Speaker 1: This is Bloomberg Business Week from Bloomberg Radio. Kelly and
Speaker 1: I'm Carol Master. Welcome to the Bloomberg Business Week Extra.
Speaker 1: It's our weekly podcast bringing you an in depth interview
Speaker 1: you will not hear anywhere else. And you're gonna hear
Speaker 1: our full panel discussion with as I like to say,
Speaker 1: group of ballers. They know a lot about the world economy.
Speaker 1: As you rightly pointed out, three hundred billion dollars in
Speaker 1: market cap. We're talking about Steve Schwarzen for Blackstone, a
Speaker 1: non Mahindra of the Mahindra Group, and Brian moynihan, a
Speaker 1: Bank of America. Check it out, Steve, I'm gonna point
Speaker 1: to you, what are you most worried about in the
Speaker 1: world right now? Jeez, there's a lot to worry about,
Speaker 1: you know, because you know, first of all, just stepping
Speaker 1: back from it, uh, you know, the social media and
Speaker 1: the Internet are making it very difficult for almost any
Speaker 1: government to function. Uh. If you come out with a plan,
Speaker 1: you have instant uh mobilization of opposition to anything you're doing.
Speaker 1: It even makes it difficult for companies. UH sometime with
Speaker 1: sort of this roving band of opposition. Uh. And and
Speaker 1: you know, financially, um you know, sort of the you
Speaker 1: have a few weaknesses in the system. I think that
Speaker 1: European banking system isn't is uh strong, certainly as the
Speaker 1: U S which is in great shape. You have um
Speaker 1: private investments in the technology area, which that we work,
Speaker 1: um you know sort of non public offering has exposed
Speaker 1: as as being uh you know, really uh pretty inflated.
Speaker 1: When when you when you have an industry that more
Speaker 1: or less marks up its positions, uh you know, in
Speaker 1: a closed circle among itself, and then it pops out
Speaker 1: into the real world. The real world says, what are
Speaker 1: you thinking that? That's usually um, you know, sort of
Speaker 1: a wake up call, but it's you know that that
Speaker 1: part of the world isn't big. That's that's a relatively
Speaker 1: small uh set. Um. And I guess any of us
Speaker 1: on the stage, and then I'll finish, because I don't
Speaker 1: want to dominate anything. When you have thirteen trillion dollars
Speaker 1: of negative interest rates, I don't even know what a
Speaker 1: negative interest rate is. And in other words, why would
Speaker 1: I take my money and give it to somebody and
Speaker 1: for the privilege of them holding it, I have to
Speaker 1: pay them like it's a storage unit um. And I'm
Speaker 1: supposed to get interest when I give people money. And
Speaker 1: as as interest rates go down, uh, most of those
Speaker 1: places that have those negative interest rates, it's not stimulative
Speaker 1: because banks have trouble earning money, uh, you know, in
Speaker 1: that kind of environment. Uh. And if banks don't do well,
Speaker 1: then they don't grow their capital. They can't then extend credit,
Speaker 1: and countries don't grow unless there's credit extension. And so
Speaker 1: this whole movement, particularly in Europe, to negative interest rates,
Speaker 1: I think is some kind of uh warning sign, some
Speaker 1: type of wake up call. How did we get in
Speaker 1: that position? Why are we in that position? Not us
Speaker 1: as Americans, but us as financial people looking at the world.
Speaker 1: So Brian may know more than I do, but it
Speaker 1: just seems so, Brian, does this negative rate environment that
Speaker 1: we increasingly see around the globe tell you that there's
Speaker 1: some underlying weakness that maybe we're missing. We we know
Speaker 1: the obvious problems that are out there, but is there
Speaker 1: something more substantial? Well, I think Steve's point is right.
Speaker 1: There's the monetary policy decision, and to take rates as
Speaker 1: low as possible to uh, to accommodate the economy, accommodate growth,
Speaker 1: and they're lower in this country than have been historically,
Speaker 1: but they're still positive. In other places are negative, and
Speaker 1: there's a significant amount of it. I think there's a
Speaker 1: debate whether it actually transmits the economy because if you
Speaker 1: look in some of the countries where the rate structure
Speaker 1: has been negative for five years, the banks still have
Speaker 1: to pay consumer depositors interest because to these point, they're
Speaker 1: not gonna give us a hundred dollars and get ninety
Speaker 1: five back and think it's a great thing. And so
Speaker 1: I think there's a great debate. The economists will hack out,
Speaker 1: but the reality is it showing a weakness and economies armies,
Speaker 1: probably more fiscal work done and more reform work done
Speaker 1: to stimulate those economies, and well, good luck with that,
Speaker 1: and good luck with that. The good news is in
Speaker 1: the US you already have an economy which is pretty
Speaker 1: flexible and work talent people, uh, lots of capital, deep
Speaker 1: capital markets at the banking system, that restructured, a set
Speaker 1: of rules that you can understand one law that covers
Speaker 1: an economy. It's the largest in the world as opposed
Speaker 1: to multiple laws. And so you're seeing the US continue
Speaker 1: to grow, unemployments low, and consumers continue to spend. So
Speaker 1: the question really from the macro sense, is all that
Speaker 1: parade of interesting things to ponder and worry about it
Speaker 1: is only Wednesday is offset by seventy U s economy
Speaker 1: has been speeding up its activity all this year, and
Speaker 1: that is as big as Chinese economy. And so when
Speaker 1: was that tension just going to be really wrestled to
Speaker 1: the ground. And that's the question, well and so and on.
