Free Markets

THE ECONOMY: The Federal Budget, the Financial Crisis, and Sovereign Wealth Funds

Economic policy covers a multitude of topics—interest rates, employment, inflation, and GDP growth to name a few. It’s about the environment, agriculture, and energy. But, mostly, it’s about budgets: deciding how much money goes where and then how to raise it.

As the US ponders its economic future, PT spoke with three different sources about their take on what lies ahead: Wilbur Ross, one of the country’s experts on bankruptcies and restructuring; Georges Sudarkis, an investment officer with ADIA, the world’s largest state fund; and Vic Miller, a leading authority on federal budgets. To read what they had to say, check out the three new articles in this May 2008 issue of Policy Today.


Wilbur Ross

Highly regarded within the field or bankruptcies and restructuring, Wilbur Ross is Chairman and CEO of W R Ross and Co. of New York. His successes include automotive, coal, and steel manufacturers. Now, Ross is focusing on the financial services sector.

At a recent conference, Ross provided a very sobering view of the financial black hole that American banks and consumers have dug for themselves.

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STATE FUNDS: No different than any other institutional investor

Georges Sudarskis

A recent conference featured a presentation by Georges Sudarskis, Senior Investment Controller at the Abu Dhabi Investment Authority, better known as ADIA. ADIA is the world's largest institutional investor and recently made headlines with its $7.5 billion stake in beleaguered Citigroup as well as buying into private equity firms Carlyle (through a related entity, Mubadala) and Apollo Management. In a presentation that represented the first of its kind, Sudarskis agreed to “share the dynamics and inner workings of a professional investment team within a sovereign fund.”?

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The Federal Budget: "A series of non-decisions"

Vic Miller

Federal budgets face splits between Congress and the White House, differences between House and Senate, and small Democratic majorities in both houses make coalition-building necessary, yet difficult as coalitions keep shifting. Add to that difficulties of producing compromises on virtually any point even when ultimate goals are agreed. Says Vic Miller, Senior Fellow at Federal Funds Information for States, “it’s very difficult to reach consensus.”

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Outsourcing: Cost-cutting or New Technology?

Social inventions such as the assembly line, franchising, and package tours have impacted our society as profoundly as the telephone, typewriter, transistor—and now, the Internet. Does outsourcing merely involve "cutting costs by moving jobs overseas" or "a new technology that will reorder our daily lives?"

Hard at work in Mumbai (Photo: Pat Kenny)
Hard at work in Mumbai (Photo: Pat Kenny)

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