An Interview with Paul Levy
ROGER BERKOWITZ: Tell us a bit about yourself and your background in business.
PAUL LEVY: I’m Paul Levy. I run a firm in New York City that is in the leveraged buyout business, something that has been much in the press recently—it’s also called private equity. I’ve been in the business now since 1983, and I had the exciting experience of working at Drexel-Burnham from 1983 to ’88. Drexel is a much-maligned, or was a much-maligned, institution when it was alive. I think my experience there has really informed a lot of what I’ve done since then, so again if that’s a good basis for questions, I’d be happy to handle some.
RB: As a businessman with wide-ranging interests, how do you understand the intellectual origins and moral impact of the financial crisis?
PL: In trying to figure out what’s gone on in this crisis, I’ve come at it from two directions: One is to try to construct some sort of sense of a moral framework in which this thing played out.
This is not the last bubble. It may be the last bubble I live though. There are students here who will probably be living through another one, and it brings to mind an article that was in the Wall Street Journal this past week about the Nobel Prize. Somebody was lamenting the fact that the Nobel Peace Prize has become a prize that is given to people who really haven’t done much for peace. They talked about the prize that was given to Frank Kellogg, who was the American secretary of state in 1928 when the Kellogg-Briand Treaty was entered into. That was the treaty, as you may know, which outlawed war as an instrument of national policy, quote unquote. The first three signers were Italy, Japan, and Germany, and by 1931 Japan had invaded Manchuria; in 1935 Italy had invaded