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Edward M. Kresky, 88; Calmed Fiscal Panic

January 30, 2013 by Leave a Comment

The cause was heart disease, his wife, Mary, said.

Mr. Kresky, a former aide to Gov. Nelson A. Rockefeller, was among the first appointments made in June 1975 to the newly formed Municipal Assistance Corporation, a money-borrowing state authority cobbled together that spring by the Legislature and Gov. Hugh L. Carey to calm a spreading, and mostly justified, panic in the financial markets about the city’s solvency.

The new corporation, which would soon be known as “Big Mac,” was authorized to borrow billions of dollars to pay the city’s short-term debts, keep services going and restructure the financial burden it had accumulated over decades. In hopes of quelling the panic, the state packed the board with financiers of the highest standing on Wall Street. Further reassurance came in the form of a novel financing proposal made by Mr. Kresky.

 The plan was to sell bonds on the tax-free municipal bond market, even though investors were risk-averse by nature and repelled by the city’s crisis. Mr. Kresky, who headed the municipal bond department at his banking firm, Wertheim Company, became the M.A.C.’s unofficial ambassador to those most important, and skittish, of Big Mac’s customers.

At Mr. Kresky’s suggestion, the M.A.C. secured its loans, and overcame market fears, with a guarantee considered fairly unusual at the time: M.A.C. bondholders were promised that city sales tax revenues would be used to pay them first, before any other city expense was addressed. Eugene J. Keilin, the authority’s executive director in the 1970s and ’80s, said Mr. Kresky had seen the strategy applied successfully in other municipal crises, though not in one of such magnitude.

Serving on the board for 12 years, the last eight as vice chairman of the M.A.C., under Felix G. Rohatyn, Mr. Kresky was also a kind of point man in the state capital, drawing on his experience there under Governor Rockefeller as he negotiated for legislation to keep the M.A.C. afloat, said Mr. Keilin.

By 1987, when Mr. Kresky resigned from the M.A.C., the authority had sold more than $4 billion in bonds. The city was on the mend, though Big Mac would borrow a total of $10 billion before it was shuttered in 2008.

“They were a brain trust, the most intelligent finance minds of their time,” said Mitchell Moss, a professor of urban policy and planning at New York University who has studied the history of the M.A.C. “When they were appointed, remember, the term ‘investment banker’ carried an aura of great integrity and respect.”

Edward Mordecai Kresky was born in Brooklyn on Aug. 15, 1924, one of three sons of Henry and Celia Kresky. His father was a physician. After graduating from Erasmus Hall High School, he attended Cornell University, but left to serve with the Army in Europe, as an infantryman during World War II. He later completed his course work for a bachelor’s degree at Cornell and received his Ph.D. in political science at New York University in the 1950s.

Mr. Kresky was twice a deputy to William J. Ronan, the former dean of the graduate school of public administration at N.Y.U.: first when Mr. Ronan was named Governor Rockefeller’s chief of staff in 1959, and later when Mr. Ronan was made chairman of the agency that was a precursor of the Metropolitan Transportation Authority.

Mr. Kresky is survived by his wife, who worked in the Rockefeller administration as an intergovernmental assistant; their daughters, Ann Banegas and Susan Gallwey; and five grandchildren.

Donna E. Shalala, the secretary of health and human services under President Bill Clinton and now president of the University of Miami, served with Mr. Kresky on the M.A.C. board in the 1970s, while she was teaching political science at Columbia University. Like many of the others on the board, she said, Mr. Kresky was defined by his generation.

“They were all from a generation of financial leaders who grew up in New York,” Ms. Shalala said. “In the crisis, the reason they were able to calm the rest of the financial community wasn’t just their expertise. It was because they clearly loved the city. They had a real passion for it. They were going to save it.”

Article source: http://www.nytimes.com/2013/01/31/nyregion/edward-m-kresky-88-calmed-fiscal-panic.html?partner=rss&emc=rss

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Wealth Matters: An Argument for Focusing Charity Dollars

December 21, 2012 by Leave a Comment

But these requests for money, from the checkout line to the mailbox, can pull well-intentioned people in too many directions and turn an act of generosity that should lift the spirits of the donor and help a worthy cause into another stressful obligation.

This onslaught and a story I was told this week — more about that later — got me thinking about the argument for focused giving, for picking an area that you care about and putting most of your philanthropic dollars into it. This is something my wife and I have done for many years and have found very rewarding: it has made us more knowledgeable, passionate and involved in the area we support.

Patrick Rooney, associate dean for academic affairs and research at Indiana University’s School of Philanthropy, said he did not want to deter people from giving away their money however they wanted. But he added, “You’re better off to target three, four or five charities and give larger gifts to a small number of charities as opposed to giving a large number of small checks.”

Part of the reason is that a single larger gift could do more good. But that was not the only benefit. “From the recipient organization’s perspective, having a gift from $1, $100, $1,000, to $100 million, there are some transaction costs,” Mr. Rooney said. “You’ve got to book it, deposit it, acknowledge the donor and cultivate the donor for future gifts. If you have a lot of checks for $5 and $10, you have a lot of transaction costs for a relatively small gift.”

The other side of this debate is equally valid: it’s your money, and if you want to give a little bit to 27 different groups, that’s your choice. As Melissa Berman, president and chief executive of Rockefeller Philanthropy Advisers, told me: “Philanthropy is voluntary. When someone tells you how your money is supposed to be used and in what proportion, that’s called a tax.”

I can appreciate both sides. But I spent this week talking to a group of people focused on one cause — breast cancer research. Their desire to support this cause, which has had great success, made an interesting argument for being more selective with donations. Here’s the story.