Speaker 1: I put that to you because you look across a
Speaker 1: hundred countries, You're you're operating in a hundred countries, I believe,
Speaker 1: is that are we at a breaking point where we
Speaker 1: may see something snap here? Or can we continue on,
Speaker 1: especially from a consumer perspective, in a nice upward, gentle trajectory.
Speaker 1: Let me start in a light or note first, because
Speaker 1: when you asked Steeve this question, but what's on your mind?
Speaker 1: I do have a very weighty global problem on my
Speaker 1: mind right now, and that is I have a two
Speaker 1: year old grandson who lives in New York. His father's
Speaker 1: Mexican American and speaks to him only in Spanish. So
Speaker 1: right now my major preoccupation is how to improve my
Speaker 1: Spanish so I can communicate with my grandchild. But if
Speaker 1: you look at it that's a lighter note. But frankly,
Speaker 1: that to me is the real thing that what is
Speaker 1: me about the world. You look at it from a
Speaker 1: human centered point. When you try to operate in a
Speaker 1: hundred countries language communication, keeping the core of your business
Speaker 1: and the governance and the values of people is a
Speaker 1: major problem. So I'm looking at more as a I'm
Speaker 1: not really worried about growth. I think we have enough
Speaker 1: locuses of growth to come up. You heard the Prime
Speaker 1: Minister of India this morning, and I don't think what
Speaker 1: he was talking about was hype. Steve, you've been out
Speaker 1: there very often. I think he knows what the potential
Speaker 1: is if you look at the population, and he talked
Speaker 1: about four ds this morning, the democracy, the demography as well,
Speaker 1: and he talked about demand and decisiveness. If India does
Speaker 1: get moving again. And I think he's taken some steps
Speaker 1: recently like the tax cut, which should do exactly what
Speaker 1: the tax cuts did here, you're going to get another
Speaker 1: engine of growth for the world, for sure. And I Brian,
Speaker 1: and I see him more in India than I do here.
Speaker 1: So I think both these gentlemen understand what the potential
Speaker 1: of India is I'm really not worried about consumer demand
Speaker 1: coming in from different parts of the world. We just
Speaker 1: have to look around the world. All the focus has
Speaker 1: been on America, rightfully, but I think you're going to
Speaker 1: see an uptake and a lot of other parts of
Speaker 1: the world. But why does it feel And I know
Speaker 1: we talked so much about recession, and I know you
Speaker 1: spoke with David Western over the summer quote that we
Speaker 1: used a lot on Bloomberg. We have nothing to fear
Speaker 1: about a recession right now except for the fear of
Speaker 1: recession T shirts, bumper stickers. I mean, but I just
Speaker 1: feel like it feels like if you talk to businesses
Speaker 1: and CEOs, they're hesitant to spend. But then you talk
Speaker 1: about the strength and to constus, how do you reconcile
Speaker 1: those two and and and are you still ruling out recession?
Speaker 1: That nobody if you look at all the consensus, you know,
Speaker 1: the thirty eight economist. When I talked to David, I said, look,
Speaker 1: there's nobody has a negative sign in front of any
Speaker 1: of their estimates. And so in the bottom five probably
Speaker 1: average and the it's you know, five point five for
Speaker 1: gdp US next year, and stuff. So even though people
Speaker 1: saying the probability is going up, because that's the uncertain
Speaker 1: the question is nobodys predicting it is going to happen.
Speaker 1: The fear you have is going to your point, it's
Speaker 1: only ones day and what's going on? Will you get
Speaker 1: the consumer confidence to to deterior right now? It's it's
Speaker 1: come up, it's come down a little bit, and we
Speaker 1: get intera if that starts to happen, that's the word.
Speaker 1: You do not see that in your activity every day. Um.
Speaker 1: The combination of housing prices still being constructive, which that
Speaker 1: part of the wealth is constructive, the stock market still
Speaker 1: being up, that part of their wealth is constructive, their
Speaker 1: wages growing faster now than they have really since any
Speaker 1: any point of last sight nine years. The employment levels
Speaker 1: being high. So that's always the good news. The questions
Speaker 1: what breaks set and that's what I worry about. The
Speaker 1: the psychology of business deteriorating somewhat again high high, still
Speaker 1: very high, but tipped over a little bit. One do
Speaker 1: the one does a business owner convey to their teammates
Speaker 1: that it might not be as good for this next year.
Speaker 1: I higher wages, a bigger boninus more incentive plans whatever,
Speaker 1: or you get to keep your job. We don't not
Speaker 1: see that in our Our middle market loans are growing
Speaker 1: on a faster clip now and they were the last
Speaker 1: few years. So it's all okay. And and that's the
Speaker 1: question that we said. And I think the fear could
Speaker 1: cause us to back up before the data will show
Speaker 1: you're there. So some of that fear and caution, Steve,
Speaker 1: comes from this dispute between the U S And China.
