The president and COO of private-equity firm Blackstone Group, Tony James, told CNBC Friday that quantitative easing by the Federal Reserve will enhance productivity, but not whittle down the large unemployment number in the United States.
“We saw that in Japan when interest rates get to this level, further easing doesn’t really do much,” said James.
"I think this is actually going to be counterproductive: You’ve got $2 trillion in corporate balance sheets. To the extent that it encourages any capital expenditures at all, I think what it will do is encourage job-saving expenses, which it is not exactly what the economy needs right now. It will enhance productivity. And by doing that, it will cost American jobs, and they'll buy equipment from Germany or Asia to replace those American jobs.”
James also said that he expects slow growth in 2011, similar to what has happened in the second half of this year.
He added that Blackstone will not raise its cash bid again to acquire the Houston-based power generator Dynergy.