June 14, 2011 Topics: On lessons learned running the Stratford Inn Market update: for better or worse, this is the kind of year we were expecting. We were surprised at the market’s unbridled optimism in April 1 , since the tug-of-war between private sector profits and public sector problems has a long way to go. We chose the charts on the front page of our 2011 Outlook carefully; they were designed to show that equity markets were priced inexpensively, but were likely to stay that way, given too much stimulus in the East, and ineffective stimulus in the West 2 . We expect a modest second half recovery, based primarily on US capital spending increases, easy credit conditions everywhere, and a pick-up in industrial production in Japan. But the world’s structural problems are weighing on the private sector, and our portfolios are positioned for a single-digit year in credit, equities and hedge funds. Something different this week. I was on the road seeing clients last week, and was asked “what should be done about job growth”. We are investors and not politicians, so my ideas 3 are not relevant. However, it seems to me that anyone involved in the jobs debate should be required to read the article below, written after the prior deep US recession (1990-1991). It’s from George McGovern, one of the most liberal politicians 4 ever to hold office and run for President. His epiphanies after leaving office and running the Stratford Inn are worth considering as legislators contemplate additional job creation measures, and the broader regulatory environment in which the private sector operates. “A Politician's Dream Is a Businessman's Nightmare”, by George McGovern 5 , June 1992 Wisdom too often never comes, and so one ought not to reject it merely because it comes late. (Justice Felix Frankfurter). It's been 11 years since I left the U.S. Senate, after serving 24 years in high public office. After leaving a career in politics, I devoted much of my time to public lectures that