Speaker 1: There are a few people who have done as much
Speaker 1: dare I say, shuttle diplomacy than you have between the
Speaker 1: leaders leaders of those two countries. You write about it,
Speaker 1: h in your book. Steve's book, by the way, is
Speaker 1: on sale now. I don't know if anybody has heard
Speaker 1: about what it takes um, but we'll have that commercial
Speaker 1: in a moment. But you do write extensively about China
Speaker 1: in the book, your experience there, the Schwartzman scholars, your
Speaker 1: relationship with President she How does this get resolved at
Speaker 1: least to the satisfaction that the CEO s that that
Speaker 1: Brian is talking about, specifically feel good enough to start
Speaker 1: spending money again. Yeah, I'll talk about that in one second,
Speaker 1: but but just in terms of risk. Uh. I've always
Speaker 1: felt that, you know, the cycle when it comes to
Speaker 1: an end, won't do it from from normal you know,
Speaker 1: business cycle issues, because because that seems to be managed
Speaker 1: pretty well. Uh, it'll be some type of geopolitical type
Speaker 1: of incident circumstance which which hits the confidence of consumers.
Speaker 1: It won't be over production of goods and things like that.
Speaker 1: I could be wrong, but I've been thinking about this
Speaker 1: for a few years, and we've got enough of these
Speaker 1: major things that that could change people's attitudes. Uh. You know,
Speaker 1: we're full employment. Uh. You know, so people have a
Speaker 1: good situation, but their behavior may change if they're scared
Speaker 1: of something. Uh. As as to China us um Uh
Speaker 1: that's as it's an interesting situation because basically driven but
Speaker 1: by the fact that you know, in the last presidential election,
Speaker 1: we discovered that that of Americans couldn't write a four
Speaker 1: check in an emergency. So so if you think about that,
Speaker 1: these are people who fundamentally don't have savings uh, and
Speaker 1: they don't earn much money. Uh, and their their education
Speaker 1: American education has really slipped dramatically for the last thirty
Speaker 1: to forty years, and those those people are very unhappy.
Speaker 1: Uh and and they they in effect or demanding some
Speaker 1: type of change. And part of that change happens when
Speaker 1: they don't and they don't get satisfied with domestic solutions. Historically,
Speaker 1: with populism, um, you get angry at some foreign entity.
Speaker 1: And China's the target. And it was pretty obvious that
Speaker 1: it was going to be. And I talked to the
Speaker 1: Chinese about that right after the election, and they were
Speaker 1: not sensitive to that, and I told them, don't don't
Speaker 1: worry about it. We we didn't understand it either, uh,
Speaker 1: you know, which is why, you know, we had a
Speaker 1: president elected that nobody thought would be elected except him.
Speaker 1: Uh And and so we all learned something. I said,
Speaker 1: don't feel bad, you know, you didn't have bad staff work,
Speaker 1: but now you know. And they they said, okay, well,
Speaker 1: you know, if that's the case, we're going to have
Speaker 1: to adjust to. China for four years has been growing
Speaker 1: faster than any major country in history. Uh. And so
Speaker 1: this is like whatever practices they have which in history
Speaker 1: when you're you know, sort of a we used to
Speaker 1: call them, you know, developing countries or underdeveloped countries. Uh.
Speaker 1: Now we call them emerging markets. Uh. You know, they
Speaker 1: in the United States did this in the nineteenth century.
Speaker 1: We hide behind terror falls, you protect your industries. Uh,
Speaker 1: you don't let foreigners in into certain things that you
Speaker 1: know where they can compete. Uh. And and that world
Speaker 1: lives until you become a more matured country and then
Speaker 1: you integrate well, I think I think in China, part
Speaker 1: of part of the interesting issue is they still think
Speaker 1: they're poor and we sort of think they're rich. And
Speaker 1: their their GDP per capita is ten thousand dollars are
Speaker 1: is roughly sixty. But when they started this sprint forty
Speaker 1: years ago, I think it was like four person So
Speaker 1: so it's been enormous progress, but there there's still you know,
Speaker 1: sort of like one six of us, and now we're
Speaker 1: demanding our bottom and effect. Uh. And also European countries
Speaker 1: don't like they have similar problems, uh that that we're
Speaker 1: asking China to like become a more mature country and
Speaker 1: join the rest of the world. Their attitude is we're
Speaker 1: still poor. So so okay, if we have to make adjustments, Um,
Speaker 1: it's not our favorite thing to do. What what do
Speaker 1: we do? And so what you've been seeing over the
Speaker 1: last two and a half years is the US wanting them.
