CHRYSTIA FREELAND: SOMEONE TO PAY ATTENTION TO

It is quickly becoming more impressive to see competent women effectively taking a stronger role in politics and giving educated opinions. One such who has impressed me recently is Chrystia Freeland, of the Financial Times

While someone was commenting on European reactions tpo and impressions of Obama, she commented that he was indeed making a favorable contact there. More importantly, she said that Europe was somewhat disillusioned with the American people that they voted Bush in for a second term (apparently fairly and squarely). Now, the Europeans think more favorably of the American people for having the wisdom to have voted Obama in as President.

A recent column by her sheds a bit of light on the way she thinks:
View from the Top - Felix Rohatyn, president of FGR Associates
By Chrystia Freeland

Published: April 3 2009 03:00 | Last updated: April 3 2009 03:00

Wall Street veteran Felix Rohatyn shot to international prominence in the 1970s when he managed the negotiations that enabled New York City to restructure its debt and resolve its financial crisis.

Mr Rohatyn was born 80 years ago in Vienna and grew up in France. His family fled the Nazis during the second world war and he ended up in the US, where he studied physics at Vermont's Middlebury College.

A long-time Democrat, Mr Rohatyn was appointed by US President Bill Clinton to serve as ambassador to France from 1997 to 2000. He was chairman of Lehman Brothers' international advisory committee and an adviser on Europe from 2006 until the bank went bankrupt last September.

The financial crisis and the muscular government intervention in the economy it provoked have lent Mr Rohatyn's views fresh currency. He is a long-time advocate of stepped-up state spending on infrastructure and this year published a book, Bold Endeavors: How Our Government Built America, and Why It Must Rebuild Now . Edited highlights of an FT.com video interview appear below.

Was it right to require General Motors' Rick Wagoner to go?

Yes. You might ask whether it should have been a little bit gentler. But you have all these people, they're under a lot of pressure, they want to make sure what they do registers. So there was no really good way out for the management here.

What about the Chrysler- Fiat deal? Is that going to work out for both parties?

It will certainly work out for Fiat. They're not putting up any money as I recall and they're going to get 30 per cent of the company. It will be quite good for both. I used to be on the board of Fiat and Fiat never really had a decent presence in the US . . . and the man who runs it, I think, is very good.

You were at Lehman in the final days. With hindsight, what went wrong? You know, you may find this hard to believe but I haven't a clue. I was at Lehman as an adviser, mostly to advise them on their European things, for about a year, a year and a half and I had very little contact. It was a very large place, but essentially there were five or six people who ran it, but things were getting tighter, things were getting more tense . . . But what it was I only found out once it was over, and it was dramatic. And I felt very, very sorry for them, for Dick Fuld, for the 24,000 people in this business. Could they have done things differently? Of course, one can always do things differently. Could they have done it in time? Could they have done it in scale? Could they have done it in a credible way? I don't know. Was there a confidence in the back of people's minds that they wouldn't be allowed to fail? Certainly, in the back of some people's minds there was the notion that this wouldn't be allowed to happen. And in hindsight that was correct because by it happening you began to see what terrible damage you could wreak by not taking care of it. What about the government treatment of Lehman? Was it a mistake to let it fail and do you think the government, in particular Tim Geithner and Hank Paulson, had any other options?

Certainly, it was a mistake to let it happen. I believe their position has always been they didn't have the authority to [behave differently] . . . I have no reason not to believe that but certainly if they could have done [so] I think they would have but I can't be sure. And then AIG coming so soon after, that was a painful thing . . .

Will the stimulus plan that was passed in January be enough? Probably not, but it was a good first step. I would have wished to see a little more infrastructure investment, but we'll maybe get it later. So I would think probably there is some room for an increased next step but the president has a lot on his plate with dealing with the Europeans, who are not at all enthused about more stimulus and are really looking for more regulation.

How do you interpret this European-American conversation right now? From a cultural point of view, financial culture if you will, the issue of regulation is much more important to the Europeans than to us. In the wake of this crisis will we understand capitalism and the relationship between markets and governments differently or will it be back to business as usual? I don't think it will be [back to business as usual]. Too many people have gotten hurt. We don't even know at this point how many people have been wiped out in terms of their savings, their 401ks. So I don't think we can ever go back to that. What will be the single biggest lesson and the single biggest change? The biggest lesson will probably be to support the new regulations. Whatever they are, they are going to be constraining and they are going to be tough. And they should be. And making the public understand why that is a good thing, when all of the instincts of Americans is freedom and lack of regulation and having to make a U-turn of this type is going to be difficult. What about the role of America in the world? There will be contradictory feelings about us. On one hand you'll have a lot of people who were always nervous about our type of runaway capitalism and will say: "Ah, we told you so, should have been careful, we don't need all of this, we're serious people." And the other that says: "God, if America goes down we go with it." So, it's important to us to have a positive reaction from the Europeans, from Asia, etc, to help us get back on our feet and to help the world because ultimately what we do affects the world more than anything else.

Chrystia Freeland