Wharton Economic Summit Features World Business Leaders Alumni and Faculty Debate Current and Future Trends
“These guys are telling you what’s happening in real time on the real frontiers,” said Wharton real estate professor Peter Linneman at Wharton’s first-ever Economic Summit, held in front of a sold-out audience on February 1 at the Pierre Hotel in New York City.
The day-long event included panel discussions on the futures of real estate, corporate governance, and energy investing; presentations from renowned Wharton finance professor Jeremy Siegel and alumnus Michael Milken, WG’70; and a concluding speech by shareholder activist Carl Icahn.
The summit’s diverse voices also included Jan Eliasson, president of the United Nations General Assembly, who delivered the opening keynote speech; and host Maria Bartiromo, from “Wall Street Journal Report with Maria Bartiromo” and CNBC’s “Closing Bell.”
The Economic Summit kicks off the yearlong celebration of Wharton’s 125th anniversary, which will include a faculty tour around the United States and numerous other special events.
Panelists Debate Hedge Funds and Business Ethics
In the first panel discussion, Martin Lipton, W’52, founding partner of the corporate law firm Wachtell, Lipton, Rosen & Katz, made the case against hedge funds, who he says are “pressuring companies to act for short-term performance.” Lipton spoke on a panel titled, “After the Corporate Governance Revolution: The Imperial Board of Directors” with fellow alumnus Arthur Collins, WG’73, chairman and CEO of Medtronic.
Lipton’s remarks typified the day’s spirit of open and candid discussion among the world’s business leaders. For example, summit attendee Richard Coons, W’76, founder of Catrock Capital Management, noted: “What’s interesting to me is that we see Marty Lipton representing management and the imperial executive and eschewing hedge funds and shareholder activism, and yet we’re getting the epitome of the raiders in Michael Milken’s early career and then of course the raider of them all in Carl Icahn.”
After lunch, the controversial Milken – now chairman of Faster Cures, the Milken Institute, and the Prostate Cancer Foundation – suggested that education is “a far better investment than stocks” in his address, “Human Capital – The World’s Most Precious Asset.”
Speakers Forecast World Economic Future
In a lunchtime speech to a full house, Jeremy Siegel assessed “the most critical long-term economic issue facing the developed world” – the economic effects of aging populations.
According to Siegel’s predictions, the developed world will have an increasingly smaller slice of the world’s GDP, while the comparatively young populations of India and China will contribute a projected 77% share of the world’s GDP by 2050.
Siegel concluded that this redistribution does not have to be bad news for the U.S. As our population ages and fewer people work, we will have more retirees liquidating assets and fewer people to absorb these assets. “Growth in the developing world,” he suggested, “will offset the slowing of the aging economies and support future equity prices.”
The day’s last three panelists addressed renewable energy, arguing that only high energy prices will drive enough demand to fund the development of renewable fuels. “We’ll be a hydrocarbon-based economy for a long time,” concluded Aubrey McClendon, chairman and CEO of Chesapeake Energy, who sat on the panel with William Macaulay, WG’68, chairman and CEO of First Reserve, and David Crane, president and CEO of NRG Energy.
The day concluded with a presentation by corporate takeover specialist Carl Icahn, who railed against corporate governance, saying, “the way we select CEOs is anti-Darwinian. It’s survival of the unfittest!”