Speaker 1: You know, it's sort of the leader of the developed
Speaker 1: world to come pretty far. And on the Chinese side,
Speaker 1: UM are trying to figure out how far and how
Speaker 1: fast they want to get someplace. So so so you know,
Speaker 1: the two countries got quite close um in May, at
Speaker 1: which point the Chinese just withdrew they you know, they
Speaker 1: had agreed to a variety of things. We thought, uh,
Speaker 1: and then they looked at the whole and they said, uh,
Speaker 1: you know, my goodness, let's not do that. And now
Speaker 1: that's just starting again. And meanwhile, what's happened in this
Speaker 1: two and a half years is that the two countries
Speaker 1: have started um as a results of false starts and
Speaker 1: in a variety of other tactical stuff, you know, are
Speaker 1: are starting to decouple, which is very dangerous. Um. Well,
Speaker 1: can we I want to dig a little bit into that,
Speaker 1: because I do wonder. I think increasingly we're expecting this
Speaker 1: world where it's China and its allies and the United
Speaker 1: States and its allies is not used. It in a
Speaker 1: very interesting place figuratively and literally between China and the
Speaker 1: United States. How do you see it? I see it
Speaker 1: as a situation of enormous opportunity I have to be mercenary,
Speaker 1: of course, absolutely because to be and I'm I'm just
Speaker 1: being truthful here that for a long time, it wasn't
Speaker 1: kosher for anyone in American policy positions to admit that
Speaker 1: there was a kind of conflict with China and that
Speaker 1: India in fact could be one of the players in
Speaker 1: this game as a buffer against China. That was just
Speaker 1: no no. If you went to the Council on Foreign Relations,
Speaker 1: nobody would admit that. I think it's now it's in
Speaker 1: the open, and I think President Trump has even made
Speaker 1: it more in the open. I mean going to Houston
Speaker 1: and listening to our Prime minister. I think he made
Speaker 1: it very clear what kind of alliance he had. I
Speaker 1: think there's nothing but opportunity for India in this and
Speaker 1: we have to play our cards right and see that
Speaker 1: we are viewed now as a very very appropriate ally
Speaker 1: for the US as a buffer both in defense terms. Frankly,
Speaker 1: if you look at the number of defense exercises between
Speaker 1: the US and India, they're proliferating dramatically. Defense procurement from
Speaker 1: the from India is already burgeoning. We never used to
Speaker 1: buy the used to buy more from the Russians and
Speaker 1: frankly all the all the tenor of the relationship with
Speaker 1: India's right. This is a democratic country, the country that
Speaker 1: values I p R. There's a country that has scale
Speaker 1: and growth, so there is profit for global companies too
Speaker 1: over there. So I think India has nothing but a
Speaker 1: unique opportunity right now and we have to just play
Speaker 1: those cards right, and I think it would be a
Speaker 1: win win for both the US and for India. So
Speaker 1: I actually agree. And having been with a bunch of
Speaker 1: CEOs with Prime Minister's Morning, all who are talking about
Speaker 1: their business expanding in India. It's been a natural recipient.
Speaker 1: And I think some of the bureocracy and things that
Speaker 1: were difficult to operate, they have been doubt whether they
Speaker 1: can be proved, and everybody knows. I think the broader
Speaker 1: context here though, is is you know, global trade and
Speaker 1: and if you go back and say, if the China
Speaker 1: US situation will take longer, the questions what can resolve
Speaker 1: in the interim, And this is where unfortunately I'm not
Speaker 1: sure what happens given the politics in the situation this
Speaker 1: week to U S, m c A and things like that,
Speaker 1: which are critical to get done because as much as
Speaker 1: India is a beneficiary, Mexico and Canada in a in
Speaker 1: a trade with US is a beneficiary in a sense
Speaker 1: or a way to operate. Let's make it simpler that
Speaker 1: wage scale in Mexico is actually lower than the parts
Speaker 1: of China. There's they could use the jobs. There's a
Speaker 1: lot of people can move to manufacturing there, there's already
Speaker 1: integrated manufacturing supply chains. Canada's a different situation. So I
Speaker 1: think to keep the US kind of moving forward, there
Speaker 1: are three or four things to knock out. Everybody hopes
Speaker 1: for China US, but there are a couple of things
Speaker 1: to knock out first, and one of them as a U,
Speaker 1: S M C A. I just don't know politically if
Speaker 1: they can push it through, even though I think O
Speaker 1: sides seem to want it, and if they could push
Speaker 1: that through, that would be good and give more time
Speaker 1: to work I think on China. So I want to
Speaker 1: stick with something you said in the context of the
Speaker 1: meaning that you had with Prime Minister Modi, which is
Speaker 1: clearly CEOs are stepping into a brighter and maybe higher
Speaker 1: expectation type spotlight. We hear it over and over again.
Speaker 1: Do you feel a greater responsibility now, especially given what's
Speaker 1: going on in Washington, in London and capitals around the world,
Speaker 1: to speak out both on your own issues related to
Speaker 1: business but also social issues in the end of the day,
Speaker 1: especially our company has been around for two d and
Speaker 1: thirty plus years and so we've been around through all
Speaker 1: kinds of fun stuff if you think about it. But
Speaker 1: but the round he is our job is to produce
Speaker 1: profits and make progress so much society needs to do.
