Austin, said Friday at a forum examining the credit crisis.

In the immediate aftermath of Hurricane Katrina in the fall of 2005, nearly 275,000 Gulf Coast residents were forced to move into group shelters, according to the Federal Emergency Management Agency.

Economists who recently completed a study for the U.S. Conference of Mayors predicted the number of home foreclosures will hit 1.4 million in 2008.

Foreclosure is the legal process by which property may be sold by a lender to pay off a defaulting borrower's loan. Often, foreclosures drive down prices for entire neighborhoods as homes sit vacant.

When new buyers fail to purchase those empty houses, "the inventory doesn't go away," Galbraith said at the event sponsored by the New America Foundation, a research group. "The houses stay there — and they decay," hurting the value of even occupied homes around them.

This can compound the mortgage slump's economic damage. As home values decrease, Americans may no longer be able to get the home-equity loans that used to help them pay for cars, remodeling projects and more. "A slump in housing could have an effect on our ability to grow — for quite a long time to come," Galbraith said. ...

For more information, please follow this link. James Galbraith spoke at a forum organized by the Economic Growth Program and American Strategy Program with New America Foundation. More information about that forum can be found on the Events Calendar.

Jennifer Washburn in Journal of Life Sciences on Academia & Industry

Communications — Tue, 13 Nov 2007 14:35:00 -0500

New America in the News:

Merck and Harvard enter a collaboration that reflects the closer ties being forged between industry and academia, but it's a trend that is alarming to some. ...

At a time when federal research dollars have grown scarcer, universities are embracing industry partners interested in getting a first crack at their cutting-edge technologies.

The latest evidence of this comes from a recently announced agreement between Harvard Medical School and the pharmaceutical giant Merck. Merck and Harvard Medical School will collaborate to advance research programs in oncology and central nervous system disorders. Merck's decision to open a research facility just down the road from Harvard in 2004 put researchers at both institutions in walking distance of each other.

For Merck, the deal gives the company an early look at new discoveries and the right to negotiate licensing deals for technology that emerges from the collaboration before anyone else. For Harvard, the agreement provides not only funding, but a chance for researchers concerned about seeing their work commercialized an opportunity to interact with a major drug company. It also provides an avenue to advance their projects at a time when capital for early-stage development to carry potential products to a point they can garner private investment is hard to come by.

But for critics of the fading lines between academia and industry, it is another sign of a troubling trend that they say is changing academic research for the worse.

"The question is, do we want our universities to focus on short-term, commercially viable research, or do we want them to continue doing research that is on the frontier that is going to lead to the next generation of technological breakthroughs?" said Jennifer Washburn, a fellow with the New America Foundation and author of University, Inc.: The Corporate Corruption of Higher Education (Basic Books, 2005). ...

For the complete article, please follow this link.

Douglas Rediker in CQ Weekly on Sovereign Wealth Funds

Communications — Sun, 04 Nov 2007 13:25:00 -0500

New America in the News:

Last week, the New York hedge fund Och-Ziff Capital Management disclosed that it was selling a $1.3 billion ownership stake to an investment firm controlled by the government of Dubai. In September, another Dubai-controlled fund announced that it was buying about a fifth of the Nasdaq stock exchange. A Chinese government bank just entered into a partnership with the investment bank Bear Stearns Companies Inc. And the Blackstone Group private equity firm recently sold a $3 billion ownership stake to China's state investment company.

Flush with cash thanks to big trade surpluses and high oil prices, some foreign governments are looking for new ways to invest. Instead of playing it safe and buying U.S. Treasury securities, many are using special investment arms known as sovereign wealth funds to take ownership stakes in U.S. companies in such sectors as financial services and technology to maximize their returns. Many of the deals will not be subject to government review because, while the dollar amounts are large, the purchasers won't be controlling the companies.

The buyout activity is nonetheless posing a dilemma for Congress, which just addressed concerns about foreign investment that grew from a deal last year, quickly scuttled, that would have given a firm linked to the Dubai government control of operations at some U.S. ports. Last month a new law took effect to strengthen and clarify the rules governing the Committee on Foreign Investment in the United States, or CFIUS, a panel of executive branch agencies that screens the sale of American businesses to foreign interests; the Bush administration is now developing regulations to implement it.

The rapid growth of sovereign wealth funds is prompting some U.S. officials and policy experts to question whether the nation needs to consider more safeguards -- or at least a more consistent approach to regulating foreign acquisitions that would both assuage national security concerns and enable foreign investors to know what to expect when they contemplate making a deal in the United States. ...

So far, members of Congress have primarily focused on individual deals. That will have to change, said Douglas Rediker, a global finance expert at the New America Foundation, a public policy think tank. Sovereign wealth funds bring "this whole level of influence that's brought to bear on the markets as a whole, that involves currencies and the subtleties of specific investments and broader investment classes," he said. "That traditionally has not been within the realm of what Congress deals with." ...

