Morgan Housel: You were the CEO of one of the world’s largest companies for several decades. You’re still very active in the business today. Just from a broad overview, how does the global economy look to you today?
Hank Greenberg: Not robust. Europe has still got tremendous problems. Are they going to work their way out of it? I hope so, but it’s going to take time.
You can’t spend more than you earn, whether it’s your family or a country. You can wait it out in a country for any number of years, but sooner or later it comes home to roost. So you have that.
Latin America is a mixed bag. Brazil is up and down. Argentina’s got political problems. Colombia is much better than it used to be. Mexico is much better.
Canada looks very good here.
Our own economy is coming back slowly. The housing market seems to be improving, but it’s early days on that. We still have high unemployment, we still have — the stock market made an all-time high yesterday and is doing reasonably well today — but we have a lot of problems economically here, yet. We’re on a spending path that is unsustainable.
In Asia, China just has a new administration coming in, actually this week. They’re doing OK. They’re going to grow 7.5% this year, and probably the next several years. Down from about 10%, but still 7.5% is a pretty good growth rate. A huge country; they have opportunities and problems, the same as anybody else would have.
Southeast Asia, the ASEAN region, is doing quite well.
There are a lot of things that need to be done. We as a country need to have more trade agreements. We have difficulty getting them done because unions oppose trade agreements in the United States, so we’re outside of that orbit.
I’ve urged for years that we negotiate a free trade agreement with China. That’s a heck of a lot better than having a trade war. We’ll see.
Morgan Housel: Do you feel as good about the next 50 years as you did about the previous 50 years?
Hank Greenberg: That’s a long horizon.
Morgan Housel: [laughs] That’s too much.
Hank Greenberg: That’s too long a horizon.
Morgan Housel: Let’s say the next decade, then.
Hank Greenberg: I think it depends on who we have in Washington. I do not believe that you can run a country or a company or a family by spending more than you take in. I think you have to have some discipline, and we have to be realistic about what we can afford and what we can’t.
Government-created jobs are not the same as private sector jobs. It’s the private sector that builds an economy, not government-controlled jobs. They’re not the jobs that built our economy in the past, and they won’t be in the future.
It’s got to be the private sector that has incentive in order to build the economy.
Morgan Housel: What’s next for you?
Hank Greenberg: Keep doing what I’m doing.
Morgan Housel: Which is working for C.V. Starr?
Hank Greenberg: Yeah.
Morgan Housel: Philanthropies, you’re on the board of several organizations?
Hank Greenberg: Yeah.
Morgan Housel: Just keep on going. No stop for you?
Hank Greenberg: I love what I’m doing. I’m doing everything I’ve always done. I play tennis, I ski, I work out daily.
Morgan Housel: My final question, what’s the best advice you’ve ever received?
Hank Greenberg: The best advice I ever received. Well, that’s a hard question to answer. I think the best advice I ever got was, “If you’re going to do something, if you believe in it, then do it 100% of your time. Don’t procrastinate and vacillate. Be committed.”
Morgan Housel: Thank you very much. I appreciate it.
Hank Greenberg: Thanks for having me.
Morgan Housel: Thank you.
The article An Interview With Former AIG CEO Hank Greenberg originally appeared on Fool.com.
Morgan Housel has no position in any stocks mentioned. The Motley Fool recommends American International Group (NYSE:AIG). The Motley Fool owns shares of American International Group and has the following options: Long Jan 2014 $25 Calls on American International Group.
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