Speaker 1: And so the idea of the purpose statement by the
Speaker 1: b R T the work I do that we all
Speaker 1: do with your National Business Council and the World Economics
Speaker 1: Forum leadership for years, the you know Mike's leadership on
Speaker 1: the climate. You pick your thing. The idea is we
Speaker 1: have to have companies can do both produce a great
Speaker 1: profit and make sustainable make progress on the STGs. And
Speaker 1: so I think all of CEOs agree with that. And
Speaker 1: I so the attribute where people say we're speaking out
Speaker 1: publicly on an issue generally comes from the need on
Speaker 1: that second, but it also reverberates the first. If you
Speaker 1: have teammates working for you and you went what we
Speaker 1: went through the last five or six years on Post
Speaker 1: Nightclub Charleston, Vegas, Houston, Parkland, and you had teammates in
Speaker 1: every one of the situations that led our team to
Speaker 1: say we ought to take a stand on something. It
Speaker 1: was not because we need to go out and make
Speaker 1: some policy statement. It was because if you think about
Speaker 1: to have great teammates to make that profit you have
Speaker 1: to make, you have to protect on HP two, which
Speaker 1: was a North Carolina issue about we had to come
Speaker 1: out because it was our headquarters town are people would
Speaker 1: not travel there and so well, people are thinking this
Speaker 1: is about you know me or something. It's not. It's
Speaker 1: about we have to represent the two hundred thousand teammates
Speaker 1: that five or six hundred thousand people in their families
Speaker 1: and ensure them well and pay them well. But also
Speaker 1: we need them to be successful and to produce great
Speaker 1: profit and sustain progress on the STGs and that and
Speaker 1: is the key. And so as long as we can
Speaker 1: do and the investors and stuff should stay with us,
Speaker 1: and then it gives us the permission and the availability.
Speaker 1: But it comes from really the view that our customers
Speaker 1: are teammates, our communities and our shareholders really are more aligned.
Speaker 1: And it's nothing new. This is we came out of
Speaker 1: the community. We were formed by people saying we need financing.
Speaker 1: To Steve's point, in this community two d and thirty
Speaker 1: years ago, So start to think about We've been through
Speaker 1: all the impeachment proceeds. We've been through tough elections. That
Speaker 1: one was a mess and maybe they made a nice
Speaker 1: play called Hamilton's out of it right. We have been
Speaker 1: there through this and we will be there through the
Speaker 1: next one if we basically do both make great returns
Speaker 1: for our shorewlers and deliver on the society needs. Because
Speaker 1: any day that means communities grow, that means we grow.
Speaker 1: So in India we handle the same thing we bill
Speaker 1: children's museum and Mumbai, Uh why because they never had
Speaker 1: a children's museum. You'd say, how's that consistent? Well, that's
Speaker 1: what our teammates wanted us to do to help out.
Speaker 1: So it's it's work on both sides. Steve, I want
Speaker 1: to bring you back in because I'm curious, as you know,
Speaker 1: on the campaign trail, some of the candidates have kind
Speaker 1: of put private equity UM on their radar and we've
Speaker 1: been happy with that. We'll just watch the batons and UM.
Speaker 1: But I am curious that's saying, you know, private equity
Speaker 1: is responsible for some of the inequalities that are in
Speaker 1: our world. What do you say to that, Well, I'd
Speaker 1: say there's a lot of misunderstandings. Um and Um. You know,
Speaker 1: the private equity industry is comprised of a lot of
Speaker 1: different firms. And but basically what we do is leaving
Speaker 1: other asset classes like real estate aside. Um, we buy
Speaker 1: companies and we try and make them grow faster because
Speaker 1: when you exit, you get to higher multiple for higher growth.
Speaker 1: Uh And and to do that, you have to invest
Speaker 1: in these businesses. They just don't grow faster because it's
Speaker 1: in your interest. So so you put more capital in them. Uh.
Speaker 1: And you come up with good strategies uh. And you
Speaker 1: you drive growth. So when you grow businesses, you typically
Speaker 1: need more people. Uh and and so um, this is
Speaker 1: sort of a virtuous circle. Uh. And you know, from
Speaker 1: a financial risk perspective, UM, you know, we went through
Speaker 1: the global financial crisis, and private equity firms didn't didn't
Speaker 1: you know, have financial difficulties more than other kind of companies.
Speaker 1: So so so on the downside, UM, the industry hasn't
Speaker 1: really created much difficulties. UM. On the upside, you arned
Speaker 1: typically for your investors who were pension funds. The regular people,
Speaker 1: they're the fireman, the government employees, the corporate employees. You
Speaker 1: make double the stock market indexes. So so basically this
Speaker 1: is a really good model. Uh in the nine eighties. Uh,
Speaker 1: it wasn't so much like that in the eighties. There
Speaker 1: were only a few firms and prices were so low
Speaker 1: in the eighties that you could buy something and just
Speaker 1: cut costs, uh, layoffs some people and you were successful.
Speaker 1: That world is just gone. With the kind of higher
Speaker 1: prices that you have to pay to buy anything today,
Speaker 1: you just can't be successful doing that. You you must
Speaker 1: grow your way out of uh. You know, the creation
Speaker 1: price and and so I think there's some leftover perceptions.