Rediker notes must purchasers in several high-profile deals, including the Chinese purchase of part of Blackstone and the agreement between Dubai and Och-Ziff, each took 9.9 percent stakes of the U.S. firm. He speculates that the acquiring companies reasoned that a 10 percent stake constituted a de facto threshold for heightened scrutiny.

Rediker and his wife, Heidi Crebo-Rediker, recently wrote a paper arguing that the United States needs a comprehensive review of all its legislation and regulations governing foreign investment, then needs to develop a policy for monitoring foreign government investments smaller than the "controlling" interest that triggers a CFIUS review.

The Redikers contend that this would not scare away foreign investors but encourage more deals, as long as funds were certain about the treatment they would receive.

"You put some vigorous rules in place, but they are absolute, so people know [if] they make X investment, there's going to be Y result. Right now the area below which a full-blown CFIUS review is triggered is fraught with political risk, and political risk takes its toll on investment," Douglas Rediker said. ...

For the complete article, please visit CQ.com. (subscription only)

Doug Rediker and Heidi-Crebo Rediker Highlighted in National Journal

Communications — Sat, 03 Nov 2007 07:54:00 -0400

New America in the News:

Remember the slogan about Bill and Hillary Clinton in the 1992 presidential race -- two for the price of one? The New America Foundation seems to be getting something similar with the hiring of husband-and-wife tandem Douglas Rediker and Heidi Crebo-Rediker (although they'll both get paid at the think tank). The Redikers, former investment bankers in Europe, have returned to the United States to co-direct the foundation's Global Strategic Finance Initiative. The couple met in Washington about 20 years ago. After Douglas worked in Hungary and Heidi worked in Russia, they married in London, where they have spent the past 16 years working for Merrill Lynch and Lehman Brothers, among other firms. ...

At New America, the Redikers will have their hands full explaining the pace of financial markets to Washington legislators and regulators. "Policy makers still operate under a time consideration that is much more deliberative," Douglas says. "Markets operate in seconds."

For the complete article, please visit The National Journal website.

Washington Post Quotes Doug Rediker on Sovereign Wealth Funds

Communications — Tue, 30 Oct 2007 06:12:00 -0400

New America in the News:

The government of Libya, flush with oil, has amassed $40 billion and is ready to put it in play on Wall Street. China recently acquired a huge stake in one of the biggest names in U.S. finance. Tiny Qatar is adding $1 billion a week to its investment coffers and is trying to buy the leading grocer in Britain.

Developing nations, especially in Asia and the Middle East, are aggressively stockpiling some of the largest concentrations of investment money in history. The cash hoards, called sovereign wealth funds, are controlled not by state-run companies or private investors but by governments.

These investment pools are equal to or even bigger than the largest pension and private-equity funds in the United States, and many are highly secretive about their activities. The Abu Dhabi Investment Authority has an estimated $875 billion to invest, while China's first stab at a sovereign wealth fund, which started last month, has $200 billion. The largest private-equity firm has about $90 billion under management.

Sovereign wealth funds have been around for decades. But enriched by the surge in the price of oil, which settled at a record $93.53 yesterday, and the trade gap between the United States and Asia, these funds have grown to gigantic proportions. This has alarmed U.S. politicians and regulators, some of whom held a series of meetings on the topic here this month. Some on Wall Street say the growing prominence of these funds portends a fundamental shift in financing power away from Western nations. ...

About two dozen countries have established sovereign wealth funds, including Iran, the United Arab Emirates, Singapore, Kuwait, Australia and Russia. While precise data about each of the funds can be difficult to obtain, most Wall Street analysts agree that the value of the funds has reached about $2 trillion and is likely to grow at least fivefold by 2012.

"We want to be encouraging people to invest as much of this money in the U.S. as we can," said Douglas Rediker, a former investment banker who works at the New America Foundation in the District. "We are driving our way around the country every day and sending them our U.S. dollars at $3 or $4 a gallon. ... You really want those dollars recycled back into your economy, because if they aren't, it means they are going somewhere else and the dollar is less attractive and will continue to weaken." ...

For the complete article, please follow this link. Douglas Rediker co-directs the Global Strategic Finance Initiative with Heidi Crebo-Rediker, at New America.

New America Foundation Launches Global Strategic Finance Initiative

Communications — Thu, 18 Oct 2007 11:10:00 -0400

The New America Foundation is pleased to announce its launch of the Global Strategic Finance Initiative. The Initiative, co-directed by Douglas Rediker and Heidi Crebo-Rediker, is sponsored by the Economic Growth Program and American Strategy Program. The Global Strategic Finance Initiative will address the fast changing relationship between global capital flows, financial markets, foreign policy and national security.

“We believe that in the global era, the creative use of financial tools may prove every bit as important to national security as traditional diplomacy and military power,” said Steve Clemons, the Director of… more