Maurice R. “Hank” Greenberg is CEO of C.V. Starr & Company, a private global investment firm headquartered in Manhattan. The company was named after its founder, Cornelius Vander Starr, who also founded the insurance giant American International Group (AIG), which Greenberg headed for 38 years. In 2005, at the age of 79, Greenberg resigned from AIG after being accused of fraud by then New York Attorney General Eliot Spitzer. Greenberg spoke to THE AMERICAN in March, on the same day that Spitzer resigned as governor of New York. 

What is your response to the resignation of Eliot Spitzer?
I feel very sorry for his wife and children, but with respect to any comments I would have about Spitzer, I think events speak for themselves and I have nothing I want to add. 

He said that his targets would be strengthened by his investigations. Do you think it has worked out that way at AIG or Marsh & McLennan?
Of course not. Look at the market cap of AIG: the shareholder value is down about $6 billion. Marsh has never recovered from what happened to it. And there are other examples. 

I think most of our readers do not recognize the name C.V. Starr & Company. Could you tell us about it?
C.V. Starr & Company was founded in China in 1919 as an insurance agency. It ultimately became the parent of what turned out to be AIG later on when I took it public in 1969. Today, C.V. Starr & Company—and Starr International Company (SICO), the companion international company—operate a global investment business and insurance business. 

Are the insurance operations themselves mainly in China?
No, the insurance operations are here in the United States. We have a syndicate at Lloyd’s of London. We have an operation in Bermuda, an operation in Hong Kong, a budding operation in China, and there will be others. 

Give us an idea of its size in assets.
A lot of the assets are still AIG shares that we own between both C.V. Starr and SICO. The net worth is probably in the area of $20 billion. 

During World War II, you were in the invasion of Normandy and you were among the liberators at Dachau. How have events like that affected your life and your business career?
The military had a very important effect on my life. I enlisted in the Army at 17. It took a little creativity—I had to show a birth certificate of 18. I spent two and a half years overseas in Europe. 

When the war was over and I came back, I went to finish high school, went to college and law school, and was recalled during the Korean War and spent about a year in Korea.

I had a lot of military experience and it taught me many things. Obviously, discipline, leadership qualities, and courage; the idea that you should never ask anybody to do what you won’t do yourself; and that you should look after your people. These are things that you need in running a business as well. 

How would you compare where the U.S. economy is now to other periods of slowdown that you have seen in the past?
I don’t think we have confronted anything quite like what we have today. The subprime problem is the outcome of a very loose credit policy and an abdication of risk analysis and control; we have seen leverage that went sky high as if nothing would ever change. You pay a price for that. 

The subprime problem is the outcome of a very loose credit policy and an abdication of risk analysis and control.

And then the development of products that were so esoteric that few knew what they were doing, including some very sophisticated firms. Whether it was credit default swaps, CDOs [collateralized debt obligations], and so on, it led to excesses. There is nothing in history that compares with that. 

Going deeper, we have inflation that is building in food products, which is a serious issue. We are converting agricultural land to grow biofuel crops—which, when you look at it closely, we don’t save a thing in energy by doing that. We are doing the wrong thing at the wrong time. 

Then you have the banks de-leveraging their balance sheets, the Fed pumping $200 billion in and swapping treasuries for subprime assets on a rollover basis. Are these things going to stimulate the economy enough so that growth begins again? I’m uneasy. 

Is there anything specifically that you think can be done from a public policy point of view to get things moving again?
I don’t think monetary policy alone is going to do it. We have cut interest rates. We need more fiscal stimulus than what has been done so far. Giving back $600 to the population is hardly going to get the economy going again. The concern I have is that if we have a Democratic White House and Congress and you raise taxes in the face of our economic plight, it will set us back further. You should be cutting taxes to stimulate investment in business. And if we start trying to renegotiate trade agreements because of protectionist sentiments, we will be even worse off. 

Are there other areas of public policy that you and your company are specifically concerned about?
I’m concerned about the economy. I’m concerned about whether or not the consumer is going to continue to spend. Is credit card debt going to continue to grow? With subprime, how long will it take to work our way out of that? Is it going to affect commercial real estate as well?  There’s a negative attitude. Banks are not lending. The Fed is trying to inject enough capital to make it easier for them to lend, but there are a lot of psychological barriers to that happening. 

In 2006 you attended a luncheon where Iranian leader Mahmoud Ahmadinejad was present and he posited that the Holocaust was fiction. How did you respond?
I responded that it’s not a fiction, and anybody who thinks it’s a fiction is out of touch of reality. I happened to be there, and to tell me that it didn’t exist is simply a lie. And I didn’t see it alone. 

There were thousands of Americans and British and French and Germans who all saw, and that was only one of many concentration camps. So to believe anything like that is trying to distort history. It’s just an outrage. And he just responded by saying “How old are you?” Then he changed the subject. 

Photograph by Marc Asnin/Redux Pictures.