Speaker 1: They are also an occasional, high profile type of situation,
Speaker 1: whether it's in the retail business. But but you must
Speaker 1: look at retail generally, and Brian would know more than
Speaker 1: I do. But retail has been with the disintermediation of
Speaker 1: the Internet. The number of retail companies that have gone
Speaker 1: busted are huge. The same way you could get a
Speaker 1: private equity company that owns a newspaper that was in
Speaker 1: this political treatise that one of the candidates came up
Speaker 1: with what's happened to newspapers. I mean, the vast majority
Speaker 1: of them have gotten into trouble. So you can take
Speaker 1: one example and and make something out of it. But
Speaker 1: but just to give you context, right, there were sixty
Speaker 1: six they were roughly a hundred and fifty one million
Speaker 1: jobs in the United States. Uh, sixty six million people
Speaker 1: change jobs in a given year. Right, US economy is
Speaker 1: unbelievable dynamic. The number of people who were fired in
Speaker 1: the United States was twenty one million. The number of
Speaker 1: total job in the private equity owned companies is eleven million.
Speaker 1: So when you look at the massive amount of companies,
Speaker 1: where do you get those twenty one million people who
Speaker 1: lost their jobs. It's not from private equity. It's a
Speaker 1: very small part of the whole economy. So so this
Speaker 1: this argument is wrong. Uh, and it's sort of pyramids
Speaker 1: mistake on mistake, and I think there's there's an ideology
Speaker 1: that goes with it, and also terrible marketing on the
Speaker 1: part of the private equity firms. You have to give
Speaker 1: them a d for not being able to explain this.
Speaker 1: This is pretty simple. Explain what you're doing. So because
Speaker 1: of where we are and all the discussions that we've
Speaker 1: had at this summit about climate and sustainability. I think
Speaker 1: it's fair to say that when we look back on
Speaker 1: this week, even this very newsy week, this star and
Speaker 1: apologies to to all of you, is going to be
Speaker 1: a sixteen year old Gretta Fundberg her statement about what
Speaker 1: the world is doing or not doing related to climate change.
Speaker 1: I'm just going to quote what she said to the
Speaker 1: heads of state. People are suffering, people are dying. Entire
Speaker 1: ecosystems are collapsing, where at the beginning of a mass extinction,
Speaker 1: and all you can talk about is money in fairy
Speaker 1: tales of endless economic growth. How dare you that's memorable?
Speaker 1: Is she right? Are we not doing enough as governments
Speaker 1: and as companies to really face this and our corporate
Speaker 1: leaders at least a non listening I think they were.
Speaker 1: I was very pleasantly surprised to see the number of
Speaker 1: people who showed up at the climate events, the CEOs
Speaker 1: who signed up wearing that large, ungainly badge about the
Speaker 1: one point five degree ambition. That's not a pretty badge,
Speaker 1: where that itself was not a fashion statement, not a
Speaker 1: fashion statement. But people are committed, and you know, my
Speaker 1: I've had one statement I make about sustainability, and I've
Speaker 1: been repeating it with monotonous regularity. I don't really intend
Speaker 1: to get into the debate of whether climate change is real,
Speaker 1: who's the guilty party, who has not done it? Has
Speaker 1: the West polluted? Should the West be paying an India
Speaker 1: only benefiting, should be be getting money? I stay out
Speaker 1: of that. My statement is, it's very simple. This is
Speaker 1: the biggest profit opportunity for business people in the next
Speaker 1: few decades. Why are you even me wasting time arguing
Speaker 1: about who's right who's wrong, whether it's a sixteen year
Speaker 1: old or it's the president of the US. You know. Frankly,
Speaker 1: somebody asked me the other day in a podcast. They said,
Speaker 1: do you have a message for governments and do you
Speaker 1: have a message for other companies? I said, yes, I
Speaker 1: do a little tongue in cheek and I said to governments,
Speaker 1: I would say, please, don't fight climate change, don't invest
Speaker 1: in innovative technology. Let India do it, let us get
Speaker 1: ahead of the game, and then you come in after
Speaker 1: we've put ourselves right on the top. And to my
Speaker 1: fellow company people in business, I would say climate change
Speaker 1: isn't real. Just stay out of the game, keep arguing
Speaker 1: with the sixteen year old girl, we are making money
Speaker 1: at everything we've done in renewables. Let Mahindra Group go out,
Speaker 1: they clean up the opportunities. You come in later. Because
Speaker 1: to me, the point I was making was this is
Speaker 1: futile and we are just creating almost a media created
Speaker 1: sensation of villain victim. And frankly, the winners are everybody
Speaker 1: because everything our group has done in sustainability has actually
Speaker 1: made money and the businesses we've started in the last
Speaker 1: five years are amongst the fastest going waste to energy solar.
Speaker 1: Why are we even wasting time on arguments? We agree?
Speaker 1: I'd agree that the time, the debate, the debate and
Speaker 1: arguments of what's going on scientifically stuff are just don't help.
Speaker 1: And I agree that, but the non that, Yeah, the
Speaker 1: reality is we have to make progress, and we have
Speaker 1: to make a lot of progress. It costs about two
Speaker 1: trillion dollars a year, UH is the estimate for the
Speaker 1: environmental part of the SDGs six trillion overall all the
Speaker 1: charity World's eight hundred billion a year. The US government
Speaker 1: budgets only four trillion a year, so there's only no
Speaker 1: government's gonna solve this, and no charity is gonna solve it.
Speaker 1: Who's gonna solve it is capitalism and driving the change.
