Real estate billionaire and editor-in-chief of U.S. News and World Report Mortimer Zuckerman shared his insights on the economy at GW’s third annual Real Estate and Wall Street Symposium in New York City May 4.
In an interview with senior New York Times financial writer Diana B. Henriques, B.A. ’69, Mr. Zuckerman discussed the impact of the budget deficit on markets, the outlook for residential and commercial real estate, and how to move the economy forward to an audience of GW alumni, trustees, faculty, students and partners, including GW trustees Steven Ross and George Wellde, GW School of Business Dean Doug Guthrie and Alan Miller, chairman and chief executive officer of Universal Health Services Inc., which operates the GW Hospital.
Held in Midtown Manhattan at the Paley Center for Media, the symposium was sponsored by the Luther Rice Society, the university’s oldest philanthropic society, and its Financial Services Alliance, a network of Luther Rice Society members working in all facets of the financial services industry.
In his opening remarks, GW President Steven Knapp said the relationship between New York and Washington provides a “critical opportunity” for the university.
“We’re increasingly becoming a presence in the rate of our convening important discussions in New York, and you’ll see us continue to reach out this way because of the powerful connection between New York and Washington,” said Dr. Knapp. “It’s really one of the core opportunities for our university, and it is an area we can really contribute to pull together these two important centers of power, culture and intellect.”
Dr. Knapp also recognized seven GW students in the audience who will intern on Wall Street this summer through a Luther Rice Society mentorship program and presented awards to Richard Goldstein, B.A.’91, and Jeffrey Silverman, B.A.’94, for their service as co-chairs of the Luther Rice Society Real Estate and Finance Alliance Board of Directors.
Mr. Zuckerman and Ms. Henriques first discussed the strength of commercial and residential real estate in the nation. Mr. Zuckerman, chairman of Boston Properties, which is involved in Square 54 and the proposed Science and Engineering Complex, said that while commercial real estate is faring well in large cities, residential real estate is going through a “downward spiral,” with $9 trillion in home equity “wiped out.”
“This had a major effect on the attitude of American consumers, because home equity was the largest asset on the balance sheet of the average American family,” said Mr. Zuckerman, “and to have suffered those losses really affects everything they think about, including consumer purchases, so it’s going to be a real depressant on the economy.
“We have a situation where corporate America is doing a lot better than the average American family.”
Mr. Zuckerman also painted a bleak outlook on unemployment, stating that the unemployment rate is closer to 18 percent due in large part to approximately 2 million “discouraged workers” who have stopped looking for jobs and therefore do not show up in unemployment numbers.
“We are in an unprecedented economic time, and therefore it’s unpredictable,” he said. “Nobody has been through this before, so nobody knows how to correlate what has happened to what will happen.”
Ms. Henriques and Mr. Zuckerman also discussed the role of technology in print media and advertising.
Publisher of the New York Daily News, Mr. Zuckerman said the advertisement-based business model is now “almost a relic,” and readers have almost entirely abandoned print media, stating that Newsweek lost $52 million in 2009 and the Washington Post Company lost $192 million in 2008.
“I really am very passionate about the role of the press and the printing press,” he said, “and it is really eroding in front of our very eyes.
“We’ve got to do something to preserve it because it plays a unique role in our society, and without it we will be a less happy and responsible world,” he said. “We’re already unhappy and irresponsible enough.”
Mr. Zuckerman believes the United States has a chance to climb out of its economic troubles if there is stronger political leadership.
“We know in our gut that this is not right what we’re doing, that we’re running huge debts, and it’s going to be a very unhappy end if we don’t find some way to get it under control.”
“What we need is remarkable leadership and, frankly, we don’t have that right now in either party,” he said.
Ms. Henriques is a former Wall Street correspondent for The Philadelphia Inquirer and an investigative reporter for The Trenton (N.J.) Times. In 2005, she was a finalist for a Pulitzer Prize and won a George Polk Award, the Worth Bingham Prize for Investigative Reporting and Harvard’s Goldsmith Prize for her 2004 series exposing insurance and investment rip-offs of young military consumers.
At the symposium Dr. Knapp announced that Ms. Henriques’ new book on the Bernard Madoff scandal, “A Wizard of Lies,” had just hit No. 10 on the New York Times best seller list.