Felix Rohatyn to the Rescue
From the Louisiana Purchase to the Panama Canal to the G.I. Bill, legendary banker Felix Rohatyn chronicles how a nation that’s falling apart was once built—and can rebuild.
Felix Rohatyn’s Bold Endeavors is a peculiar book in the best sense—rather than strange it is distinctive, rather than predictable, it is surprising. Investment bankers are by and large an unpeculiar breed, common in their love of money, risk, and the shadowed interstices of power and wealth. Yet there have always been peculiar bankers—Morgan, Baruch, Harriman, Lovett all come to mind—who chose to serve the public interest in one visible way or another and thus lifted their lives and legacy above the secretive and bespoke world whence they’d come.
Felix Rohatyn certainly belongs to that group: A French Jew who as a boy fled Paris ahead of the Nazis, he ended up a managing partner of Lazard Frères, a firm once upon a time considered perhaps the most elegantly mannered and well connected of its kind, the jewel in the crown of New York private finance. (The firm is something else today—but so is investment banking, another story, its vastly costly posturings and no-longer-hidden incompetencies now on parade for all of us to see and bemoan at the moment.)
President Obama’s stimulus package includes infrastructure investment, but in dollar terms no more than a down payment really on the sort of spending Rohatyn says is needed.
Rohatyn, who’s nearly 80, has for most of his professional career made a point of civic-mindedness and political engagement, mainly (in banking’s Jewish rather than white-shoe WASP tradition) through the Democratic Party. Perhaps most famously, he chaired the financial advisory committee that rescued New York City from its impending bankruptcy in the mid-1970s (after the Ford Administration refused federal aid, a gesture legendarily scribed by the Daily News as “Ford to City: Drop Dead”). Twenty years later, nearing the end of his career at Lazard, and after some talk about Bill Clinton appointing him deputy chairman of the Fed, Rohatyn returned to his native France as U.S. ambassador. Around these two larger roles, there have been the usual commissions, committees, group proclamations, and the like expected of such a man’s life. Somewhat more unusually, principally through widely read articles for the New York Times and The New York Review of Books, he has also over the years provided written public service through a number of cogently framed analyses of contemporary issues involving taxes, regulation, and finance.
Bold Endeavors is his most recent such contribution, on the potentially deadly dreary issue of public infrastructure. What’s most wonderfully peculiar about Rohatyn here is that he avoids authoring a book—as one might inevitably expect—in the Dukakis-Tells-Us-All-About-Swedish-Land-Use-Planning mode. That is, Bold Endeavors is actually an interesting read about infrastructure because instead of policy analysis, Rohatyn gives us a gamely told history in the manner of Herodotus, Thucydides, or in more recent times, the great English Whig historians.
In other words, he ignores the leaden apparatus of policy—the charts, equations, bureaucratese, and cost-benefit analyses—in favor of the historians’ and novelists’ defter arts: character, plot, and adventure. Who could have ever guessed this of public policy? Yet starting with the Louisiana Purchase, the Erie Canal, the transcontinental railroad, and the Homestead Act in the 19th century, Rohatyn introduces us to the bold men (I’m afraid I saw no women here) whose “bold adventures” in profound ways made us who we are. It continues on in the 20th with the building of the Panama Canal, the Reconstruction Finance Corporation, the GI Bill, and the Interstate Highway System.
He gives over a chapter to each of these pivotal moments when, as often as not, one or at most a few figures displayed the foresight and courage to overturn conventional wisdom, commit us to a large and daring new project, and thereby dramatically move the nation forward. Many of these figures are familiar—Jefferson, Lincoln, both Roosevelts; presidents loom large here, necessarily because Rohatyn’s focus is on public action—but there are plenty of the unfamiliar as well: the stubborn surveyor, the willful general, the corrupt grocer, the self-made millionaire, the veterans’ leader.
None of the stories is told in detail—length prohibits—but they are told colorfully enough to remind us that well before Barack Obama retold the merits of audacity, it had been the driving engine of much of which is great about our country. Neither are the stories told with the sort of granular detail a professional historian might want but which risks needless pedantry to the general audience—indeed, the stories here are simply yet purposefully enough told that they qualify as parables really, stories told to edify the audience and help it draw conclusions from its own sense of moral duty and capacity for civic engagement. But for Rohatyn’s needs that seems enough: By engaging a broad audience, hopefully, rather than specialists, he clearly wants to fuel a national conversation about priorities, and why investing in the nation’s fundamental infrastructure—from roads and bridges to education—should be at the forefront of our choices about public spending.
The book’s coda is its final chapter in which Rohatyn sketches out his concept of What Is To Be Done. He tells us why we need a National Infrastructure Bank, how it would be staffed, governed, and financed, and why it would be superior to a more dispersed strategy for public investment. He has laid this all out before—in greatest detail in the report of a private bipartisan committee he and former Senator Warren Rudman chaired, and most recently in the New York Review of Books. These projects, relying on the estimates of groups such as the American Society of Civil Engineers and on congressional studies that have concluded that simply bringing America’s decaying physical infrastructure up to reasonably safe standards—quite apart from any investment in new technologies—would reasonably cost something on the order of $1.5 trillion.
For a country that has, over the last six months, committed nearly $10 trillion in grants, loans, and guarantees to salvage the disaster imposed on us by the Wall Street where Rohatyn once worked, the challenge he puts forward is powerful, challenging, and open to doubt all at once, so great are the financial demands simply to rescue all of us from the serial misdeeds of investment bankers and their confreres. President Obama’s stimulus package includes infrastructure investment, but in dollar terms no more than a down payment really on the sort of spending Rohatyn says is needed. But there is every good reason to recognize that we are nowhere near the end of what Washington is going to have to invest to restore the American economy, and so the opportunity to take up his challenge remains.
Seen as a piece of what needs to be done—and a shameful reminder of so much of what wasn’t done during the three decades when Markets were Gods— Bold Endeavors is an easy-to-read narrative of what we as a people can do when we embolden our leaders. Too worried about our 401(K)s and our jobs, it may be hard to understand why we need to embolden on a course of action such as this—but if we do not act now, do not summon up the stamina to reach beyond the vistas of failure before us toward the capacity for hope we have, we will have failed ourselves, our past, and our future.
One must also hope that in Washington there are leaders reading Bold Endeavors who can grasp the meaning of this useful banker’s parables, at a moment in our collective global history when bankers seem anything but useful.
Richard Parker is an economist who teaches at Harvard's Kennedy School of Government and the author of John Kenneth Galbraith: His Life, His Politics, His Economics.