Speaker 1: So in a lot, since two thousand seven to two
Speaker 1: thousand nineteen, we did a hundred twenty five billion dollars
Speaker 1: of stuff around the environment. In the next seven years
Speaker 1: ten years, we'll do another three hundred billion. That is,
Speaker 1: you know, green bonds. That is, we're carbon neutral in
Speaker 1: twenty not five years from now, we're carbon neutral next year.
Speaker 1: Um it is sold installations across the country of India,
Speaker 1: solar installations across UH, the prologst Uh warehouses in the
Speaker 1: United States is a wind farm financing. There's a tremendous
Speaker 1: business opportunity, but it's time for capitalism to come to
Speaker 1: drive it because that's where the money will be. And
Speaker 1: so it's how we operate as a company, and all
Speaker 1: of us have companies, you operate and driving them to
Speaker 1: carbon neutrality and making that commitment. It's how we then
Speaker 1: finance the build out. And it's the last part is
Speaker 1: to keep thing a non mentionance. We can't be in
Speaker 1: the western developed countries. We cannot be of a sort
Speaker 1: that we will not allow other countries to have the
Speaker 1: energy that they need to have to develop. We have
Speaker 1: to produce the right energy form that it was sustainable
Speaker 1: energy for all from the last un A Secretary General
Speaker 1: where they figured out a plan and how much it costs.
Speaker 1: That is the critical things. We can't be arrogant in
Speaker 1: the West or developed countries and say hey, you can't
Speaker 1: have the power. We have to sit there and say
Speaker 1: we will get you the power the right way. And
Speaker 1: that that is where we really got to watch what's
Speaker 1: going on with coal and other things and somebody's econm.
Speaker 1: We have to provide the replacement. EVA costs us all money,
Speaker 1: but I think the business opportunity actually takes care of it.
Speaker 1: That goes back to point you can bruce a profit
Speaker 1: and you can make the bulls and if you look
Speaker 1: at what we've done and this is this has become
Speaker 1: a large business force. And her right again about saying
Speaker 1: you're just focusing on money. I would just say, Gretta,
Speaker 1: let it be about money, don't make it about either,
Speaker 1: or you've got to ditch that dichotomy. So the only
Speaker 1: argument I have with her, it's it's both. It's because
Speaker 1: she's making it sound like give up your ways of
Speaker 1: making money, and what about the environment. I'm saying the
Speaker 1: real power is not that, So she is wrong. I'm saying,
Speaker 1: be a businessman, you're showing us the money. There is
Speaker 1: money there, and the pursuit of profit and capitalism is
Speaker 1: in fact one of the answers to this solution. So
Speaker 1: I would argue with her if I met her, that
Speaker 1: don't make it so, you know, black and white. But
Speaker 1: I think there's concerns that the goals that a lot
Speaker 1: of folks are laying out a more ambitious, ambitious than
Speaker 1: the actual initiatives. And I think that's some of the concerns.
Speaker 1: But from what you folks are saying, I mean, I'm
Speaker 1: listening to you talk and under Steve, you guys have
Speaker 1: s G investments over Blackstone, so I know it's it's
Speaker 1: it's just the pounding effect. If everybody doing more and
Speaker 1: more and more and and isn't going to be enough,
Speaker 1: there would be great debate every year on the forty
Speaker 1: years about that. The question is if we do more
Speaker 1: next year than this year, and you get more people
Speaker 1: doing more, and you get the investors, not only Steve
Speaker 1: but also the mainstream investors to say, if you're not
Speaker 1: doing something on this, we're gonna start to take the money,
Speaker 1: not not the oil companies, but all of us, and
Speaker 1: then you'll see the compounding effect to that, and it
Speaker 1: is powerful. I mean, just think of called an ambition loop,
Speaker 1: which is already in. We set an ambition three years
Speaker 1: ago about reducing our cobbin footprint by twenty percent in
Speaker 1: three years. We did it in one year, so we
Speaker 1: made another rollover. It just keeps MULTIPLI episodic, No, I
Speaker 1: mean I think they've answered the questions. I mean, the
Speaker 1: sale has been made. Uh on sustainability. It's a favorite saying,
Speaker 1: and I mean, really, you know there there's there's not
Speaker 1: much bay right that that are we doing it fast enough?
Speaker 1: Because I think one of the things that was brought
Speaker 1: up on one of the panels is we're kind of
Speaker 1: running out of time. You can't reverse what's done, and
Speaker 1: so do we need to be more ambitious with our goals.
Speaker 1: Let's actually put the policies into place. I read a
Speaker 1: book recently and said you should always go big. Excuse
Speaker 1: me said, I read a book recently that said you
Speaker 1: should always go big. I guess, well, that's one of
Speaker 1: the big takeaways. The you know, the hardest thing to
Speaker 1: do is change what people think and inform a consensus
Speaker 1: I think on sustainability. Um, that's that's happened. Uh. And
Speaker 1: virtually every business I know has concerns in that area. Uh.
Speaker 1: And as Annan was saying, um, it's it's very profitable
Speaker 1: to to address those issues. I mean, we we found
Speaker 1: once we started looking at that area. You know, we
Speaker 1: we owned a large retailer. Uh and um, you know
Speaker 1: we we we hired a t to start putting in
Speaker 1: sustainability stuff. And I know this sounds almost like primitive,
Speaker 1: but on the roof of every one of these retailing
Speaker 1: units is some air conditioner condenser or something, and you
Speaker 1: know it's it's what keeps the store uh, you know, cooled.
