Daniel Doctoroff discusses current financial crisis at Annual Alumni Luncheon (AUDIO)
No stranger to responding quickly in economic downturns, Daniel Doctoroff, president of Bloomberg L.P. and former deputy mayor for economic development and rebuilding in New York City, revamped his January 30 speech for the NYU Law Alumni Association's Annual Alumni Luncheon in reaction to the current global financial crisis. His original topic, "Private to Public to Private Again," became "Planning Through Panic."
"My entire career has essentially been shaped by the four major downturns of the last 30 years," Doctoroff said, "and they truly do provide my frame of reference for thinking about a response to a period like this, and where we go from here." When he graduated from college in 1980, a recession was beginning, so he went on to earn a J.D. from the University of Chicago Law School (although he spent his third year at NYU Law). After a secure stint at Lehman Brothers, he formed an investment partnership in 1987 focused on leveraged buyouts and junk bonds; Black Monday happened two months later. Years later, soon after 9/11, Doctoroff signed on as deputy mayor in New York City, when the economy was in shambles and city government in dire straits. Finally, in January 2008, he became president of Bloomberg L.P., only to see the economy collapse yet again.
New York City itself, Doctoroff explained, offered a perfect financial model for study. "New York was literally formed by the rhythm of boom and bust," he said. "You can look at the layers of the city and trace them right back to the boom times and the bust times." Depending on one's point of view, Doctoroff said, the city is currently in either its 11th or 12th financial crisis since becoming a financial center two centuries ago. Rattling off the dozen names of New York's past crises, from the Panic of 1809 through the present, Doctoroff observed that, with the exception of two postwar recoveries, every recovery has been fueled by major innovation.
Innovation was the key to overcoming the current crisis as well, Doctoroff said. "It's those who have thought independently and used big ideas to solve big problems, particularly when times are tough...who prosper most when the good times return.... We all have to push ourselves to be open to new ways of doing things, especially in times like these, so that when the recovery arrives—which it inevitably will—and the new opportunities are upon us, we are ready."