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Much of the blame for the current market turmoil was directed at Washington, particularly the president, as voiced in a lively exchange Tuesday between real estate icons Sam Zell and Mortimer Zuckerman during the keynote presentation at DLA Piper’s 10th Global Real Estate Summit in Chicago.
One major issue, not only in this country and around the world, is the huge global overhang of debt, Zuckerman, chairman of Boston Properties, Inc. (NYSE: BXP), said at the summit.
“That debt is going to take a long time to unravel, particularly for the American consumer, whose spending drives 70% of the economy,” Zuckerman said, asserting that 25 million working-age Americans are unemployed or underemployed and not a single full-time job has been created on a net-net basis since the current administration took office in January 2009. “They have lost complete confidence in the economy as well as in the leadership of this country. The collapse of confidence in this Administration and in the economy is going to affect everything.”
Zell, chairman of Equity Group Investments, leveled a critique of the Obama Administration using particularly salty language, comparing the president unfavorably to former presidents Reagan, Clinton and even Carter.
“The president sets the agenda, and the agenda is out of line with America,” said Zell, whose $39 billion sale of the assets of the former Equity Office Properties Trust to Blackstone Group topped the real estate boom market. “In the end, what makes America work is the risk takers, whether they be in real estate or social engineering. America succeeded better than anyone else in the world for one simple reason — we created a culture of risk, and we encourage risk. We’ve now created an environment that’s so difficult and so uncertain that everybody’s appetite for risk decreases accordingly.”