Speaker 1: And we just sent somebody up to look at every
Speaker 1: one of them. Uh. And what you found is that
Speaker 1: a little rubber you know, sort of thing that makes
Speaker 1: some of these circular things do something. What it was
Speaker 1: was was like tired. It wasn't taught. Uh. And as
Speaker 1: a result of that, the electric costs were way higher.
Speaker 1: And by buying something as simple as like a two
Speaker 1: three dollar you know sort of little part um, we
Speaker 1: could cut electric bills by and you know who could
Speaker 1: be against this. The practices at the beginning were the problem.
Speaker 1: But what what's happened is there there's a the sensitivity
Speaker 1: on these issues has driven the business community do all
Speaker 1: kinds of things that are basically there. Some of the
Speaker 1: are not even so hard, and they're really important to mindset.
Speaker 1: We only have a couple of minutes. We're gonna ask
Speaker 1: you to be kind of quick, but we'd like to
Speaker 1: end on an optimistic note because we do feel like
Speaker 1: we're all challenged every day with some of the headlines
Speaker 1: that are coming out. So give us something, Brian, to
Speaker 1: be hopeful about. I'd be hopeful about the human capital
Speaker 1: in the world for lack of better term of ingenuity
Speaker 1: and ability to solve problems. And so if you look
Speaker 1: at nineteen s nine in America today, we went through Vietnam,
Speaker 1: we went through an appeachment reservation a president, we went
Speaker 1: through the civil rights issues, We went to the DNC
Speaker 1: with rights in the streets X six night, Bobby Kenny, Martin,
Speaker 1: Luther King. Twice as many people work in the US,
Speaker 1: six million more working, less manufacturing, eighty million more people working,
Speaker 1: and the unemployment new claims today that are filed on
Speaker 1: a Thursday are the same nominally as they were back then,
Speaker 1: and the population has come from two fifty million people
Speaker 1: of three hundred and some million people and eighty million
Speaker 1: people more work all because of the ingenuity in the US.
Speaker 1: That's a very optimist We'll figure our way through this,
Speaker 1: and if we configure out if there's and they configure way,
Speaker 1: there's Europe configure way thors. It's just gonna take some time.
Speaker 1: But you have to be optimistic that all his talent,
Speaker 1: he's eight seven billion, eight billion people in the world
Speaker 1: are going to figure out solutions. We just have to
Speaker 1: get them working. I'm going to keep it very simple. Um.
Speaker 1: Even though I gave an argument against greata earlier, I
Speaker 1: find her one of the biggest causes for optimism. I
Speaker 1: grew up in a generation of time of Woodstock, and
Speaker 1: you know, people from my generation missed the fact that
Speaker 1: young people didn't seem to have the kind of search
Speaker 1: for identity that we went through. They weren't questioning anything.
Speaker 1: There weren't those coffee room conversations questioning the world, existentialism sat,
Speaker 1: where's all that gone? It was all Instagram now. And
Speaker 1: the protests in New York gave me hope because it
Speaker 1: felt like the old days. It felt like people, young
Speaker 1: people were beginning to question again. And you know in
Speaker 1: America more than anywhere else that that generation is what
Speaker 1: brought about real change that brought an end to the war.
Speaker 1: So I'm optimistic because if if these young people are
Speaker 1: going to become anything like what that generation was, you're
Speaker 1: going to see real change, in very positive change. Last
Speaker 1: word to you, Steve Well, I I said a meeting
Speaker 1: before lunch. Well, I guess we all were with with
Speaker 1: with the Prime Minister of India talking about the development
Speaker 1: of India, and he's a very special kind of head
Speaker 1: of a country. But what gave me enormous optimism because
Speaker 1: they went around part of the room and and each
Speaker 1: CEO was talking about what they were doing in India. UM,
Speaker 1: and each of these individuals, we're really amazing, Uh, what
Speaker 1: they were doing, what they were innovating, what were they
Speaker 1: were creating, the way they presented themselves, UM, the way
Speaker 1: they were conceptualizing how to expand. It just happened to
Speaker 1: be one country that I sort of looked at this
Speaker 1: group of people and I said, this is a resource.
Speaker 1: Uh that's really unique. UM. The drive, the commitment the
Speaker 1: creativity of every one of the speakers, And I said,
Speaker 1: you know, we've got a winning hand long term because
Speaker 1: there are people in the back of each of those
Speaker 1: people who are equally gifted. Uh And and I think
Speaker 1: that's a part of America we take for granted or
Speaker 1: we don't see it. But anybody who sat in that
Speaker 1: room watching listening had to be dazzled by the people
Speaker 1: who were in charge of substantial organizations trying to do
Speaker 1: really interesting things. And those people will do that in
Speaker 1: other areas as well. And that's what I think is.
Speaker 1: It's it's a really really under understood area of uniqueness
Speaker 1: in America and a reminder of everything going on behind
Speaker 1: kind of a crazy headline. That was our panel from
Speaker 1: the Bloomberg Global Business War. You've been listening to Bloomberg
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