THE LUNCH Addressing about two dozen women over lunch in late November, Leonard A. Lauder, chairman emeritus of Estée Lauder, told how he had bought his wife, Evelyn, a piece of jewelry every time she finished a round of chemotherapy and they thought she was better.

Mrs. Lauder, who learned she had breast cancer in 1987 and survived it, started the Breast Cancer Research Foundation in 1993, with the goal of raising funds for research that would eradicate the disease. Last year, she died of ovarian cancer.

A few weeks before she died, Mr. Lauder said, he found her standing in their kitchen one night wearing a ring he had bought her.

“She said, ‘I’ll never have a chance to wear this ring. so I’m wearing it tonight,’ ” Mr. Lauder told me. “When she died, I had all this jewelry. I didn’t feel right giving it to someone. I thought, ‘What should I do with the jewelry?’ ”

He decided to auction it off and give all the money to the foundation. He said he got Sotheby’s to waive the commission it charges sellers so that any money raised would go to a new fund at the foundation to focus on the genetic links between different types of cancers.

Among those in the audience of prospective bidders that day was Cindy Citrone. Mrs. Citrone’s mother and father died of cancer, and she is active in various cancer charities in Connecticut, where she lives. She also sits on the board of visitors of M. D. Anderson Cancer Center in Houston. Cancer charities are something she and her husband, Rob, who runs a hedge fund, support in many different ways.

She was moved by Mr. Lauder’s account of how he wanted his gifts to his wife to be passed on as part of a continuing contribution to the fight against cancer. “After hearing him tell this story of love and the legacy of joy,” she said, “I came home and wanted to be part of it.”

This article has been revised to reflect the following correction:

Correction: December 21, 2012

A picture caption with an earlier version of this column misspelled the surname of the Breast Cancer Research Foundation’s scientific adviser. He is Larry Norton, not Nortan.

Article source: http://www.nytimes.com/2012/12/22/your-money/an-argument-for-focusing-charity-dollars.html?partner=rss&emc=rss

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Why We Deregulated the Banks

July 30, 2011 by Leave a Comment

Jeff Madrick’s “Age of Greed” almost seems to have set out to be the economic equivalent of Mann’s history. Writing against the backdrop of the 2007-9 financial crisis, Madrick, the author of “The End of Affluence,” also starts his story in the 1970s, tracing the regulatory and cultural changes that led to our current trouble. In Madrick’s telling, a cabal of conservatives, driven first by greed and second by “extreme free-market ideology,” gradually seized power. The result, as proclaimed in his bold subtitle, was “the triumph of finance and the decline of America.”

It’s clear from the outset that Madrick has his work cut out for him. Where Mann’s story concentrated on six individuals who held office through successive Republican administrations, Madrick draws in a far wider cast of characters: thinkers like Milton Friedman; business leaders like Jack Welch; presidents like Richard Nixon and Ronald Reagan. It’s not always obvious what connects these disparate figures, so the book jumps from pen portrait to pen portrait without always advancing its main theme.

And the theme itself is slippery. A history of neoconservatism can home in on self-professed neocons, whose actions are clearly informed by a defined body of beliefs. But it’s harder to identify a cabal that self-consciously embraced greed as a guiding philosophy. To be sure, the insider trader Ivan Boesky once defended greed at a forum in Berkeley, Calif. But an undertow of avarice is surely a human constant. Was Sandy Weill, the Wall Street executive who retained a corporate jet while slashing retired employees’ health insurance, really so very different from a 19th-century Rockefeller or Vanderbilt?

If the greed of Boesky or Weill is unsurprising, the lack of greed evinced by some of Madrick’s characters is striking. Paul Volcker, the Fed chairman whom Madrick eccentrically berates for his determined fight against inflation, was known to be frugal; John Reed, Citigroup’s boss during the 1990s, was by Madrick’s own account “thoughtful and unflashy.” Reagan himself was more enthusiastic about self-reliance and hard work than about material advancement, remarking that “free enterprise is not a hunting license.” Early in his career, Walter Wriston, Reed’s predecessor at Citi and perhaps the character whom Madrick conjures most successfully, was offered a salary of $1 million to move to Monaco and work for Aristotle Onassis. He chose to remain in a middle-income housing project in Stuyvesant Village.

If “Age of Greed” is an unhelpful label, what of Madrick’s secondary contention — that the era was defined by extreme free-market ideology? Well, the extreme was pretty mainstream. Free-market ideas were embraced by Democrats almost as much as by Republicans. Jimmy Carter initiated the big push toward deregulation, generally with the support of his party in Congress. Bill Clinton presided over the growth of the loosely supervised shadow financial system and the repeal of Depression-era restrictions on commercial banks. Centrist intellectuals like Lawrence Summers, who was fully aware of market failures — indeed, who had emphasized them in his academic writings — nonetheless embraced pro-market public policies because, he thought, they were more right than not.

Besides, free-market policies were never embraced with the unqualified enthusiasm that some imagine. Throughout Madrick’s period, entitlement spending grew and armies of supervisors at multiple agencies tried to keep the financial sector in check. Contrary to Madrick’s view that the regulators were always retreating, the 1980s saw the imposition of new capital-adequacy rules on banks, and the 2000s brought the passage of the ambitious ­Sarbanes-Oxley accounting reforms. These regulatory efforts proved hard to enforce, but the record hardly supports Madrick’s argument that policy was captured by free-market extremists.

Sebastian Mallaby, the Paul A. Volcker senior fellow at the Council on Foreign Relations, is the author of “More Money Than God: Hedge Funds and the Making of a New Elite.”

Article source: http://feeds.nytimes.com/click.phdo?i=c72dca4c3b03e5708ee1838ff39551a2

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