Diary

Fidelity’s Edward “Ned” Johnson Slams FDR, Obama ‘New Deal II’

Cross posted to The Political Class.

I may have to move my accounts to Fidelity:

Fidelity’s Edward “Ned” Johnson jumped into the controversial debate over President Obama’s “New Deal II” and what Johnson called government “make-work projects.”

Wow – I admire the stones on that man. The term “skin in the game” has become quite the catchphrase as of late. Edward “Ned” Johnson has billions of dollars worth of “skin in the game.”  He is the current Chairman and CEO of Fidelity Investments, one of the largest mutual fund and investment service companies in the world (and 49% owned by the Johnson family, started by his father). He is worth billions, and Fidelity many multiples of that. As such, it quite surprising for him to venture such criticism of policies of the young, yet notoriously thin-skinned, administration:

Without naming names, Johnson praised the administration’s effort to make economic recovery its top priority, saying it was “admirable.”

But Johnson, sounding like he’s never been a big fan of the original New Dealers from the 1930s, warned of too much government involvement in the economy and indicated Fidelity is beefing up its government-affairs unit to fend off possibly burdensome new regulations.

Let us hope that there are not extra burdens imposed due to his speaking out, suggesting that the cure may be worse than the disease:

“We can only hope that the government’s cure doesn’t further sicken the patient,” Johnson wrote in his annual update on Fidelity’s performance over the past year.

“During the ’30s, Congress – with guidance from the president and the same kind of good intentions – shifted the country’s cash flow away from productive businesses to government make-work projects, which most likely prolonged the Great Depression,” wrote Johnson, arguably Boston’s most powerful business executive.

Johnson sounds like a savvy businessman who thinks largely that the best thing the federal government can do is get out of the way (my interpretation):

As for the financial-system crisis, Johnson also took a somewhat anti-government conservative view toward its causes, saying “this climate was caused by many well-intentioned policies – stimulated by individuals at high levels in government and sanctioned by regulatory structures.”

Those policies helped make “money ridiculously easy to obtain and business people eager to comply with the policies,” Johnson wrote.

Edward Johnson Slams FDR,‘New Deal II’ – BostonHerald.com

Cross posted to The Political Class.